Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 18, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | MJ Holdings, Inc. | |
Entity Central Index Key | 0001456857 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 70,628,015 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash | $ 7,428,042 | $ 117,536 |
Accounts receivable | 15,127 | 9,461 |
Prepaid expenses | 822,812 | 713,782 |
Marketable securities - available for sale | 150,000 | |
Convertible note receivable | 300,000 | |
Other current assets | 50,000 | |
Total current assets | 8,615,981 | 990,779 |
Property and equipment, net | 2,801,885 | 4,115,675 |
Intangible assets | 300,000 | 300,000 |
Deposits | 364,817 | 64,817 |
Operating lease - right-of-use asset | 1,959,713 | 1,979,181 |
Total non-current assets | 5,426,415 | 6,499,673 |
Total assets | 14,042,396 | 7,490,452 |
Current liabilities | ||
Accounts payable and accrued expenses | 1,696,333 | 2,382,779 |
Deposits | 538,921 | 538,921 |
Other current liabilities | 1,454,471 | 1,328,438 |
Current portion of notes payable - related party | 300,405 | |
Current portion of long-term notes payable | 912,470 | 1,485,678 |
Operating lease obligation, short-term | 241,466 | 241,466 |
Total current liabilities | 4,093,661 | 5,977,282 |
Non-current liabilities | ||
Long-term notes payable, net of current portion | 167,205 | 921,723 |
Operating lease obligation, net of current portion | 1,870,107 | 1,889,575 |
Deferred rent | ||
Total non-current liabilities | 2,037,312 | 2,811,298 |
Total liabilities | 6,880,973 | 8,788,580 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity (deficit) | ||
Common stock, $0.001 par value, 95,000,000 shares authorized, 69,628,015 and 68,613,541 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively | 69,627 | 68,613 |
Additional paid-in capital | 19,980,041 | 18,748,688 |
Common stock issuable | 1,000 | |
Subscription receivable | ||
Accumulated deficit | (12,776,776) | (20,002,960) |
Total stockholders' equity (deficit) attributable to MJ Holdings, Inc. | 7,273,892 | (1,185,659) |
Noncontrolling interests | (112,469) | (112,469) |
Total shareholders' equity (deficit) | 7,161,423 | (1,298,128) |
Total liabilities and stockholders' equity (deficit) | 14,042,396 | 7,490,452 |
Series A Convertible Preferred Stock [Member] | ||
Stockholders' equity (deficit) | ||
Preferred stock, $0.001 par value, 5,000,000 shares authorized, 0 shares issued; Series A convertible Preferred stock $1,000 stated value, 2,500 authorized, 0 shares issued and outstanding |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Preferred stock, stated value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 95,000,000 | 95,000,000 |
Common stock, shares issued | 69,628,015 | 68,613,541 |
Common stock, shares outstanding | 69,628,015 | 68,613,541 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, stated value | $ 1,000 | $ 1,000 |
Preferred stock, shares authorized | 2,500 | 2,500 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Revenue, net | $ 307,375 | $ 456,158 |
Operating expenses | ||
Direct costs of revenue | 472,770 | |
General and administrative | 2,819,926 | 1,038,681 |
Depreciation | 97,470 | 111,746 |
Marketing and selling | (908) | |
Total operating expenses | 2,917,396 | 1,622,289 |
Operating loss | (2,610,021) | (1,166,131) |
Other income (expense) | ||
Interest expense | (17,227) | (48,987) |
Interest income | 4,662 | 4,586 |
Miscellaneous expense | 41,726 | |
Loss on conversion of related party note payable | (310,526) | |
Gain on sale of marketable securities | 9,857,429 | |
Gain on sale of commercial building | 260,141 | |
Total other income (expense) | 9,836,205 | (44,401) |
Net income (loss) before income taxes | 7,226,184 | (1,210,532) |
Provision for income tax | ||
Net income (loss) | 7,226,184 | (1,210,532) |
Income attributable to non-controlling interest | (2,262) | |
Net income (loss) attributable to common shareholders | $ 7,226,184 | $ (1,208,270) |
Net loss per common share - basic and diluted | $ 0.10 | $ (0.02) |
Weighted average number of shares outstanding - basic | 68,877,240 | 65,573,114 |
Weighted average number of shares outstanding - diluted | 69,097,364 | 65,573,114 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock Issuable [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Subscriptions Receivable [Member] | Non Controlling Interest [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2019 | $ 19 | $ 65,436 | $ 18,177,723 | $ 10,000 | $ (103,956) | $ (16,038,345) | $ 2,110,877 |
Balance, shares at Dec. 31, 2019 | 18,562 | 65,436,449 | |||||
Issuance of common stock for services | $ 281 | 55,969 | 56,250 | ||||
Issuance of common stock for services, shares | 281,251 | ||||||
Issuance of common stock for conversion of debt and interest | $ (19) | $ 19 | |||||
Issuance of common stock for conversion of debt and interest, shares | (18,562) | 18,562 | |||||
Net loss | (2,262) | (1,208,270) | (1,210,532) | ||||
Balance at Mar. 31, 2020 | $ 65,736 | 18,233,692 | 10,000 | (106,218) | (17,246,615) | 956,595 | |
Balance, shares at Mar. 31, 2020 | 65,736,262 | ||||||
Balance at Dec. 31, 2020 | $ 68,613 | 18,748,688 | (112,469) | (20,002,960) | (1,298,128) | ||
Balance, shares at Dec. 31, 2020 | 68,613,541 | ||||||
Common stock to be issued for termination of rights participation agreement | $ 1,000 | 629,000 | 629,000 | ||||
Common stock to be issued for termination of rights participation agreement, shares | 1,000,000 | ||||||
Issuance of common stock for services | $ 225 | 134,775 | 135,000 | ||||
Issuance of common stock for services, shares | 225,000 | ||||||
Issuance of common stock for cash | $ 263 | 49,737 | 50,000 | ||||
Issuance of common stock for cash, shares | 263,158 | ||||||
Issuance of common stock for loan payable conversion | $ 526 | 410,000 | 410,526 | ||||
Issuance of common stock for loan payable conversion, shares | 526,316 | ||||||
Stock based compensation | 7,841 | 7,841 | |||||
Net loss | 7,226,184 | 7,226,184 | |||||
Balance at Mar. 31, 2021 | $ 1,000 | $ 69,627 | $ 19,980,041 | $ (112,469) | $ (12,776,776) | $ 7,161,423 | |
Balance, shares at Mar. 31, 2021 | 1,000,000 | 69,628,015 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash Flows from Operating Activities | ||
Net income (loss) | $ 7,226,184 | $ (1,210,532) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of right to use asset | 19,468 | 52,667 |
Common stock issued for prepaid services | 135,000 | 56,250 |
Depreciation | 97,470 | 111,746 |
Gain on sale of cost method investments | (9,857,429) | |
Gain on sale of commercial building | (260,141) | |
Stock based compensation | 7,841 | |
Common stock to be issued for termination of rights participation agreement | 630,000 | |
Expenses paid on behalf of Company | 36,405 | |
Loss on conversion of related party note payable | 310,526 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (5,666) | (8,760) |
Prepaid expenses and prepaid inventory | (109,030) | 137,460 |
Deposits | (300,000) | |
Accounts payable and accrued liabilities | (686,444) | 205,528 |
Customer deposits | 5,212 | |
Other current assets | (50,000) | 156,229 |
Other current liabilities | 126,033 | 462,694 |
Operating lease liability | (19,468) | (58,294) |
Net cash used in operating activities | (2,735,731) | (53,395) |
Cash Flows from Investing Activities | ||
Purchase of property and equipment | (111,039) | |
Proceeds from sale of commercial building | 1,627,500 | |
Purchase of marketable securities | (200,000) | |
Proceeds from the issuance of convertible note receivable | (300,000) | |
Proceeds from the sale of marketable securities | 10,207,504 | |
Net cash used in investing activities | 11,223,965 | |
Financing activities | ||
Proceeds from notes payable | 300,000 | 74,000 |
Repayment of notes payable | (1,527,728) | (5,844) |
Proceeds from common stock issued for cash | (50,000) | |
Net cash provided by (used in) financing activities | (1,177,728) | 68,156 |
Net change in cash | 7,310,506 | 14,761 |
Cash, beginning of period | 117,536 | 22,932 |
Cash, end of period | 7,428,042 | 37,693 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 72,684 | 18,501 |
Income taxes paid | ||
Non-cash investing and financing activities: | ||
Common stock issued for prior period debt conversion | 19 | |
Issuance of stock for conversion of related party note payable | $ 100,000 |
Nature of the Business
Nature of the Business | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of the Business | Note 1 — Nature of the Business MJ Holdings, Inc. (OTCPK: MJNE) is a highly-diversified cannabis holding company providing cultivation management, asset and infrastructure development – currently concentrated in the Las Vegas market. It is the Company’s intention to grow its business and provide a 360-degree spectrum of infrastructure, including, cannabis cultivation, production of cannabis related products, management services, dispensaries and consulting services. The Company intends to grow its business through joint ventures with existing companies possessing complementary subject matter expertise, acquisition of existing companies and through the development of new opportunities. The Company intends to “prove the concept” profitably in the rapidly expanding Las Vegas market and then use that anticipated success as a template for replicating the concept in other developing states through a combination of strategic partnerships, acquisitions and opening new operations. The Company was incorporated on November 17, 2006, as Securitas EDGAR Filings, Inc. under the laws of the State of Nevada. Prior to the formation of Securitas EDGAR Filings Inc., the business was operated as Xpedient EDGAR Filings, LLC, a Florida Limited Liability Company, formed on October 31, 2005. On November 21, 2005, Xpedient EDGAR Filings LLC amended its Articles of Organization to change its name to Securitas EDGAR Filings, LLC. On January 21, 2009, Securitas EDGAR Filings LLC merged into Securitas EDGAR Filings, Inc., a Nevada corporation. On February 14, 2014, the Company amended and restated its Articles of Incorporation and changed its name to MJ Holdings, Inc. On November 22, 2016, in connection with a plan to divest the Company of its real estate business, the Company submitted to its stockholders an offer to exchange (the “Exchange Offer”) its common stock for shares in MJ Real Estate Partners, LLC, (“MJRE”) a newly formed LLC formed for the sole purpose of effecting the Exchange Offer. On January 10, 2017, the Company accepted for exchange 1,800,000 shares of its Common Stock in exchange for 1,800,000 shares of MJRE’s common units, representing membership interests in MJRE. Effective February 1, 2017, the Company transferred its ownership interests in the real estate properties and its subsidiaries, through which the Company held ownership of the real estate properties, to MJRE. MJRE also assumed the senior notes and any and all obligations associated with the real estate properties and business, effective February 1, 2017. Acquisition of Red Earth On December 15, 2017, the Company acquired all of the issued and outstanding membership interests of Red Earth, LLC, a Nevada limited liability company (“Red Earth”) established in October 2016, in exchange for 52,732,969 shares of its Common Stock and a promissory note in the amount of $900,000. The acquisition was accounted for as a “Reverse Merger”, whereby Red Earth was considered the accounting acquirer and became its wholly owned subsidiary. Upon the consummation of the acquisition, the now former members of Red Earth became the beneficial owners of approximately 88% of the Company’s Common Stock, obtained controlling interest of the Company, and retained certain of its key management positions. In accordance with the accounting treatment for a “reverse merger” or a “reverse acquisition”, the Company’s historical financial statements prior to the reverse merger will be replaced with the historical financial statements of Red Earth prior to the reverse merger in all future filings with the SEC. Red Earth is the holder of a Nevada Marijuana Establishment Certificate for the cultivation of marijuana. COVID-19 COVID-19 has caused and continues to cause significant loss of life and disruption to the global economy, including the curtailment of activities by businesses and consumers in much of the world as governments and others seek to limit the spread of the disease, and through business and transportation shutdowns and restrictions on people’s movement and congregation. As a result of the pandemic, the Company has experienced, and continues to experience, weakened demand for its products. Many of its customers have been unable to sell its products in customer stores due to government-mandated closures and have deferred or significantly reduced orders for the Company’s products. The Company expects these trends to continue until such closures are significantly curtailed or lifted. In addition, the pandemic has reduced foot traffic in the stores where its products are sold that remain open, and the global economic impact of the pandemic has temporarily reduced consumer demand for its products as they focus on purchasing essential goods. Given these factors, the Company anticipates that the greatest impact from the COVID-19 pandemic in 2020 occurred in the second and third quarters and resulted in a significant net sales decline in its quarterly results. In addition, certain of its suppliers and the manufacturers of certain of its products were adversely impacted by COVID-19. As a result, the Company faced delays or difficulty sourcing products, which negatively affected its business and financial results. Even if the Company were able to find alternate sources for such products, it may cost more and cause delays in its supply chain, which could adversely impact its profitability and financial condition. The Company has taken actions to protect its employees in response to the pandemic, including closing its corporate offices and requiring its office employees to work from home. At its grow facilities, certain practices are in effect to safeguard workers, including a staggered work schedule, and the Company is continuing to monitor direction from local and national governments carefully. As a result of the impact of COVID-19 on its financial results, and the anticipated future impact of the pandemic, the Company has implemented cost control measures and cash management actions, including: ● Furloughing a significant portion of its employees; and ● Implementing 20% salary reductions across its executive team and other members of upper-level management; and ● Executing reductions in operating expenses, planned inventory levels and non-product development capital expenditures; and ● Proactively managing working capital, including reducing incoming inventory to align with anticipated sales. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 — Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Red Earth, LLC, HDGLV, LLC, Icon Management, LLC, Alternative Hospitality, Inc., Condo Highrise Management, LLC and Prescott Management, LLC. Inter-company balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates and assumptions are required in the determination of the fair value of financial instruments and the valuation of stock-based compensation. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. Cash Cash includes cash on hand and deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal and use and with an original maturity of three months or less. The Company maintains its cash in bank deposit accounts. The Company, at various times throughout the year, had cash in financial institutions in excess of Federally insured limits. However, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on its credit balances. Fair Value of Financial Instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2021 and December 31, 2020. