Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 21, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-55900 | |
Entity Registrant Name | MJ HOLDINGS, INC. | |
Entity Central Index Key | 0001456857 | |
Entity Tax Identification Number | 20-8235905 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 2580 S. Sorrel St. | |
Entity Address, City or Town | Las Vegas | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89146 | |
City Area Code | (702) | |
Local Phone Number | 879-4440 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | MJNE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 79,417,355 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash | $ 2,021,538 | $ 4,699,372 |
Accounts receivable, net | 93,228 | 7,989 |
Loan receivable - related party | 182,469 | 40,165 |
Prepaid expenses | 156,250 | |
Convertible note receivable | 500,000 | 500,000 |
Total current assets | 2,953,485 | 5,247,526 |
Property and equipment, net | 2,543,263 | 2,578,931 |
Goodwill | 1,451,815 | |
Deposits | 1,016,184 | 1,016,184 |
Total non-current assets | 5,011,262 | 3,595,115 |
Total assets | 7,964,747 | 8,842,641 |
Current liabilities | ||
Accounts payable and accrued expenses | 2,147,429 | 1,750,402 |
Contract liabilities | 1,360,000 | 1,404,444 |
Income taxes payable | 277,000 | 277,000 |
Current portion of long-term notes payable | 996,010 | 874,728 |
Current portion of operating lease obligation | 83,410 | 83,410 |
Total current liabilities | 4,863,849 | 4,389,984 |
Non-current liabilities | ||
Operating lease obligation, net of current portion | 686,274 | 686,274 |
Total non-current liabilities | 686,274 | 686,274 |
Total liabilities | 5,550,123 | 5,076,258 |
Commitments and contingencies (Note 10) | ||
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 | ||
Common stock, $0.001 par value, 95,000,000 shares authorized, 78,591,667 and 71,501,667 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 78,590 | 71,500 |
Additional paid-in capital | 22,261,217 | 20,279,897 |
Common stock issuable | 84 | 84 |
Accumulated deficit | (19,812,798) | (16,472,629) |
Total stockholders’ equity (deficit) attributable to MJ Holdings, Inc. | 2,527,093 | 3,878,852 |
Noncontrolling interests | (112,469) | (112,469) |
Total shareholders’ equity | 2,414,624 | 3,766,383 |
Total liabilities and stockholders’ equity | $ 7,964,747 | $ 8,842,641 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Preferred stock, stated value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 95,000,000 | 95,000,000 |
Common stock, shares outstanding | 78,591,667 | 71,501,667 |
Common stock, shares issued | 78,591,667 | 71,501,667 |
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 | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenue, net | $ 712,856 | $ 19,580 | $ 773,462 | $ 535,961 |
Operating expenses | ||||
Direct costs of revenue | 40,590 | |||
General and administrative | 2,780,284 | 583,516 | 4,074,444 | 5,356,540 |
Depreciation | 42,930 | 91,781 | 173,110 | 286,038 |
Marketing and selling | 2,471 | 47,763 | 7,777 | 55,643 |
Total operating expenses | 2,825,685 | 723,060 | 4,255,331 | 5,738,811 |
Operating loss | (2,112,829) | (703,480) | (3,481,869) | (5,202,850) |
Other income (expense) | ||||
Interest expense | (18,690) | (44,241) | (58,432) | (76,549) |
Interest income | 34,505 | 4,586 | 85,688 | 13,884 |
Miscellaneous income | 94,447 | 70,000 | ||
Loss on conversion of related party note payable | (310,526) | |||
Gain on sale of luxury box | 44,444 | |||
Gain on sale of marketable securities | 9,857,429 | |||
Gain on disposal of subsidiary | 337,551 | 337,551 | ||
Gain on sale of commercial building | 260,141 | |||
Other income | 88,888 | 1,494,408 | ||
Total other income (expense) | 110,262 | 386,784 | 141,700 | 11,576,338 |
