Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 18, 2015 | Jun. 30, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | Terra Tech Corp. | ||
Entity Central Index Key | 1451512 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 309,720,267 | ||
Entity Public Float | $84,279,603 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current Assets: | ||
Cash | $846,650 | $26,943 |
Accounts receivable, net | 417,463 | 41,903 |
Prepaid expenses | 82,200 | 857 |
Inventory | 670,180 | |
Note receivable | 173,754 | |
Total Current Assets | 2,016,493 | 243,457 |
Property, equipment and leasehold improvements, net | 5,446,743 | 21,369 |
Intangible assets, net | 161,412 | 194,872 |
Deposits | 94,578 | 3,580,887 |
Total Assets | 7,719,226 | 4,040,585 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 573,721 | 1,275,918 |
Note payable | 4,615,547 | 1,197,680 |
Loans from Related Party | 102,500 | |
Derivative liability | 1,253,000 | 1,381,000 |
Total Current Liabilities | 6,442,268 | 3,957,098 |
Commitment and Contingencies | ||
Stockholders' Equity | ||
Common stock, par value $0.001; authorized 350,000,000 shares; issued 197,532,892 and 146,806,928 shares as of December 31, 2014 and 2013, respectively | 197,533 | 146,808 |
Additional Paid in Capital | 38,081,784 | 14,759,246 |
Accumulated Deficit | -36,726,529 | -14,837,317 |
Total Terra Tech Corp. stockholders' equity | 1,568,288 | 83,487 |
Non-controlling interest | -291,330 | |
Total Stockholders' Equity | 1,276,958 | 83,487 |
Total Liabilities and Stockholders' Equity | 7,719,226 | 4,040,585 |
Convertible Series A Preferred Stock | ||
Stockholders' Equity | ||
Preferred stock, value | ||
Convertible Series B Preferred Stock | ||
Stockholders' Equity | ||
Preferred stock, value | $15,500 | $14,750 |
CONSOLIDATED_BALANCE_SHEETS_PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Stockholders' Equity | ||
Preferred stock, Par value | $0.00 | $0.00 |
Preferred stock, Authorized | 25,000,000 | 25,000,000 |
Common stock, par value | $0.00 | $0.00 |
Common stock, Authorized | 350,000,000 | 350,000,000 |
Common stock, Issued | 197,532,892 | 146,806,928 |
Convertible Series A Preferred Stock | ||
Stockholders' Equity | ||
Preferred stock, Par value | $0.00 | $0.00 |
Preferred stock, Authorized | 100 | 100 |
Preferred stock, Issued | 100 | 100 |
Preferred stock, Outstanding | 100 | 100 |
Convertible Series B Preferred Stock | ||
Stockholders' Equity | ||
Preferred stock, Par value | $0.00 | $0.00 |
Preferred stock, Authorized | 24,999,900 | 24,999,900 |
Preferred stock, Issued | 15,500,000 | 14,750,000 |
Preferred stock, Outstanding | 15,500,000 | 14,750,000 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statements Of Operations | ||
Total Revenues | $7,094,270 | $2,125,851 |
Cost of Goods Sold | 6,941,278 | 2,036,933 |
Total | 152,992 | 88,918 |
Selling, general and administrative expenses | 18,327,792 | 3,575,897 |
Loss from operations | -18,174,800 | -3,486,979 |
Other Income (Expenses) | ||
Loss from derivatives issued with debt greater than debt carrying value | -4,808,000 | -2,054,000 |
Gain (Loss) on fair market valuation of derivatives | 1,912,037 | 673,000 |
Interest Expense | -1,096,324 | -1,278,721 |
Total Other Income (Expense) | -3,992,287 | -2,659,721 |
Loss before Provision for Income taxes | -22,167,087 | -6,146,700 |
Provision for Income Taxes | 13,455 | 1,650 |
Net Loss | -22,180,542 | -6,148,350 |
Net Loss attributable to non-controlling interest | 291,330 | |
Net Loss attributable to Terra Tech Corp. | ($21,889,212) | ($6,148,350) |
Net Loss per Common Share attributable to Terra Tech Corp common stockholders - Basic and Diluted | ($0.13) | ($0.06) |
Weighted Average Number of Common Shares Outstanding - Basic And Diluted | 174,297,430 | 99,041,439 |
CONSOLIDATED_STATEMENT_OF_STOC
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (USD $) | Series A Convertible Preferred Stock | Series B Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Non- Controlling Interest | Total |
Beginning Balance, Amount at Dec. 31, 2012 | $14,750 | $82,372 | $8,131,305 | ($8,688,967) | ($460,540) | ||
Beginning Balance, Shares at Dec. 31, 2012 | 100 | 14,750,000 | 82,371,853 | ||||
Sale of Common Stock, Amount | 22,085 | 1,552,457 | 1,574,542 | ||||
Sale of Common Stock, Shares | 22,084,567 | ||||||
Issuance of Warrants | 1,355,990 | 1,355,990 | |||||
Issuance of Common Stock for debt and interest expense, Amount | 35,280 | 2,548,900 | 2,584,180 | ||||
Issuance of Common Stock for debt and interest expense, Shares | 35,279,767 | ||||||
Issuance of Common Stock for services, Amount | 5,421 | 767,744 | 773,165 | ||||
Issuance of Common Stock for services, Shares | 5,420,741 | ||||||
Issuance of Common Stock for acquisition, Amount | 1,250 | 211,250 | 212,500 | ||||
Issuance of Common Stock for acquisition, Shares | 1,250,000 | ||||||
Issuance of Common Stock for deposits, Amount | 400 | 191,600 | 192,000 | ||||
Issuance of Common Stock for deposits, Shares | 400,000 | ||||||
Short swing profit payment | |||||||
Net Loss | -6,148,350 | -6,148,350 | |||||
Ending Balance, Amount at Dec. 31, 2013 | 14,750 | 146,808 | 14,759,246 | -14,837,317 | 83,487 | ||
Ending Balance, Shares at Dec. 31, 2013 | 100 | 14,750,000 | 146,806,928 | ||||
Sale of Common Stock, Amount | 6,600 | 4,008,319 | 4,014,919 | ||||
Sale of Common Stock, Shares | 6,600,000 | ||||||
Issuance of Warrants | 5,038,986 | 5,038,986 | |||||
Issuance of Common Stock for debt and interest expense, Amount | 26,097 | 7,191,291 | 7,217,388 | ||||
Issuance of Common Stock for debt and interest expense, Shares | 26,097,816 | ||||||
Issuance of Common Stock for services, Amount | 6,973 | 3,707,580 | 3,714,553 | ||||
Issuance of Common Stock for services, Shares | 6,973,414 | ||||||
Proceeds from issuance of Common Stock from the exercise of warrants, Amount | 4,614 | 288,806 | 293,420 | ||||
Proceeds from issuance of Common Stock from the exercise of warrants, Shares | 4,613,362 | ||||||
Short swing profit payment | 67,100 | -67,100 | |||||
Common Stock retired, Amount | -740 | 740 | |||||
Common Stock retired, Shares | -740,000 | ||||||
Issuance of Common Stock for the exercise of cashless warrants, Amount | 3,003 | -3,003 | |||||
Issuance of Common Stock for the exercise of cashless warrants, Shares | 3,003,335 | ||||||
Issuance of Common Stock for compensation, Amount | 4,178 | 1,937,182 | 1,941,360 | ||||
Issuance of Common Stock for compensation, Shares | 4,178,037 | ||||||
Issuance of Preferred Stock for compensation, Amount | 750 | 1,085,537 | 1,086,287 | ||||
Issuance of Preferred Stock for compensation, Shares | 750,000 | ||||||
Non-controlling Share of Loss | -291,330 | -291,330 | |||||
Net Loss | -21,889,212 | -21,889,212 | |||||
Ending Balance, Amount at Dec. 31, 2014 | $15,500 | $197,533 | $38,081,784 | ($36,726,529) | ($291,330) | $1,276,958 | |
Ending Balance, Shares at Dec. 31, 2014 | 100 | 15,500,000 | 197,532,892 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Loss | ($21,889,212) | ($6,148,350) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
(Gain) loss on fair market valuation of derivatives | -1,912,037 | -673,000 |
Depreciation and amortization | 438,783 | 41,309 |
Warrants issued with common stock and debt | 5,038,986 | 1,355,990 |
Stock issued for interest expense | 396,555 | 1,039,081 |
Stock issued for compensation | 3,027,647 | |
Stock issued for services | 3,714,553 | 773,165 |
Equity instruments issued with debt greater than debt carrying amount | 4,808,000 | 2,054,000 |
Change in accounts receivable and inventory reserve | 18,140 | 359,126 |
Changes in operating assets and liabilities: | ||
Accounts receivable | -393,700 | -41,450 |
Prepaid expenses | -81,343 | -857 |
Inventory | -670,180 | -75,389 |
Prepaid inventory | 51,988 | |
Note receivable | 173,754 | -173,754 |
Deposits | 5,422 | -3,388,887 |
Accounts payable | -528,723 | 973,441 |
Net cash used in operations | -7,853,355 | -3,853,587 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | -2,337,370 | |
Purchase of intangible assets - domain names | -12,440 | -11,400 |
Cash assumed in merger | 100 | |
Net cash used in investing activities | -2,349,810 | -11,300 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of notes payable | 7,344,737 | 2,403,474 |
Proceeds from issuance of notes payable to related parties | 27,500 | 17,502 |
Payment on notes payable | -303,474 | -100,000 |
Payments on notes payable to related parties | -130,000 | -20,000 |
Proceeds from issuance of common stock and warrants and common stock subscribed | 4,014,919 | 1,574,542 |
Proceeds from issuance of common stock from the exercise of warrants | 293,420 | |
Payments by subsidiaries for non-controlling interest | -291,330 | |
Short swing profit payment | 67,100 | |
Net cash provided by financing activities | 11,022,872 | 3,875,518 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 819,707 | 10,631 |
CASH AND CASH EQUIVALENTS, beginning of period | 26,943 | 16,312 |
CASH AND CASH EQUIVALENTS, end of period | 846,650 | 26,943 |
SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITES | ||
Cash paid for interest | 54,908 | 13,500 |
SUPPLEMENTAL DISCLOSURE FOR FINANCING ACTIVITIES | ||
Warrant expense | $5,038,986 | $1,355,990 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Organization |
We were incorporated in Nevada on July 22, 2008, under the name Private Secretary, Inc. The Company’s original business was developing a software program that would allow for automatic call processing through voice-over-Internet protocol, or “VoIP”, technology. Our operations were limited to capital formation, organization, and development of our business plan and target customer market. We generated no revenue. We changed our name to Terra Tech Corp. on January 27, 2012. We are pioneering the future by integrating the best of the natural world with technology to create sustainable solutions for food production, indoor cultivation, rare and exotic plants, and agricultural research and development. Through our wholly-owned subsidiary, GrowOp Technology Ltd., a Nevada corporation (“GrowOp Technology”), we engage in the design, marketing and sale of hydroponic equipment with proprietary technology to create sustainable solutions for the cultivation of indoor agriculture. We are also a retail seller of locally grown hydroponic produce through our wholly-owned subsidiary, Edible Garden Corp., a Nevada corporation (“Edible Garden”). Through MediFarm, LLC, a Nevada limited liability company (“MediFarm”), MediFarm I, LLC, a Nevada limited liability company (“MediFarm I”), and MediFarm II, LLC, a Nevada limited liability company (“MediFarm II”), subsidiaries in which we own interests in, we plan to operate medical marijuana cultivation, production, and dispensary facilities in Nevada. Most recently, we formed another wholly-owned subsidiary, IVXX, LLC, a Nevada limited liability company (“IVXX”), for the purpose of producing and selling a line of cannabis flowers, cigarettes, and pure concentrates. | |
Recent Developments | |
