Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 04, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 000-54258 | |
Entity Registrant Name | UNRIVALED BRANDS, INC. | |
Entity Incorporation, State or Country Code | NV | |
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 $0.001 | |
Trading Symbol | UNRV | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 691,886,374 | |
Entity Central Index Key | 0001451512 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and Cash Equivalents | $ 1,364 | $ 1,200 |
Accounts Receivable | 669 | 313 |
Inventory | 2,558 | 1,939 |
Prepaid Expenses & Other Assets | 310 | 498 |
Notes Receivable | 625 | 625 |
Total Current Assets | 5,526 | 4,575 |
Property, Equipment and Leasehold Improvements, Net | 12,878 | 13,000 |
Intangible Assets, Net | 2,296 | 2,859 |
Goodwill | 3,585 | 3,585 |
Other Assets | 15,181 | 16,279 |
Investments | 0 | 210 |
TOTAL ASSETS | 39,466 | 40,508 |
Current Liabilities: | ||
Accounts Payable | 11,957 | 12,990 |
Accrued Liabilities | 2,089 | 4,424 |
Current Lease Liabilities | 2,128 | 1,996 |
Current Portion of Notes Payable | 11,711 | 29,662 |
Income Taxes Payable | 10,729 | 10,071 |
Total Current Liabilities | 38,614 | 59,143 |
Noncurrent Liabilities: | ||
Notes Payable, Net of Discounts | 21,848 | 4,814 |
Lease Liabilities | 12,706 | 13,088 |
TOTAL LIABILITIES | 73,168 | 77,045 |
COMMITMENTS AND CONTINGENCIES (Note 18) | 0 | 0 |
STOCKHOLDERS’ DEFICIT: | ||
25,000,000 shares authorized, 14,074,431 and nil shares outstanding as of March 31, 2023 and December 31, 2022, respectively | 1 | 0 |
990,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 691,886,374 and 679,513,556 shares outstanding as of March 31, 2023 and December 31, 2022, respectively | 717 | 701 |
Treasury Stock: 3,808,412 and 2,308,412 shares of common stock as of March 31, 2023 and December 31, 2022, respectively | (810) | (808) |
Additional Paid-In Capital | 406,029 | 403,619 |
Accumulated Deficit | (439,639) | (440,049) |
TOTAL STOCKHOLDERS’ DEFICIT | (33,702) | (36,537) |
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ 39,466 | $ 40,508 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares outstanding (in shares) | 14,074,431 | 0 |
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) | 691,886,374 | 679,513,556 |
Treasury stock, shares issued (in shares) | 3,808,412 | 2,308,412 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 8,729,000 | $ 18,445,000 |
Cost of Goods Sold | 4,545,000 | 12,736,000 |
Gross Profit | 4,184,000 | 5,709,000 |
Operating Expenses: | ||
Selling, General & Administrative | 7,104,000 | 17,931,000 |
Gain on Disposal of Assets | 0 | (198,000) |
Total Operating Expenses | 7,104,000 | 17,733,000 |
Loss from Operations | (2,920,000) | (12,024,000) |
Other Income (Expense): | ||
Interest Expense, Net | (1,024,000) | (1,766,000) |
Gain on Extinguishment of Debt | 3,026,000 | 542,000 |
Gain on Settlement of Liabilities | 1,507,000 | 0 |
Loss on Sale of Investments | (61,000) | 0 |
Other Income, Net | 540,000 | 1,032,000 |
Total Other Income (Expense), Net | 3,988,000 | (192,000) |
Income (Loss) from Continuing Operations Before Provision for Income Taxes | 1,068,000 | (12,216,000) |
Provision for Income Tax (Expense) Benefit for Continuing Operations | (658,000) | 1,688,000 |
Net Income (Loss) from Continuing Operations | 410,000 | (10,528,000) |
Net Income from Discontinued Operations | 0 | 1,930,000 |
NET INCOME (LOSS) | 410,000 | (8,598,000) |
Less: Net (Loss) Income from Discontinued Operations Attributable to Non-Controlling Interest | 0 | 275,000 |
NET INCOME (LOSS) ATTRIBUTABLE TO UNRIVALED BRANDS, INC. | $ 410,000 | $ (8,873,000) |
Net Income (Loss) from Continuing Operations per Common Share Attributable to Unrivaled Brands, Inc. – basic (in dollars per share) | $ 0 | $ (0.02) |
Net Income (Loss) from Continuing Operations per Common Share Attributable to Unrivaled Brands, Inc. – diluted (in dollars per share) | 0 | (0.02) |
Net Income (Loss) per Common Share Attributable to Unrivaled Brands, Inc. – basic (in dollars per share) | 0 | (0.02) |
Net Income (Loss) per Common Share Attributable to Unrivaled Brands, Inc. – diluted (in dollars per share) | $ 0 | $ (0.02) |
Weighted-Average Shares Outstanding - Basic (in shares) | 815,202,580 | 561,818,857 |
Weighted-Average Shares Outstanding - Diluted (in shares) | 833,791,151 | 561,818,857 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY - USD ($) $ in Thousands | Total | Series A Convertible Preferred Stock | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Non- Controlling Interest |
Beginning balance, shares at Dec. 31, 2021 | 498,546,303 | ||||||
Beginning balance, amount at Dec. 31, 2021 | $ 146,487 | $ 521 | $ 392,930 | $ (250,015) | $ 3,859 | ||
Beginning balance, treasury stock, amount at Dec. 31, 2021 | $ (808) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income Attributable to Unrivaled Brands, Inc. | (8,873) | (8,873) | |||||
Debt conversion - Common Stock (in shares) | 294,452 | ||||||
Debt Conversion - Common Stock | 75 | 75 | |||||
Warrants exercise (in shares) | 4,759,708 | ||||||
Cashless Warrants Exercise | 0 | $ 5 | (5) | ||||
Stock Compensation - Employees | 900,000 | ||||||
Stock compensation - employees, amount | 182 | $ 1 | 181 | ||||
Stock compensation - Directors (in shares) | 683,332 | ||||||
Stock Compensation - Directors | 184 | $ 1 | 183 | ||||
Stock Option Exercises (in shares) | 146,212 | ||||||
Stock Issued for Cash (in shares) | 25,000,000 | ||||||
Stock Issued for Cash | 4,375 | $ 24 | 4,351 | ||||
Stock Option Expense | 1,821 | 1,821 | |||||
Net income (loss) attributable to noncontrolling interest | 275 | 275 | |||||
Ending balance, shares at Mar. 31, 2022 | 530,330,007 | ||||||
Ending balance, amount at Mar. 31, 2022 | $ 144,526 | $ 552 | 399,536 | (258,888) | 4,134 | ||
Ending balance, treasury stock, amount at Mar. 31, 2022 | (808) | ||||||
Beginning balance, preferred stock, shares at Dec. 31, 2022 | 0 | 0 | |||||
Beginning balance, preferred stock, amount at Dec. 31, 2022 | $ 0 | ||||||
Beginning balance, shares at Dec. 31, 2022 | 679,513,564 | ||||||
Beginning balance, amount at Dec. 31, 2022 | $ (36,537) | $ 701 | 403,619 | (440,049) | 0 | ||
Beginning balance, treasury stock, amount at Dec. 31, 2022 | 808 | (808) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income Attributable to Unrivaled Brands, Inc. | $ 410 | 410 | |||||
Stock compensation - Services Expense (in shares) | 16,181,230 | 16,181,230 | |||||
Stock Compensation - Services Expense | $ 356 | $ 16 | 340 | ||||
Stock Issued for Cash (in shares) | 14,071,431 | ||||||
Stock Issued for Cash | 1,970 | $ 1 | 1,969 | ||||
Forfeiture of Common Stock | 0 | (2) | 2 | ||||
Stock Option Expense | $ 99 | 99 | |||||
Ending balance, preferred stock, shares at Mar. 31, 2023 | 14,074,431 | 14,071,431 | |||||
Ending balance, preferred stock, amount at Mar. 31, 2023 | $ 1 | ||||||
Ending balance, shares at Mar. 31, 2023 | 695,694,794 | ||||||
Ending balance, amount at Mar. 31, 2023 | $ (33,702) | $ 717 | $ 406,029 | $ (439,639) | $ 0 | ||
Ending balance, treasury stock, amount at Mar. 31, 2023 | $ 810 | $ (810) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
NET INCOME (LOSS) | $ 410 | $ (8,598) |
Less: Net Income from Discontinued Operations | 0 | 1,930 |
Net Income (Loss) from Continuing Operations | 410 | (10,528) |
Adjustments to Reconcile Net Income (Loss) to Net Cash Used in Operating Activities: | ||
Deferred Income Tax Benefit | 0 | (1,688) |
Bad Debt Expense | (7) | 1,207 |
Gain on Settlement of Liabilities | (1,507) | 0 |
Loss on Sale of Investments | 61 | 0 |
Gain on Extinguishment of Debt | (3,026) | (542) |
Non-Cash Interest Expense | 326 | 346 |
Gain on Disposal of Assets | 0 | (198) |
Depreciation and Amortization | 775 | 3,250 |
Amortization of Operating Lease Right-of-Use Asset | 491 | 560 |
Stock-Based Compensation | 455 | 2,187 |
Change in Operating Assets and Liabilities: | ||
Accounts Receivable | (349) | (103) |
Inventory | (619) | (427) |
Prepaid Expenses and Other Current Assets | 188 | (925) |
Other Assets | (27) | (561) |
Accounts Payable and Accrued Expenses | 804 | 5,281 |
Operating Lease Liabilities | (250) | (622) |
Net Cash Used in Operating Activities - Continuing Operations | (2,275) | (2,763) |
Net Cash Used in Operating Activities - Discontinued Operations | 0 | (663) |
NET CASH USED IN OPERATING ACTIVITIES | (2,275) | (3,426) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of Property and Equipment | (90) | (845) |
Proceeds from Notes Receivable | 634 | 375 |
Proceeds from Sale of Investments | 149 | 0 |
Proceeds from Sale of Assets | 0 | 450 |
Net Cash Provided by (Used in) Investing Activities - Continuing Operations | 693 | (20) |
Net Cash Provided by Investing Activities - Discontinued Operations | 0 | 14,209 |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 693 | 14,189 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments of Debt Principal | (224) | (18,604) |
Proceeds from Issuance of Common Stock | 1,970 | 4,375 |
Net Cash Provided by (Used in) Financing Activities - Continuing Operations | 1,746 | (14,229) |