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Level 1: Level 2 Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. The FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants. As of March 31, 2021 and December 31, 2020, the Company’s investment in marketable securities – available for sale was determined to be a level 1 investment. March 31, 2021 December 31, 2020 Marketable securities - 150,000 Total $ - $ 150,000 On February 17, 2021, the Company entered into a Stock Purchase Agreement (the “Agreement”) with ATG Holdings, LLC (the “ATG”). Under the terms of the Agreement, the Company purchased 1,500,000,000 shares of common stock of Healthier Choices Management Corp (“HCMC”) from ATG for the purchase price of $200,000. The transaction closed on February 19, 2021. During the three months ended March 31, 2021, the Company liquidated its marketable securities that it received in the Stock Exchange Agreement with HCMC dated August 13, 2018 and the shares of HCMC that it received under the Agreement with ATG. The net proceeds received by the Company for the sale of the marketable securities were $9,857,429. Accounts Receivable and Allowance for Doubtful Accounts: Accounts receivable are recorded at invoiced amount and generally do not bear interest. An allowance for doubtful accounts is established, as necessary, based on past experience and other factors which, in management’s judgment, deserve current recognition in estimating bad debts. Such factors include growth and composition of accounts receivable, the relationship of the allowance for doubtful accounts to accounts receivable and current economic conditions. The determination of the collectability of amounts due from customer accounts requires the Company to make judgments regarding future events and trends. Allowances for doubtful accounts are determined based on assessing the Company’s portfolio on an individual customer and on an overall basis. This process consists of a review of historical collection experience, current aging status of the customer accounts, and the financial condition of the Company’s customers. Based on a review of these factors, the Company establishes or adjusts the allowance for specific customers and the accounts receivable portfolio as a whole. March 31, December 31, Accounts receivable $ 50,061 $ 23,675 Less allowance 34,932 12,000 Net accounts receivable $ 15,129 $ 11,675 Debt Issuance Costs Costs associated with obtaining, closing, and modifying loans and/or debt instruments are netted against the carrying amount of the debt instrument, and charged to interest expense over the term of the loan. Inventory Inventories consist of finished goods as of March 31, 2021. Inventories are valued at the lower of cost or net realizable value. The Company determines cost on the basis of the first in first out method. The Company periodically reviews inventories for obsolescence and any inventories identified as obsolete are reserved or written off. The Company has performed a valuation and has established a reserve against its finished goods inventory. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and any impairment losses. Depreciation is computed using the straight-line method over the useful lives of the assets. Major renewals and betterments are capitalized and depreciated; maintenance and repairs that do not extend the life of the respective assets are expensed as incurred. Upon disposal of assets, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in the consolidated statements of operations. Construction in progress primarily represents the construction or the renovation costs stated at cost less any accumulated impairment loss, which is not depreciated. Costs incurred are capitalized and transferred to property and equipment upon completion, at which time depreciation commences. Property and equipment are depreciated over their estimated useful lives as follows: Buildings 12 years Land Not depreciated Leasehold Improvements Lessor of lease term or 5 years Machinery and Equipment 5 years Furniture and Fixtures 5 years Long–lived Assets Long-lived assets, including real estate property and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate. If the assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair value. Impairment of Long-lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, “Impairment or Disposal of Long-Lived Assets.” ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flow analysis or appraisals. The Company recorded an impairment of its long-lived assets in the amount of $4,586 and $18,345 for the three months ended March 31, 2021 and year ended December 31, 2020, respectively. Non- Controlling Interest The Company’s non-controlling interest represents the minority shareholder’s ownership interest related to the Company’s subsidiary, Alternative Hospitality, Inc. The Company reports its non-controlling interest in subsidiaries as a separate component of equity in the Consolidated Balance Sheets and reports both net loss attributable to the non-controlling interest and net loss attributable to the Company’s common shareholders on the face of the Consolidated Statements of Operations. The Company’s equity interest in Alternative Hospitality, Inc. is 51% and the non-controlling stockholder’s interest is 49%. This is reflected in the Consolidated Statements of Equity. Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 606 – Revenue from Contracts with Customers Generally, the Company considers all revenues as arising from contracts with customers. Revenue is recognized based on the five-step process outlined in the Accounting Standards Codification (“ASC”) 606: Step 1 – Identify the Contract with the Customer – A contract exists when (a) the parties to the contract have approved the contract and are committed to perform their respective obligations, (b) the entity can identify each party’s rights regarding the goods or services to be transferred, (c) the entity can identify the payment terms for the goods or services to be transferred, (d) the contract has commercial substance and it is probably that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Step 2 – Identify Performance Obligations in the Contract – Upon execution of a contract, the Company identifies as performance obligations each promise to transfer to the customer either (a) goods or services that are distinct, or (b) a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. To the extent a contract includes multiple promised goods or services, the Company must apply judgement to determine whether the goods or services are capable of being distinct within the context of the contract. If these criteria are not met, the goods or services are accounted for as a combined performance obligation. Step 3 – Determine the Transaction Price – When (or as) a performance obligation is satisfied, the Company shall recognize as revenue the amount of the transaction price that is allocated to the performance obligation. The contract terms are used to determine the transaction price. Generally, all contracts include fixed consideration. If a contract did include variable consideration, the Company would determine the amount of variable consideration that should be included in the transaction price based on expected value method. Variable consideration would be included in the transaction price, if in the Company’s judgement, it is probable that a significant future reversal of cumulative revenue under the contract would not occur. Step 4 – Allocate the Transaction Price – After the transaction price has been determined, the next step is to allocate the transaction price to each performance obligation in the contract. If the contract only has one performance obligation, the entire transaction price will be applied to that obligation. If the contract has multiple performance obligations, the transaction price is allocated to the performance obligations based on the relative standalone selling price (SSP) at contract inception. Step 5 – Satisfaction of the Performance Obligations (and Recognize Revenue) – Revenue is recognized when (or as) goods or services are transferred to a customer. The Company satisfies each of its performance obligations by transferring control of the promised good or service underlying that performance obligation to the customer. Control is the ability to direct the use of and obtain substantially all of the remaining benefits from an asset. It includes the ability to prevent other entities from directing the use of and obtaining the benefits from an asset. Indicators that control has passed to the customer include: a present obligation to pay; physical possession of the asset; legal title; risks and rewards of ownership; and acceptance of the asset(s). Performance obligations can be satisfied at a point in time or over time. The majority of the Company’s revenue was derived under the agreements, Consulting Agreement and Equipment Lease Agreement, entered into with Acres Cultivation, LLC. Revenue derived from consulting services fees are recognized over the term of the arrangement as services are provided. Revenue is presented net of discounts, fees and other related taxes. Revenue derived from equipment leases For the three months ended March 31, 2021 2020 Revenues: Rental income (i) $ 19,861 $ 22,499 Management income (ii) 202,951 306,112 Equipment lease income (ii) 84,563 127,547 Total $ 307,375 $ 456,158 (i) The rental income is from the Company’s THC Park. (ii) In April 2018, the Company entered into a management agreement with Acres Cultivation, LLC, a Nevada limited liability company (the “Licensed Operator”) that holds a license for the legal cultivation of marijuana for sale under the laws of the State of Nevada. In January of 2019, the Company entered into a revised agreement, which replaced the April 2018 agreement, with the Licensed Operator in order to be more stringently aligned with Nevada marijuana laws. The material terms of the agreement remain unchanged. The Licensed Operator is contractually obligated to pay over to the Company eighty-five (85%) percent of gross revenues defined as gross proceeds from sales of marijuana products minus applicable state excise taxes and local sales tax. The agreement is to remain in force until April 2026. In April 2019, the Licensed Operator was acquired by Curaleaf Holdings, Inc., a publicly traded Canadian cannabis company. Other Current Liabilities The Company’s other current liabilities consisted of amounts due under the management agreement and performance guarantee with Acres Cultivation, LLC. As of March 31, 2021 and December 31, 2020, other current liabilities were $1,454,471 and $1,328,438, respectively. Stock-Based Compensation The Company’s share-based payment awards principally consist of grants of common stock. In accordance with the applicable accounting guidance, stock-based payment awards are classified as either equity or liabilities. For equity-classified awards, the Company measures compensation cost based on the grant date fair value and recognizes compensation expense in the consolidated statements of operations over the requisite service or performance period the award is expected to vest. The fair value of liability-classified awards is at each reporting date through the settlement date. Change in fair value during the requisite service period will be remeasured as compensation cost over that period. The Company utilizes its historical stock price to determine the volatility of any stock-based compensation. The expected dividend yield is 0% as the Company has not paid any dividends on its common stock and does not anticipate it will pay any dividends in the foreseeable future. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant date with a term equal to the expected term of the stock-based award. For stock-based financial instruments issued to parties other than employees, the Company uses the contractual term of the financial instruments as the expected term of the stock-based financial instruments. The assumptions used in calculating the fair value of stock-based financial instruments represent its best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and it uses different assumptions, its stock-based compensation expense could be materially different in the future. Operating Leases The Company adopted ASC Topic 842, Leases, on January 1, 2019. The new leasing standard requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company used its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. A number of the lease agreements contain options to renew and options to terminate the leases early. The lease term used to calculate ROU assets and lease liabilities only includes renewal and termination options that are deemed reasonably certain to be exercised. The Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months. The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances of accrued and prepaid rent, and unamortized lease incentives provided by lessors. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur. The Company has elected not to separate lease and non-lease components for all property leases for the purposes of calculating ROU assets and lease liabilities. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance on deferred tax assets is established when management considers it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax benefits from an uncertain tax position are only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Interest and penalties related to unrecognized tax benefits are recorded as incurred as a component of income tax expense. The Company has not recognized any tax benefits from uncertain tax positions for any of the reporting periods presented. Recent Accounting Pronouncements Stock Based Compensation: Compensation – Stock Compensation (Topic 718) Improvements to Nonemployee Share Based Payment Accounting. The amendments in this Update expand the scope of stock compensation to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance in this Update does not apply to transactions involving equity instruments granted to a lender or investor that provides financing to the issuer. The guidance is effective for fiscal years beginning after December 31, 2018 including interim periods within the fiscal year. The Company adopted with an effective date of January 1, 2019. |
Going Concern
Going Concern | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | Note 3 — Going Concern The Company has recurring net losses, which have resulted in an accumulated deficit of $12,776,776 as of March 31, 2021. The Company had negative cash flows from operations of $2,735,731 for the three months ended March 31, 2021. These factors raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the financial statements. The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan, raise capital, and generate revenues. The Financial Statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company’s current capital resources include cash. Historically, the Company has financed its operations principally through equity and debt financing. |
Note Receivable