On February 9, 2012, we completed a reverse-triangular merger with GrowOp Technology, whereby we acquired all of the issued and outstanding shares of GrowOp Technology and in exchange we issued: (i) 33,998,520 shares of our Common Stock, (ii) 100 shares of Series A Preferred Stock, convertible into shares of Common Stock on a one-for-one basis, and (iii) 14,750,000 shares of Series B Preferred Stock, with each share convertible into 5.38425537 shares of Common Stock. The issuance represented approximately 50.3% of our total shares of Common Stock outstanding, assuming the conversion of all the shares of Series A Preferred Stock and Series B Preferred Stock, immediately following the closing of the merger. As a result of the merger, GrowOp Technology became our wholly-owned subsidiary. Following the merger, we ceased our prior operations and are now solely a holding company. | |
We acquired our second wholly-owned subsidiary, Edible Garden, in 2013. Edible Garden is a retail seller of locally grown hydroponic produce, which is distributed throughout Florida, the Midwest and the Northeast United States. We entered into a Share Exchange Agreement, dated March 23, 2013 (the “Share Exchange Agreement”), by and among the Company, Edible Garden, and the stockholders of Edible Garden. Pursuant to the Share Exchange Agreement, we offered and sold 1,250,000 shares of our Common Stock in consideration for all the issued and outstanding shares in Edible Garden. Separately, Amy Almsteier, our stockholder, and an officer and director, offered and sold 7,650,000 shares of Series B Preferred Stock to Ken Vande Vrede, Mike Vande Vrede, Steve Vande Vrede, Dan Vande Vrede, Beverly Willekes, and David Vande Vrede (collectively, the “Former EG Principal Stockholders”). The 7,650,000 shares of Series B Preferred Stock is convertible at any time into 36,344,198 shares of Common Stock and have voting power equal to 765,000,000 shares of Common Stock. | |
The effect of the issuance of the 1,250,000 shares of Common Stock and the sale of the 7,650,000 shares of Series B Preferred Stock by Ms. Almsteier was that the Former EG Principal Stockholders held approximately 25.7% of the issued and outstanding shares of Common Stock of the Company and approximately 43.3% of the voting power of the Company as of March 23, 2013. Articles of Exchange, consummating the share exchange, were filed with the Secretary of the State of Nevada on April 24, 2013. | |
On March 19, 2014, we formed MediFarm, a subsidiary. On July 18, 2014, we formed MediFarm I, a subsidiary. On July 30, 2014, we formed MediFarm II, a subsidiary. Through MediFarm, MediFarm I, and MediFarm II, we plan to operate medical marijuana cultivation, production, and dispensary facilities establishments in Nevada. | |
On September 16, 2014, we formed IVXX for the purposes of producing a line of cannabis flowers, cigarettes, and pure concentrates including: oils, waxes, shatters, and clears. The science of cannabis concentrate extraction functions on the solubility of the cannabinoids and other active ingredients in the cannabis plant. Cannabinoids are not water soluble, so to extract them properly the cannabinoids must be dissolved in a solvent. Co2 functions as a solvent when it is heated or cooled and pushed through the flower at high (supercritical) or low (subcritical) pressures. Many argue that Co2 extraction is the least-toxic form of cannabis concentrate extraction because of its low environmental impact and nonexistent toxicity. IVXX has chosen the Co2 extraction method and uses its supercritical Co2 extractor, as well as other proprietary processes, to produce its concentrates in its lab located in Oakland, California. Essentially, our supercritical Co2 extractor processes raw cannabis plants and separates the chemical cannabinoids from the cannabis plant material, producing a concentrate. IVXX also expects to sell clothing, apparel, and other various branded products. | |
The accompanying unaudited condensed financial statements include all of the accounts of Terra Tech. These condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for financial information and with the instructions to Form 10-K and Regulation S-X. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. | |
Use of Estimates | |
The preparation of the financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
Cash and Cash Equivalents | |
Cash and all highly liquid investments with a maturity of three months or less from the date of purchase, including money market mutual funds, short-term time deposits, and government agency and corporate obligations, are classified as cash and cash equivalents. | |
Accounts Receivable | |
The Company reviews all outstanding accounts receivable for collectability on a quarterly basis. An allowance for doubtful accounts is recorded for any amounts deemed uncollectable. The Company does not accrue interest receivable on past due accounts receivable. There was an allowance of $49,168 at December 31, 2014 and $52,000 at December 31, 2013. | |
Property and Equipment | |
Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets: 3-15 years for machinery and equipment, leasehold improvements are amortized over the estimated useful life. Repairs and maintenance expenditures which do not extend the useful lives of related assets are expensed as incurred. | |
Intangibles | |
Intangible assets with definite lives are amortized, but are tested for impairment quarterly and when an event occurs or circumstances change such that it is more likely than not that an impairment may exist. We test intangibles for impairment by first comparing the carrying value of net assets to the fair value of the related operations. If the fair value is determined to be less than carrying value, a second step is performed to compute the amount of the impairment. In this process, a fair value for intangibles is estimated, based in part on the fair value of the operations, and is compared to its carrying value. The shortfall of the fair value below carrying value represents the amount of intangible impairment. We test these intangibles for impairment by comparing their carrying value to current projections of discounted cash flows attributable to the customer list. Any excess carrying value over the amount of discounted cash flows represents the amount of the impairment. | |
Deposits | |
Deposits are for a store and land in Nevada. | |
Revenue Recognition | |
Revenue is recognized net of discounts, rebates, promotional adjustments, price adjustments and estimated returns and upon transfer of title and risk to the customer which occurs at shipping (F.O.B. terms). Upon shipment, the Company has no further performance obligations and collection is reasonably assured as the majority of sales are paid for prior to shipping. | |
Cost of Goods Sold | |
Cost of goods sold are for the plants purchased and sold into the retail marketplace. | |
Research and Development | |
Research and development costs are expensed as incurred. | |
Income Taxes | |
The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expenses are expected to be settled in the Company’s income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. Accordingly, for Federal and state income tax purposes, the benefit for income taxes has been offset entirely by a valuation allowance against the related federal and state deferred tax asset for the year ended December 31, 2014. | |
Loss Per Common Share | |
Net loss per share, in accordance with the provisions of ASC 260, “Earnings Per Share” is computed by dividing net loss by the weighted average number of 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 income (loss) per share calculation since the effect would be anti-dilutive. The results of operations were a net loss for the year ended December 31, 2014, therefore the basic and diluted weighted average common shares outstanding were the same. | |
Fair Value of Financial Instruments | |
The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: | |
Level 1 – Quoted prices in active markets for identical assets or liabilities. | |
Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. | |
The Company’s valuation techniques used to measure the fair value of money market funds and certain marketable equity securities were derived from quoted prices in active markets for identical assets or liabilities. The valuation techniques used to measure the fair value of all other financial instruments, all of which have counterparties with high credit ratings, were valued based on quoted market prices or model driven valuations using significant inputs derived from or corroborated by observable market data. | |
In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value. The Company has not elected the fair value option for any eligible financial instruments. | |
Recently Issued Accounting Standards | |
Management does not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow. |
GOING_CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
Note 2. GOING CONCERN | The Company’s future success is dependent upon its ability to achieve profitable operations and generate cash from operating activities, and upon additional financing. Management believes they can raise the appropriate funds needed to support their business plan and develop an operating company which is cash flow positive. |
However, the Company has incurred net losses for the year ended December 31, 2014 and has accumulated a deficit of approximately $36.7 million at December 31, 2014. The Company has not been able to generate sufficient cash from operating activities to fund its ongoing operations. There is no guarantee that the Company will be able to generate enough revenue and/or raise capital to support its operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. | |
The condensed financial statements do not include any adjustments relating to the recoverability or classification of recorded assets and liabilities that might result should the Company be unable to continue as a going concern. |
CONCENTRATIONS_OF_BUSINESS_AND
CONCENTRATIONS OF BUSINESS AND CREDIT RISK | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
Note 3. CONCENTRATIONS OF BUSINESS AND CREDIT RISK | The Company maintains cash balances in several financial institutions which are insured by the Federal Deposit Insurance Corporation up to certain federal limitations. |
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. |
SHARE_EXCHANGE
SHARE EXCHANGE | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Notes to Financial Statements | |||||
Note 4. SHARE EXCHANGE | On April 24, 2013, the shareholders of the Company entered into a definitive agreement pursuant to which its shareholders exchanged common stock of Edible Garden for Common Stock of the Company. Under the agreement the Company acquired the customer list. Under the terms of this agreement the Company paid 1,250,000 shares of Common Stock valued at $212,500. | ||||
The transaction was accounted for as a business acquisition. In accordance with generally accepted accounting principles, intangible assets are recorded at fair values as of the date of the transaction. The Company has preliminarily allocated the $212,500 consideration paid to the acquired assets as follows: | |||||
Cash | 100 | ||||
Intangible assets, customer list | 212,400 | ||||
Fair value acquired | $ | 212,500 | |||
Intangible assets with estimated useful lives are amortized over a 5 year period. Amortization expense was $45,900 for the year ended December 31, 2014. |
REVERSE_MERGER
REVERSE MERGER | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Notes to Financial Statements | |||||