Net Cash Used in Financing Activities - Discontinued Operations | 0 | (6) |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 1,746 | (14,235) |
NET CHANGE IN CASH | 164 | (3,472) |
Cash at Beginning of Period | 1,200 | 6,700 |
CASH AT END OF PERIOD | 1,364 | 3,228 |
SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITIES: | ||
Cash Paid for Interest | 179 | 1,444 |
SUPPLEMENTAL DISCLOSURE FOR NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Debt Principal and Accrued Interest Converted into Common Stock | 0 | 52 |
Reclass of Accrued Interest to Principle | $ 1,896 | $ 0 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS Unrivaled Brands, Inc. (the “Company”) is a cannabis company with operations in retail, production, distribution, and cultivation throughout California, with an emphasis on providing the highest quality of medical and adult use cannabis products. 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”) • People’s First Choice, LLC, a California limited liability company (“People’s”) • UMBRLA, Inc., a Nevada corporation ("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 | 3 Months Ended |
Mar. 31, 2023 | |
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 and Exchange Commission (“SEC”) Form 10-Q and Article 10 of 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 March 31, 2023 and December 31, 2022, and the consolidated results of operations and cash flows for the periods ended March 31, 2023 and 2022 have been included. These interim unaudited condensed consolidated financial statements do not include all disclosures required by GAAP for complete financial statements and, therefore, should be read in conjunction with the more detailed audited consolidated financial statements for the year ended December 31, 2022. The December 31, 2022 balances reported herein are derived from the audited consolidated financial statements for the year ended December 31, 2022. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications did not affect total assets, total liabilities, stockholders' deficit, revenues or net loss. Going Concern While the Company incurred a pre-tax net income from continuing operations of $1.07 million for the three months ended March 31, 2023, the Company has incurred significant losses in prior periods. For the three months ended March 31, 2022, the Company incurred a pre-tax net loss from continuing operations of $12.22 million. As of March 31, 2023 and December 31, 2022, the Company had an accumulated deficit of $439.64 million and $440.05 million, respectively. At March 31, 2023, the Company had a consolidated cash balance of $1.36 million. Management expects to experience further net losses in 2023 and in the foreseeable future. The Company may not be 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. Significant Accounting Policies The significant accounting policies and critical estimates applied by the Company in these interim unaudited condensed consolidated financial statements are the same as those applied in the Company’s audited consolidated financial statements and accompanying notes included in the Company’s 2022 Form 10-K, unless otherwise disclosed in these accompanying notes to the unaudited consolidated financial statements for the interim period ended March 31, 2023. 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 revenue recognition, allowances for doubtful accounts, sales returns, inventory valuation, stock-based compensation expense, goodwill and purchased intangible asset valuations, derivative liabilities, deferred income tax asset valuation allowances, uncertain tax positions, tax contingencies, 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. Loss Per Common Share In accordance with the provisions of ASC 260, “Earnings Per Share”, net loss per share is computed by dividing net income or 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. If the Company is in a net income position, diluted earnings per share includes stock options, warrants, convertible preferred stock, and convertible debt that are determined to be dilutive using the treasury stock method for all equity instruments issuable in equity units and the “if converted” method for the Company’s convertible debt. The Company's operations resulted in net income and net loss for the three months ended March 31, 2023 and 2022, respectively. 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): Three Months Ended 2023 2022 Common Stock Warrants 101,161,796 24,945,055 Common Stock Options 43,331,576 87,851,618 144,493,372 112,796,673 Recently Adopted Accounting Standards 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 adoption of the standard did not have a material impact on the Company’s consolidated financial statements. 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 adoption of the standard did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Standards 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. In June 2016, the FASB ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”)” . ASU 2016-13 replaces the “incurred loss” credit losses framework with a new accounting standard that requires management's measurement of the allowance for credit losses to be based on a broader range of reasonable and supportable information for lifetime credit loss estimates. Effective January 1, 2023, the Company adopted the standard. The adoption of this standard do not have a material impact on our financial statements. |
CONCENTRATIONS OF BUSINESS AND
CONCENTRATIONS OF BUSINESS AND CREDIT RISK | 3 Months Ended |
Mar. 31, 2023 | |
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 at $1.21 million and nil as of March 31, 2023 and December 31, 2022, respectively. The Company provides credit in the normal course of business to customers located throughout the U.S. 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 three months ended March 31, 2023 and 2022. |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2023 | |
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. Finished goods consists of cannabis products sold in retail and distribution. Inventory as of March 31, 2023 and December 31, 2022 consisted of the following: (in thousands) March 31, December 31, Raw Materials $ 489 $ 524 Work-In-Progress 269 284 Finished Goods 1,800 1,131 Total Inventory $ 2,558 $ 1,939 |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Investments [Abstract] | |
INVESTMENTS | INVESTMENTS On May 3, 2022, Edible Garden Corp. ("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 publi c 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. During the three months ended March 31, 2023, the Company sold all its shares in Edible Garden and received $0.15 million. As a result, the Company recorded a realized loss on the sale of investments of $0.06 million during the three months ended March 31, 2023 . During the three months ended March 31, 2022, |
PROPERTY EQUIPMENT AND LEASEHOL
PROPERTY EQUIPMENT AND LEASEHOLD IMPROVEMENTS NET | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS Property, equipment, and leasehold improvements as of March 31, 2023 and December 31, 2022 consisted of the following: (in thousands) March 31, December 31, Land and Building $ 7,581 $ 7,581 Furniture and Equipment 1,336 1,336 Computer Hardware 361 299 Leasehold Improvements 8,036 8,009 Vehicles 103 103 Construction in Progress 2,565 2,565 Subtotal 19,982 19,893 Less Accumulated Depreciation (7,104) (6,893) Property, Equipment and Leasehold Improvements, Net $ 12,878 $ 13,000 Depreciation expense related to continuing operations was $0.21 million and $0.91 million for the three months ended March 31, 2023 and 2022, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS Intangible assets as of March 31, 2023 and December 31, 2022 consisted of the following: (in thousands) March 31, 2023 December 31, 2022 Estimated Gross Accumulated Net Gross Accumulated 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 (3,554) 946 4,500 (2,991) 1,509 Operating Licenses 14 12,239 (12,239) — 12,239 (12,239) — Total Amortizing Intangible Assets 24,139 (23,193) 946 24,139 (22,630) 1,509 Non-Amortizing Intangible Assets: Trade Name Indefinite 1,350 — 1,350 1,350 — 1,350 Total Non-Amortizing Intangible Assets 1,350 — 1,350 1,350 — 1,350 Total Intangible Assets, Net $ 25,489 $ (23,193) $ 2,296 $ 25,489 $ (22,630) $ 2,859 |
GOODWILL
GOODWILL | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL As of March 31, 2023, changes in the carrying amount of goodwill during the period presented were as follows: (in thousands) Balance as of December 31, 2022 $ 3,585 Balance as of March 31, 2023 $ 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. Management did not identify any impairment triggers during the three months ended March 31, 2023 and concluded there was no impairment of goodwill. 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”) where the Company estimates the fair value of each reporting unit using a discounted cash flow method (income approach). Goodwill is assigned to the reporting unit, which is the operating segment level or one level below the operating segment. The balance of goodwill at March 31, 2023 and December 31, 2022 remained unchanged at $3.59 million. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following: (in thousands) March 31, December 31, Tax Liabilities $ 584 $ 1,018 Accrued Payroll and Benefits 523 628 Accrued Interest 736 2,113 Other Accrued Expenses 246 665 Total Accounts Payable and Accrued Expenses $ 2,089 $ 4,424 |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2023 | |