Note Receivable | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Note Receivable | Note 4 — Note Receivable Note receivable at March 31, 2021 and December 31, 2020 consisted of the following: March 31, 2021 December 31, 2020 Note receivable- GeneRx (i) 300,000 - Total $ 300,000 $ - i. On March 12, 2021, the Company (the “Holder”) was issued a Convertible Promissory Note (the “Note”) by GeneRx (the “Borrower”), a Delaware corporation, in the amount of $300,000. The Note has a term of one year (March 12, 2022 Maturity Date) and accrues interest at two percent (2%) per annum. The Note is convertible, at the option of the Holder, into shares of common stock of the Borrower at a fixed conversion price of $1.00 per share. Upon an Event of Default, the Conversion Price shall equal the Alternate Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Alternate Conversion Price” shall equal the lesser of (i) 80% multiplied by the average of the three lowest daily volume weighted average prices (“VWAP”) during the previous twenty (20) Trading Days (as defined below) before the Issue Date of this Note (representing a discount rate of 20%) or (ii) 80% multiplied by the Market Price (as defined herein) (representing a discount rate of 20%). “Market Price” means the average of the three lowest daily VWAPs for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date thereof until the same is paid (the “Default Interest”). The Company funded the transaction on March 15, 2021. ii. The convertible note receivable is considered available for sale debt securities with a private company that is not traded in active markets. Since observable price quotations were not available at acquisition, fair value was estimated based on cost less an appropriate discount upon acquisition. The discount of each instrument is accreted into interest income over the respective term as shown within the Company’s Condensed Consolidated Statements of Operations. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 5 — Property and Equipment Property and equipment at March 31, 2021 and December 31, 2020 consisted of the following: March 31, December 31, Leasehold Improvements $ 323,281 $ 323,281 Machinery and Equipment 1,163,242 1,087,679 Building and Land 1,650,000 3,150,000 Furniture and Fixtures 578,843 543,366 Total property and equipment 3,715,366 5,104,326 Less: Accumulated depreciation (913,481 ) (948,651 ) Property and equipment, net $ 2,801,885 $ 4,155,675 Depreciation expense for the three months ended March 31, 2021 and 2020 was $97,470 and $92,282, respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 6 — Intangible Assets In October 2016, Red Earth entered into an Asset Purchase and Sale Agreement with the owner of a provisional Medical Marijuana Establishment Registration Certificate (the “Provisional Grow License”) issued by the state of Nevada for the cultivation of medical marijuana for $300,000. To initiate the purchase and transfer the Provisional Grow License, the Company paid a $25,000 deposit to the seller in October 2016. In February 2017, an investor advanced the Company $350,000. The Provisional Grow License remains in a provisional status until the Company has completed the build out of a cultivation facility and obtained approval from the state of Nevada to begin cultivation in the approved facility. Once approval from the state of Nevada is received, the Company begins the cultivation process. |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 7 — Notes Payable Notes payable as of March 31, 2021 and December 31, 2020 consist of the following: March 31, December 31, Note payable bearing interest at 6.50%, originated November 1, 2018, due on October 31, 2023, originally $1,100,000 (i) $ - $ 1,022,567 Note payable bearing interest at 5.0%, originated January 17, 2019, due on January 31, 2022, originally $750,000 (ii) 750,000 750,000 Note payable bearing interest at 9.0%, originated January 17, 2019, due on January 16, 2020, originally $150,000 (iii) 100,000 100,000 Note payable bearing interest at 6.5% originated April 1, 2019, due on March 31, 2022, originally $250,000 (iv) 229,675 234,431 Notes payable, related party, bearing interest at 9.0%, originated February 20, 2020, due on February 20, 2021, originally $110,405 (v) - 110,405 Notes payable, related party, bearing interest at 9.0%, originated April 3, 2020, due on March 30, 2021, originally $90,000 (vi) - 90,000 Total notes payable $ 1,079,675 $ 2,307,403 Less: current portion (912,470 ) (1,485,678 ) Long-term notes payable $ 167,205 $ 921,725 (i) On September 21, 2018, the Company, through its wholly-owned subsidiary Prescott Management, LLC, entered into a contract to purchase an approximately 10,000 square foot office building located at 1300 South Jones Boulevard, Las Vegas, Nevada 89146 for $1,500,000, subject to seller financing in the amount of $1,100,000, amortizing over 30 years at an interest rate of 6.5% per annum with monthly installments of $6,952.75 beginning on November 1, 2018, and continuing on the same day of each month thereafter until October 31, 2019. Upon the one-year anniversary of the note, a principal reduction payment of $50,000 is due, and provided that the monthly payments and the principal reduction payment have been made, the payments will be recalculated and re-amortized on the same terms with a new scheduled monthly payment of $6,559 beginning on November 1, 2019 and continuing until October 31, 2023, at which time the entire sum of principal in the amount of $986,438, plus any accrued interest, is due and payable. The Company closed the purchase on October 18, 2018. On December 12, 2020, the Company entered into a sales contract with Helping Hands Support, Inc. for the sale of the Company’s commercial building. On January 12, 2021, the Company completed the sale of its commercial building for $1,627,500. As of March 31, 2021, the note was paid in full. (ii) On January 17, 2019, the Company executed a promissory note for $750,000 with FR Holdings LLC, a Wyoming limited liability company. The note accrues interest at 5.0% per annum, payable in regular monthly installments of $3,125, due on or before the same day of each month beginning February 1, 2019 until January 31, 2022 at which the entire principal and any then accrued interest thereon shall be due and payable. As of March 31, 2021, $750,000 principal and $2,475 interest remain due. (iii) On January 17, 2019, the Company executed a short-term promissory note for $150,000 with Let’s Roll Holdings, LLC, and entity controlled by the Company’s Chief Cultivation Officer and a director. The note accrues interest at 9.0% per annum and is due on January 16, 2020. Principal payments in the amount of $50,000 were made during the year ended December 31, 2019. As of March 31, 2021, $100,000 principal and $22,013 interest remain due. (iv) On April 1, 2019, the Company executed a promissory note for $250,000 with John T. Jacobs and Teresa D. Jacobs. The note accrues interest at 6.5% per annum, payable in regular monthly installments of $2,178, due on or before the same day of each month beginning May 1, 2019 until March 31, 2020 at which time a principal reduction of $50,000 shall be due, the payments shall be re-amortized (15-year amortization). On or before March 31, 2021, a second principal reduction of $50,000 shall be due, the payments shall be re-amortized (15-year amortization). Payments shall continue to be paid until March 31, 2022, at which time the entire sum of principal and accrued interest shall be due and payable. As of March 31, 2021, $229,675 principal and $1,318 interest remain due. (v) On February 20, 2020, the Company’s subsidiary, Alternative Hospitality, Inc. (the “Borrower”), issued a Short-Term Promissory Note (the “Note”) to Pyrros One, LLC (the “Holder”), an entity controlled by a relative of a director of the Company, in the amount of $110,405 that matures on February 19, 2021. The Company received cash in the amount of $74,000 and the Holder paid expenses on behalf of the Company in the amount of $36,405. The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $825 due on or before the twentieth day of each month commencing on April 20, 2020. The Borrower was required to make an interest and principal reduction payment in the amount of $1,233 on or before March 20, 2020. The Holder is granted a security interest in that certain real property located at 1300 S. Jones Blvd, Las Vegas, NV 89146, which was owned by the Borrower. As of March 31, 2021, the note was paid in full (vi) On March 31, 2020, the Company’s subsidiary, Condo Highrise Management, LLC (the “Borrower”), issued a Short-Term Promissory Note (the “Note”) to Pyrros One, LLC (the “Holder”), an entity controlled by a relative of a director of the Company, in the amount of $90,000 that matures on March 30, 2021. The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $675 due on or before the first day of each month commencing on May 1, 2020. The Holder is granted a security interest in that certain real property located at 4295 Hwy 343, Amargosa, NV 89020, which was owned by the Borrower. The transaction closed on April 3, 2020. As of March 31, 2021, the note was paid in full Amount Fiscal year ending December 31: 2021 (excluding the three months ended March 31, 2021) 913,475 2022 19,397 2023 20,696 2024 22,082 2025 23,561 Thereafter 80,464 Total minimum loan payments $ 1,079,675 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8 — Commitments and Contingencies Employment Agreements On October 1, 2020, the Company entered into an Employment Agreement (the “Agreement”) with Jim Kelly. The Agreement became effective as of October 1, 2020. Under the terms of the Kelly Agreement, the Employee shall serve as the Company’s Interim Chief Financial Officer for a term of (i) the sooner of six (6) months, or (ii) the completion of all regulatory filings, including but not limited to the Company’s 2019 Annual Report on Form 10-K, the March 31, 2020 Quarterly Report on Form 10-Q, the June 30, 2020 Quarterly Report on Form 10-Q, the September 30, 2020 Quarterly Report on Form 10-Q and all required Current Reports on Form 8-K, with the Securities and Exchange Commission (“SEC”) to bring the Company current with the SEC. The Employee shall receive a base salary of $24,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the C-Suite of the Company in its sole discretion, in an amount equal to up to 400% of the Employee’s base salary for the then current fiscal year, and at commencement of the Term the Employee shall receive a grant of stock of 500,000 restricted shares of the Company’s common stock. On March 16, 2021, Mr. Kelly resigned in his position as Interim Chief Financial Officer. On September 1, 2020, the Company entered into an Employment Agreement (the “Agreement”) with Paris Balaouras (the “Employee”). Under the terms of the Agreement, the Employee shall serve as the Company’s Chief Cultivation Officer for a term of three (3) years (the “Term”) commencing on September 15, 2020. The Employee shall receive a base salary of $105,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the board of directors of the Company in its sole discretion, in amount equal to up to 100% of Employee’s base salary for the then current fiscal year, shall be eligible to receive an annual discretionary stock grant during the Term which shall be vested in equal increments of 1/3 rd On September 1, 2020, the Company entered into an Employment Agreement (the “Agreement”) with Roger Bloss. Under the terms of the Agreement, the Employee shall serve as the Company’s Interim Chief Executive Officer for a term of six (6) months and the Chief Executive Officer and for an additional two (2) years and six (6) months as the Chief Executive Officer for a total of three (3) years (the “Term”) commencing on September 15, 2020. The Employee shall receive a base salary of $105,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the board of directors of the Company in its sole discretion, in amount equal to up to 100% of Employee’s base salary for the then current fiscal year, shall be eligible to receive an annual discretionary stock grant during the Term which shall be vested in equal increments of 1/3 rd On September 1, 2020, the Company entered into an Employment Agreement (the “Agreement”) with Bernard Moyle. Under the terms of the Agreement, the Employee shall serve as the Company’s Secretary/Treasurer for a term of three (3) years (the “Term”) commencing on September 15, 2020. The Employee shall receive a base salary of $60,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the board of directors of the Company in its sole discretion, in amount equal to up to 200% of Employee’s base salary for the then current fiscal year, shall, at commencement of the Term receive a grant of stock of 500,000 shares and shall be eligible to receive an annual discretionary stock grant during the Term which shall be vested in equal increments of 1/3 rd Board of Directors Services Agreements On September 15, 2020, the Company entered into a Board of Directors Services Agreement (the “Agreement”) with Messrs. Bloss, Dear and Balaouras (collectively, the “Directors”). Under the terms of the Agreement, each of the Directors shall provide services to the Company as a member of the Board of Directors for a period of not less than one year. Each of the Directors shall receive compensation as follows: (i) Fifteen Thousand and no/100 dollars ($15,000.00), paid in four (4) equal installments on the last calendar day of each quarter, and (ii) Fifteen Thousand (15,000) shares of the Company’s common stock on the last calendar day of each quarter. The Agreement for each of the Directors is effective as of October 1, 2020. Operating Leases The Company leases a two production / warehouse facility under a non-cancelable operating lease that expires in June 2027 and September 2029, respectively. As of March 31, 2021, the Company recorded operating lease liabilities of $2,111,573 and right of use assets for operating leases of $1,959,713. During the three months ended March 31, 2021, operating cash outflows relating to operating lease liabilities was $19,468. As of March 31, 2021, the Company’s operating leases had a weighted-average remaining term of 7.88 years. Future minimal rental and lease commitments under non-cancelable operating leases with terms in excess of one year as of March 31, 2021, are as follows: Amount Fiscal year ending December 31: 2021 (excluding the three months ended March 31, 2021) 262,980 2022 350,755 2023 350,986 2024 351,333 2025 351,333 Thereafter 799,662 Total minimum lease payments $ 2,467,049 Rent expense, incurred pursuant to operating leases for the three months ended March 31, 2021 and 2020, was $60,937 and $87,660, respectively. Litigation From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. When the Company is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company will record a liability for the loss. In addition to the estimated loss, the liability includes probable and estimable legal cost associated with the claim or potential claim. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company business. There is no pending litigation involving the Company at this time. DGMD Complaint On March 19, 2021, a Complaint was filed against the Company, Jim Mueller, John Mueller, MachNV, LLC, Acres Cultivation, Paris Balaouras, Dimitri Deslis, ATG Holdings, LLC and Curaleaf, Inc. (collectively, the “Defendants”) by DGMD Real Estate Investments, LLC, ARMPRO, LLC, Zhang Springs LV, LLC, Prodigy Holdings, LLC and Green Organics, LLC (collectively, the “Plaintiffs”) in the District Court of Clark County, Nevada. In the Complaint, the Plaintiffs allege that the Defendants: (i) intended to fraudulently obtain money from the Plaintiffs in order to put that money towards the Acres dispensary and to make Acres look more appealing to potential buyers as well as pay off Defendants’ agents, and (ii) the Defendants acted together in order to find investors to invest money into the Acres and MJ Holdings “Investment Schemes”, and (iii) the Defendants intended to fraudulently obtain Plaintiffs’ money for the purpose of harming the Plaintiffs to benefit the Defendants, and (iv) the Defendants committed unlawful fraudulent misrepresentation in the furtherance of the agreement to defraud the Plaintiffs. The Plaintiffs allege that damages are in excess of $15,000. As the complaint pleads only the statutory minimum of damages, the Company is unable to estimate the potential exposure, if any, resulting from this matter but believes it is without merit as to liability and otherwise deminimis as to damages. Thus, the Company does not expect this matter to have a material effect on the Company’s consolidated financial position or its results of operations. The Company will vigorously defend itself against this action and has filed Tierney Arbitration On March 9, 2021, Terrence Tierny, the Company’s former President and Secretary, filed for arbitration with the American Arbitration Association for: (i) breach of contract, (i) breach of the implied covenant of good faith and fair dealing, and (iii) NRS 608 wage claim. Mr. Tierney demanded payment in the amount of $501,085 for deferred business compensation, business compensation, expenses paid on behalf of the Company, accrued vacation and severance pay. On April 7, 2021, the Company made payment against the wage claim in the amount of $62,392, inclusive of $59,583 for wages and $2,854 for accrued vacation. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | Note 9 — Stockholders’ Equity (Deficit) General The Company is currently authorized to issue up to 95,000,000 shares of Common Stock and 5,000,000 shares of preferred stock, par value $0.001 per share. Common Stock Of the 95,000,000 shares of Common Stock authorized by the Company’s Articles of Incorporation, 69,628,015 shares of Common Stock are issued and outstanding as of March 31, 2021. Each holder of Common Stock is entitled to one vote per share on all matters to be voted upon by the stockholders and are not entitled to cumulative voting for the election of directors. Holders of Common Stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the board of directors out of funds legally available therefor subject to the rights of preferred stockholders. The Company has not paid any dividends and does not intend to pay any cash dividends to the holders of Common Stock in the foreseeable future. The Company anticipates reinvesting its earnings, if any, for use in the development of its business. In the event of liquidation, dissolution, or winding up of the Company, the holders of Common Stock are entitled, unless otherwise provided by law or the Company’s Articles of Incorporation, including any certificate of designations for a series of preferred stock, to share ratably in all assets remaining after payment of liabilities and the preferences of preferred stockholders. Holders of the Company’s Common Stock do not have preemptive, conversion, or other subscription rights. There are no redemptions or sinking fund provisions applicable to the Company’s Common Stock. Common Stock Issuances For the three months ended March 31, 2021, the Company issued and/or sold the following unregistered securities: For the three months ended March 31, 2021 On March 8, 2021, the Company issued 526,216 shares of common stock in satisfaction of $100,000 principal and all accrued interest for a note payable to a related party as per the terms of the Debt Conversion and Stock Purchase Agreement dated January 14, 2021. On March 8, 2021, the Company issued 263,158 shares of common stock to a related party for the purchase of $50,000 of common stock as per the terms of the Debt Conversion and Stock Purchase Agreement dated January 14, 2021. On March 29, 2021, the Company issued 225,000 shares of common stock to a consultant as per the terms of the Consulting Agreement dated February 25, 2021. At March 31, 2021 and December 31, 2020, there are 69,628,015 and 68,613,541 shares of Common Stock issued and outstanding, respectively. Preferred Stock The Board is authorized, without further approval from our stockholders, to create one or more series of preferred stock, and to designate the rights, privileges, preferences, restrictions, and limitations of any given series of preferred stock. Accordingly, the Board may, without stockholder approval, issue shares of preferred stock with dividend, liquidation, conversion, voting, or other rights that could adversely affect the voting power or other rights of the holders of Common Stock. The issuance of preferred stock could have the effect of restricting dividends payable to holders of our Common Stock, diluting the voting power of our Common Stock, impairing the liquidation rights of our Common Stock, or delaying or preventing a change in control of us, all without further action by our stockholders. Of the 5,000,000 shares of preferred stock, par value $0.001 per share, authorized in our Articles of Incorporation, 2,500 shares are designated as Series A Convertible Preferred Stock. Series A Convertible Preferred Stock Each share of Series A Preferred Stock is convertible, at the option of the holder, into that number of shares of Common Stock determined by dividing the stated value of each share of Series A Preferred Stock (currently, $1,000) by the conversion price (currently, $0.75). The stated value and the conversion price are subject to adjustment as provided for in the Certificate of Designation. We are prohibited from effecting a conversion of the Series A Preferred Stock to the extent that, after giving effect to the conversion, the holder (together with such holder’s affiliates and any persons acting as a group with holder or any of such holder’s affiliates) would beneficially own in excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion. A holder, upon notice to us, may increase or decrease this beneficial ownership limitation; provided, that, in no event can the holder increase the beneficial ownership limitation in excess of 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon the conversion of the Series A Preferred Stock then held by holder. Such increase of the beneficial ownership limitation cannot be effective until the 61 st Preferred Stock Issuances For the three months ended March 31, 2021 None At March 31, 2021 and December 31, 2020, there were 0 and 0 shares of Series A Preferred Stock issued and outstanding, respectively. |
Basic and Diluted Earnings (Los
Basic and Diluted Earnings (Loss) Per Common Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings (Loss) Per Common Share | Note 10 — Basic and Diluted Earnings (Loss) per Common Share Basic earnings (loss) per share is computed by dividing the net income or net loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated using the treasury stock method and reflects the potential dilution that could occur if warrants were exercised and were not anti-dilutive. For the three months ended March 31, 2021, basic and diluted loss per common share were the same since there were no potentially dilutive shares outstanding during the respective periods. The outstanding warrants and options as of March 31, 2021, to purchase 2,993,000 shares of common stock were not included in the calculations of diluted loss per share because the impact would have been anti-dilutive. |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation | Note 11 — Stock Based Compensation Warrants and Options A summary of the warrants and options issued, exercised and expired are below: Stock Options On June 22, 2018, the Company entered into a Corporate Advisory Agreement (“Advisory Agreement”) with a New York City based consulting company (the “Consultant”) to provide business management, corporate compliance and related services to the Company and its subsidiaries. Pursuant to the Advisory Agreement, the Company granted the Consultant an option to acquire up to 10,000 additional shares of the Company’s common stock at an exercise price of $1.20. The option has a term of 3 years. On September 15, 2020, the Company issued an option to purchase 500,000 shares of common stock to each of Messrs. Balaouras, Bloss and Moyle as per the terms of their employment agreements. The options have an exercise price of $0.75 and expire on the three-year anniversary date. A summary of the options issued, exercised and expired are below: Options: Shares Weighted Avg. Remaining Contractual Life in Years Balance at December 31, 2020 1,510,000 $ 0.76 2.33 Issued - - - Exercised - - - Expired - - - Balance at March 31, 2021 1,510,000 $ 0.76 2.44 Exercisable at March 31, 2021 760,000 $ 0.76 2.4 Options outstanding as of March 31, 2021 and December 31, 2020 were 1,510,000 and 1,510,000, respectively. Warrants In June of 2019, in conjunction with the Company’s offering under Rule 506 of Regulation D of the Securities Act (the “Offering”), the Company granted warrants to each participant in the Offering upon the following terms and conditions: (a) each participant has the right to acquire additional shares of the Company’s Common Stock equal to ten (10%) of the shares purchased in the offering (the “Warrants”); (b) one-half of the Warrants granted to each participant have an exercise price of $0.65 and the other one-half have an exercise price of $1.00, and (c) the Warrants shall be exercisable between June 5, 2019, the date of grant and June 4, 2021 the date of expiration of the Warrants. On January 11, 2021, the Company issued an accredited investor a Common Stock Purchase Warrant Agreement in conjunction with the July 2020 Securities Purchase Agreement granting the holder the right to purchase up to 250,000 shares of the Company’s common stock at an exercise price of $0.10 for a term of 4-years. A summary of the warrants issued, exercised and expired are below: Warrants: Shares Weighted Avg. Remaining Contractual Life in Years Balance at December 31, 2020 1,233,000 $ 0.83 0.4 Issued 250,000 0.10 3.8 Exercised - - - Expired - - - Balance at March 31, 2021 1,483,000 $ 0.75 .75 Warrants outstanding as of March 31, 2021 and December 31, 2020 were 1,483,000 and 1,233,000, respectively. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 12 — Related Party Transactions On February 20, 2020, the Company’s subsidiary, Alternative Hospitality, Inc. (the “Borrower”), issued a Short-Term Promissory Note (the “Note”) to Pyrros One, LLC (the “Holder”), an entity controlled by a relative of a director of the Company, in the amount of $110,405 that matures on February 19, 2021. The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $825 due on or before the twentieth day of each month commencing on April 20, 2020. The Borrower was required to make an interest and principal reduction payment in the amount of $1,233 on or before March 20, 2020. The Holder is granted a security interest in that certain real property located at 1300 S. Jones Blvd, Las Vegas, NV 89146, which is owned by the Borrower. The Note was paid in full during the three months ended March 31, 2021. On March 31, 2020, the Company’s subsidiary, Condo Highrise Management, LLC (the “Borrower”), issued a Short-Term Promissory Note (the “Note”) to Pyrros One, LLC (the “Holder”), an entity controlled by a relative of a director of the Company, in the amount of $90,000 that matures on March 30, 2021. The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $675 due on or before the first day of each month commencing on May 1, 2020. The Holder is granted a security interest in that certain real property located at 4295 Hwy 343, Amargosa, NV 89020 which is owned by the Borrower. The transaction closed on April 3, 2020. The Note was paid in full during the three months ended March 31, 2021. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13 — Subsequent Events On April 7, 2021, the Company (the “Holder”) was issued a Convertible Promissory Note (the “Note”) by GeneRx (the “Borrower”), a Delaware corporation, in the amount of $200,000. The Note has a term of one year (April 7, 2022 Maturity Date) and accrues interest at two percent (2%) per annum. The Note is convertible, at the option of the Holder, into shares of common stock of the Borrower at a fixed conversion price of $1.00 per share. Upon an Event of Default, the Conversion Price shall equal the Alternate Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Alternate Conversion Price” shall equal the lesser of (i) 80% multiplied by the average of the three lowest daily volume weighted average prices (“VWAP”) during the previous twenty (20) Trading Days (as defined below) before the Issue Date of this Note (representing a discount rate of 20%) or (ii) 80% multiplied by the Market Price (as defined herein) (representing a discount rate of 20%). “Market Price” means the average of the three lowest daily VWAPs for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date thereof until the same is paid (the “Default Interest”). The Company funded $150,000 on April 5, 2021 and $50,000 on April 7, 2021. On April 24, 2021, the Company issued 1,000,000 shares of common stock as per the terms of the Termination Agreement with Blue Sky Companies, LLC and Let’s Roll Nevada, LLC. On May 7, 2021 (the “Effective Date”), MJ Holdings, Inc. (“MJNE”) entered into a Cultivation and Sales Agreement (the “Agreement”) with Green Grow Investments Corporation (the “Company”). Under the terms of the Agreement, MJNE shall retain the Company to provide oversight and management of MJNE’s cultivation and sale of products at MJNE’s Amargosa Valley, NV farm. The Agreement shall commence on the Effective Date, continue for a period of ten (10) years and automatically renew for a period of five (5) years. The Company shall be responsible for compliance, standard of care, packaging, insurance, labor matters, policies and procedures, testing, record keeping, security and marketing. As deposits, security and royalty, the Company shall pay to MJNE: (i) a $600,000 Product Royalty of which $50,000 is due upon signing, $150,000 upon MJNE obtaining the licenses from MJ Distributing, Inc. and affiliates and $200,000 for each of the first and second years’ harvests; (ii) a deposit of $20,000 to be applied against the first and last month’s Security and Compliance fee; (iii) $10,000 on the first of each month for Security and Compliance; (iv) a royalty of 10% of gross revenue less applicable taxes (hereinafter “Net Sales Revenue”) on all sales of product by the Company; and (v) the Company shall, after the first two (2) years from execution of the Agreement, be responsible to pay to MJNE a minimum royalty of $50,000.00 per month. As compensation, MJNE shall pay to the Company: (i) a Management Fee that is based upon the net sales price (after taxes) and further subject to all contractual expenses. On May 12, 2021, the Company entered into a Cooperation and Release Agreement (the “Agreement”) with Richard S. Groberg and RSG Advisors, LLC. Under the terms of the Agreement, Mr. Groberg agreed to relinquish all common stock of the Company issued to or owned by him and waived any right to any future stock issuances except for 100,000 shares to be retained by Mr. Groberg. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Red Earth, LLC, HDGLV, LLC, Icon Management, LLC, Alternative Hospitality, Inc., Condo Highrise Management, LLC and Prescott Management, LLC. Inter-company balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates and assumptions are required in the determination of the fair value of financial instruments and the valuation of stock-based compensation. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. |
Cash | Cash Cash includes cash on hand and deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal and use and with an original maturity of three months or less. The Company maintains its cash in bank deposit accounts. The Company, at various times throughout the year, had cash in financial institutions in excess of Federally insured limits. However, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on its credit balances. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2021 and December 31, 2020. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Level 1: Level 2 Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. The FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants. As of March 31, 2021 and December 31, 2020, the Company’s investment in marketable securities – available for sale was determined to be a level 1 investment. March 31, 2021 December 31, 2020 Marketable securities - 150,000 Total $ - $ 150,000 On February 17, 2021, the Company entered into a Stock Purchase Agreement (the “Agreement”) with ATG Holdings, LLC (the “ATG”). Under the terms of the Agreement, the Company purchased 1,500,000,000 shares of common stock of Healthier Choices Management Corp (“HCMC”) from ATG for the purchase price of $200,000. The transaction closed on February 19, 2021. During the three months ended March 31, 2021, the Company liquidated its marketable securities that it received in the Stock Exchange Agreement with HCMC dated August 13, 2018 and the shares of HCMC that it received under the Agreement with ATG. The net proceeds received by the Company for the sale of the marketable securities were $9,857,429. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts: Accounts receivable are recorded at invoiced amount and generally do not bear interest. An allowance for doubtful accounts is established, as necessary, based on past experience and other factors which, in management’s judgment, deserve current recognition in estimating bad debts. Such factors include growth and composition of accounts receivable, the relationship of the allowance for doubtful accounts to accounts receivable and current economic conditions. The determination of the collectability of amounts due from customer accounts requires the Company to make judgments regarding future events and trends. Allowances for doubtful accounts are determined based on assessing the Company’s portfolio on an individual customer and on an overall basis. This process consists of a review of historical collection experience, current aging status of the customer accounts, and the financial condition of the Company’s customers. Based on a review of these factors, the Company establishes or adjusts the allowance for specific customers and the accounts receivable portfolio as a whole. March 31, December 31, Accounts receivable $ 50,061 $ 23,675 Less allowance 34,932 12,000 Net accounts receivable $ 15,129 $ 11,675 |
Debt Issuance Costs | Debt Issuance Costs Costs associated with obtaining, closing, and modifying loans and/or debt instruments are netted against the carrying amount of the debt instrument, and charged to interest expense over the term of the loan. |