Note 5. REVERSE MERGER | On February 9, 2012, the Company completed a reverse merger transaction through a merger with GrowOp Technology whereby we acquired all of the issued and outstanding shares of GrowOp Technology in exchange for 33,998,520 shares of our Common Stock, which represented approximately 41.4% of our total shares outstanding immediately following the closing of the transaction. As a result of the reverse merger, GrowOp Technology became our wholly-owned subsidiary and the former shareholders of GrowOp Technology became our controlling stockholders. The share exchange transaction with GrowOp Technology was treated as a reverse merger, with GrowOp Technology as the acquiror and the Company as the acquired party. | ||||
On February 26, 2012, pursuant the Agreement and Plan of Merger, the Company issued an aggregate of 100 shares of Series A Preferred Stock and 14,750,000 shares of Series B Preferred Stock to Derek Peterson and Amy Almsteier, both of whom are officers and directors of the Company. The Company exchanged the shares for the Series A Preferred Stock and shares of Series B Preferred Stock issued by GrowOp Technology. | |||||
Purchase Accounting | |||||
The merger was accounted for using the purchase method of accounting as a reverse acquisition. In a reverse acquisition, the post-acquisition net assets of the surviving combined company includes the historical cost basis of the net assets of the accounting acquirer (GrowOp Technologies) plus the fair value of the net assets of the accounting acquiree (Terra Tech). Further, under the purchase method, the purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values and the excess of the purchase price over the estimated fair value of the identifiable net assets is allocated to any intangible assets with the remaining excess purchase price over net assets acquired allocated to goodwill. | |||||
The fair value of the consideration transferred in the merger was $4,800,000 and was calculated as the number of shares of common stock that GrowOp Technologies would have had to issue in order for Terra Tech shareholders to hold a 58.6% equity interest in the combined entity post-merger, multiplied by the estimated fair value of the Company’s Common Stock on the merger date. The estimated fair value of the Company’s Common Stock was based on the offering price of the Common Stock sold in a private placement of share subscriptions, which was completed most recently prior to the merger. This price was determined to be the best indication of fair value on that date since the price was based on an arm’s length negotiation with a group consisting of both new and existing investors that had been advised of the pending merger and assumed similar liquidity risk as those investors holding the majority of shares being valued as purchase consideration. | |||||
The following table summarizes the Company’s determination of fair values of the assets acquired and the liabilities as of the date of merger. | |||||
Consideration - issuance of securities | $ | 4,800,000 | |||
Cash | $ | 35 | |||
Goodwill | 4,799,965 | ||||
Total purchase price | $ | 4,800,000 | |||
The Company performed an impairment test related to goodwill as of the date of the merger and it was determined that goodwill was impaired. At that time, the Company recorded a charge to operations for the amount of the impairment of $4,799,965. |
INVENTORY
INVENTORY | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Note 6. INVENTORY | Inventory consist of raw materials for the Company’s herb product lines. Cost of goods sold are calculated using the average costing method. The Company reviews its inventory periodically to determine net realizable value. The Company writes down inventory, if required, based on forecasted demand. These factors are impacted by market and economic conditions, new products introductions and require estimates that may include uncertain elements. Inventory at December 31, 2014 and December 31, 2013 consisted of the following: | ||||||||
December 31, | December | ||||||||
31, | |||||||||
2014 | 2013 | ||||||||
Raw Materials | $ | 479,682 | $ | - | |||||
Work-In-Progress | 190,498 | - | |||||||
$ | 670,180 | $ | - |
PROPERTY_EQUIPMENT_AND_LEASEHO
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Note 7. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS | Property, equipment and leasehold improvements at cost, less accumulated depreciation, at December 31, 2014 and December 31, 2013 consisted of the following: | ||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Furniture | $ | 53,790 | $ | 31,539 | |||||
Equipment | 2,367,605 | 26,022 | |||||||
Leasehold improvements | 3,468,243 | 10,400 | |||||||
Subtotal | 5,889,638 | 67,961 | |||||||
Less accumulated depreciation | (442,895 | ) | (46,592 | ) | |||||
Total | $ | 5,446,743 | $ | 21,369 | |||||
Depreciation expense related to property and equipment for the year ended December 31, 2014 was $392,883 and for the year ended December 31, 2013 was $9,211. |
ACCOUNTS_PAYABLE_AND_ACCRUED_E
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Note 8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES | Accounts payable and accrued expenses consisted of the following: | ||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Accounts payable | $ | 240,204 | $ | 948,421 | |||||
Accrued officers’ salary | - | 60,000 | |||||||
Accrued interest | 270,918 | 204,898 | |||||||
Accrued payroll taxes | 62,599 | 62,599 | |||||||
$ | 573,721 | $ | 1,275,918 |
NOTE_PAYABLE
NOTE PAYABLE | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Note 9. NOTE PAYABLE | Notes payable is as follows: | ||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Unsecured promissory demand note dated May 7, 2012, issued to an accredited investor, bearing interest at a rate of 4% per annum. Holder may elect to convert into Common Stock at $0.75 per share. | 5,000 | 5,000 | |||||||
Promissory note dated July 26, 2013, issued to an accredited investor, maturing July 15, 2014, bearing interest at a rate of 12% per annum. Principal and interest may be converted into Common Stock based on the average trading price of the ten days prior to maturity at the holders’ option. | 150,000 | 150,000 | |||||||
Unsecured promissory demand notes, issued to an accredited investor, bearing interest at a rate of 4% per annum. Holder may elect to convert into Common Stock at $0.75 per share. | 109,306 | 109,306 | |||||||
Unsecured promissory demand note, issued to an accredited investor, bearing interest at a rate of 15% per annum. | - | 3,474 | |||||||
Senior secured promissory notes dated July 26, 2013, issued to accredited investors, maturing April 26, 2013, bearing interest at a rate of 6% per annum. Principal and interest was converted into Common Stock based on the average trading price of the ten days prior to maturity at the holders’ option during the quarter ended March 31, 2014. | - | 250,000 | |||||||
Senior secured promissory notes dated October 10, 2013, issued to accredited investors, maturing April 5, 2014, bearing interest at a rate of 6% per annum. Principal and interest was converted into Common Stock based on the average trading price of the ten days prior to maturity at the holders’ option during the quarter ended March 31, 2014. | - | 54,900 | |||||||
Senior secured promissory note dated October 10, 2013, issued to an accredited investor, maturing May 22, 2014, bearing interest at a rate of 6% per annum. Principal and interest may be converted into Common Stock based on the average trading price of the ten days prior to maturity at the holders’ option. $50,000 was converted during the six months ended June 30, 2014. | 50,000 | - | |||||||
Senior secured promissory notes dated November 22, 2013, issued to accredited investors, maturing May 15, 2014, bearing interest at a rate of 6% per annum. Principal and interest may be converted into Common Stock based on the average trading price of the ten days prior to maturity at the holders’ option. $175,000 was converted during the quarter ended March 31, 2014. $100,000 principal plus accrued interest was paid during the quarter ended March 31, 2014. | 275,000 | - | |||||||
Senior secured promissory notes dated December 5, 2013, issued to accredited investors, maturing July 1, 2014, bearing interest at a rate of 12% per annum. Principal and interest was converted into equity during the year ended December 31, 2014. | 300,000 | - | |||||||
5% Original issue discount senior secured convertible promissory note dated March 5, 2014, issued to accredited investors, bearing interest at a rate of 12% per annum. The fixed conversion price in effect shall be 90% of the 20 day VWAP of Company Common Stock prior to February 5, 2014. | 248,902 | - | |||||||
5% Original issue discount senior secured convertible promissory note dated May 5, 2014, issued to accredited investors, bearing interest at a rate of 12% per annum. The fixed conversion price in effect shall be 90% of the 20 day VWAP of Company Common Stock prior to February 5, 2014. | 482,456 | - | |||||||
5% Original issue discount senior secured convertible promissory dated June 5, 2014, issued to accredited investors, bearing interest at a rate of 12% per annum. The fixed conversion price in effect shall be 90% of the 20 day VWAP of Company Common Stock prior to February 5, 2014. | 146,197 | - | |||||||
5% Original issue discount senior secured convertible promissory note dated July 1, 2014, issued to accredited investors, bearing interest at a rate of 12% per annum. The fixed conversion price in effect shall be 90% of the 20 day VWAP of Company Common Stock prior to February 5, 2014. | 547,948 | - | |||||||
5% Original issue discount senior secured convertible promissory note dated July 31, 2014, issued to accredited investors, bearing interest at a rate of 12% per annum. The fixed conversion price in effect shall be 90% of the 20 day VWAP of Company Common Stock prior to February 5, 2014. | 2,894,739 | - | |||||||
$ | 4,615,547 | $ | 1,197,680 | ||||||
The senior secured promissory notes are secured by shares of Common Stock. There is accrued interest of $270,918 as of December 31, 2014. |
LOANS_FROM_RELATED_PARTY
LOANS FROM RELATED PARTY | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Note 10. LOANS FROM RELATED PARTY | Notes payable to related parties are as follows: | ||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Unsecured promissory note dated December 2, 2011 and due December 2, 2012, issued to an entity controlled by Michael James, an officer of the Company, bearing interest at a rate of 15% per annum. The maturity date was extended until March 31, 2014. Interest shall be paid in cash or common stock at the holders’ option. Principal in the amount of $30,000 was paid during the quarter ended March 31, 2014. | $ | - | $ | 30,000 | |||||
Unsecured promissory note dated December 2, 2011 and due December 2, 2012, issued to Michael Nahass a director of the Company, bearing interest at a rate of 15% per annum. The maturity date was extended until March 31, 2014. Interest shall be paid in cash or common stock at the holders’ option. During the year ended December 31, 2013, $17,502 has been advanced to the Company. Principal in the amount of $72,500 was paid during the quarter ended March 31, 2014. | $ | - | $ | 72,500 | |||||