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 facilities under lease agreements that expire at various dates. In addition, office, production and transportation equipment is leased under agreements that expire at various date s. The Company does not have any significant finance leases. T otal operating lease costs were $0.65 million and $1.09 million for the three months ended March 31, 2023 and 2022, respectiv ely. Short-term lease costs during the fiscal quarters ended March 31, 2023 and 2022 were not material. As of March 31, 2023 and December 31, 2022, the Company has short-term lease liabilities of $2.13 million and $2.00 million, respectively. The table below presents total operating lease right-of-use assets and lease liabilities as of March 31, 2023 and December 31, 2022: (in thousands) March 31, December 31, Operating Lease Right-of-Use Assets $ 13,468 $ 13,946 Operating Lease Liabilities $ 14,834 $ 15,084 The table below presents the maturities of operating lease liabilities as of March 31, 2023: (in thousands) Operating Leases 2023 (remaining) $ 2,604 2024 3,570 2025 3,128 2026 2,554 2027 1,831 Thereafter 8,934 Total Lease Payments 22,621 Less: Discount (7,787) Total Operating Lease Liabilities $ 14,834 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: Three Months Ended March 31, March 31, Weighted Average Remaining Lease Term (Years) 8.3 6.3 Weighted Average Discount Rate 11.7 % 11.3 % |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2023 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | NOTES PAYABLE Notes payable as of March 31, 2023 and December 31, 2022 consisted of the following: (in thousands) March 31, December 31, 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 matures in February 2025. 14 14 Convertible promissory note dated January 25, 2021, issued to accredited investors, which matured July 22, 2022 and bears interest at a rate of 8.0% per annum. The conversion price is $0.175 per share. 3,253 3,450 Promissory note dated July 27, 2021, issued to Arthur Chan which matures July 26, 2024, and bears interest at a rate of 8.0% per annum. 2,500 2,500 Unsecured promissory note dated December 28, 2022 due to a related party. The interest rate on the note is 1.0% and matures on December 28, 2027. 154 154 Promissory note dated October 1, 2021, issued to Sterling Harlan as part of the SilverStreak Solutions acquisition. The interest rate on the note was 10.0%. The note matured on April 1, 2022. 317 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 was 10.0%. The note matures in March 2028 1,268 2,500 Secured promissory note dated November 22, 2021 issued to People's California, LLC, which matures in March 2028 and bears interest at a rate of 10.0% per annum on the first $3.00 million due in September 2023, 5.0% on the remaining balance for 180 days and 10.0% per annum thereafter. Payment of the remaining balance is due in March 2028. 23,465 21,569 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 9.9% per year. 2,882 2,882 Notes Payable - Promissory Notes $ 33,853 $ 35,069 Vehicle Loans 49 76 Less: Short-Term Debt (11,711) (29,662) Less: Debt Discount (343) (669) Net Long-Term Debt $ 21,848 $ 4,814 Amendment of Promissory Note Related to People's California, LLC On March 6, 2023, the Company entered into a binding settlement term sheet ("Settlement Term Sheet") to resolve pending litigation matters with People’s California, LLC, whereby the parties agreed to amend the terms of that certain secured promissory note ("Original Note"), issued by the Company to People's California, LLC on November 22, 2021. The Original Note was amended and restated into two secured promissory notes: a $3.00 million note ("$3M Note") and a $20.00 million note ("Settlement Note"). The $3M Note accrues simple interest at 10.0% annually, interest payable monthly in cash, and principal is due 180 days after effective date of the Settlement Term Sheet. The Settlement Note accrues interest at 5.0% for the first 180 days, and 10.0% thereafter, interest is paid in cash (or the Company’s common stock based on the 10-day volume-weighted average price ("VWAP") at the date of issuance) starting 180 days after the effective date of the Settlement Term Sheet and on the first of the month thereafter. The amount of $5.00 million of principal is due in cash within 90 days of the effective date of the Settlement Term Sheet with the balance due on the fifth anniversary of the effective date of the Settlement Term Sheet, which is March 6, 2028. When the $5.00 million principal payment for the Settlement Note and the $3.00 million payment under the $3M Note are paid (“Up-front Settlement”) in accordance with the Settlement Term Sheet, People's California, LLC will be obligated to transfer the Riverside and Costa Mesa licenses and stores to the Company as described in that certain membership interest purchase agreement, dated as of November 22, 2021, with Peoples's California, LLC for no additional consideration. On the earlier of the date of the Up-front Settlement payment or 180 days after the effective date of the Settlement Term Sheet, People's California, LLC will have the option to convert a portion or all of the principal balance of the Settlement Note into the Company's common stock subject to certain requirements in the Settlement Agreement. The conversion price is the lower of $0.20 or the 10-day VWAP of the Company's common stock. Upon payment of the Up-front Settlement, the Company has the option to convert the unpaid principal balance of either notes into the Company's common stock at a conversion price of $0.20 per shareas long as the at the time of the conversion the Company's common stock has a 10-day VWAP of $0.20 per share or greater. After the first $5.00 million principal payment on the Settlement Note, principal payments made in cash prior to the first anniversary of the Settlement Term Sheet reduce the principal balance by twice the amount of the cash payment. The modification to the Company's promissory note under the Settlement Term Sheet was classified as troubled debt restructuring pursuant to ASC 470-60, " Troubled Debt Restructurings by Debtors," and the Company recorded a premium of $0.47 million. See " Note 18 – Commitments and Contingencies " for details on the related litigation matters. Amendment of Promissory Notes Related to SilverStreak Acquisition On March 23, 2023, the Company entered into a binding term sheet to modify the terms of the $2.00 million and $2.50 million unsecured promissory notes originally issued on October 1, 2021 in connection with that certain stock purchase agreement dated June 9, 2021 and amended on July 13, 2021, which reduced the principal to an aggregate of $1.25 million, with required monthly aggregate payments of approximately $0.03 million, interest of 10% per annum, and maturing on March 15, 2028 ("Notes Modification"). The parties also agreed that the Company shall be responsible for certain tax liabilities of approximately $0.53 million. The Notes Modification was classified as a troubled debt restructuring pursuant to ASC 470-60, " Troubled Debt Restructurings by Debtors," and the Company recorded a gain on extinguishment of debt of $3.02 million and reduced the carrying value of the promissory notes to total future cash payments of $1.59 million. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS' DEFICIT | STOCKHOLDERS' DEFICIT Series V Preferred Stock In December 2022, the Company filed a Certificate of Designation of Rights, Privileges, Preferences, and Restrictions with the Secretary of State of the State of Nevada to establish a new class of preferred shares, the Series V Preferred Stock, $0.001 par value. 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 non-assessable 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. The purchasers in the December 22 transaction agreed to enter into a voting agreement assigning their voting rights to Sabas Carrillo, the Company's Chief Executive Officer. In January 2023, the Company entered into Securities Purchase Agreements with certain investors, including Sabas Carrillo, the Company’s Chief Executive Officer, Patty Chan, the Company’s Interim Chief Financial Officer, James Miller, the Company's Chief Operating 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 on December 30, 2022 on an as-converted-to-common stock-basis of ten 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 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. Series N Preferred Stock In February 2023, the Company filed a Certificate of Designation of Rights, Privileges, Preferences, and Restrictions with the Secretary of State of the State of Nevada to establish a new class of preferred shares, the Series N Preferred Stock, $0.001 par value. The number of authorized shares of Series N Preferred Stock is 2,500,000 shares. Each share of Series N Preferred Stock is convertible into 100 shares of the Company's common stock at any time from and before the first anniversary of the issuance date. Each share of Series N Preferred Stock will automatically be converted into 100 fully paid and non-assessable shares of the Company's common stock on the first anniversary of the issuance date. Common Stock The Company authorized 990,000,000 shares of common stock with $0.001 par value per share. As of March 31, 2023 and December 31, 2022, 691,886,374 and 679,513,556 shares of common stock were outstanding, respectively. During the three months ended March 31, 2023 , the Company issued 16,181,230 shares of common stock to a related party service provider. As a result, the Company recorded $0.36 million of stock-based compensation expense for services during the three months ended March 31, 2023 . See " Note 17 – Related Party Transactions " for further information. During the three months ended March 31, 2023 , a member of the Company's board of directors forfeited 1,500,000 shares of the Company's common stock to the Company for no cash value. Accordingly, treasury stock outstanding as of March 31, 2023 and December 31, 20222 was 3,808,412 and 2,308,412 shares of common stock, respectively. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2023 | |