Inventory | Inventory Inventories consist of finished goods as of March 31, 2021. Inventories are valued at the lower of cost or net realizable value. The Company determines cost on the basis of the first in first out method. The Company periodically reviews inventories for obsolescence and any inventories identified as obsolete are reserved or written off. The Company has performed a valuation and has established a reserve against its finished goods inventory. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and any impairment losses. Depreciation is computed using the straight-line method over the useful lives of the assets. Major renewals and betterments are capitalized and depreciated; maintenance and repairs that do not extend the life of the respective assets are expensed as incurred. Upon disposal of assets, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in the consolidated statements of operations. Construction in progress primarily represents the construction or the renovation costs stated at cost less any accumulated impairment loss, which is not depreciated. Costs incurred are capitalized and transferred to property and equipment upon completion, at which time depreciation commences. Property and equipment are depreciated over their estimated useful lives as follows: Buildings 12 years Land Not depreciated Leasehold Improvements Lessor of lease term or 5 years Machinery and Equipment 5 years Furniture and Fixtures 5 years |
Long-lived Assets | Long–lived Assets Long-lived assets, including real estate property and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate. If the assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair value. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, “Impairment or Disposal of Long-Lived Assets.” ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flow analysis or appraisals. The Company recorded an impairment of its long-lived assets in the amount of $xx and $18,345 for the three months ended March 31, 2021 and year ended December 31, 2020, respectively. |
Non- Controlling Interest | Non- Controlling Interest The Company’s non-controlling interest represents the minority shareholder’s ownership interest related to the Company’s subsidiary, Alternative Hospitality, Inc. The Company reports its non-controlling interest in subsidiaries as a separate component of equity in the Consolidated Balance Sheets and reports both net loss attributable to the non-controlling interest and net loss attributable to the Company’s common shareholders on the face of the Consolidated Statements of Operations. The Company’s equity interest in Alternative Hospitality, Inc. is 51% and the non-controlling stockholder’s interest is 49%. This is reflected in the Consolidated Statements of Equity. |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 606 – Revenue from Contracts with Customers Generally, the Company considers all revenues as arising from contracts with customers. Revenue is recognized based on the five-step process outlined in the Accounting Standards Codification (“ASC”) 606: Step 1 – Identify the Contract with the Customer – A contract exists when (a) the parties to the contract have approved the contract and are committed to perform their respective obligations, (b) the entity can identify each party’s rights regarding the goods or services to be transferred, (c) the entity can identify the payment terms for the goods or services to be transferred, (d) the contract has commercial substance and it is probably that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Step 2 – Identify Performance Obligations in the Contract – Upon execution of a contract, the Company identifies as performance obligations each promise to transfer to the customer either (a) goods or services that are distinct, or (b) a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. To the extent a contract includes multiple promised goods or services, the Company must apply judgement to determine whether the goods or services are capable of being distinct within the context of the contract. If these criteria are not met, the goods or services are accounted for as a combined performance obligation. Step 3 – Determine the Transaction Price – When (or as) a performance obligation is satisfied, the Company shall recognize as revenue the amount of the transaction price that is allocated to the performance obligation. The contract terms are used to determine the transaction price. Generally, all contracts include fixed consideration. If a contract did include variable consideration, the Company would determine the amount of variable consideration that should be included in the transaction price based on expected value method. Variable consideration would be included in the transaction price, if in the Company’s judgement, it is probable that a significant future reversal of cumulative revenue under the contract would not occur. Step 4 – Allocate the Transaction Price – After the transaction price has been determined, the next step is to allocate the transaction price to each performance obligation in the contract. If the contract only has one performance obligation, the entire transaction price will be applied to that obligation. If the contract has multiple performance obligations, the transaction price is allocated to the performance obligations based on the relative standalone selling price (SSP) at contract inception. Step 5 – Satisfaction of the Performance Obligations (and Recognize Revenue) – Revenue is recognized when (or as) goods or services are transferred to a customer. The Company satisfies each of its performance obligations by transferring control of the promised good or service underlying that performance obligation to the customer. Control is the ability to direct the use of and obtain substantially all of the remaining benefits from an asset. It includes the ability to prevent other entities from directing the use of and obtaining the benefits from an asset. Indicators that control has passed to the customer include: a present obligation to pay; physical possession of the asset; legal title; risks and rewards of ownership; and acceptance of the asset(s). Performance obligations can be satisfied at a point in time or over time. The majority of the Company’s revenue was derived under the agreements, Consulting Agreement and Equipment Lease Agreement, entered into with Acres Cultivation, LLC. Revenue derived from consulting services fees are recognized over the term of the arrangement as services are provided. Revenue is presented net of discounts, fees and other related taxes. Revenue derived from equipment leases For the three months ended March 31, 2021 2020 Revenues: Rental income (i) $ 19,861 $ 22,499 Management income (ii) 202,951 306,112 Equipment lease income (ii) 84,563 127,547 Total $ 307,375 $ 456,158 (i) The rental income is from the Company’s THC Park. (ii) In April 2018, the Company entered into a management agreement with Acres Cultivation, LLC, a Nevada limited liability company (the “Licensed Operator”) that holds a license for the legal cultivation of marijuana for sale under the laws of the State of Nevada. In January of 2019, the Company entered into a revised agreement, which replaced the April 2018 agreement, with the Licensed Operator in order to be more stringently aligned with Nevada marijuana laws. The material terms of the agreement remain unchanged. The Licensed Operator is contractually obligated to pay over to the Company eighty-five (85%) percent of gross revenues defined as gross proceeds from sales of marijuana products minus applicable state excise taxes and local sales tax. The agreement is to remain in force until April 2026. In April 2019, the Licensed Operator was acquired by Curaleaf Holdings, Inc., a publicly traded Canadian cannabis company. |
Other Current Liabilities | Other Current Liabilities The Company’s other current liabilities consisted of amounts due under the management agreement and performance guarantee with Acres Cultivation, LLC. As of March 31, 2021 and December 31, 2020, other current liabilities were $2,217,935 and $1,328,438, respectively. |
Stock-based Compensation | Stock-Based Compensation The Company’s share-based payment awards principally consist of grants of common stock. In accordance with the applicable accounting guidance, stock-based payment awards are classified as either equity or liabilities. For equity-classified awards, the Company measures compensation cost based on the grant date fair value and recognizes compensation expense in the consolidated statements of operations over the requisite service or performance period the award is expected to vest. The fair value of liability-classified awards is at each reporting date through the settlement date. Change in fair value during the requisite service period will be remeasured as compensation cost over that period. The Company utilizes its historical stock price to determine the volatility of any stock-based compensation. The expected dividend yield is 0% as the Company has not paid any dividends on its common stock and does not anticipate it will pay any dividends in the foreseeable future. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant date with a term equal to the expected term of the stock-based award. For stock-based financial instruments issued to parties other than employees, the Company uses the contractual term of the financial instruments as the expected term of the stock-based financial instruments. The assumptions used in calculating the fair value of stock-based financial instruments represent its best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and it uses different assumptions, its stock-based compensation expense could be materially different in the future. |
Operating Leases | Operating Leases The Company adopted ASC Topic 842, Leases, on January 1, 2019. The new leasing standard requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company used its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. A number of the lease agreements contain options to renew and options to terminate the leases early. The lease term used to calculate ROU assets and lease liabilities only includes renewal and termination options that are deemed reasonably certain to be exercised. The Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months. The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances of accrued and prepaid rent, and unamortized lease incentives provided by lessors. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur. The Company has elected not to separate lease and non-lease components for all property leases for the purposes of calculating ROU assets and lease liabilities. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance on deferred tax assets is established when management considers it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax benefits from an uncertain tax position are only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Interest and penalties related to unrecognized tax benefits are recorded as incurred as a component of income tax expense. The Company has not recognized any tax benefits from uncertain tax positions for any of the reporting periods presented. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Stock Based Compensation: Compensation – Stock Compensation (Topic 718) Improvements to Nonemployee Share Based Payment Accounting. The amendments in this Update expand the scope of stock compensation to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance in this Update does not apply to transactions involving equity instruments granted to a lender or investor that provides financing to the issuer. The guidance is effective for fiscal years beginning after December 31, 2018 including interim periods within the fiscal year. The Company adopted with an effective date of January 1, 2019. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Investment in Marketable Securities | As of March 31, 2021 and December 31, 2020, the Company’s investment in marketable securities – available for sale was determined to be a level 1 investment. March 31, 2021 December 31, 2020 Marketable securities - 150,000 Total $ - $ 150,000 |
Schedule of Accounts Receivable and Allowance for Doubtful Accounts | Note receivable at March 31, 2021 and December 31, 2020 consisted of the following: March 31, 2021 December 31, 2020 Note receivable- GeneRx (i) 300,000 - Total $ 300,000 $ - i. On March 12, 2021, the Company (the “Holder”) was issued a Convertible Promissory Note (the “Note”) by GeneRx (the “Borrower”), a Delaware corporation, in the amount of $300,000. The Note has a term of one year (March 12, 2022 Maturity Date) and accrues interest at two percent (2%) per annum. The Note is convertible, at the option of the Holder, into shares of common stock of the Borrower at a fixed conversion price of $1.00 per share. Upon an Event of Default, the Conversion Price shall equal the Alternate Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Alternate Conversion Price” shall equal the lesser of (i) 80% multiplied by the average of the three lowest daily volume weighted average prices (“VWAP”) during the previous twenty (20) Trading Days (as defined below) before the Issue Date of this Note (representing a discount rate of 20%) or (ii) 80% multiplied by the Market Price (as defined herein) (representing a discount rate of 20%). “Market Price” means the average of the three lowest daily VWAPs for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date thereof until the same is paid (the “Default Interest”). The Company funded the transaction on March 15, 2021. ii. The convertible note receivable is considered available for sale debt securities with a private company that is not traded in active markets. Since observable price quotations were not available at acquisition, fair value was estimated based on cost less an appropriate discount upon acquisition. The discount of each instrument is accreted into interest income over the respective term as shown within the Company’s Condensed Consolidated Statements of Operations. |
Schedule of Property and Equipment Estimated Useful Lives | Property and equipment are depreciated over their estimated useful lives as follows: Buildings 12 years Land Not depreciated Leasehold Improvements Lessor of lease term or 5 years Machinery and Equipment 5 years Furniture and Fixtures 5 years |
Schedule of Rental Revenue Recognition | For the three months ended March 31, 2021 2020 Revenues: Rental income (i) $ 19,861 $ 22,499 Management income (ii) 202,951 306,112 Equipment lease income (ii) 84,563 127,547 Total $ 307,375 $ 456,158 (i) The rental income is from the Company’s THC Park. (ii) In April 2018, the Company entered into a management agreement with Acres Cultivation, LLC, a Nevada limited liability company (the “Licensed Operator”) that holds a license for the legal cultivation of marijuana for sale under the laws of the State of Nevada. In January of 2019, the Company entered into a revised agreement, which replaced the April 2018 agreement, with the Licensed Operator in order to be more stringently aligned with Nevada marijuana laws. The material terms of the agreement remain unchanged. The Licensed Operator is contractually obligated to pay over to the Company eighty-five (85%) percent of gross revenues defined as gross proceeds from sales of marijuana products minus applicable state excise taxes and local sales tax. The agreement is to remain in force until April 2026. In April 2019, the Licensed Operator was acquired by Curaleaf Holdings, Inc., a publicly traded Canadian cannabis company. |
Note Receivable (Tables)