$ | - | $ | 102,500 |
TAX
TAX | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Notes to Financial Statements | ||||||||||
Note 11. TAX | The Company incurred no current or deferred tax expense during the years ended December 31, 2014 and 2013. | |||||||||
The components of deferred tax assets and liabilities: | ||||||||||
December 31, | December 31, | |||||||||
2014 | 2013 | |||||||||
Deferred income tax assets: | ||||||||||
Allowance for bad debt | $ | 21 | $ | - | ||||||
Warrants expense | 2,216,000 | - | ||||||||
Derivatives expense | 1,274,000 | - | ||||||||
Net operating losses | 3,227,000 | 70,700 | ||||||||
6,738,747 | 70,700 | |||||||||
Valuation allowance | (6,738,000 | ) | (70,700 | ) | ||||||
Net deferred tax assets | $ | - | $ | - | ||||||
For the years ended December 31, 2014 and 2013, a reconciliation of the federal statutory tax rate to the Company's effective tax rate is as follows: | ||||||||||
Effective Tax Rate | December 31, | December 31, | ||||||||
2014 | 2013 | |||||||||
Federal statutory | 35 | % | 35 | % | ||||||
State and local, net of federal | 5.84 | % | 5.84 | % | ||||||
Change in Valuation allowance | -40.84 | % | -40.84 | % | ||||||
Total effective tax rate | 0 | % | 0 | % | ||||||
Permanent differences include ordinary and necessary business expenses deemed by the Company as a non-allowable deduction under IRC § 280E, and tax deductions related to equity compensation that are less than the compensation recognized for financial reporting. | ||||||||||
As of December 31, 2014, and December 31, 2013, the Company has net operating loss carryforwards of approximately $3,200,000 and $202,000, respectively, which, if unused, will expire beginning in years 2034. These tax attributes are subject to an annual limitation from equity shifts, which constitute a change of ownership as defined under Internal Revenue Code Section 382. | ||||||||||
Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative losses incurred through the period ended December 31, 2014. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth. On the basis of this evaluation, as of December 31, 2014, a valuation allowance of approximately $6,700,000 has been recorded against all deferred tax assets as these assets are more likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth. |
CAPITAL_STOCK
CAPITAL STOCK | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
Note 12. CAPITAL STOCK | Preferred Stock |
The Company has authorized 25 million shares of preferred stock with $0.001 par value, of which there were 100 shares of Series A Convertible Preferred Stock outstanding as of December 31, 2014. Series A Convertible Preferred Stock is convertible on a one-for-one basis into Common Stock and has all of the voting rights that the holders of our Common Stock has. | |
There were 15,500,000 shares of Series B Convertible Preferred Stock outstanding as of December 31, 2014. The Series B Convertible Preferred shares has all of the voting rights that the holders of our Common Stock, has voting power equal to 100 shares of Common Stock, and is convertible into shares of Common Stock on a 1-for-5.384325537 basis. | |
On February 26, 2012, pursuant the Agreement and Plan of Merger, the Company issued an aggregate of 14,750,000 shares of Series B Preferred Stock to Derek Peterson and Amy Almsteier, both of whom are officers and directors of the Company. On April 23, 2013, we entered into a Share Exchange Agreement, by and among the Company, Edible Garden, and the holders of common stock of Edible Garden. Amy Almsteier, our majority shareholder, and officer and director, offered and sold 7,650,000 of her 12,500,000 shares of Series B Preferred Stock to the Former EG Principal Stockholders, each of whom acquired the Series B Preferred Stock on a pro-rata basis, based on their respective percentage of equity interest in Edible Garden immediately prior to the consummation of the Share Exchange Agreement. | |
Common Stock | |
The Company has authorized 350 million shares of Common Stock with $0.001 par value, of which there were issued and outstanding 197,532,892 as of December 31, 2014. |
WARRANTS
WARRANTS | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Notes to Financial Statements | |||||||||||||
Note 13. WARRANTS | The Company has the following shares of Common Stock reserved for the warrants outstanding as of December 31, 2014: | ||||||||||||
31-Dec-14 | |||||||||||||
Weighted | |||||||||||||
Average | |||||||||||||
Exercise | |||||||||||||
Shares | Price | ||||||||||||
Warrants outstanding – beginning of year | 19,550,817 | $ | 0.17 | ||||||||||
Warrants exercised | (10,332,199 | ) | 0.19 | ||||||||||
Warrants granted | 11,491,227 | 0.3 | |||||||||||
Warrants expired | - | - | |||||||||||
Warrants outstanding – end of period | 20,709,845 | $ | 0.23 | ||||||||||
The weighted exercise price and weighted fair value of the warrants granted by the Company as of December 31, 2014, are as follows: | |||||||||||||
31-Dec-14 | |||||||||||||
Weighted Average | Weighted | ||||||||||||
Average | |||||||||||||
Exercise Price | Fair Value | ||||||||||||
Weighted average of warrants granted during the twelve months whose exercise price exceeded fair market value at the date of grant | $ | 0.3 | $ | 0.45 | |||||||||
The following table summarizes information about fixed-price warrants outstanding: | |||||||||||||
Number | Average | ||||||||||||
Range of | Outstanding at | Remaining | Weighted | ||||||||||
Exercise | December 31, | Contractual | Average | ||||||||||
Prices | 2014 | Life | Exercise Price | ||||||||||
$ | 0.33 | 3,154,800 | 1 Month | $ | 0.33 | ||||||||
$ | 0.33 | 564,000 | 2 Months | $ | 0.33 | ||||||||
$ | 0.33 | 264,000 | 3 Months | $ | 0.33 | ||||||||
$ | 0.33 | 1,188,000 | 4 Months | $ | 0.33 | ||||||||
$ | 0.33 | 120,000 | 5 Months | $ | 0.33 | ||||||||
$ | 0.33 | 249,600 | 6 Months | $ | 0.33 | ||||||||
$ | 0.46 | 600,000 | 8 Months | $ | 0.46 | ||||||||
$ | 0.46 | 150,000 | 13 Months | $ | 0.46 | ||||||||
$ | 0.85 | 40,000 | 16 Months | $ | 0.85 | ||||||||
$ | 0.4 | 333,333 | 20 Months | $ | 0.4 | ||||||||
$ | 0.33 | 439,637 | 25 Months | $ | 0.33 | ||||||||
$ | 0.16 | 750,000 | 27 Months | $ | 0.16 | ||||||||
$ | 0.3 | 964,912 | 43 Months | $ | 0.3 | ||||||||
$ | 0.3 | 4,824,561 | 44 Months | $ | 0.3 | ||||||||
$ | 0.06 | 7,067,002 | 46 Months | $ | 0.06 | ||||||||
20,709,845 | |||||||||||||
For the warrants issued in February 2014, the Company valued the warrants utilizing the black scholes method with the following inputs: stock price of $0.57, exercise price of $0.330, volatility of 122.84%, years 4, treasury bond rate 2.5%, and dividend rate of 0%. | |||||||||||||
For the warrants issued in March 2014, the Company valued the warrants utilizing the black scholes method with the following inputs: stock price of $0.50, exercise price of $0.30, volatility of 122.61%, years 4, treasury bond rate 2.5%, and dividend rate of 0%. | |||||||||||||
For the warrants issued in April 2014, the Company valued the warrants utilizing the black scholes method with the following inputs: stock price of $0.80, exercise price of $0.30, volatility of 125.88%, years 4, treasury bond rate 2.5%, and dividend rate of 0%. | |||||||||||||
For the warrants issued in May 2014, the Company valued the warrants utilizing the black scholes method with the following inputs: stock price of $0.59, exercise price of $0.30, volatility of 127.68%, years 4, treasury bond rate 2.5%, and dividend rate of 0%. | |||||||||||||
For the warrants issued in June 2014, the Company valued the warrants utilizing the black scholes method with the following inputs: stock price of $0.68, exercise price of $0.30, volatility of 130.55%, years 4, treasury bond rate 2.5%, and dividend rate of 0%. | |||||||||||||
For the warrants issued in July 2014, the Company valued the warrants utilizing the black scholes method with the following inputs: stock price of $0.55, exercise price of $0.30, volatility of 130.71%, years 4, treasury bond rate 2.5%, and dividend rate of 0%. | |||||||||||||
For the warrants issued in July 2014, the Company valued the warrants utilizing the black scholes method with the following inputs: stock price of $0.40, exercise price of $0.30, volatility of 131.05%, years 4, treasury bond rate 2.5%, and dividend rate of 0%. | |||||||||||||
The warrant expense of $5,038,986 was based on the Black Scholes calculation, which was expensed during the year ended December 31, 2014. |
OPERATING_LEASE_COMMITMENTS
OPERATING LEASE COMMITMENTS | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Notes to Financial Statements | ||||||
Note 14. OPERATING LEASE COMMITMENTS | The Company leases certain business facilities under operating lease agreements which specify minimum rentals. Many of these have renewal provisions along with the option to acquire the property. Net rent expense for the Company for the year ended December 31, 2014 and 2013 was $367,204 and $54,408, respectively. Future minimum lease payments under non-cancelable operating leases having an initial or remaining term of more than one year are as follows: | |||||
Scheduled | ||||||
Year Ending December 31: | Payments | |||||
2015 | $ | 539,705 | ||||
2016 | 541,656 | |||||
2017 | 487,517 | |||||
2018 | 478,587 | |||||
2019 | 342,336 | |||||
2020 and thereafter | 2,277,656 | |||||
Total minimum rental payments | $ | 4,667,457 |
LITIGATION_AND_CLAIMS
LITIGATION AND CLAIMS | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
Note 15. LITIGATION AND CLAIMS | From time to time, the Company may be involved in various legal proceedings and claims arising in the ordinary course of business. The disposition of these additional matters, which may occur, individually or in the aggregate, is not expected to have a material adverse effect on the Company’s financial condition. However, depending on the amount and timing of such disposition, an unfavorable resolution of some or all of these matters could materially affect the future results of operations or cash flows in a particular period. |
As of December 31, 2014, there was no accrual recorded for any potential losses related to pending litigation. |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Notes to Financial Statements | |||||||||||||||||
Note 16. SEGMENT INFORMATION | Our operating and reportable segments are currently organized around the following products that we offer as part of our core business strategy: | ||||||||||||||||
· | Hydroponic Produce | ||||||||||||||||
· | Cannabis Products | ||||||||||||||||
These two reportable segments, described in greater detail below, had previously been reported on a combined basis as they had been operated and evaluated as one operating segment. We experienced significant growth over the last year in most of our product areas. As we have grown organically, and as we have added to our capabilities through acquisitions, our products have increased in scale and become more strategically important and distinctly organized and managed under these two groupings. In addition, our chief operating decision maker (“CODM”) has begun reviewing results and managing and allocating resources among these two strategic business groupings, and we have begun budgeting using these business segments. Our segment information for the year ended December 31, 2013 has been reclassified to conform to our current presentation. | |||||||||||||||||