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 the Company's equity incentive plans as of March 31, 2023: Awards Reserved for Issuance Awards Exercised Awards Outstanding Awards Available for Grant 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 shares / options) For the Three Months Ended March 31, 2023 March 31, 2022 Type of Award Number of Stock-Based Number of Stock-Based Stock Options — $ 99 114,006,195 $ 1,821 Stock Grants: Employees (Common Stock) — $ — 900,000 182 Directors (Common Stock) — $ — 683,332 184 Non–Employee Consultants (Common Stock) 16,181,230 $ 356 — — Total Stock–Based Compensation Expense $ 455 $ 2,187 Stock Options The following table summarizes the Company’s stock option activity and related information for the three months ended March 31, 2023: Number of Shares Weighted- Weighted- Aggregate Options Outstanding as of January 1, 2023 52,821,099 $ 0.23 Forfeited (9,489,523) $ 0.13 Options Outstanding as of March 31, 2023 43,331,576 $ 0.23 7.6 years $ — Options Exercisable as of March 31, 2023 37,867,298 $ 0.27 7.4 years $ — As of March 31, 2023, total unrecognized stock-based compensation was $0.35 million. Such costs are expected to be recognized over a weighted-average period of approximately 1.22 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 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 | 3 Months Ended |
Mar. 31, 2023 | |
Warrants and Rights Note Disclosure [Abstract] | |
WARRANTS | WARRANTS The following table summarizes the Company's warrant activity for the three months ended March 31, 2023: Warrants Weighted-Average Warrants Outstanding as of January 1, 2023 80,881,817 $ 0.11 Issued 70,357,155 $ 0.03 Exercised (316,862) $ 3.71 Warrants Outstanding as of March 31, 2023 150,922,110 $ 0.06 |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 3 Months Ended |
Mar. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS 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 nil 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 50.0% equity interests in Psychonaut Oregon, LLC (“Psychonaut”) to Joseph Gerlach for an aggregate purchase price of $1.00. Mr. Gerlach owns the other 50.0% 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 (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 fair value less costs to sell ("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 18 – Commitments and Contingencies ”. NuLeaf On November 17, 2021, Medifarm III, LLC (“Medifarm III”), a wholly-owned subsidiary of the Company, entered into a Membership Interest Purchase Agreement (the “NuLeaf Purchase Agreement”) with NuLeaf, Inc., a Nevada corporation (“NuLeaf”). Upon the terms and subject to the satisfaction of the conditions described in the NuLeaf Purchase Agreement, Medifarm III agreed to sell its 50.0% 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 50.0% 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. OneQor During fiscal year 2020, management suspended the operations of OneQor 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 as of December 31, 2022. The completed sales of our NuLeaf operations during the periods presented represent a strategic shift that had 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 the discontinued operations were comprised of the following: (in thousands) Three Months Ended 2022 Total Revenues $ 4,885 Cost of Goods Sold 2,099 Gross Profit 2,786 Selling, General and Administrative Expenses 2,471 Gain on Sale of Assets (1,681) Income from Operations 1,996 Other Income 29 Income from Discontinued Operations Before Provision for Income Taxes 2,025 Income Tax Expense (95) Income from Discontinued Operations $ 1,930 Income from Discontinued Operations per Common Share Attributable to Unrivaled Brands, Inc. Common Stockholders - Basic And Diluted $ 0.01 As of March 31, 2023 and December 31, 2022, the assets and liabilities related to discontinued operations were deconsolidated and no balance remained. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2023 | |
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 a cultivation facility in Oakland, California and distributes flower grown from the facility to other manufacturers or to its own retail cannabis dispensaries in California under the Korova brand. For the periods presented, revenue by reportable segments are as follows: (in thousands) Total Revenue % of Total Revenue Three Months Ended March 31, Segment 2023 2022 2023 2022 Cannabis Retail $ 7,959 $ 12,109 91.2 % 65.6 % Cannabis Cultivation & Distribution 770 6,336 8.8 % 34.4 % Total $ 8,729 $ 18,445 100.0 % 100.0 % For the periods presented, results of operations by reportable segments are as follows: (in thousands) Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Cannabis Retail Cannabis Cultivation & Distribution Corporate & Other Total Cannabis Retail Cannabis Cultivation & Distribution Corporate & Other Total Total Revenues $ 7,959 $ 770 $ — $ 8,729 $ 12,109 $ 6,336 $ — $ 18,445 Cost of Goods Sold 3,805 740 — 4,545 6,881 5,855 — 12,736 Gross Profit 4,154 30 — 4,184 5,228 481 — 5,709 Selling, General & Administrative Expenses 3,045 164 3,895 7,104 5,025 4,600 8,306 17,931 Gain on Disposal of Assets — — — — — — (198) (198) Income (Loss) from Operations 1,109 (134) (3,895) (2,920) 203 (4,119) (8,108) (12,024) Other Income (Expense): Interest Expense (48) — (976) (1,024) — (165) (1,601) (1,766) Gain on Extinguishment of Debt — — 3,026 3,026 — — 542 542 Gain on Settlement of Liabilities 587 9 911 1,507 — — — — Loss on Sale of Investments — — (61) (61) — — — — Other Income, Net 225 315 — 540 78 415 539 1,032 Total Other Income (Loss), Net 764 324 2,900 3,988 78 250 (520) (192) Income (Loss) Before Provision for Income Taxes $ 1,873 $ 190 $ (995) $ 1,068 $ 281 $ (3,869) $ (8,628) $ (12,216) Total Assets $ 19,882 $ 4,290 $ 15,294 $ 39,466 $ 52,125 $ 580 $ 197,097 $ 249,802 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2023 | |
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 Company's board of directors. During the three months ended March 31, 2023, the Company incurred a total of $0.45 million in fees pursuant to the engagement letter (the "Engagement") dated August 12, 2022 for executive level consulting and related business support services. In accordance with the Engagement, the Company issued 16,181,230 shares of the Company's common stock under the performance bonus award valued at $0.36 million the three months ended March 31, 2023. During the three months ended March 31, 2023 , a member of the Company's board of directors forfeited 1,500,000 shares of the Company's common stock to the Company for no cash value. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES California Operating Licenses The Company’s subsidiaries have operated compliantly and have been eligible for applicable licenses and renewals of those licenses. 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 estima te 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 March 31, 2023. 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 29, 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. Trial in this matter has not been set. 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 in this matter is set for September 12, 2023. Fusion LLF, LLC v. Unrivaled Brands, Inc. - On June 27, 2022, Fusion LLF, LLC filed an action against the Company, in the Superior Court for the State of California, County of Orange, 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 8, 2022. People's California, LLC v. Unrivaled Brands, Inc. - On July 19, 2022, People’s California, LLC, the sellers of People's First Choice, filed an action against the Company in the Superior Court for the State of California, County of Orange, 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. Refer to "Note 11 – Notes Payable" for further details. 