Note Receivable (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Schedule of Note Receivable | Note receivable at March 31, 2021 and December 31, 2020 consisted of the following: March 31, 2021 December 31, 2020 Note receivable- GeneRx (i) 300,000 - Total $ 300,000 $ - i. On March 12, 2021, the Company (the “Holder”) was issued a Convertible Promissory Note (the “Note”) by GeneRx (the “Borrower”), a Delaware corporation, in the amount of $300,000. The Note has a term of one year (March 12, 2022 Maturity Date) and accrues interest at two percent (2%) per annum. The Note is convertible, at the option of the Holder, into shares of common stock of the Borrower at a fixed conversion price of $1.00 per share. Upon an Event of Default, the Conversion Price shall equal the Alternate Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Alternate Conversion Price” shall equal the lesser of (i) 80% multiplied by the average of the three lowest daily volume weighted average prices (“VWAP”) during the previous twenty (20) Trading Days (as defined below) before the Issue Date of this Note (representing a discount rate of 20%) or (ii) 80% multiplied by the Market Price (as defined herein) (representing a discount rate of 20%). “Market Price” means the average of the three lowest daily VWAPs for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date thereof until the same is paid (the “Default Interest”). The Company funded the transaction on March 15, 2021. ii. The convertible note receivable is considered available for sale debt securities with a private company that is not traded in active markets. Since observable price quotations were not available at acquisition, fair value was estimated based on cost less an appropriate discount upon acquisition. The discount of each instrument is accreted into interest income over the respective term as shown within the Company’s Condensed Consolidated Statements of Operations. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment at March 31, 2021 and December 31, 2020 consisted of the following: March 31, December 31, Leasehold Improvements $ 323,281 $ 323,281 Machinery and Equipment 1,163,242 1,087,679 Building and Land 1,650,000 3,150,000 Furniture and Fixtures 578,843 543,366 Total property and equipment 3,715,366 5,104,326 Less: Accumulated depreciation (913,481 ) (948,651 ) Property and equipment, net $ 2,801,885 $ 4,155,675 |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable as of March 31, 2021 and December 31, 2020 consist of the following: March 31, December 31, Note payable bearing interest at 6.50%, originated November 1, 2018, due on October 31, 2023, originally $1,100,000 (i) $ - $ 1,022,567 Note payable bearing interest at 5.0%, originated January 17, 2019, due on January 31, 2022, originally $750,000 (ii) 750,000 750,000 Note payable bearing interest at 9.0%, originated January 17, 2019, due on January 16, 2020, originally $150,000 (iii) 100,000 100,000 Note payable bearing interest at 6.5% originated April 1, 2019, due on March 31, 2022, originally $250,000 (iv) 229,675 234,431 Notes payable, related party, bearing interest at 9.0%, originated February 20, 2020, due on February 20, 2021, originally $110,405 (v) - 110,405 Notes payable, related party, bearing interest at 9.0%, originated April 3, 2020, due on March 30, 2021, originally $90,000 (vi) - 90,000 Total notes payable $ 1,079,675 $ 2,307,403 Less: current portion (912,470 ) (1,485,678 ) Long-term notes payable $ 167,205 $ 921,725 (i) On September 21, 2018, the Company, through its wholly-owned subsidiary Prescott Management, LLC, entered into a contract to purchase an approximately 10,000 square foot office building located at 1300 South Jones Boulevard, Las Vegas, Nevada 89146 for $1,500,000, subject to seller financing in the amount of $1,100,000, amortizing over 30 years at an interest rate of 6.5% per annum with monthly installments of $6,952.75 beginning on November 1, 2018, and continuing on the same day of each month thereafter until October 31, 2019. Upon the one-year anniversary of the note, a principal reduction payment of $50,000 is due, and provided that the monthly payments and the principal reduction payment have been made, the payments will be recalculated and re-amortized on the same terms with a new scheduled monthly payment of $6,559 beginning on November 1, 2019 and continuing until October 31, 2023, at which time the entire sum of principal in the amount of $986,438, plus any accrued interest, is due and payable. The Company closed the purchase on October 18, 2018. On December 12, 2020, the Company entered into a sales contract with Helping Hands Support, Inc. for the sale of the Company’s commercial building. On January 12, 2021, the Company completed the sale of its commercial building for $1,627,500. As of March 31, 2021, the note was paid in full. (ii) On January 17, 2019, the Company executed a promissory note for $750,000 with FR Holdings LLC, a Wyoming limited liability company. The note accrues interest at 5.0% per annum, payable in regular monthly installments of $3,125, due on or before the same day of each month beginning February 1, 2019 until January 31, 2022 at which the entire principal and any then accrued interest thereon shall be due and payable. As of March 31, 2021, $750,000 principal and $2,475 interest remain due. (iii) On January 17, 2019, the Company executed a short-term promissory note for $150,000 with Let’s Roll Holdings, LLC, and entity controlled by the Company’s Chief Cultivation Officer and a director. The note accrues interest at 9.0% per annum and is due on January 16, 2020. Principal payments in the amount of $50,000 were made during the year ended December 31, 2019. As of March 31, 2021, $100,000 principal and $22,013 interest remain due. (iv) On April 1, 2019, the Company executed a promissory note for $250,000 with John T. Jacobs and Teresa D. Jacobs. The note accrues interest at 6.5% per annum, payable in regular monthly installments of $2,178, due on or before the same day of each month beginning May 1, 2019 until March 31, 2020 at which time a principal reduction of $50,000 shall be due, the payments shall be re-amortized (15-year amortization). On or before March 31, 2021, a second principal reduction of $50,000 shall be due, the payments shall be re-amortized (15-year amortization). Payments shall continue to be paid until March 31, 2022, at which time the entire sum of principal and accrued interest shall be due and payable. As of March 31, 2021, $229,675 principal and $1,318 interest remain due. (v) On February 20, 2020, the Company’s subsidiary, Alternative Hospitality, Inc. (the “Borrower”), issued a Short-Term Promissory Note (the “Note”) to Pyrros One, LLC (the “Holder”), an entity controlled by a relative of a director of the Company, in the amount of $110,405 that matures on February 19, 2021. The Company received cash in the amount of $74,000 and the Holder paid expenses on behalf of the Company in the amount of $36,405. The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $825 due on or before the twentieth day of each month commencing on April 20, 2020. The Borrower was required to make an interest and principal reduction payment in the amount of $1,233 on or before March 20, 2020. The Holder is granted a security interest in that certain real property located at 1300 S. Jones Blvd, Las Vegas, NV 89146, which was owned by the Borrower. As of March 31, 2021, the note was paid in full (vi) On March 31, 2020, the Company’s subsidiary, Condo Highrise Management, LLC (the “Borrower”), issued a Short-Term Promissory Note (the “Note”) to Pyrros One, LLC (the “Holder”), an entity controlled by a relative of a director of the Company, in the amount of $90,000 that matures on March 30, 2021. The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $675 due on or before the first day of each month commencing on May 1, 2020. The Holder is granted a security interest in that certain real property located at 4295 Hwy 343, Amargosa, NV 89020, which was owned by the Borrower. The transaction closed on April 3, 2020. As of March 31, 2021, the note was paid in full |
Schedule of Minimum Loan Payments | Amount Fiscal year ending December 31: 2021 (excluding the three months ended March 31, 2021) 913,475 2022 19,397 2023 20,696 2024 22,082 2025 23,561 Thereafter 80,465 Total minimum loan payments $ 1,079,676 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental and Lease Commitments | Future minimal rental and lease commitments under non-cancelable operating leases with terms in excess of one year as of March 31, 2021, are as follows: Amount Fiscal year ending December 31: 2021 (excluding the three months ended March 31, 2021) 262,980 2022 350,755 2023 350,986 2024 351,333 2025 351,333 Thereafter 799,662 Total minimum lease payments $ 2,467,049 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Options Issued, Exercised and Expired | A summary of the options issued, exercised and expired are below: Options: Shares Weighted Avg. Remaining Contractual Life in Years Balance at December 31, 2020 1,510,000 $ 0.76 2.33 Issued - - - Exercised - - - Expired - - - Balance at March 31, 2021 1,510,000 $ 0.76 2.44 Exercisable at March 31, 2021 760,000 $ 0.76 2.4 |
Summary of Warrants Issued, Exercised and Expired | A summary of the warrants issued, exercised and expired are below: Warrants: Shares Weighted Avg. Remaining Contractual Life in Years Balance at December 31, 2020 1,233,000 $ 0.83 0.4 Issued 250,000 0.10 3.8 Exercised - - - Expired - - - Balance at March 31, 2021 1,483,000 $ 0.75 .75 |
Nature of the Business (Details
Nature of the Business (Details Narrative) - USD ($) | Dec. 15, 2017 | Jan. 10, 2017 | Mar. 31, 2021 | Dec. 31, 2020 |
Promissory note | $ 1,079,675 | $ 2,307,403 | ||
MJ Real Estate Partners, LLC (MJRE) [Member] | ||||
Number of common stocks, exchanged during period | 1,800,000 | |||
Red Earth LLC [Member] | ||||
Number of common stocks, exchanged during period | 52,732,969 | |||
Promissory note | $ 900,000 | |||
Percentage of controlling interest | 88.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Feb. 17, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Proceeds from sale of marketable securities | $ 10,207,504 | |||
Impairment of long-lived assets | 4,586 | $ 18,345 | ||
Other current liabilities | $ 1,454,471 | $ 1,328,438 | ||
Expected dividend yield | 0.00% | 0.00% | ||
Stockholder [Member] | ||||
Non-controlling interest percentage | 49.00% | |||
Alternative Hospitality, Inc [Member] | ||||
Equity interest | 51.00% | |||
Stock Purchase Agreement [Member] | ATG Holdings, LLC [Member] | ||||
Number of common stock shares purchased | 1,500,000,000 | |||
Purchase price of shares purchased | $ 200,000 | |||
Proceeds from sale of marketable securities | $ 9,857,429 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Investment in Marketable Securities (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Marketable securities | $ 150,000 | |
Total | $ 150,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Accounts receivable | $ 50,061 | $ 23,675 |
Less: allowance | 34,932 | 12,000 |
Net accounts receivable | $ 15,127 | $ 9,461 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Property, Plant and Equipment Estimated Useful Lives (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Buildings [Member] | |
Property, plant and equipment, estimated useful lives | 12 years |
Land [Member] | |
Property, plant and equipment, estimated useful lives, description | Not depreciated |
Leasehold Improvements [Member] | |
Property, plant and equipment, estimated useful lives, description | Lessor of lease term or 5 years |
Machinery and Equipment [Member] | |
Property, plant and equipment, estimated useful lives | 5 years |
Furniture and Fixtures [Member] | |
Property, plant and equipment, estimated useful lives | 5 years |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Rental Revenue Recognition (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Accounting Policies [Abstract] | |||
Rental income | [1] | $ 19,861 | $ 22,499 |
Management income | [2] | 202,951 | 306,112 |
Equipment lease income | [2] | 84,563 | 127,547 |
Total | $ 307,375 | $ 456,158 | |
[1] | The rental income is from the Company's THC Park. | ||
[2] | In April 2018, the Company entered into a management agreement with Acres Cultivation, LLC, a Nevada limited liability company (the "Licensed Operator") that holds a license for the legal cultivation of marijuana for sale under the laws of the State of Nevada. In January of 2019, the Company entered into a revised agreement, which replaced the April 2018 agreement, with the Licensed Operator in order to be more stringently aligned with Nevada marijuana laws. The material terms of the agreement remain unchanged. The Licensed Operator is contractually obligated to pay over to the Company eighty-five (85%) percent of gross revenues defined as gross proceeds from sales of marijuana products minus applicable state excise taxes and local sales tax. The agreement is to remain in force until April 2026. In April 2019, the Licensed Operator was acquired by Curaleaf Holdings, Inc., a publicly traded Canadian cannabis company. |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Schedule of Rental Revenue Recognition (Details) (Parenthetical) - Management Agreement [Member] - Acres Cultivation, LLC [Member] | 1 Months Ended |
Apr. 30, 2018 | |
Percentage of gross revenue payable | 85.00% |
Agreement expiration date | 2026-04 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accumulated deficit | $ (12,776,776) | $ (20,002,960) | |
Net cash used in operating activities | $ 2,735,731 | $ 53,395 |
Note Receivable - Schedule of N
Note Receivable - Schedule of Note Receivable (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | |
Total | $ 300,000 | ||
Note Receivable- GeneRx [Member] | |||
Total | [1] | $ 300,000 | |
[1] | On March 12, 2021, the Company (the "Holder") was issued a Convertible Promissory Note (the "Note") by GeneRx (the "Borrower"), a Delaware corporation, in the amount of $300,000. The Note has a term of one year (March 12, 2022 Maturity Date) and accrues interest at two percent (2%) per annum. The Note is convertible, at the option of the Holder, into shares of common stock of the Borrower at a fixed conversion price of $1.00 per share. Upon an Event of Default, the Conversion Price shall equal the Alternate Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower's securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Alternate Conversion Price" shall equal the lesser of (i) 80% multiplied by the average of the three lowest daily volume weighted average prices ("VWAP") during the previous twenty (20) Trading Days (as defined below) before the Issue Date of this Note (representing a discount rate of 20%) or (ii) 80% multiplied by the Market Price (as defined herein) (representing a discount rate of 20%). "Market Price" means the average of the three lowest daily VWAPs for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date thereof until the same is paid (the "Default Interest"). The Company funded the transaction on March 15, 2021. |
Note Receivable - Schedule of_2
Note Receivable - Schedule of Note Receivable (Details) (Parenthetical) - Convertible Promissory Note [Member] - GeneRx [Member] | Mar. 12, 2021USD ($)Integer$ / shares |
Debt face amount | $ | $ 300,000 |
Debt term | 1 year |
Debt maturity date | Mar. 12, 2022 |
Debt interest rate | 2.00% |
Conversion price per share | $ / shares | $ 1 |
Debt conversion description | A Delaware corporation, in the amount of $300,000. The Note has a term of one year (March 12, 2022 Maturity Date) and accrues interest at two percent (2%) per annum. The Note is convertible, at the option of the Holder, into shares of common stock of the Borrower at a fixed conversion price of $1.00 per share. Upon an Event of Default, the Conversion Price shall equal the Alternate Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower's securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Alternate Conversion Price" shall equal the lesser of (i) 80% multiplied by the average of the three lowest daily volume weighted average prices ("VWAP") during the previous twenty (20) Trading Days (as defined below) before the Issue Date of this Note (representing a discount rate of 20%) or (ii) 80% multiplied by the Market Price (as defined herein) (representing a discount rate of 20%). "Market Price" means the average of the three lowest daily VWAPs for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date thereof until the same is paid (the "Default Interest"). The Company funded the transaction on March 15, 2021. |
Debt volume weighted average prices | 80.00% |
Debt discount rate | 20.00% |
Trading days | Integer | 20 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Depreciation expense | $ 97,470 | $ 111,746 |
Property, Plant and Equipment [Member] | ||
Depreciation expense | $ 97,470 | $ 92,282 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Total property and equipment | $ 3,715,366 | $ 5,104,326 |
Less: Accumulated depreciation | (913,481) | (948,651) |
Property and equipment, net | 2,801,885 | 4,115,675 |
Leasehold Improvements [Member] | ||
Total property and equipment | 323,281 | 323,281 |
Machinery and Equipment [Member] | ||
Total property and equipment | 1,163,242 | 1,087,679 |
Building and Land [Member] | ||
Total property and equipment | 1,650,000 | 3,150,000 |
Furniture and Fixtures [Member] | ||
Total property and equipment | $ 578,843 | $ 543,366 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - Provisional Grow License [Member] - USD ($) | 1 Months Ended | |