Our CODM reviews revenues including intersegment revenues, gross profit and operating income (loss) before income taxes when evaluating segment performance and allocating resources to each segment. Accordingly, intersegment revenue is included in the segment revenues presented in the tables below and is eliminated from revenues and cost of sales in the “Eliminations and Other” column. The “Eliminations and Other” column also includes various income and expense items that we do not allocate to our operating segments. These income and expense amounts include the results of our hydroponic equipment which are not material, interest income, interest expense, corporate overhead and corporate-wide expense items such as legal and professional fees as well as expense items for which we have not identified a reasonable basis for allocation. The accounting policies of the reportable segments are the same as those described in Note 2 of the notes to the consolidated financial statements. | |||||||||||||||||
Hydroponic Produce – Our locally grown hydroponic produce is started from seed and is grown in environmentally controlled greenhouses. When harvested the products are sold through retailers targeted to customers seeking fresh produce locally grown using environmentally sustainable methods. | |||||||||||||||||
Cannabis Products – Our cannabis products are currently produced in our lab in California and will be sold in California. The Company was granted eight provisional permits in Nevada and has received approval from the local authorities with respect to six of the eight permits. The Company plans to operate medical marijuana cultivation, production, and dispensary facilities in Nevada through its subsidiaries. | |||||||||||||||||
Summarized financial information concerning our reportable segments is shown in the following tables. Total asset amounts at December 31, 2014 and 2013 exclude intercompany receivable balances eliminated in consolidation. | |||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
Hydroponic | Cannabis | Eliminations | |||||||||||||||
Produce | Products | and Other | Total | ||||||||||||||
Total Revenues | $ | 6,627,109 | $ | - | $ | 467,161 | $ | 7,094,270 | |||||||||
Cost of Goods Sold | 6,667,967 | - | 273,311 | 6,941,278 | |||||||||||||
(40,858 | ) | - | 193,850 | 152,992 | |||||||||||||
Selling, general and administrative expenses | 1,506,684 | 1,115,577 | 15,705,530 | 18,327,791 | |||||||||||||
Loss from operations | (1,547,542 | ) | (1,115,577 | ) | (19,506,200 | ) | (18,174,799 | ) | |||||||||
Other Income (Expenses) | |||||||||||||||||
Loss from derivatives issued with debt greater than debt carrying value | - | - | (4,808,000 | ) | (4,808,000 | ) | |||||||||||
Gain (Loss) on fair market valuation of derivatives | - | - | 1,912,037 | 1,912,037 | |||||||||||||
Interest Income (Expense) | 2,232 | - | (1,098,557 | ) | (1,096,325 | ) | |||||||||||
Total Other Income (Expense) | 2,232 | - | (3,994,520 | ) | (3,992,288 | ) | |||||||||||
Loss before Provision of Income Taxes | $ | (1,545,310 | ) | $ | (1,115,577 | ) | $ | (19,506,200 | ) | $ | (22,167,087 | ) | |||||
Total assets at December 31, 2014 | $ | 5,956,861 | $ | 858,180 | $ | 904,185 | $ | 7,719,226 | |||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Hydroponic | Cannabis | Eliminations | |||||||||||||||
Produce | Products | and Other | Total | ||||||||||||||
Total Revenues | $ | 1,936,054 | $ | - | $ | 189,797 | $ | 2,125,851 | |||||||||
Cost of Goods Sold | 1,955,203 | - | 81,730 | 2,036,933 | |||||||||||||
(19,149 | ) | - | 108,067 | 88,918 | |||||||||||||
Selling, general and administrative expenses | 201,953 | - | 3,373,944 | 3,575,897 | |||||||||||||
Loss from operations | (221,102 | ) | - | (3,265,877 | ) | (3,486,979 | ) | ||||||||||
Other Income (Expenses) | |||||||||||||||||
Loss from derivatives issued with debt greater than debt carrying value | - | - | (2,054,000 | ) | (2,054,000 | ) | |||||||||||
Gain (Loss) on fair market valuation of derivatives | - | - | 673,000 | 673,000 | |||||||||||||
Interest Income (Expense) | (651 | ) | - | (1,278,070 | ) | (1,278,721 | ) | ||||||||||
Total Other Income (Expense) | (651 | ) | - | (2,659,070 | ) | (2,659,721 | ) | ||||||||||
Loss before Provision of Income Taxes | $ | (221,753 | ) | $ | - | $ | (5,924,947 | ) | $ | (6,146,700 | ) | ||||||
Total assets at December 31, 2013 | $ | 3,250,788 | $ | - | $ | 789,797 | $ | 4,040,585 |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
Note 17. RELATED PARTY TRANSACTIONS | During the year the Company sold equipment amounting to $74,016 to an entity in which our President, Chief Executive Officer, and Chairman of our Board, has an ownership interest. The equipment was sold on an arms-length basis. There was an accounts receivable balance from this entity in the amount of $58,850 as of December 31, 2014. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
Note 18. SUBSEQUENT EVENTS | On February 27, 2015, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain purchasers (the “Purchasers”) relating to the issuance and sale (the “Offering”) of (i) 12% Convertible Promissory Notes (the “Notes”) in the aggregate principal amount of Three Million Dollars ($3,000,000), that are convertible into shares (the “Conversion Shares”) of our common stock, par value $0.001 per share (the “Common Stock”), and (ii) warrants (the “Warrants”) to acquire shares (the “Warrant Shares”) of our Common Stock pursuant to the terms of the Purchase Agreement. The purchase of the Notes is expected to occur in six (6) tranches (each, a “Tranche”, and, collectively, the “Tranches”), with the first Tranche of $750,000 closing simultaneously with the execution of the Purchase Agreement. Each additional Tranche is expected to be in the amount of $450,000 and, as long as we are not in default of the Notes, each Tranche is expected to close on every 30th day following the previous closing date; however, the closing of the third through sixth Tranches is subject to the mutual agreement of the parties. |
We agreed to reimburse the Purchasers $15,000 for legal fees incurred in connection with the Offering to be paid at the closing of the first Tranche. Aegis Capital Corp. (the “Placement Agent” or “Aegis”) served as the placement agent in connection with this Offering and, in exchange for its services, earned an advisory fee equal to approximately $31,000. Aegis will receive additional compensation for each additional Tranche. Certain affiliates of Aegis are participants in the Offering; however, Aegis will not receive an advisory fee on any capital invested by affiliates of Aegis. | |
The Purchase Agreement contains customary representations, warranties, and covenants by, among, and for the benefit of the parties. The Purchasers were granted customary participation rights in future financings. The Purchase Agreement also limits our ability to engage in subsequent equity sales for a certain period of time. | |
The proceeds from the Offering are intended to be used for general corporate proceeds and cannot be used: (i) for the satisfaction of any portion of our debt (other than payment of trade payables in the ordinary course of our business and prior practices), (ii) for the redemption of our Common Stock or Common Stock equivalents, (iii) for the settlement of any outstanding litigation, or (iv) in violation of the Foreign Corrupt Practices Act or the Office of Foreign Assets Control. | |
The Offering is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Act”), pursuant to Section 4(a)(2) of the Act (in that the Notes, the Conversion Shares, the Warrants, and the Warrant Shares were sold by us in a transaction not involving any public offering) and pursuant to Rule 506 of Regulation D promulgated thereunder. The Notes, the Conversion Shares, the Warrants, and the Warrant Shares are restricted securities that have not been registered under the Act, and will not be registered under the Act, and may not be offered or sold absent registration or applicable exemption from the registration requirements. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Summary Of Significant Accounting Policies Policies | |
Organization | We were incorporated in Nevada on July 22, 2008, under the name Private Secretary, Inc. The Company’s original business was developing a software program that would allow for automatic call processing through voice-over-Internet protocol, or “VoIP”, technology. Our operations were limited to capital formation, organization, and development of our business plan and target customer market. We generated no revenue. We changed our name to Terra Tech Corp. on January 27, 2012. We are pioneering the future by integrating the best of the natural world with technology to create sustainable solutions for food production, indoor cultivation, rare and exotic plants, and agricultural research and development. Through our wholly-owned subsidiary, GrowOp Technology Ltd., a Nevada corporation (“GrowOp Technology”), we engage in the design, marketing and sale of hydroponic equipment with proprietary technology to create sustainable solutions for the cultivation of indoor agriculture. We are also a retail seller of locally grown hydroponic produce through our wholly-owned subsidiary, Edible Garden Corp., a Nevada corporation (“Edible Garden”). Through MediFarm, LLC, a Nevada limited liability company (“MediFarm”), MediFarm I, LLC, a Nevada limited liability company (“MediFarm I”), and MediFarm II, LLC, a Nevada limited liability company (“MediFarm II”), subsidiaries in which we own interests in, we plan to operate medical marijuana cultivation, production, and dispensary facilities in Nevada. Most recently, we formed another wholly-owned subsidiary, IVXX, LLC, a Nevada limited liability company (“IVXX”), for the purpose of producing and selling a line of cannabis flowers, cigarettes, and pure concentrates. |
Recent Developments | On February 9, 2012, we completed a reverse-triangular merger with GrowOp Technology, whereby we acquired all of the issued and outstanding shares of GrowOp Technology and in exchange we issued: (i) 33,998,520 shares of our Common Stock, (ii) 100 shares of Series A Preferred Stock, convertible into shares of Common Stock on a one-for-one basis, and (iii) 14,750,000 shares of Series B Preferred Stock, with each share convertible into 5.38425537 shares of Common Stock. The issuance represented approximately 50.3% of our total shares of Common Stock outstanding, assuming the conversion of all the shares of Series A Preferred Stock and Series B Preferred Stock, immediately following the closing of the merger. As a result of the merger, GrowOp Technology became our wholly-owned subsidiary. Following the merger, we ceased our prior operations and are now solely a holding company. |