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 in the Superior Court for the State of California, County of Orange, 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. 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, 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. On April 10, 2023, the Company filed an answer 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. 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, alleging claims for breach of contract, account stated, and unjust enrichment. The complaint alleges damages of $0.40 million. On April 10, 2023, the Company filed an answer 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 | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company has evaluated subsequent events through May 10, 2023, which is the date these consolidated financial statements were issued, and has concluded that the following subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the notes to the consolidated financial statements. On April 30, 2023, the Company entered into a Settlement Agreement and Release (the “Settlement Agreement”) as definitive documentation of the binding term sheet dated March 23, 2023 related to the unsecured promissory notes issued on October 1, 2021 in connection with the acquisition of SilverStreak Solutions, Inc. Refer to "Note 11 – Notes Payable" for further information. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
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 and Exchange Commission (“SEC”) Form 10-Q and Article 10 of 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 March 31, 2023 and December 31, 2022, and the consolidated results of operations and cash flows for the periods ended March 31, 2023 and 2022 have been included. These interim unaudited condensed consolidated financial statements do not include all disclosures required by GAAP for complete financial statements and, therefore, should be read in conjunction with the more detailed audited consolidated financial statements for the year ended December 31, 2022. The December 31, 2022 balances reported herein are derived from the audited consolidated financial statements for the year ended December 31, 2022. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. |
Reclassifications | Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications did not affect total assets, total liabilities, stockholders' deficit, revenues or net loss. |
Going Concern | While the Company incurred a pre-tax net income from continuing operations of $1.07 million for the three months ended March 31, 2023, the Company has incurred significant losses in prior periods. For the three months ended March 31, 2022, the Company incurred a pre-tax net loss from continuing operations of $12.22 million. As of March 31, 2023 and December 31, 2022, the Company had an accumulated deficit of $439.64 million and $440.05 million, respectively. At March 31, 2023, the Company had a consolidated cash balance of $1.36 million. Management expects to experience further net losses in 2023 and in the foreseeable future. The Company may not be 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. |
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 revenue recognition, allowances for doubtful accounts, sales returns, inventory valuation, stock-based compensation expense, goodwill and purchased intangible asset valuations, derivative liabilities, deferred income tax asset valuation allowances, uncertain tax positions, tax contingencies, 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. |
Loss Per Common Share | In accordance with the provisions of ASC 260, “Earnings Per Share”, net loss per share is computed by dividing net income or 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. If the Company is in a net income position, diluted earnings per share includes stock options, warrants, convertible preferred stock, and convertible debt that are determined to be dilutive using the treasury stock method for all equity instruments issuable in equity units and the “if converted” method for the Company’s convertible debt. The Company's operations resulted in net income and net loss for the three months ended March 31, 2023 and 2022, respectively. |
Recently Adopted and Issued Accounting Standards | Recently Adopted Accounting Standards 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 adoption of the standard did not have a material impact on the Company’s consolidated financial statements. 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 adoption of the standard did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Standards 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. In June 2016, the FASB ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”)” . ASU 2016-13 replaces the “incurred loss” credit losses framework with a new accounting standard that requires management's measurement of the allowance for credit losses to be based on a broader range of reasonable and supportable information for lifetime credit loss estimates. Effective January 1, 2023, the Company adopted the standard. The adoption of this standard do not have a material impact on our financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | 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): Three Months Ended 2023 2022 Common Stock Warrants 101,161,796 24,945,055 Common Stock Options 43,331,576 87,851,618 144,493,372 112,796,673 |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventory as of March 31, 2023 and December 31, 2022 consisted of the following: (in thousands) March 31, December 31, Raw Materials $ 489 $ 524 Work-In-Progress 269 284 Finished Goods 1,800 1,131 Total Inventory $ 2,558 $ 1,939 |
PROPERTY EQUIPMENT AND LEASEH_2
PROPERTY EQUIPMENT AND LEASEHOLD IMPROVEMENTS NET (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, equipment, and leasehold improvements as of March 31, 2023 and December 31, 2022 consisted of the following: (in thousands) March 31, December 31, Land and Building $ 7,581 $ 7,581 Furniture and Equipment 1,336 1,336 Computer Hardware 361 299 Leasehold Improvements 8,036 8,009 Vehicles 103 103 Construction in Progress 2,565 2,565 Subtotal 19,982 19,893 Less Accumulated Depreciation (7,104) (6,893) Property, Equipment and Leasehold Improvements, Net $ 12,878 $ 13,000 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets as of March 31, 2023 and December 31, 2022 consisted of the following: (in thousands) March 31, 2023 December 31, 2022 Estimated Gross Accumulated Net Gross Accumulated 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 (3,554) 946 4,500 (2,991) 1,509 Operating Licenses 14 12,239 (12,239) — 12,239 (12,239) — Total Amortizing Intangible Assets 24,139 (23,193) 946 24,139 (22,630) 1,509 Non-Amortizing Intangible Assets: Trade Name Indefinite 1,350 — 1,350 1,350 — 1,350 Total Non-Amortizing Intangible Assets 1,350 — 1,350 1,350 — 1,350 Total Intangible Assets, Net $ 25,489 $ (23,193) $ 2,296 $ 25,489 $ (22,630) $ 2,859 |
GOODWILL (Tables)
GOODWILL (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | As of March 31, 2023, changes in the carrying amount of goodwill during the period presented were as follows: (in thousands) Balance as of December 31, 2022 $ 3,585 Balance as of March 31, 2023 $ 3,585 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued expenses consisted of the following: (in thousands) March 31, December 31, Tax Liabilities $ 584 $ 1,018 Accrued Payroll and Benefits 523 628 Accrued Interest 736 2,113 Other Accrued Expenses 246 665 Total Accounts Payable and Accrued Expenses $ 2,089 $ 4,424 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of Operating Lease ROU Assets and Lease Liabilities | The table below presents total operating lease right-of-use assets and lease liabilities as of March 31, 2023 and December 31, 2022: (in thousands) March 31, December 31, Operating Lease Right-of-Use Assets $ 13,468 $ 13,946 Operating Lease Liabilities $ 14,834 $ 15,084 |
Lessee, Operating Lease, Liability, Maturity | The table below presents the maturities of operating lease liabilities as of March 31, 2023: (in thousands) Operating Leases 2023 (remaining) $ 2,604 2024 3,570 2025 3,128 2026 2,554 2027 1,831 Thereafter 8,934 Total Lease Payments 22,621 Less: Discount (7,787) Total Operating Lease Liabilities $ 14,834 |
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: Three Months Ended March 31, March 31, Weighted Average Remaining Lease Term (Years) 8.3 6.3 Weighted Average Discount Rate 11.7 % 11.3 % |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Notes Payable [Abstract] | |