Feb. 28, 2017 | Oct. 31, 2016 | |
Investor [Member] | ||
Payment for business acquisition | $ 350,000 | |
Red Earth LLC [Member] | Asset Purchase and Sale Agreement [Member] | ||
Agreement amount received from seller | $ 300,000 | |
Payment for deposit | $ 25,000 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | |
Total notes payable | $ 1,079,675 | $ 2,307,403 | |
Less: current portion | (912,470) | (1,485,678) | |
Long-term notes payable | 167,205 | 921,723 | |
Note Payable One [Member] | |||
Total notes payable | [1] | 1,022,567 | |
Note Payable Two [Member] | |||
Total notes payable | [2] | 750,000 | 750,000 |
Note Payable Three [Member] | |||
Total notes payable | [3] | 100,000 | 100,000 |
Note Payable Four [Member] | |||
Total notes payable | [4] | 229,675 | 234,431 |
Note Payable Five [Member] | |||
Total notes payable | [5] | 110,405 | |
Note Payable Six [Member] | |||
Total notes payable | [6] | $ 90,000 | |
[1] | On September 21, 2018, the Company, through its wholly-owned subsidiary Prescott Management, LLC, entered into a contract to purchase an approximately 10,000 square foot office building located at 1300 South Jones Boulevard, Las Vegas, Nevada 89146 for $1,500,000, subject to seller financing in the amount of $1,100,000, amortizing over 30 years at an interest rate of 6.5% per annum with monthly installments of $6,952.75 beginning on November 1, 2018, and continuing on the same day of each month thereafter until October 31, 2019. Upon the one-year anniversary of the note, a principal reduction payment of $50,000 is due, and provided that the monthly payments and the principal reduction payment have been made, the payments will be recalculated and re-amortized on the same terms with a new scheduled monthly payment of $6,559 beginning on November 1, 2019 and continuing until October 31, 2023, at which time the entire sum of principal in the amount of $986,438, plus any accrued interest, is due and payable. The Company closed the purchase on October 18, 2018. The building is home to the Company's business operations. As of March 31, 20201 $1,083426 principal and $5,886. interest remain due. Please see Note 15- Subsequent Events for further information. | ||
[2] | On January 17, 2019, the Company executed a promissory note for $750,000 with FR Holdings LLC, a Wyoming limited liability company. The note accrues interest at 5.0% per annum, payable in regular monthly installments of $3,125, due on or before the same day of each month beginning February 1, 2019 until January 31, 2022 at which the entire principal and any then accrued interest thereon shall be due and payable. As of March 31, 2021, $750,000 principal and $2,475 interest remain due. | ||
[3] | On January 17, 2019, the Company executed a short-term promissory note for $150,000 with Let's Roll Holdings, LLC, and entity controlled by the Company's Chief Cultivation Officer and a director. The note accrues interest at 9.0% per annum and is due on January 16, 2020. Principal payments in the amount of $50,000 were made during the year ended December 31, 2019. As of March 31, 2020, $100,000 principal and $13,013 interest remain due. | ||
[4] | On April 1, 2019, the Company executed a promissory note for $250,000 with John T. Jacobs and Teresa D. Jacobs. The note accrues interest at 6.5% per annum, payable in regular monthly installments of $2,178, due on or before the same day of each month beginning May 1, 2019 until March 31, 2020 at which time a principal reduction of $50,000 shall be due, the payments shall be re-amortized (15-year amortization). On or before March 31, 2021, a second principal reduction of $50,000 shall be due, the payments shall be re-amortized (15-year amortization). Payments shall continue to be paid until March 31, 2022, at which time the entire sum of principal and accrued interest shall be due and payable. As of March 31, 2021, $239,817 principal and $4,383 interest remain due. | ||
[5] | On February 20, 2020, the Company's subsidiary, Alternative Hospitality, Inc. (the Borrower), issued a Short-Term Promissory Note (the Note) to Pyrros One, LLC (the Holder), an entity controlled by a relative of a director of the Company, in the amount of $110,405 that matures on February 19, 2021. The Company received cash in the amount of $74,000 and the Holder paid expenses on behalf of the Company in the amount of $36,405. The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $825 due on or before the twentieth day of each month commencing on April 20, 2020. The Borrower was required to make an interest and principal reduction payment in the amount of $1,233 on or before March 20, 2020. The Holder is granted a security interest in that certain real property located at 1300 S. Jones Blvd, Las Vegas, NV 89146, which was owned by the Borrower. As of March 31, 2020, $110,405 principal and $825 interest remain due. | ||
[6] | On March 31, 2020, the Company's subsidiary, Condo Highrise Management, LLC (the Borrower), issued a Short-Term Promissory Note (the Note) to Pyrros One, LLC (the Holder), an entity controlled by a relative of a director of the Company, in the amount of $90,000 that matures on March 30, 2021. The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $675 due on or before the first day of each month commencing on May 1, 2020. The Holder is granted a security interest in that certain real property located at 4295 Hwy 343, Amargosa, NV 89020. which was owned by the Borrower. The transaction closed on April 3, 2020. As of March 31, 2021, $90,000 principal and $0 interest remain due. |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) | Jan. 12, 2021USD ($) | Mar. 31, 2020USD ($) | Feb. 20, 2020USD ($) | Apr. 02, 2019USD ($) | Jan. 17, 2019USD ($) | Nov. 02, 2018USD ($) | Sep. 21, 2018USD ($)ft² | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) |
Sale of commercial building | $ 1,627,500 | ||||||||
Note Payable One [Member] | |||||||||
Debt interest rate | 6.50% | ||||||||
Debt instrument maturity date | Oct. 31, 2023 | ||||||||
Debt instrument principal value | $ 1,100,000 | ||||||||
Promissory Note [Member] | John T. Jacobs and Teresa D. Jacobs [Member] | |||||||||
Debt interest rate | 6.50% | ||||||||
Debt instrument maturity date | Mar. 31, 2022 | ||||||||
Debt instrument principal value | $ 250,000 | 229,675 | |||||||
Debt instrument monthly installments | $ 2,178 | ||||||||
Debt instrument maturity date, description | Beginning May 1, 2019 until March 31, 2020 | ||||||||
Interest payable | 1,318 | ||||||||
Promissory Note [Member] | Second Payment [Member] | March 31, 2021 [Member] | John T. Jacobs and Teresa D. Jacobs [Member] | |||||||||
Amortizing period | 15 years | ||||||||
Debt instrument principal payment reduction | $ 50,000 | ||||||||
Debt instrument, interest rate terms | The payments shall be re-amortized (15-year amortization) | ||||||||
Short Term Promissory Note [Member] | Alternative Hospitality, Inc [Member] | Pyrros One, LLC [Member] | |||||||||
Debt interest rate | 9.00% | ||||||||
Debt instrument maturity date | Feb. 19, 2021 | ||||||||
Debt instrument principal value | $ 110,405 | ||||||||
Notes payable, description | The Holder is granted a security interest in that certain real property located at 1300 S. Jones Blvd, Las Vegas, NV 89146, which is owned by the Borrower. | ||||||||
Debt instrument, interest rate terms | The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $825 due on or before the twentieth day of each month commencing on April 20, 2020. | ||||||||
Debt instrument interest payment | $ 825 | ||||||||
Debt instrument interest and principal reduction payment | 1,233 | ||||||||
Debt intrument payment expenses | $ 36,405 | ||||||||
Debt instrument, payment terms | The Borrower was required to make an interest and principal reduction payment in the amount of $1,233 on or before March 20, 2020. | ||||||||
Short Term Promissory Note [Member] | Condo Highrise Management, LLC [Member] | Pyrros One, LLC [Member] | |||||||||
Debt instrument principal value | $ 90,000 | $ 90,000 | |||||||
Notes payable, description | The Holder is granted a security interest in that certain real property located at 4295 Hwy 343, Amargosa, NV 89020 which is owned by the Borrower. | ||||||||
Debt instrument, interest rate terms | The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $675 due on or before the first day of each month commencing on May 1, 2020. | ||||||||
Debt instrument interest payment | $ 675 | ||||||||
Note Payable Five [Member] | |||||||||
Debt interest rate | 9.00% | ||||||||
Debt instrument maturity date | Feb. 19, 2021 | ||||||||
Debt instrument principal value | $ 110,405 | ||||||||
Debt instrument principal payment reduction | $ 74,000 | ||||||||
Prescott Management LLC [Member] | |||||||||
Seller financing | $ 1,100,000 | ||||||||
Amortizing period | 30 years | ||||||||
Debt instrument monthly installments | $ 6,953 | ||||||||
Debt instrument maturity date, description | Beginning on November 1, 2018, and continuing on the same day of each month thereafter until October 31, 2019 | ||||||||
Sale of commercial building | $ 1,627,500 | ||||||||
Prescott Management LLC [Member] | One-Year Anniversary [Member] | |||||||||
Debt instrument monthly installments | $ 50,000 | ||||||||
Prescott Management LLC [Member] | New Scheduled Payment [Member] | Beginning on November 1, 2019 and Continuing Until October 31, 2023 [Member] | |||||||||
Debt instrument principal value | 986,438 | ||||||||
Debt instrument monthly installments | $ 6,559 | ||||||||
Debt instrument maturity date, description | Beginning on November 1, 2019 and continuing until October 31, 2023 | ||||||||
Prescott Management LLC [Member] | Office Building [Member] | |||||||||
Area of land | ft² | 10,000 | ||||||||
Seller financing | $ 1,500,000 | ||||||||
Notes payable, description | The Company, through its wholly-owned subsidiary Prescott Management, LLC, entered into a contract to purchase an approximately 10,000 square foot office building located at 1300 South Jones Boulevard, Las Vegas, Nevada 89146 for $1,500,000, subject to seller financing in the amount of $1,100,000, amortizing over 30 years at an interest rate of 6.5% per annum with monthly installments of $6,952.75 beginning on November 1, 2018, and continuing on the same day of each month thereafter until October 31, 2019. Upon the one-year anniversary of the note, a principal reduction payment of $50,000 is due, and provided that the monthly payments and the principal reduction payment have been made, the payments will be recalculated and re-amortized on the same terms with a new scheduled monthly payment of $6,559 beginning on November 1, 2019 and continuing until October 31, 2023, at which time the entire sum of principal in the amount of $986,438, plus any accrued interest, is due and payable. The Company closed the purchase on October 18, 2018. The building is home to the Company's business operations. | ||||||||
FR Holdings LLC [Member] | Promissory Note [Member] | |||||||||
Debt interest rate | 5.00% | ||||||||
Debt instrument maturity date | Jan. 31, 2022 | ||||||||
Debt instrument principal value | $ 750,000 | 750,000 | |||||||
Debt instrument monthly installments | $ 3,125 | ||||||||
Debt instrument maturity date, description | Beginning February 1, 2019 until January 31, 2022 | ||||||||
Interest payable | 2,475 | ||||||||
Let's Roll Holdings, LLC [Member] | Short Term Promissory Note [Member] | Chief Cultivation Officer and Director [Member] | |||||||||
Debt interest rate | 9.00% | ||||||||
Debt instrument maturity date | Jan. 16, 2020 | ||||||||
Debt instrument principal value | $ 150,000 | 100,000 | |||||||
Debt instrument monthly installments | $ 50,000 | ||||||||
Interest payable | $ 22,013 |
Notes Payable - Schedule of Min
Notes Payable - Schedule of Minimum Loan Payments (Details) | Mar. 31, 2021USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 913,475 |
2022 | 19,397 |
2023 | 20,696 |
2024 | 22,082 |
2025 | 23,561 |
Thereafter | 80,464 |
Total minimum loan payments | $ 1,079,675 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) | Apr. 07, 2021 | Mar. 09, 2021 | Oct. 01, 2020 | Sep. 15, 2020 | Sep. 01, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Stock awarded options to purchase | ||||||||
Stock option exercisable price | $ 0.76 | |||||||
Stock issued during period value of common stock | $ 50,000 | |||||||
Operating lease liabilities | 2,111,573 | |||||||
Operating lease, right of use asset | $ 1,959,713 | $ 1,979,181 | ||||||
Operating cash outflows relating to operating lease liabilities | $ 19,468 | |||||||
Operating leases remaining term | 7 years 10 months 17 days | |||||||
Rent expense | $ 87,660 | |||||||
Excess alleged damages | $ 15,000 | |||||||
Bernard Moyle [Member] | ||||||||
Stock awarded options to purchase | 500,000 | |||||||
Former Secretary and President [Member] | ||||||||
Consideration of past compensation | $ 501,085 | |||||||
Payment made for wage claim | $ 62,392 | |||||||
Former Secretary and President [Member] | Wages [Member] | ||||||||
Payment made for wage claim | 59,583 | |||||||
Former Secretary and President [Member] | Accrued Vacation [Member] | ||||||||
Payment made for wage claim | $ 2,854 | |||||||
Employment Agreement [Member] | ||||||||
Employment agreement description | On October 1, 2020, the Company entered into an Employment Agreement (the "Agreement") with Jim Kelly. The Agreement became effective as of October 1, 2020. Under the terms of the Kelly Agreement, the Employee shall serve as the Company's Interim Chief Financial Officer for a term of (i) the sooner of six (6) months, or (ii) the completion of all regulatory filings, including but not limited to the Company's 2019 Annual Report on Form 10-K, the March 31, 2020 Quarterly Report on Form 10-Q, the June 30, 2020 Quarterly Report on Form 10-Q, the September 30, 2020 Quarterly Report on Form 10-Q and all required Current Reports on Form 8-K, with the Securities and Exchange Commission ("SEC") to bring the Company current with the SEC. The Employee shall receive a base salary of $24,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the C-Suite of the Company in its sole discretion, in an amount equal to up to 400% of the Employee's base salary for the then current fiscal year, and at commencement of the Term the Employee shall receive a grant of stock of 500,000 restricted shares of the Company's common stock. Please see Note 15 - Subsequent Events for further information. | On September 1, 2020, the Company entered into an Employment Agreement (the "Agreement") with Roger Bloss. Under the terms of the Agreement, the Employee shall serve as the Company's Interim Chief Executive Officer for a term of six (6) months and the Chief Executive Officer and for an additional two (2) years and six (6) months as the Chief Executive Officer for a total of three (3) years (the "Term") commencing on September 15, 2020. The Employee shall receive a base salary of $105,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the board of directors of the Company in its sole discretion, in amount equal to up to 100% of Employee's base salary for the then current fiscal year, shall be eligible to receive an annual discretionary stock grant during the Term which shall be vested in equal increments of 1/3rd each over a three year period beginning on the first anniversary of employment and shall be awarded options to purchase 500,000 shares of the Company's common stock, exercisable at a price of $.75 per share. | On September 1, 2020, the Company entered into an Employment Agreement (the "Agreement") with Paris Balaouras (the "Employee"). Under the terms of the Agreement, the Employee shall serve as the Company's Chief Cultivation Officer for a term of three (3) years (the "Term") commencing on September 15, 2020. The Employee shall receive a base salary of $105,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the board of directors of the Company in its sole discretion, in amount equal to up to 100% of Employee's base salary for the then current fiscal year, shall be eligible to receive an annual discretionary stock grant during the Term which shall be vested in equal increments of 1/3rd each over a three year period beginning on the first anniversary of employment, shall be eligible to receive a compensatory stock grant of 667,000 shares for and in consideration of past compensation ($224,000 at September 15, 2020) foregone by Employee; such grant exercisable at Employee's option as such time as Employer is profitable at the NOI level on a trailing twelve (12) month basis or upon other commercial reasonable terms as the Board may determine and shall be awarded options to purchase 500,000 shares of the Company's common stock, exercisable at a price of $.75 per share. | |||||