We acquired our second wholly-owned subsidiary, Edible Garden, in 2013. Edible Garden is a retail seller of locally grown hydroponic produce, which is distributed throughout Florida, the Midwest and the Northeast United States. We entered into a Share Exchange Agreement, dated March 23, 2013 (the “Share Exchange Agreement”), by and among the Company, Edible Garden, and the stockholders of Edible Garden. Pursuant to the Share Exchange Agreement, we offered and sold 1,250,000 shares of our Common Stock in consideration for all the issued and outstanding shares in Edible Garden. Separately, Amy Almsteier, our stockholder, and an officer and director, offered and sold 7,650,000 shares of Series B Preferred Stock to Ken Vande Vrede, Mike Vande Vrede, Steve Vande Vrede, Dan Vande Vrede, Beverly Willekes, and David Vande Vrede (collectively, the “Former EG Principal Stockholders”). The 7,650,000 shares of Series B Preferred Stock is convertible at any time into 36,344,198 shares of Common Stock and have voting power equal to 765,000,000 shares of Common Stock. | |
The effect of the issuance of the 1,250,000 shares of Common Stock and the sale of the 7,650,000 shares of Series B Preferred Stock by Ms. Almsteier was that the Former EG Principal Stockholders held approximately 25.7% of the issued and outstanding shares of Common Stock of the Company and approximately 43.3% of the voting power of the Company as of March 23, 2013. Articles of Exchange, consummating the share exchange, were filed with the Secretary of the State of Nevada on April 24, 2013. | |
On March 19, 2014, we formed MediFarm, a subsidiary. On July 18, 2014, we formed MediFarm I, a subsidiary. On July 30, 2014, we formed MediFarm II, a subsidiary. Through MediFarm, MediFarm I, and MediFarm II, we plan to operate medical marijuana cultivation, production, and dispensary facilities establishments in Nevada. | |
On September 16, 2014, we formed IVXX for the purposes of producing a line of cannabis flowers, cigarettes, and pure concentrates including: oils, waxes, shatters, and clears. The science of cannabis concentrate extraction functions on the solubility of the cannabinoids and other active ingredients in the cannabis plant. Cannabinoids are not water soluble, so to extract them properly the cannabinoids must be dissolved in a solvent. Co2 functions as a solvent when it is heated or cooled and pushed through the flower at high (supercritical) or low (subcritical) pressures. Many argue that Co2 extraction is the least-toxic form of cannabis concentrate extraction because of its low environmental impact and nonexistent toxicity. IVXX has chosen the Co2 extraction method and uses its supercritical Co2 extractor, as well as other proprietary processes, to produce its concentrates in its lab located in Oakland, California. Essentially, our supercritical Co2 extractor processes raw cannabis plants and separates the chemical cannabinoids from the cannabis plant material, producing a concentrate. IVXX also expects to sell clothing, apparel, and other various branded products. | |
The accompanying unaudited condensed financial statements include all of the accounts of Terra Tech. These condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for financial information and with the instructions to Form 10-K and Regulation S-X. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. | |
Use of Estimates | The preparation of the financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and all highly liquid investments with a maturity of three months or less from the date of purchase, including money market mutual funds, short-term time deposits, and government agency and corporate obligations, are classified as cash and cash equivalents. |
Accounts Receivable | The Company reviews all outstanding accounts receivable for collectability on a quarterly basis. An allowance for doubtful accounts is recorded for any amounts deemed uncollectable. The Company does not accrue interest receivable on past due accounts receivable. There was an allowance of $49,168 at December 31, 2014 and $52,000 at December 31, 2013. |
Property and Equipment | Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets: 3-15 years for machinery and equipment, leasehold improvements are amortized over the estimated useful life. Repairs and maintenance expenditures which do not extend the useful lives of related assets are expensed as incurred. |
Intangibles | Intangible assets with definite lives are amortized, but are tested for impairment quarterly and when an event occurs or circumstances change such that it is more likely than not that an impairment may exist. We test intangibles for impairment by first comparing the carrying value of net assets to the fair value of the related operations. If the fair value is determined to be less than carrying value, a second step is performed to compute the amount of the impairment. In this process, a fair value for intangibles is estimated, based in part on the fair value of the operations, and is compared to its carrying value. The shortfall of the fair value below carrying value represents the amount of intangible impairment. We test these intangibles for impairment by comparing their carrying value to current projections of discounted cash flows attributable to the customer list. Any excess carrying value over the amount of discounted cash flows represents the amount of the impairment. |
Deposits | Deposits are for a store and land in Nevada. |
Revenue Recognition | Revenue is recognized net of discounts, rebates, promotional adjustments, price adjustments and estimated returns and upon transfer of title and risk to the customer which occurs at shipping (F.O.B. terms). Upon shipment, the Company has no further performance obligations and collection is reasonably assured as the majority of sales are paid for prior to shipping. |
Cost of Goods Sold | Cost of goods sold are for the plants purchased and sold into the retail marketplace. |
Research and Development | Research and development costs are expensed as incurred. |
Income Taxes | The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expenses are expected to be settled in the Company’s income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. Accordingly, for Federal and state income tax purposes, the benefit for income taxes has been offset entirely by a valuation allowance against the related federal and state deferred tax asset for the year ended December 31, 2014. |
Loss Per Common Share | Net loss per share, in accordance with the provisions of ASC 260, “Earnings Per Share” is computed by dividing net loss by the weighted average number of 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 income (loss) per share calculation since the effect would be anti-dilutive. The results of operations were a net loss for the year ended December 31, 2014, therefore the basic and diluted weighted average common shares outstanding were the same. |
Fair Value of Financial Instruments | The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: |
Level 1 – Quoted prices in active markets for identical assets or liabilities. | |
Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. | |
The Company’s valuation techniques used to measure the fair value of money market funds and certain marketable equity securities were derived from quoted prices in active markets for identical assets or liabilities. The valuation techniques used to measure the fair value of all other financial instruments, all of which have counterparties with high credit ratings, were valued based on quoted market prices or model driven valuations using significant inputs derived from or corroborated by observable market data. | |
In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value. The Company has not elected the fair value option for any eligible financial instruments. | |
Recently Issued Accounting Standards | Management does not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow. |
SHARE_EXCHANGE_Tables
SHARE EXCHANGE (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Share Exchange Tables | |||||
Acquired assets | Cash | 100 | |||
Intangible assets, customer list | 212,400 | ||||
Fair value acquired | $ | 212,500 |
REVERSE_MERGER_Tables
REVERSE MERGER (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Reverse Merger Tables | |||||
Fair values of assets acquired and liabilities | Consideration - issuance of securities | $ | 4,800,000 | ||
Cash | $ | 35 | |||
Goodwill | 4,799,965 | ||||
Total purchase price | $ | 4,800,000 |
INVENTORY_Tables
INVENTORY (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory Tables | |||||||||
Inventories | December 31, | December | |||||||
31, | |||||||||
2014 | 2013 | ||||||||
Raw Materials | $ | 479,682 | $ | - | |||||
Work-In-Progress | 190,498 | - | |||||||
$ | 670,180 | $ | - |
PROPERTY_EQUIPMENT_AND_LEASEHO1
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property Equipment And Leasehold Improvements Tables | |||||||||
Property and equipment | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Furniture | $ | 53,790 | $ | 31,539 | |||||
Equipment | 2,367,605 | 26,022 | |||||||
Leasehold improvements | 3,468,243 | 10,400 | |||||||
Subtotal | 5,889,638 | 67,961 | |||||||
Less accumulated depreciation | (442,895 | ) | (46,592 | ) | |||||
Total | $ | 5,446,743 | $ | 21,369 |
ACCOUNTS_PAYABLE_AND_ACCRUED_E1
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounts Payable And Accrued Expenses Tables | |||||||||
Accounts payable and accrued expenses | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Accounts payable | $ | 240,204 | $ | 948,421 | |||||
Accrued officers’ salary | - | 60,000 | |||||||
Accrued interest | 270,918 | 204,898 | |||||||
Accrued payroll taxes | 62,599 | 62,599 | |||||||
$ | 573,721 | $ | 1,275,918 |
NOTE_PAYABLE_Tables
NOTE PAYABLE (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Note Payable Tables | |||||||||
Notes payable | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Unsecured promissory demand note dated May 7, 2012, issued to an accredited investor, bearing interest at a rate of 4% per annum. Holder may elect to convert into Common Stock at $0.75 per share. | 5,000 | 5,000 | |||||||
Promissory note dated July 26, 2013, issued to an accredited investor, maturing July 15, 2014, bearing interest at a rate of 12% per annum. Principal and interest may be converted into Common Stock based on the average trading price of the ten days prior to maturity at the holders’ option. | 150,000 | 150,000 | |||||||
Unsecured promissory demand notes, issued to an accredited investor, bearing interest at a rate of 4% per annum. Holder may elect to convert into Common Stock at $0.75 per share. | 109,306 | 109,306 | |||||||
Unsecured promissory demand note, issued to an accredited investor, bearing interest at a rate of 15% per annum. | - | 3,474 | |||||||
Senior secured promissory notes dated July 26, 2013, issued to accredited investors, maturing April 26, 2013, bearing interest at a rate of 6% per annum. Principal and interest was converted into Common Stock based on the average trading price of the ten days prior to maturity at the holders’ option during the quarter ended March 31, 2014. | - | 250,000 | |||||||
Senior secured promissory notes dated October 10, 2013, issued to accredited investors, maturing April 5, 2014, bearing interest at a rate of 6% per annum. Principal and interest was converted into Common Stock based on the average trading price of the ten days prior to maturity at the holders’ option during the quarter ended March 31, 2014. | - | 54,900 | |||||||
Senior secured promissory note dated October 10, 2013, issued to an accredited investor, maturing May 22, 2014, bearing interest at a rate of 6% per annum. Principal and interest may be converted into Common Stock based on the average trading price of the ten days prior to maturity at the holders’ option. $50,000 was converted during the six months ended June 30, 2014. | 50,000 | - | |||||||