Schedule of Debt | Notes payable as of March 31, 2023 and December 31, 2022 consisted of the following: (in thousands) March 31, December 31, 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 matures in February 2025. 14 14 Convertible promissory note dated January 25, 2021, issued to accredited investors, which matured July 22, 2022 and bears interest at a rate of 8.0% per annum. The conversion price is $0.175 per share. 3,253 3,450 Promissory note dated July 27, 2021, issued to Arthur Chan which matures July 26, 2024, and bears interest at a rate of 8.0% per annum. 2,500 2,500 Unsecured promissory note dated December 28, 2022 due to a related party. The interest rate on the note is 1.0% and matures on December 28, 2027. 154 154 Promissory note dated October 1, 2021, issued to Sterling Harlan as part of the SilverStreak Solutions acquisition. The interest rate on the note was 10.0%. The note matured on April 1, 2022. 317 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 was 10.0%. The note matures in March 2028 1,268 2,500 Secured promissory note dated November 22, 2021 issued to People's California, LLC, which matures in March 2028 and bears interest at a rate of 10.0% per annum on the first $3.00 million due in September 2023, 5.0% on the remaining balance for 180 days and 10.0% per annum thereafter. Payment of the remaining balance is due in March 2028. 23,465 21,569 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 9.9% per year. 2,882 2,882 Notes Payable - Promissory Notes $ 33,853 $ 35,069 Vehicle Loans 49 76 Less: Short-Term Debt (11,711) (29,662) Less: Debt Discount (343) (669) Net Long-Term Debt $ 21,848 $ 4,814 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The following table contains information about the Company's equity incentive plans as of March 31, 2023: Awards Reserved for Issuance Awards Exercised Awards Outstanding Awards Available for Grant 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 |
Share-based Payment Arrangement, Activity | 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 shares / options) For the Three Months Ended March 31, 2023 March 31, 2022 Type of Award Number of Stock-Based Number of Stock-Based Stock Options — $ 99 114,006,195 $ 1,821 Stock Grants: Employees (Common Stock) — $ — 900,000 182 Directors (Common Stock) — $ — 683,332 184 Non–Employee Consultants (Common Stock) 16,181,230 $ 356 — — Total Stock–Based Compensation Expense $ 455 $ 2,187 |
Share-based Payment Arrangement, Option, Activity | The following table summarizes the Company’s stock option activity and related information for the three months ended March 31, 2023: Number of Shares Weighted- Weighted- Aggregate Options Outstanding as of January 1, 2023 52,821,099 $ 0.23 Forfeited (9,489,523) $ 0.13 Options Outstanding as of March 31, 2023 43,331,576 $ 0.23 7.6 years $ — Options Exercisable as of March 31, 2023 37,867,298 $ 0.27 7.4 years $ — |
WARRANTS (Tables)
WARRANTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of Stockholders' Equity Note, Warrants or Rights | The following table summarizes the Company's warrant activity for the three months ended March 31, 2023: Warrants Weighted-Average Warrants Outstanding as of January 1, 2023 80,881,817 $ 0.11 Issued 70,357,155 $ 0.03 Exercised (316,862) $ 3.71 Warrants Outstanding as of March 31, 2023 150,922,110 $ 0.06 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | Operating results for the discontinued operations were comprised of the following: (in thousands) Three Months Ended 2022 Total Revenues $ 4,885 Cost of Goods Sold 2,099 Gross Profit 2,786 Selling, General and Administrative Expenses 2,471 Gain on Sale of Assets (1,681) Income from Operations 1,996 Other Income 29 Income from Discontinued Operations Before Provision for Income Taxes 2,025 Income Tax Expense (95) Income from Discontinued Operations $ 1,930 Income from Discontinued Operations per Common Share Attributable to Unrivaled Brands, Inc. Common Stockholders - Basic And Diluted $ 0.01 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 Three Months Ended March 31, Segment 2023 2022 2023 2022 Cannabis Retail $ 7,959 $ 12,109 91.2 % 65.6 % Cannabis Cultivation & Distribution 770 6,336 8.8 % 34.4 % Total $ 8,729 $ 18,445 100.0 % 100.0 % For the periods presented, results of operations by reportable segments are as follows: (in thousands) Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Cannabis Retail Cannabis Cultivation & Distribution Corporate & Other Total Cannabis Retail Cannabis Cultivation & Distribution Corporate & Other Total Total Revenues $ 7,959 $ 770 $ — $ 8,729 $ 12,109 $ 6,336 $ — $ 18,445 Cost of Goods Sold 3,805 740 — 4,545 6,881 5,855 — 12,736 Gross Profit 4,154 30 — 4,184 5,228 481 — 5,709 Selling, General & Administrative Expenses 3,045 164 3,895 7,104 5,025 4,600 8,306 17,931 Gain on Disposal of Assets — — — — — — (198) (198) Income (Loss) from Operations 1,109 (134) (3,895) (2,920) 203 (4,119) (8,108) (12,024) Other Income (Expense): Interest Expense (48) — (976) (1,024) — (165) (1,601) (1,766) Gain on Extinguishment of Debt — — 3,026 3,026 — — 542 542 Gain on Settlement of Liabilities 587 9 911 1,507 — — — — Loss on Sale of Investments — — (61) (61) — — — — Other Income, Net 225 315 — 540 78 415 539 1,032 Total Other Income (Loss), Net 764 324 2,900 3,988 78 250 (520) (192) Income (Loss) Before Provision for Income Taxes $ 1,873 $ 190 $ (995) $ 1,068 $ 281 $ (3,869) $ (8,628) $ (12,216) Total Assets $ 19,882 $ 4,290 $ 15,294 $ 39,466 $ 52,125 $ 580 $ 197,097 $ 249,802 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | |||
Income (Loss) Before Provision for Income Taxes | $ 1,068 | $ (12,216) | |
Accumulated Deficit | (439,639) | $ (440,049) | |
Cash balance | $ 1,360 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 144,493,372 | 112,796,673 |
Common Stock Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 101,161,796 | 24,945,055 |
Common Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 43,331,576 | 87,851,618 |
CONCENTRATIONS OF BUSINESS AN_2
CONCENTRATIONS OF BUSINESS AND CREDIT RISK (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Risks and Uncertainties [Abstract] | ||
Cash, uninsured amount | $ 1,210,000 | $ 0 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw Materials | $ 489 | $ 524 |
Work-In-Progress | 269 | 284 |
Finished Goods | 1,800 | 1,131 |
Inventory | $ 2,558 | $ 1,939 |
INVESTMENTS (Details)
INVESTMENTS (Details) - USD ($) | 3 Months Ended | ||||
May 05, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Jan. 31, 2023 | May 03, 2022 | |
Schedule of Investments [Line Items] | |||||
Warrants available for purchase (in shares) | 70,357,155 | ||||
Exercise price (in dollars per share) | $ 0.028 | ||||
Proceeds from shares sold | $ 149,000 | $ 0 | |||
Realized loss on investment | (60,000) | ||||
Loss related to investments | $ (61,000) | $ 0 | |||
IPO | Edible Garden | |||||
Schedule of Investments [Line Items] | |||||
Warrants available for purchase (in shares) | 2,930,000 | ||||
Exercise price (in dollars per share) | $ 5 | ||||
Offering price (in dollars per share) | $ 5 | ||||
Common Stock | IPO | Edible Garden | |||||
Schedule of Investments [Line Items] | |||||
Shares granted (in shares) | 2,930,000 | ||||
Gross proceeds from restricted stock | $ 14,700,000 | ||||
Edible Garden | |||||
Schedule of Investments [Line Items] | |||||
Shares held (in shares) | 1,000,000 |
PROPERTY EQUIPMENT AND LEASEH_3
PROPERTY EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||
Subtotal | $ 19,982 | $ 19,893 | |
Less Accumulated Depreciation | (7,104) | (6,893) | |
Property, Equipment and Leasehold Improvements, Net | 12,878 | 13,000 | |
Depreciation | 210 | $ 910 | |
Land and Building | |||
Property, Plant and Equipment [Line Items] | |||
Subtotal | 7,581 | 7,581 | |
Furniture and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Subtotal | 1,336 | 1,336 | |
Computer Hardware | |||
Property, Plant and Equipment [Line Items] | |||
Subtotal | 361 | 299 | |
Leasehold Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Subtotal | 8,036 | 8,009 | |
Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Subtotal | 103 | 103 | |
Construction in Progress | |||
Property, Plant and Equipment [Line Items] | |||
Subtotal | $ 2,565 | $ 2,565 |
INTANGIBLE ASSETS - Schedule of
INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Goodwill [Line Items] | ||
Gross Carrying Amount | $ 24,139 | $ 24,139 |
Accumulated Amortization | (23,193) | (22,630) |
Net Carrying Value | 946 | 1,509 |
Net Carrying Value | 1,350 | 1,350 |
Total Intangible Assets, Gross | 25,489 | 25,489 |
Total Intangible Assets, Net | 2,296 | 2,859 |
Trade Name | ||
Goodwill [Line Items] | ||
Net Carrying Value | 1,350 | 1,350 |
Customer Relationships | ||
Goodwill [Line Items] | ||
Gross Carrying Amount | 7,400 | 7,400 |
Accumulated Amortization | (7,400) | (7,400) |
Net Carrying Value | $ 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 | (3,554) | (2,991) |
Net Carrying Value | $ 946 | 1,509 |
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 | 12,239 |
Accumulated Amortization | (12,239) | (12,239) |
Net Carrying Value | $ 0 | $ 0 |
INTANGIBLE ASSETS - Narrative (
INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 560 | $ 2,340 |
GOODWILL (Details)
GOODWILL (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Goodwill [Roll Forward] | |
Goodwil - Beginning balance | $ 3,585 |
Goodwill - Ending balance | $ 3,585 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Tax Liabilities | $ 584 | $ 1,018 |
Accrued Payroll and Benefits | 523 | 628 |
Accrued Interest | 736 | 2,113 |
Other Accrued Expenses | 246 | 665 |
Total Accounts Payable and Accrued Expenses | $ 2,089 | $ 4,424 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Leases [Abstract] | |||