Annual base compensation | $ 24,000 | $ 105,000 | $ 105,000 | |||||
Annual discretionary bonus percentage | 400.00% | 100.00% | 100.00% | |||||
Stock awarded options to purchase | 500,000 | 500,000 | 500,000 | |||||
Stock reserved for future issuance | 667,000 | |||||||
Consideration of past compensation | $ 224,000 | |||||||
Stock option exercisable price | $ 0.75 | |||||||
Employment Agreement [Member] | Bernard Moyle [Member] | ||||||||
Employment agreement description | On September 1, 2020, the Company entered into an Employment Agreement (the "Agreement") with Bernard Moyle. Under the terms of the Agreement, the Employee shall serve as the Company's Secretary/Treasurer for a term of three (3) years (the "Term") commencing on September 15, 2020. The Employee shall receive a base salary of $60,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the board of directors of the Company in its sole discretion, in amount equal to up to 200% of Employee's base salary for the then current fiscal year, shall, at commencement of the Term receive a grant of stock of 500,000 shares and shall be eligible to receive an annual discretionary stock grant during the Term which shall be vested in equal increments of 1/3rd each over a three year period beginning on the first anniversary of employment and shall be awarded options to purchase 500,000 shares of the Company's common stock, exercisable at a price of $.75 per share. | |||||||
Annual base compensation | $ 60,000 | |||||||
Annual discretionary bonus percentage | 200.00% | |||||||
Stock awarded options to purchase | 500,000 | |||||||
Stock reserved for future issuance | 500,000 | |||||||
Stock option exercisable price | $ 0.75 | |||||||
Employment Agreement [Member] | Chief Executive Officer [Member] | ||||||||
Term of employment agreement | 6 months | |||||||
Employment Agreement [Member] | Chief Cultivation Officer [Member] | ||||||||
Term of employment agreement | 3 years | |||||||
Employment Agreement [Member] | Chief Executive Officer [Member] | ||||||||
Term of employment agreement | 3 years | |||||||
Employment Agreement [Member] | Secretary/Treasurer [Member] | Bernard Moyle [Member] | ||||||||
Term of employment agreement | 3 years | |||||||
Board of Directors Services Agreement [Member] | Directors [Member] | ||||||||
Stock issued during period value of common stock | $ 15,000 | |||||||
Shares issued during the period | 15,000 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Rental and Lease Commitments (Details) | Mar. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 262,980 |
2022 | 350,755 |
2023 | 350,986 |
2024 | 351,333 |
2025 | 351,333 |
Thereafter | 799,662 |
Total minimum lease payments | $ 2,467,049 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Details Narrative) - USD ($) | Mar. 29, 2021 | Mar. 08, 2021 | Dec. 14, 2020 | Apr. 07, 2020 | Mar. 31, 2020 | Mar. 31, 2020 | Feb. 11, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Common stock, shares authorized | 95,000,000 | 95,000,000 | ||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||||||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||||
Common stock, shares issued | 69,628,015 | 68,613,541 | ||||||||
Common stock, shares outstanding | 69,628,015 | 68,613,541 | ||||||||
Shares issued during the period | $ 50,000 | |||||||||
Preferred stock, shares issued | 0 | 0 | ||||||||
Preferred stock, shares outstanding | 0 | 0 | ||||||||
Number of shares issued for services | 2,500 | |||||||||
Series A Convertible Preferred Stock [Member] | ||||||||||
Preferred stock, shares authorized | 2,500 | 2,500 | ||||||||
Preferred stock, par value | $ 1,000 | $ 1,000 | ||||||||
Ownership percentage | 4.99% | |||||||||
Preferred stock, shares issued | 0 | 0 | ||||||||
Preferred stock, shares outstanding | 0 | 0 | ||||||||
Common Stock [Member] | ||||||||||
Shares issued during the period, shares | 263,158 | |||||||||
Shares issued during the period | $ 263 | |||||||||
Number of shares issued for services | 225,000 | 281,251 | ||||||||
Preferred Stock [Member] | ||||||||||
Preferred stock, shares authorized | 5,000,000 | |||||||||
Preferred stock, par value | $ 0.001 | |||||||||
Conversion price | $ 0.75 | |||||||||
Related Party [Member] | Debt Conversion and Stock Purchase Agreement [Member] | ||||||||||
Shares issued during the period, shares | 526,216 | |||||||||
Principal and accrued interest | $ 100,000 | |||||||||
Debt conversion, description | On March 8, 2021, the Company issued 526,216 shares of common stock in satisfaction of $100,000 principal and all accrued interest for a note payable to a related party as per the terms of the Debt Conversion and Stock Purchase Agreement dated January 14, 2021. | |||||||||
Related Party [Member] | Debt Conversion and Stock Purchase Agreement [Member] | Common Stock [Member] | ||||||||||
Shares issued during the period, shares | 263,158 | |||||||||
Shares issued during the period | $ 50,000 | |||||||||
Debt conversion, description | On March 8, 2021, the Company issued 263,158 shares of common stock to a related party for the purchase of $50,000 of common stock as per the terms of the Debt Conversion and Stock Purchase Agreement dated January 14, 2021. | |||||||||
Consultant [Member] | Common Stock [Member] | ||||||||||
Shares issued during the period, shares | 225,000 | |||||||||
Former Secretary and President [Member] | ||||||||||
Number of shares issued for services | 250,000 | |||||||||
Former Chief Financial Officer [Member] | ||||||||||
Number of shares issued for services | 31,251 | |||||||||
Interim Chief Executive Officer [Member] | ||||||||||
Number of shares issued for services | 250,000 | 18,562 | ||||||||
Accredited Investor [Member] | ||||||||||
Number of shares issued for services | 1,402,279 | 20,000 | ||||||||
Secretary [Member] | ||||||||||
Number of shares issued for services | 500,000 | |||||||||
Interim Chief Financial Officer [Member] | ||||||||||
Number of shares issued for services | 500,000 | |||||||||
Consultant [Member] | ||||||||||
Number of shares issued for services | 200,000 |
Basic and Diluted Earnings (L_2
Basic and Diluted Earnings (Loss) Per Common Share (Details Narrative) | 3 Months Ended |
Mar. 31, 2021shares | |
Earnings Per Share [Abstract] | |
Anti-dilute purchase of common stock not included in diluted loss per share | 2,993,000 |
Stock Based Compensation (Detai
Stock Based Compensation (Details Narrative) - $ / shares | Sep. 15, 2020 | Jun. 22, 2018 | Jun. 30, 2019 | Mar. 31, 2021 | Dec. 31, 2020 | Jan. 11, 2021 |
Number of option granted, shares | ||||||
Option exercise price per | ||||||
Options term | 2 years 3 months 29 days | |||||
Options outstanding | 1,510,000 | 1,510,000 | ||||
Warrants outstanding | 1,483,000 | 1,233,000 | ||||
Warrant One [Member] | ||||||
Warrants exercise price | $ 0.65 | |||||
Warrant Two [Member] | ||||||
Warrants exercise price | $ 1 | |||||
Warrants [Member] | ||||||
Warrants, description | (a) each participant has the right to acquire additional shares of the Company's Common Stock equal to ten (10%) of the shares purchased in the offering (the "Warrants"); (b) one-half of the Warrants granted to each participant have an exercise price of $0.65 and the other one-half have an exercise price of $1.00, and (c) the Warrants shall be exercisable between June 5, 2019, the date of grant and June 4, 2021 the date of expiration of the Warrants. | |||||
Warrant [Member] | ||||||
Warrants exercisable date | Jun. 5, 2019 | |||||
Warrants expiration date | Jun. 4, 2021 | |||||
Paris Balaouras [Member] | ||||||
Number of option granted, shares | 500,000 | |||||
Option exercise price per | $ 0.75 | |||||
Options term | 3 years | |||||
Roger Bloss [Member] | ||||||
Number of option granted, shares | 500,000 | |||||
Option exercise price per | $ 0.75 | |||||
Options term | 3 years | |||||
Bernard Moyle [Member] | ||||||
Number of option granted, shares | 500,000 | |||||
Option exercise price per | $ 0.75 | |||||
Options term | 3 years | |||||
Corporate Advisory Agreement [Member] | ||||||
Number of option granted, shares | 10,000 | |||||
Option exercise price per | $ 1.20 | |||||
Options term | 3 years | |||||
Common Stock Purchase Warrant Agreement [Member] | ||||||
Warrants exercise price | $ 0.10 | |||||
Warrant to purchase common stock | 250,000 | |||||
Warrant term | 4 years |
Stock Based Compensation - Summ
Stock Based Compensation - Summary of Options Issued, Exercised and Expired (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Options, Beginning Balance | shares | 1,510,000 |
Options, Issued | shares | |
Options, Exercised | shares | |
Options, Expired | shares | |
Options, Ending Balance | shares | 1,510,000 |
Options, Exercisable, Ending Balance | shares | 760,000 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 0.76 |
Weighted Average Exercise Price, Issued | $ / shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Expired | $ / shares | |
Weighted Average Exercise Price, Ending Balance | $ / shares | 0.76 |
Weighted Average Exercise Price, Exercisable, Ending Balance | $ / shares | $ 0.76 |
Remaining Contractual Life in Years, Beginning Balance | 2 years 3 months 29 days |
Remaining Contractual Life in Years, Issued | 0 years |
Remaining Contractual Life in Years, Ending Balance | 2 years 5 months 9 days |
Remaining Contractual Life in Years, Exercisable, Ending Balance | 2 years 4 months 24 days |
Stock Based Compensation - Su_2
Stock Based Compensation - Summary of Warrants Issued, Exercised and Expired (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Warrants Shares, Beginning Balance | shares | 1,233,000 |
Warrants Shares, Issued | shares | 250,000 |
Warrants Shares, Exercised | shares | |
Warrants Shares, Expired | shares | |
Warrants Shares, Ending Balance | shares | 1,483,000 |
Weighted Avg. Exercise Price Warrant, Beginning Balance | $ / shares | $ 0.83 |
Weighted Avg. Exercise Price Warrant, Issued | $ / shares | 0.10 |
Weighted Avg. Exercise Price Warrant, Exercised | $ / shares | |
Weighted Avg. Exercise Price Warrant, Expired | $ / shares | |
Weighted Avg. Exercise Price Warrant, Ending Balance | $ / shares | $ 0.75 |
Remaining Contractual Life in Years, Beginning Balance | 4 months 24 days |
Remaining Contractual Life in Years, Issued | 3 years 9 months 18 days |
Remaining Contractual Life in Years, Ending Balance | 9 months |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - Pyrros One, LLC [Member] - USD ($) | Mar. 31, 2020 | Feb. 20, 2020 |
Alternative Hospitality, Inc [Member] | ||
Debt instrument principal value | $ 110,405 | |
Debt instrument maturity date | Feb. 19, 2021 | |
Debt interest rate | 9.00% | |
Debt instrument monthly installments, interest | $ 825 | |
Debt instrument reduction in interest and principal | $ 1,233 | |
Debt instrument collateral | The Holder is granted a security interest in that certain real property located at 1300 S. Jones Blvd, Las Vegas, NV 89146, which is owned by the Borrower. | |
Condo Highrise Management, LLC [Member] | Short Term Promissory Note [Member] | ||
Debt instrument principal value | $ 90,000 | |
Debt instrument maturity date | Mar. 30, 2021 | |
Debt interest rate | 9.00% | |
Debt instrument monthly installments, interest | $ 675 | |
Debt instrument collateral | The Holder is granted a security interest in that certain real property located at 4295 Hwy 343, Amargosa, NV 89020 which is owned by the Borrower. The transaction closed on April 3, 2020. |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | May 07, 2021USD ($) | Apr. 24, 2021shares | Apr. 07, 2021USD ($)Integer$ / shares | Mar. 12, 2021USD ($)Integer$ / shares | Apr. 05, 2021USD ($) |
Convertible Promissory Note [Member] | GeneRx [Member] | |||||
Debt face amount | $ 300,000 | ||||
Debt term | 1 year | ||||
Debt maturity date | Mar. 12, 2022 | ||||
Debt interest rate | 2.00% | ||||
Conversion price per share | $ / shares | $ 1 | ||||
Debt conversion description | A Delaware corporation, in the amount of $300,000. The Note has a term of one year (March 12, 2022 Maturity Date) and accrues interest at two percent (2%) per annum. The Note is convertible, at the option of the Holder, into shares of common stock of the Borrower at a fixed conversion price of $1.00 per share. Upon an Event of Default, the Conversion Price shall equal the Alternate Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower's securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Alternate Conversion Price" shall equal the lesser of (i) 80% multiplied by the average of the three lowest daily volume weighted average prices ("VWAP") during the previous twenty (20) Trading Days (as defined below) before the Issue Date of this Note (representing a discount rate of 20%) or (ii) 80% multiplied by the Market Price (as defined herein) (representing a discount rate of 20%). "Market Price" means the average of the three lowest daily VWAPs for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date thereof until the same is paid (the "Default Interest"). The Company funded the transaction on March 15, 2021. | ||||
Debt volume weighted average prices | 80.00% | ||||
Trading days | Integer | 20 | ||||
Debt discount rate | 20.00% | ||||
Subsequent Event [Member] | |||||
Debt face amount | $ 50,000 | $ 150,000 | |||
Subsequent Event [Member] | Cultivation and Sales Agreement [Member] | |||||
Payments for royalty | $ 50,000 | ||||
Deposit for security and compliance fee | $ 20,000 | ||||
Percentage of royalty on gross revenues | 10.00% | ||||
Minimum royalty, description | After the first two (2) years from execution of the Agreement, be responsible to pay to MJNE a minimum royalty of $50,000.00 per month. | ||||
Subsequent Event [Member] | Cultivation and Sales Agreement [Member] | First Month [Member] | |||||
Deposit for security and compliance fee | $ 10,000 | ||||
Subsequent Event [Member] | Blue Sky Companies, LLC and Let's Roll Nevada, LLC [Member] | |||||
Shares issued during the period | shares | 1,000,000 | ||||
Subsequent Event [Member] | Green Grow Investments Corporation [Member] | Cultivation and Sales Agreement [Member] | |||||
Agreement term, description | The Agreement shall commence on the Effective Date, continue for a period of ten (10) years and automatically renew for a period of five (5) years. | ||||
Product royalty | $ 600,000 | ||||
Payments for royalty | 50,000 | ||||
Subsequent Event [Member] | MJ Distributing, Inc. and Affiliates [Member] | Cultivation and Sales Agreement [Member] | |||||
Payments for royalty | 150,000 | ||||
Subsequent Event [Member] | MJ Distributing, Inc. and Affiliates [Member] | Cultivation and Sales Agreement [Member] | First and Second Year Harvests [Member] | |||||
Payments for royalty | $ 200,000 | ||||
Subsequent Event [Member] | Convertible Promissory Note [Member] | GeneRx [Member] | |||||
Debt face amount | $ 200,000 | ||||
Debt term | 1 year | ||||
Debt maturity date | Apr. 7, 2022 | ||||
Debt interest rate | 2.00% | ||||
Conversion price per share | $ / shares | $ 1 | ||||
Debt conversion description | A Delaware corporation, in the amount of $200,000. The Note has a term of one year (April 7, 2022 Maturity Date) and accrues interest at two percent (2%) per annum. The Note is convertible, at the option of the Holder, into shares of common stock of the Borrower at a fixed conversion price of $1.00 per share. Upon an Event of Default, the Conversion Price shall equal the Alternate Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower's securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Alternate Conversion Price" shall equal the lesser of (i) 80% multiplied by the average of the three lowest daily volume weighted average prices ("VWAP") during the previous twenty (20) Trading Days (as defined below) before the Issue Date of this Note (representing a discount rate of 20%) or (ii) 80% multiplied by the Market Price (as defined herein) (representing a discount rate of 20%). "Market Price" means the average of the three lowest daily VWAPs for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date thereof until the same is paid (the "Default Interest"). | ||||
Debt volume weighted average prices | 80.00% | ||||
Trading days | Integer | 20 | ||||
Debt discount rate | 20.00% |