Senior secured promissory notes dated November 22, 2013, issued to accredited investors, maturing May 15, 2014, bearing interest at a rate of 6% per annum. Principal and interest may be converted into Common Stock based on the average trading price of the ten days prior to maturity at the holders’ option. $175,000 was converted during the quarter ended March 31, 2014. $100,000 principal plus accrued interest was paid during the quarter ended March 31, 2014. | 275,000 | - | |||||||
Senior secured promissory notes dated December 5, 2013, issued to accredited investors, maturing July 1, 2014, bearing interest at a rate of 12% per annum. Principal and interest was converted into equity during the year ended December 31, 2014. | 300,000 | - | |||||||
5% Original issue discount senior secured convertible promissory note dated March 5, 2014, issued to accredited investors, bearing interest at a rate of 12% per annum. The fixed conversion price in effect shall be 90% of the 20 day VWAP of Company Common Stock prior to February 5, 2014. | 248,902 | - | |||||||
5% Original issue discount senior secured convertible promissory note dated May 5, 2014, issued to accredited investors, bearing interest at a rate of 12% per annum. The fixed conversion price in effect shall be 90% of the 20 day VWAP of Company Common Stock prior to February 5, 2014. | 482,456 | - | |||||||
5% Original issue discount senior secured convertible promissory dated June 5, 2014, issued to accredited investors, bearing interest at a rate of 12% per annum. The fixed conversion price in effect shall be 90% of the 20 day VWAP of Company Common Stock prior to February 5, 2014. | 146,197 | - | |||||||
5% Original issue discount senior secured convertible promissory note dated July 1, 2014, issued to accredited investors, bearing interest at a rate of 12% per annum. The fixed conversion price in effect shall be 90% of the 20 day VWAP of Company Common Stock prior to February 5, 2014. | 547,948 | - | |||||||
5% Original issue discount senior secured convertible promissory note dated July 31, 2014, issued to accredited investors, bearing interest at a rate of 12% per annum. The fixed conversion price in effect shall be 90% of the 20 day VWAP of Company Common Stock prior to February 5, 2014. | 2,894,739 | - | |||||||
$ | 4,615,547 | $ | 1,197,680 |
LOANS_FROM_RELATED_PARTY_Table
LOANS FROM RELATED PARTY (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Loans From Related Party Tables | |||||||||
Loans from related party | Notes payable to related parties are as follows: | ||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Unsecured promissory note dated December 2, 2011 and due December 2, 2012, issued to an entity controlled by Michael James, an officer of the Company, bearing interest at a rate of 15% per annum. The maturity date was extended until March 31, 2014. Interest shall be paid in cash or common stock at the holders’ option. Principal in the amount of $30,000 was paid during the quarter ended March 31, 2014. | $ | - | $ | 30,000 | |||||
Unsecured promissory note dated December 2, 2011 and due December 2, 2012, issued to Michael Nahass a director of the Company, bearing interest at a rate of 15% per annum. The maturity date was extended until March 31, 2014. Interest shall be paid in cash or common stock at the holders’ option. During the year ended December 31, 2013, $17,502 has been advanced to the Company. Principal in the amount of $72,500 was paid during the quarter ended March 31, 2014. | $ | - | $ | 72,500 | |||||
$ | - | $ | 102,500 |
TAX_Tables
TAX (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Tax Tables | ||||||||||
Deferred tax assets and liabilities | December 31, | December 31, | ||||||||
2014 | 2013 | |||||||||
Deferred income tax assets: | ||||||||||
Allowance for bad debt | $ | 21 | $ | - | ||||||
Warrants expense | 2,216,000 | - | ||||||||
Derivatives expense | 1,274,000 | - | ||||||||
Net operating losses | 3,227,000 | 70,700 | ||||||||
6,738,747 | 70,700 | |||||||||
Valuation allowance | (6,738,000 | ) | (70,700 | ) | ||||||
Net deferred tax assets | $ | - | $ | - | ||||||
Effective tax rate | Effective Tax Rate | December 31, | December 31, | |||||||
2014 | 2013 | |||||||||
Federal statutory | 35 | % | 35 | % | ||||||
State and local, net of federal | 5.84 | % | 5.84 | % | ||||||
Change in Valuation allowance | -40.84 | % | -40.84 | % | ||||||
Total effective tax rate | 0 | % | 0 | % |
WARRANTS_Tables
WARRANTS (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Warrants Tables | |||||||||||||
Warrants outstanding | 31-Dec-14 | ||||||||||||
Weighted | |||||||||||||
Average | |||||||||||||
Exercise | |||||||||||||
Shares | Price | ||||||||||||
Warrants outstanding – beginning of year | 19,550,817 | $ | 0.17 | ||||||||||
Warrants exercised | (10,332,199 | ) | 0.19 | ||||||||||
Warrants granted | 11,491,227 | 0.3 | |||||||||||
Warrants expired | - | - | |||||||||||
Warrants outstanding – end of period | 20,709,845 | $ | 0.23 | ||||||||||
Weighted exercise price and weighted fair value of the warrants granted | 31-Dec-14 | ||||||||||||
Weighted | |||||||||||||
Average | Weighted | ||||||||||||
Exercise | Average | ||||||||||||
Price | Fair Value | ||||||||||||
Weighted average of warrants granted during the twelve months whose exercise price exceeded fair market value at the date of grant | $ | 0.3 | $ | 0.45 | |||||||||
Summarizes information about fixed-price warrants outstanding | Number | Average | |||||||||||
Range of | Outstanding at | Remaining | Weighted | ||||||||||
Exercise | December 31, | Contractual | Average | ||||||||||
Prices | 2014 | Life | Exercise Price | ||||||||||
$ | 0.33 | 3,154,800 | 1 Month | $ | 0.33 | ||||||||
$ | 0.33 | 564,000 | 2 Months | $ | 0.33 | ||||||||
$ | 0.33 | 264,000 | 3 Months | $ | 0.33 | ||||||||
$ | 0.33 | 1,188,000 | 4 Months | $ | 0.33 | ||||||||
$ | 0.33 | 120,000 | 5 Months | $ | 0.33 | ||||||||
$ | 0.33 | 249,600 | 6 Months | $ | 0.33 | ||||||||
$ | 0.46 | 600,000 | 8 Months | $ | 0.46 | ||||||||
$ | 0.46 | 150,000 | 13 Months | $ | 0.46 | ||||||||
$ | 0.85 | 40,000 | 16 Months | $ | 0.85 | ||||||||
$ | 0.4 | 333,333 | 20 Months | $ | 0.4 | ||||||||
$ | 0.33 | 439,637 | 25 Months | $ | 0.33 | ||||||||
$ | 0.16 | 750,000 | 27 Months | $ | 0.16 | ||||||||
$ | 0.3 | 964,912 | 43 Months | $ | 0.3 | ||||||||
$ | 0.3 | 4,824,561 | 44 Months | $ | 0.3 | ||||||||
$ | 0.06 | 7,067,002 | 46 Months | $ | 0.06 | ||||||||
20,709,845 |
OPERATING_LEASE_COMMITMENTS_Ta
OPERATING LEASE COMMITMENTS (Tables) | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Operating Lease Commitments Tables | ||||||
Schedule of lease payments | Scheduled | |||||
Year Ending December 31: | Payments | |||||
2015 | $ | 539,705 | ||||
2016 | 541,656 | |||||
2017 | 487,517 | |||||
2018 | 478,587 | |||||
2019 | 342,336 | |||||
2020 and thereafter | 2,277,656 | |||||
Total minimum rental payments | $ | 4,667,457 |
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Summary of financial information | Year Ended December 31, 2014 | ||||||||||||||||
Hydroponic | Cannabis | Eliminations | |||||||||||||||
Produce | Products | and Other | Total | ||||||||||||||
Total Revenues | $ | 6,627,109 | $ | - | $ | 467,161 | $ | 7,094,270 | |||||||||
Cost of Goods Sold | 6,667,967 | - | 273,311 | 6,941,278 | |||||||||||||
(40,858 | ) | - | 193,850 | 152,992 | |||||||||||||
Selling, general and administrative expenses | 1,506,684 | 1,115,577 | 15,705,530 | 18,327,791 | |||||||||||||
Loss from operations | (1,547,542 | ) | (1,115,577 | ) | (19,506,200 | ) | (18,174,799 | ) | |||||||||
Other Income (Expenses) | |||||||||||||||||
Loss from derivatives issued with debt greater than debt carrying value | - | - | (4,808,000 | ) | (4,808,000 | ) | |||||||||||
Gain (Loss) on fair market valuation of derivatives | - | - | 1,912,037 | 1,912,037 | |||||||||||||
Interest Income (Expense) | 2,232 | - | (1,098,557 | ) | (1,096,325 | ) | |||||||||||
Total Other Income (Expense) | 2,232 | - | (3,994,520 | ) | (3,992,288 | ) | |||||||||||
Loss before Provision of Income Taxes | $ | (1,545,310 | ) | $ | (1,115,577 | ) | $ | (19,506,200 | ) | $ | (22,167,087 | ) | |||||
Total assets at December 31, 2014 | $ | 5,956,861 | $ | 858,180 | $ | 904,185 | $ | 7,719,226 | |||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Hydroponic | Cannabis | Eliminations | |||||||||||||||
Produce | Products | and Other | Total | ||||||||||||||
Total Revenues | $ | 1,936,054 | $ | - | $ | 189,797 | $ | 2,125,851 | |||||||||
Cost of Goods Sold | 1,955,203 | - | 81,730 | 2,036,933 | |||||||||||||
(19,149 | ) | - | 108,067 | 88,918 | |||||||||||||
Selling, general and administrative expenses | 201,953 | - | 3,373,944 | 3,575,897 | |||||||||||||
Loss from operations | (221,102 | ) | - | (3,265,877 | ) | (3,486,979 | ) | ||||||||||
Other Income (Expenses) | |||||||||||||||||
Loss from derivatives issued with debt greater than debt carrying value | - | - | (2,054,000 | ) | (2,054,000 | ) | |||||||||||
Gain (Loss) on fair market valuation of derivatives | - | - | 673,000 | 673,000 | |||||||||||||
Interest Income (Expense) | (651 | ) | - | (1,278,070 | ) | (1,278,721 | ) | ||||||||||
Total Other Income (Expense) | (651 | ) | - | (2,659,070 | ) | (2,659,721 | ) | ||||||||||
Loss before Provision of Income Taxes | $ | (221,753 | ) | $ | - | $ | (5,924,947 | ) | $ | (6,146,700 | ) | ||||||
Total assets at December 31, 2013 | $ | 3,250,788 | $ | - | $ | 789,797 | $ | 4,040,585 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Summary Of Significant Accounting Policies Details Narrative | ||
Accounts receivable allowance | $49,168 | $52,000 |
GOING_CONCERN_Details_Narrativ
GOING CONCERN (Details Narrative) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Going Concern Details Narrative | ||
Accumulated deficit | ($36,726,529) | ($14,837,317) |
SHARE_EXCHANGE_Details
SHARE EXCHANGE (Details) (USD $) | Dec. 31, 2014 |
Share Exchange Details | |
Cash | $100 |
Intangible assets, customer list | 212,400 |
Fair value acquired | $212,500 |
SHARE_EXCHANGE_Details_Narrati
SHARE EXCHANGE (Details Narrative) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Share Exchange Details Narrative | |
Amortization expense | $45,900 |
Intangible assets estimated useful lives | 5 years |
REVERSE_MERGER_Details
REVERSE MERGER (Details) (USD $) | Dec. 31, 2014 |
Reverse Merger Details | |
Consideration - issuance of securities | $4,800,000 |
Cash | 35 |
Goodwill | 4,799,965 |
Total purchase price | $4,800,000 |
INVENTORY_Details
INVENTORY (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Inventory Details | ||
Raw Materials | $479,682 | |
Work-In-Progress | 190,498 | |
Inventory, Net | $670,180 |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Property And Equipment Details | ||
Furniture | $53,790 | $31,539 |
Equipment | 2,367,605 | 26,022 |
Leasehold improvements | 3,468,243 | 10,400 |
Subtotal | 5,889,638 | 67,961 |
Less accumulated depreciation | -442,895 | -46,592 |
Total | $5,446,743 | $21,369 |
PROPERTY_AND_EQUIPMENT_Details1
PROPERTY AND EQUIPMENT (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property And Equipment Details Narrative | ||
Depreciation expense | $392,883 | $9,211 |