Operating lease costs | $ 650 | $ 1,090 | |
Short-term lease liabilities | $ 2,128 | $ 1,996 |
LEASES - Schedule of Operating
LEASES - Schedule of Operating Lease ROU Assets and Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Operating Lease Right-of-Use Assets | $ 13,468 | $ 13,946 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets | Other Assets |
Operating Lease Liabilities | $ 14,834 | $ 15,084 |
LEASES - Schedule of Maturities
LEASES - Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
2023 (remaining) | $ 2,604 | |
2024 | 3,570 | |
2025 | 3,128 | |
2026 | 2,554 | |
2027 | 1,831 | |
Thereafter | 8,934 | |
Total Lease Payments | 22,621 | |
Less: Discount | (7,787) | |
Operating Lease Liabilities | $ 14,834 | $ 15,084 |
LEASES - Schedule of Weighted A
LEASES - Schedule of Weighted Average Number of Shares (Details) | Mar. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Weighted Average Remaining Lease Term (Years) | 8 years 3 months 18 days | 6 years 3 months 18 days |
Weighted Average Discount Rate | 11.70% | 11.30% |
NOTES PAYABLE - Schedule of Deb
NOTES PAYABLE - Schedule of Debt (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Notes Payable - Promissory Notes | $ 33,853 | $ 35,069 |
Vehicle Loans | 49 | 76 |
Less: Short-Term Debt | (11,711) | (29,662) |
Less: Debt Discount | (343) | (669) |
Net Long-Term Debt | 21,848 | 4,814 |
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 matures in February 2025. | ||
Debt Instrument [Line Items] | ||
Notes Payable - Promissory Notes | $ 14 | 14 |
Convertible promissory note dated January 25, 2021, issued to accredited investors, which matured July 22, 2022 and bears interest at a rate of 8.0% per annum. The conversion price is $0.175 per share. | ||
Debt Instrument [Line Items] | ||
Interest rate | 8% | |
Conversion price (in dollars per share) | $ 0.175 | |
Notes Payable - Promissory Notes | $ 3,253 | 3,450 |
Promissory note dated July 27, 2021, issued to Arthur Chan which matures July 26, 2024, and bears interest at a rate of 8.0% per annum. | ||
Debt Instrument [Line Items] | ||
Interest rate | 8% | |
Notes Payable - Promissory Notes | $ 2,500 | 2,500 |
Unsecured promissory note dated December 28, 2022 due to a related party. The interest rate on the note is 1.0% and matures on December 28, 2027. | ||
Debt Instrument [Line Items] | ||
Interest rate | 1% | |
Notes Payable - Promissory Notes | $ 154 | 154 |
Promissory note dated October 1, 2021, issued to Sterling Harlan as part of the SilverStreak Solutions acquisition. The interest rate on the note was 10.0%. The note matured on April 1, 2022. | ||
Debt Instrument [Line Items] | ||
Interest rate | 10% | |
Notes Payable - Promissory Notes | $ 317 | 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 was 10.0%. The note matures in March 2028 | ||
Debt Instrument [Line Items] | ||
Interest rate | 10% | |
Notes Payable - Promissory Notes | $ 1,268 | 2,500 |
Secured promissory note dated November 22, 2021 issued to People's California, LLC, which matures in March 2028 and bears interest at a rate of 10.0% per annum on the first $3.00 million due in September 2023, 5.0% on the remaining balance for 180 days and 10.0% per annum thereafter. Payment of the remaining balance is due in March 2028. | ||
Debt Instrument [Line Items] | ||
Interest rate | 10% | |
Payments due, next fiscal year | $ 3,000 | |
Interest rate | 5% | |
Notes Payable - Promissory Notes | $ 23,465 | 21,569 |
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 9.9% per year. | ||
Debt Instrument [Line Items] | ||
Interest rate | 9.90% | |
Notes Payable - Promissory Notes | $ 2,882 | $ 2,882 |
NOTES PAYABLE - Narrative (Deta
NOTES PAYABLE - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||||
Mar. 23, 2023 | Mar. 06, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Sep. 06, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||||||
Secured promissory notes | $ 33,853 | $ 35,069 | ||||
Gain on extinguishment of debt | 3,026 | $ 542 | ||||
$3m Note | ||||||
Debt Instrument [Line Items] | ||||||
Secured promissory notes | $ 3,000 | |||||
Interest rate | 10% | |||||
Principal payment due | $ 3,000 | |||||
Settlement Note | ||||||
Debt Instrument [Line Items] | ||||||
Secured promissory notes | $ 20,000 | |||||
Interest rate | 5% | |||||
Principal payment due | $ 5,000 | |||||
Debt instrument, convertible, conversion price (in dollars per share) | $ 0.20 | |||||
10-day VWAP minimum price per share (in dollars per share) | $ 0.20 | |||||
Premium recorded | $ 470 | |||||
Settlement Note | Forecast | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 10% | |||||
Promissory note dated October 1, 2021, issued to Sterling Harlan as part of the SilverStreak Solutions acquisition. The interest rate on the note was 10.0%. The note matured on April 1, 2022. | ||||||
Debt Instrument [Line Items] | ||||||
Secured promissory notes | 317 | 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 was 10.0%. The note matures in March 2028 | ||||||
Debt Instrument [Line Items] | ||||||
Secured promissory notes | 1,268 | $ 2,500 | ||||
Promissory Note, SilverStreak Solutions, Aggregate | ||||||
Debt Instrument [Line Items] | ||||||
Secured promissory notes | $ 1,250 | 1,590 | ||||
Interest rate | 10% | |||||
Principal payment due | 30 | |||||
Gain on extinguishment of debt | $ 3,020 | |||||
Tax liabilities | $ 530 |
STOCKHOLDERS' DEFICIT (Details)
STOCKHOLDERS' DEFICIT (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2023 | Mar. 31, 2023 | Feb. 28, 2023 | Dec. 31, 2022 | |
Class of Stock [Line Items] | ||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Common stock, par value (in dollars per share) | $ 0.014 | $ 0.001 | $ 0.001 | |
Warrants available for purchase (in shares) | 70,357,155 | |||
Exercise price (in dollars per share) | $ 0.028 | |||
Total gross proceeds from private placement | $ 1,970 | |||
Common stock, shares authorized (in shares) | 990,000,000 | 990,000,000 | ||
Common stock, shares outstanding (in shares) | 691,886,374 | 679,513,556 | ||
Stock compensation - Services Expense (in shares) | 16,181,230 | |||
Stock Compensation - Services Expense | $ 356 | |||
Treasury stock, shares issued (in shares) | 3,808,412 | 2,308,412 | ||
Director | ||||
Class of Stock [Line Items] | ||||
Common shares forfeited (in shares) | 1,500,000 | |||
Preferred Stock Series V | ||||
Class of Stock [Line Items] | ||||
Preferred stock, par value (in dollars per share) | $ 0.14 | $ 0.001 | ||
Shares authorized for issuance (in shares) | 25,000,000 | |||
Shares granted (in shares) | 14,071,431 | |||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, shares issued upon conversion | 10 | 100 | 10 | |
Preferred Stock Series N | ||||
Class of Stock [Line Items] | ||||
Preferred stock, par value (in dollars per share) | $ 0.001 | |||
Shares authorized for issuance (in shares) | 2,500,000 |
STOCK-BASED COMPENSATION - Plan
STOCK-BASED COMPENSATION - Plan Details (Details) | Mar. 31, 2023 shares |
2016 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Reserved for Issuance (in shares) | 999,906 |
Awards Exercised (in shares) | 0 |
Awards Outstanding (in shares) | 499,953 |
Awards Available for Grant (in shares) | 499,953 |
2018 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Reserved for Issuance (in shares) | 29,920,933 |
Awards Exercised (in shares) | 4,022,133 |
Awards Outstanding (in shares) | 13,326,509 |
Awards Available for Grant (in shares) | 12,572,291 |
2019 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Reserved for Issuance (in shares) | 61,109,696 |
Awards Exercised (in shares) | 34,884 |
Awards Outstanding (in shares) | 37,617,531 |
Awards Available for Grant (in shares) | 23,457,281 |
STOCK-BASED COMPENSATION - Shar
STOCK-BASED COMPENSATION - Share-based Payment Arrangement, Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-Based Compensation Expense | $ 455 | $ 2,187 |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares or Options Granted | 0 | 114,006,195 |
Stock-Based Compensation Expense | $ 99 | $ 1,821 |
Employees (Common Stock) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares or Options Granted | 0 | 900,000 |
Stock-Based Compensation Expense | $ 0 | $ 182 |
Directors (Common Stock) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares or Options Granted | 0 | 683,332 |
Stock-Based Compensation Expense | $ 0 | $ 184 |
Non–Employee Consultants (Common Stock) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares or Options Granted | 16,181,230 | 0 |
Stock-Based Compensation Expense | $ 356 | $ 0 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Share-Based Payment Arrangement [Abstract] | |
Unrecognized stock-based compensation | $ 350 |
Unrecognized stock-based compensation, weighted average period of recognition | 1 year 2 months 19 days |
STOCK-BASED COMPENSATION - Sh_2
STOCK-BASED COMPENSATION - Share-based Payment Arrangement, Option, Activity (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Number of Shares | |
Options outstanding - beginning balance (in shares) | shares | 52,821,099 |
Options forfeited (in shares) | shares | (9,489,523) |
Options outstanding - ending balance (in shares) | shares | 43,331,576 |