ACCOUNTS_PAYABLE_AND_ACCRUED_E2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Accounts Payable And Accrued Expenses Details | ||
Accounts payable | $240,204 | $948,421 |
Accrued officers' salary | 60,000 | |
Accrued interest | 270,918 | 204,898 |
Accrued payroll taxes | 62,599 | 62,599 |
Accounts payable and accrued expenses | $573,721 | $1,275,918 |
NOTE_PAYABLE_Details
NOTE PAYABLE (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Total | $4,615,547 | $1,197,680 |
Unsecured Promissory Demand Note [Member] | ||
Total | 5,000 | 5,000 |
Promissory Demand Note [Member] | ||
Total | 150,000 | 150,000 |
Unsecured Promissory Demand Note One [Member] | ||
Total | 109,306 | 109,306 |
Unsecured Promissory Demand Note Two [Member] | ||
Total | 3,474 | |
Senior Secured Promissory Note [Member] | ||
Total | 250,000 | |
Senior Secured Promissory Note One [Member] | ||
Total | 54,900 | |
Senior Secured Promissory Note Two [Member] | ||
Total | 50,000 | |
Senior Secured Promissory Note Three [Member] | ||
Total | 275,000 | |
Senior Secured Promissory Note Four [Member] | ||
Total | 300,000 | |
Senior Secured Convertible Promissory Note [Member] | ||
Total | 248,902 | |
Senior Secured Convertible Promissory Note One [Member] | ||
Total | 482,456 | |
Senior Secured Convertible Promissory Note Two [Member] | ||
Total | 146,197 | |
Senior Secured Convertible Promissory Note Three [Member] | ||
Total | 547,948 | |
Senior Secured Convertible Promissory Note Four [Member] | ||
Total | $2,894,739 |
NOTE_PAYABLE_Details_Narrative
NOTE PAYABLE (Details Narrative) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Note Payable Details Narrative | ||
Accrued interest | $270,918 | $204,898 |
LOANS_FROM_RELATED_PARTY_Detai
LOANS FROM RELATED PARTY (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Total | $102,500 | |
Unsecured Promissory Note One [Member] | Officers [Member] | ||
Total | 30,000 | |
Unsecured Promissory Note Two [Member] | Director One [Member] | ||
Total | $72,500 |
TAX_Details
TAX (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred income tax assets: | ||
Allowance for bad debt | $21,000 | |
Warrants expense | 2,216,000 | |
Derivatives expense | 1,274,000 | |
Net operating losses | 3,227,000 | 70,700 |
Deferred tax assets | 6,738,747 | 70,700 |
Valuation allowance | -6,738,000 | -70,700 |
Net deferred tax assets |
TAX_Details_1
TAX (Details 1) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Effective Tax Rate | ||
Federal statutory | 35.00% | 35.00% |
State and local, net of federal | 5.84% | 5.84% |
Change in Valuation allowance | -40.84% | -40.84% |
Total effective tax rate | 0.00% | 0.00% |
TAX_Details_Narrative
TAX (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Mar. 31, 2013 | |
Tax Details Narrative | ||
Net operating loss carryforwards | $3,200,000 | $202,000 |
Net operating loss carryforwards expiring from | 2034 | |
Valuation allowance | $6,700,000 |
CAPITAL_STOCK_Details_Narrativ
CAPITAL STOCK (Details Narrative) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Preferred stock, Par value | $0.00 | $0.00 |
Preferred stock, Authorized | 25,000,000 | 25,000,000 |
Common stock, par value | $0.00 | $0.00 |
Common stock, Authorized | 350,000,000 | 350,000,000 |
Common stock, Issued | 197,532,892 | 146,806,928 |
Convertible Series A Preferred Stock | ||
Preferred stock, Par value | $0.00 | $0.00 |
Preferred stock, Authorized | 100 | 100 |
Preferred stock, Outstanding | 100 | 100 |
Convertible Series B Preferred Stock | ||
Preferred stock, Par value | $0.00 | $0.00 |
Preferred stock, Authorized | 24,999,900 | 24,999,900 |
Preferred stock, Outstanding | 15,500,000 | 14,750,000 |
WARRANTS_Details
WARRANTS (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Shares | |
Warrants outstanding - beginning of year | 19,550,817 |
Warrants exercised | -10,332,199 |
Warrants granted | 11,491,227 |
Warrants expired | |
Warrants outstanding - end of period | 20,709,845 |
Weighted Average Exercise Price | |
Warrants outstanding - beginning of year | $0.17 |
Warrants exercised | $0.19 |
Warrants granted | $0.30 |
Warrants expired | |
Warrants outstanding - end of period | $0.23 |
WARRANTS_Details_1
WARRANTS (Details 1) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Warrants Details 1 | |
Weighted average exercise price of warrants granted | $0.30 |
Weighted average fair value of warrants granted | $0.45 |
WARRANTS_Details_2
WARRANTS (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Number of warrants Outstanding at December 31, 2013 | 20,709,845 | 19,550,817 |
Exercise Price Range One [Member] | ||
Range of Exercise Prices | $0.33 | |
Number of warrants Outstanding at December 31, 2013 | 3,154,800 | |
Average Remaining Contractual Life | 1 month | |
Weighted Average Exercise Price | $0.33 | |
Exercise Price Range Two [Member] | ||
Range of Exercise Prices | $0.33 | |
Number of warrants Outstanding at December 31, 2013 | 564,000 | |
Average Remaining Contractual Life | 2 months | |
Weighted Average Exercise Price | $0.33 | |
Exercise Price Range Three [Member] | ||
Range of Exercise Prices | $0.33 | |
Number of warrants Outstanding at December 31, 2013 | 264,000 | |
Average Remaining Contractual Life | 3 months | |
Weighted Average Exercise Price | $0.33 | |
Exercise Price Range Four [Member] | ||
Range of Exercise Prices | $0.33 | |
Number of warrants Outstanding at December 31, 2013 | 1,188,000 | |
Average Remaining Contractual Life | 4 months | |
Weighted Average Exercise Price | $0.33 | |
Exercise Price Range Five [Member] | ||
Range of Exercise Prices | $0.33 | |
Number of warrants Outstanding at December 31, 2013 | 120,000 | |
Average Remaining Contractual Life | 5 months | |
Weighted Average Exercise Price | $0.33 | |
Exercise Price Range Six [Member] | ||
Range of Exercise Prices | $0.33 | |
Number of warrants Outstanding at December 31, 2013 | 249,600 | |
Average Remaining Contractual Life | 6 months | |
Weighted Average Exercise Price | $0.33 | |
Exercise Price Range Seven [Member] | ||
Range of Exercise Prices | $0.46 | |
Number of warrants Outstanding at December 31, 2013 | 600,000 | |
Average Remaining Contractual Life | 8 months | |
Weighted Average Exercise Price | $0.46 | |
Exercise Price Range Eight [Member] | ||
Range of Exercise Prices | $0.46 | |
Number of warrants Outstanding at December 31, 2013 | 150,000 | |
Average Remaining Contractual Life | 13 months | |
Weighted Average Exercise Price | $0.46 | |
Exercise Price Range Nine [Member] | ||
Range of Exercise Prices | $0.85 | |
Number of warrants Outstanding at December 31, 2013 | 40,000 | |
Average Remaining Contractual Life | 16 months | |
Weighted Average Exercise Price | $0.85 | |
Exercise Price Range Ten [Member] | ||
Range of Exercise Prices | $0.40 | |
Number of warrants Outstanding at December 31, 2013 | 333,333 | |
Average Remaining Contractual Life | 20 months | |
Weighted Average Exercise Price | $0.40 | |
Exercise Price Range Eleven [Member] | ||
Range of Exercise Prices | $0.33 | |
Number of warrants Outstanding at December 31, 2013 | 439,637 | |
Average Remaining Contractual Life | 25 months | |
Weighted Average Exercise Price | $0.33 | |
Exercise Price Range Twelve [Member] | ||
Range of Exercise Prices | $0.16 | |
Number of warrants Outstanding at December 31, 2013 | 750,000 | |
Average Remaining Contractual Life | 27 months | |
Weighted Average Exercise Price | $0.16 | |
Exercise Price Range Thirteen [Member] | ||
Range of Exercise Prices | $0.30 | |
Number of warrants Outstanding at December 31, 2013 | 964,912 | |
Average Remaining Contractual Life | 43 months | |
Weighted Average Exercise Price | $0.30 | |
Exercise Price Range Fourteen [Member] | ||
Range of Exercise Prices | $0.30 | |
Number of warrants Outstanding at December 31, 2013 | 4,824,561 | |
Average Remaining Contractual Life | 44 months | |
Weighted Average Exercise Price | $0.30 | |
Exercise Price Range Fifteen [Member] | ||
Range of Exercise Prices | $0.06 | |
Number of warrants Outstanding at December 31, 2013 | 7,067,002 | |
Average Remaining Contractual Life | 46 months | |
Weighted Average Exercise Price | $0.06 |
WARRANTS_Details_Narrative
WARRANTS (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Warrants Details Narrative | ||
Warrant expense | $5,038,986 | $1,355,990 |
OPERATING_LEASE_COMMITMENTS_De
OPERATING LEASE COMMITMENTS (Details) (USD $) | Dec. 31, 2014 |
Year Ending December 31: | |
2015 | $539,705 |
2016 | 541,656 |
2017 | 487,517 |
2018 | 478,587 |
2019 | 342,336 |
2020 and thereafter | 2,277,656 |
Total minimum rental payments | $4,667,457 |
OPERATING_LEASE_COMMITMENTS_De1
OPERATING LEASE COMMITMENTS (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Lease Commitments Details Narrative | ||
Net rent expense | $367,204 | $54,408 |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Total Revenues | $7,094,270 | $2,125,851 |
Cost of Goods Sold | 6,941,278 | 2,036,933 |
Total | 152,992 | 88,918 |
Selling, general and administrative expenses | 18,327,792 | 3,575,897 |
Loss from operations | -18,174,800 | -3,486,979 |
Other Income (Expenses) | ||
Loss from derivatives issued with debt greater than debt carrying value | -4,808,000 | -2,054,000 |
Gain (Loss) on fair market valuation of derivatives | 1,912,037 | 673,000 |
Interest Expense | -1,096,324 | -1,278,721 |
Total Other Income (Expense) | -3,992,287 | -2,659,721 |
Loss before Provision for Income taxes | -22,167,087 | -6,146,700 |
Total assets | 7,719,226 | 4,040,585 |
Hydroponic Produce [Member] | ||
Total Revenues | 6,627,109 | 1,936,054 |
Cost of Goods Sold | 6,667,967 | 1,955,203 |
Total | -40,858 | -19,149 |
Selling, general and administrative expenses | 1,506,684 | 201,953 |
Loss from operations | -1,547,542 | -221,102 |
Other Income (Expenses) | ||
Loss from derivatives issued with debt greater than debt carrying value | ||
Gain (Loss) on fair market valuation of derivatives | ||
Interest Expense | 2,232 | -651 |
Total Other Income (Expense) | 2,232 | -651 |
Loss before Provision for Income taxes | -1,545,310 | -221,753 |
Total assets | 5,956,861 | 3,250,788 |
Cannabis Products [Member] | ||
Total Revenues | ||
Cost of Goods Sold | ||
Total | ||
Selling, general and administrative expenses | 1,115,577 | |
Loss from operations | -1,115,577 | |
Other Income (Expenses) | ||
Loss from derivatives issued with debt greater than debt carrying value | ||
Gain (Loss) on fair market valuation of derivatives | ||
Interest Expense | ||
Total Other Income (Expense) | ||
Loss before Provision for Income taxes | -1,115,577 | |
Total assets | 858,180 | |
Eliminations and Other [Member] | ||
Total Revenues | 467,161 | 189,797 |
Cost of Goods Sold | 273,311 | 81,730 |
Total | 193,850 | 108,067 |
Selling, general and administrative expenses | 15,705,530 | 3,373,944 |
Loss from operations | -19,506,200 | -3,265,877 |
Other Income (Expenses) | ||
Loss from derivatives issued with debt greater than debt carrying value | -4,808,000 | -2,054,000 |
Gain (Loss) on fair market valuation of derivatives | 1,912,037 | 673,000 |
Interest Expense | -1,098,557 | -1,278,070 |
Total Other Income (Expense) | -3,994,520 | -2,659,070 |
Loss before Provision for Income taxes | -19,506,200 | -5,924,947 |
Total assets | $904,185 | $789,797 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Narrative) (Chief Executive Officer [Member], USD $) | Dec. 31, 2014 |
Chief Executive Officer [Member] | |
Accounts receivable | $58,850 |