Options exercisable (in shares) | shares | 37,867,298 |
Weighted- Average Exercise Price Per Share | |
Options Outstanding, beginning balance (in dollars per share) | $ / shares | $ 0.23 |
Options forfeited (in dollars per share) | $ / shares | 0.13 |
Options Outstanding, ending balance (in dollars per share) | $ / shares | 0.23 |
Options exercisable (in dollars per share) | $ / shares | $ 0.27 |
Weighted- Average Remaining Contractual Life | |
Options Outstanding, term | 7 years 7 months 6 days |
Options Exercisable. term | 7 years 4 months 24 days |
Aggregate Intrinsic Value of In-the-Money Options | |
Options outstanding | $ | $ 0 |
Options exercisable | $ | $ 0 |
WARRANTS - Schedule of Stockhol
WARRANTS - Schedule of Stockholders' Equity Note, Warrants or Rights (Details) - Warrants | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Class of Warrant or Right [Line Items] | |
Warrants outstanding - beginning balance (in shares) | shares | 80,881,817 |
Warrants Issued (in shares) | shares | 70,357,155 |
Warrants Exercised (in shares) | shares | (316,862) |
Warrants outstanding - ending balance (in shares) | shares | 150,922,110 |
Warrants Outstanding, beginning balance (in dollars per share) | $ / shares | $ 0.11 |
Warrants Issued (in dollars per share) | $ / shares | 0.03 |
Warrants Exercised (in dollars per share) | $ / shares | 3.71 |
Warrants Outstanding, ending balance (in dollars per share) | $ / shares | $ 0.06 |
DISCONTINUED OPERATIONS - Narra
DISCONTINUED OPERATIONS - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 29, 2022 | Dec. 28, 2022 | Nov. 17, 2021 | |
Psychonaut | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Equity method investment, ownership percentage | 50% | |||
Mr. Gerlach | Psychonaut | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Equity method investment, ownership percentage | 50% | |||
MediFarm LLC | NuLeaf | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Equity method investment, ownership percentage | 50% | |||
NuLeaf Sparks Cultivation, LLC | NuLeaf | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Equity method investment, ownership percentage | 50% | |||
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 | ||
Interest rate | 8% | |||
Gain on sale | $ (500,000) | |||
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 | |||
NuLeaf | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Consideration | $ 6,500,000 |
DISCONTINUED OPERATIONS - Sched
DISCONTINUED OPERATIONS - Schedule of discontinued operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenue | $ 8,729 | $ 18,445 |
Cost of Goods Sold | 4,545 | 12,736 |
Gross Profit | 4,184 | 5,709 |
Selling, General and Administrative Expenses | 7,104 | 17,931 |
Other Income | 540 | 1,032 |
Net Income from Discontinued Operations | $ 0 | 1,930 |
Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenue | 4,885 | |
Cost of Goods Sold | 2,099 | |
Gross Profit | 2,786 | |
Selling, General and Administrative Expenses | 2,471 | |
Gain on Sale of Assets | (1,681) | |
Income from Operations | 1,996 | |
Other Income | 29 | |
Income from Discontinued Operations Before Provision for Income Taxes | 2,025 | |
Income Tax Expense | (95) | |
Net Income from Discontinued Operations | $ 1,930 | |
Loss from discontinued operations per common share attributable to Unrivaled Brands, Inc. common stockholders – diluted (in dollars per share) | $ 0.01 | |
Loss from discontinued operations per common share attributable to Unrivaled Brands, Inc. common stockholders – basic (in dollars per share) | $ 0.01 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 operating_segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
SEGMENT INFORMATION - Revenue (
SEGMENT INFORMATION - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue, Major Customer [Line Items] | ||
Revenue | $ 8,729 | $ 18,445 |
Revenue Benchmark | Revenue from Rights Concentration Risk | ||
Revenue, Major Customer [Line Items] | ||
% of Total Revenue | 100% | 100% |
Cannabis Retail | ||
Revenue, Major Customer [Line Items] | ||
Revenue | $ 7,959 | $ 12,109 |
Cannabis Retail | Revenue Benchmark | Revenue from Rights Concentration Risk | ||
Revenue, Major Customer [Line Items] | ||
% of Total Revenue | 91.20% | 65.60% |
Cannabis Cultivation & Distribution | ||
Revenue, Major Customer [Line Items] | ||
Revenue | $ 770 | $ 6,336 |
Cannabis Cultivation & Distribution | Revenue Benchmark | Revenue from Rights Concentration Risk | ||
Revenue, Major Customer [Line Items] | ||
% of Total Revenue | 8.80% | 34.40% |
SEGMENT INFORMATION - Income St
SEGMENT INFORMATION - Income Statement (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Revenue, Major Customer [Line Items] | |||
Revenue | $ 8,729,000 | $ 18,445,000 | |
Cost of Goods Sold | 4,545,000 | 12,736,000 | |
Gross Profit | 4,184,000 | 5,709,000 | |
Selling, General & Administrative | 7,104,000 | 17,931,000 | |
Gain on Disposal of Assets | 0 | (198,000) | |
Income (Loss) from Operations | (2,920,000) | (12,024,000) | |
Interest Expense | (1,024,000) | (1,766,000) | |
Gain on Extinguishment of Debt | 3,026,000 | 542,000 | |
Gain on Settlement of Liabilities | 1,507,000 | 0 | |
Loss on Sale of Investments | (61,000) | 0 | |
Other Income, Net | 540,000 | 1,032,000 | |
Total Other Income (Loss), Net | 3,988,000 | (192,000) | |
Income (Loss) Before Provision for Income Taxes | 1,068,000 | (12,216,000) | |
Assets | 39,466,000 | 249,802,000 | $ 40,508,000 |
Cannabis Retail | |||
Revenue, Major Customer [Line Items] | |||
Revenue | 7,959,000 | 12,109,000 | |
Cannabis Cultivation & Distribution | |||
Revenue, Major Customer [Line Items] | |||
Revenue | 770,000 | 6,336,000 | |
Operating Segments | Cannabis Retail | |||
Revenue, Major Customer [Line Items] | |||
Revenue | 7,959,000 | 12,109,000 | |
Cost of Goods Sold | 3,805,000 | 6,881,000 | |
Gross Profit | 4,154,000 | 5,228,000 | |
Selling, General & Administrative | 3,045,000 | 5,025,000 | |
Gain on Disposal of Assets | 0 | 0 | |
Income (Loss) from Operations | 1,109,000 | 203,000 | |
Interest Expense | (48,000) | 0 | |
Gain on Extinguishment of Debt | 0 | 0 | |
Gain on Settlement of Liabilities | 587,000 | 0 | |
Loss on Sale of Investments | 0 | 0 | |
Other Income, Net | 225,000 | 78,000 | |
Total Other Income (Loss), Net | 764,000 | 78,000 | |
Income (Loss) Before Provision for Income Taxes | 1,873,000 | 281,000 | |
Assets | 19,882,000 | 52,125,000 | |
Operating Segments | Cannabis Cultivation & Distribution | |||
Revenue, Major Customer [Line Items] | |||
Revenue | 770,000 | 6,336,000 | |
Cost of Goods Sold | 740,000 | 5,855,000 | |
Gross Profit | 30,000 | 481,000 | |
Selling, General & Administrative | 164,000 | 4,600,000 | |
Gain on Disposal of Assets | 0 | 0 | |
Income (Loss) from Operations | (134,000) | (4,119,000) | |
Interest Expense | 0 | (165,000) | |
Gain on Extinguishment of Debt | 0 | 0 | |
Gain on Settlement of Liabilities | 9,000 | 0 | |
Loss on Sale of Investments | 0 | 0 | |
Other Income, Net | 315,000 | 415,000 | |
Total Other Income (Loss), Net | 324,000 | 250,000 | |
Income (Loss) Before Provision for Income Taxes | 190,000 | (3,869,000) | |
Assets | 4,290,000 | 580,000 | |
Corporate & Other | |||
Revenue, Major Customer [Line Items] | |||
Revenue | 0 | 0 | |
Cost of Goods Sold | 0 | 0 | |
Gross Profit | 0 | 0 | |
Selling, General & Administrative | 3,895,000 | 8,306,000 | |
Gain on Disposal of Assets | 0 | (198,000) | |
Income (Loss) from Operations | (3,895,000) | (8,108,000) | |
Interest Expense | (976,000) | (1,601,000) | |
Gain on Extinguishment of Debt | 3,026,000 | 542,000 | |
Gain on Settlement of Liabilities | 911,000 | 0 | |
Loss on Sale of Investments | (61,000) | 0 | |
Other Income, Net | 0 | 539,000 | |
Total Other Income (Loss), Net | 2,900,000 | (520,000) | |
Income (Loss) Before Provision for Income Taxes | (995,000) | (8,628,000) | |
Assets | $ 15,294,000 | $ 197,097,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) shares | |
Related Party Transaction [Line Items] | |
Shares issued for performance bonus award (in shares) | shares | 16,181,230 |
Performance bonus award | $ 356 |
Adnant Engagement Letter | |
Related Party Transaction [Line Items] | |
Total fees | $ 450 |
Shares issued for performance bonus award (in shares) | shares | 16,181,230 |
Performance bonus award | $ 360 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 06, 2023 | Jan. 30, 2023 | Sep. 20, 2022 | Jul. 19, 2022 | Jun. 27, 2022 | May 11, 2022 | Mar. 31, 2023 |
Loss Contingencies [Line Items] | |||||||
Loss accrual | $ 500 | ||||||
People's California | |||||||
Loss Contingencies [Line Items] | |||||||
Contract damages | $ 5,400 | ||||||
1149 South LA Street Fashion District | |||||||
Loss Contingencies [Line Items] | |||||||
Contract damages | $ 580 | ||||||
Greelane Holdings, LLC | |||||||
Loss Contingencies [Line Items] | |||||||
Contract damages | $ 400 | ||||||
Mystic Holdings, Inc. | |||||||
Loss Contingencies [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 | |||||||
Loss Contingencies [Line Items] | |||||||
Contract damages | $ 4,550 | ||||||
People's California | |||||||
Loss Contingencies [Line Items] | |||||||
Contract damages | $ 23,000 |