Net income (loss) before income taxes | (2,002,567) | (316,696) | (3,340,169) | 6,364,315 |
Provision for income taxes | 277,000 | |||
Net income (loss) | (2,002,567) | (316,696) | (3,340,169) | 6,087,315 |
Loss (gain) attributable to non-controlling interest | ||||
Net income (loss) attributable to common stockholders | $ (2,002,567) | $ (316,696) | $ (3,340,169) | $ 6,087,315 |
Net income (loss) attributable to common stockholders per share - basic and diluted | $ (0.03) | $ 0 | $ (0.04) | $ 0.09 |
Weighted average number of shares outstanding: | ||||
Basic | 78,102,500 | 70,094,440 | 73,701,945 | 65,694,138 |
Diluted | 78,102,500 | 70,094,440 | 73,701,945 | 65,694,138 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Common Stock Issuable [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Noncontrolling Interest [Member] | Retained Earnings [Member] | Total |
Beginning Balance at Dec. 31, 2020 | $ 68,613 | $ 18,748,688 | $ (112,469) | $ (20,002,960) | $ (1,298,128) | |
Begining balance, shares at Dec. 31, 2020 | 68,613,541 | |||||
Issuance of common stock for services | $ 560 | 222,829 | 223,389 | |||
Issuance of common stock for services, shares | 559,333 | |||||
Net income | 6,087,315 | 6,087,315 | ||||
Common stock to be issued for director compensation | $ 129 | $ 115 | 122,657 | 122,901 | ||
Common stock to be issued for director compensation, shares | 127,554 | 115,985 | ||||
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 | |||||
Issuance of common stock as per terms of Termination Agreement | $ 1,000 | 629,000 | 630,000 | |||
Issuance of common stock as per terms of Termination Agreement, shares | 1,000,000 | |||||
Ending Balance at Sep. 30, 2021 | $ 129 | $ 71,077 | 20,182,911 | (112,469) | (13,915,645) | 6,226,003 |
Ending balance, shares at Sep. 30, 2021 | 127,554 | 71,078,333 | ||||
Beginning Balance at Jun. 30, 2021 | $ 199 | $ 70,660 | 20,084,895 | (112,469) | (13,598,949) | 6,444,336 |
Begining balance, shares at Jun. 30, 2021 | 198,539 | 70,660,015 | ||||
Issuance of common stock for services | $ 302 | 73,687 | 73,989 | |||
Issuance of common stock for services, shares | 302,333 | |||||
Net income | (316,696) | (316,696) | ||||
Common stock to be issued for director compensation | $ (70) | $ 115 | 24,329 | 24,374 | ||
Common stock to be issued for director compensation, shares | (70,985) | 115,985 | ||||
Ending Balance at Sep. 30, 2021 | $ 129 | $ 71,077 | 20,182,911 | (112,469) | (13,915,645) | 6,226,003 |
Ending balance, shares at Sep. 30, 2021 | 127,554 | 71,078,333 | ||||
Beginning Balance at Dec. 31, 2021 | $ 84 | $ 71,500 | 20,279,897 | (112,469) | (16,472,629) | 3,766,383 |
Begining balance, shares at Dec. 31, 2021 | 82,554 | 71,501,667 | ||||
Issuance of common stock for the acquisition of MJH research, shares | 7,000,000 | |||||
Net income | (3,340,169) | (3,340,169) | ||||
Stock based compensation | $ 90 | 31,820 | 31,910 | |||
Stock based compensation, shares | 90,000 | |||||
Issuance of common stock for the acquisition of MJH research | $ 7,000 | 1,949,500 | 1,956,500 | |||
Ending Balance at Sep. 30, 2022 | $ 84 | $ 78,590 | 22,261,217 | (112,469) | (19,812,798) | 2,414,624 |
Ending balance, shares at Sep. 30, 2022 | 82,554 | 78,591,667 | ||||
Beginning Balance at Jun. 30, 2022 | $ 84 | $ 71,500 | 20,286,607 | (112,469) | (17,810,231) | 2,435,491 |
Begining balance, shares at Jun. 30, 2022 | 82,554 | 71,501,667 | ||||
Issuance of common stock for the acquisition of MJH research | $ 7,000 | 1,949,500 | 1,956,500 | |||
Issuance of common stock for the acquisition of MJH research, shares | 7,000,000 | |||||
Issuance of common stock for services | $ 90 | 25,110 | 25,200 | |||
Issuance of common stock for services, shares | 90,000 | |||||
Net income | (2,002,567) | (2,002,567) | ||||
Ending Balance at Sep. 30, 2022 | $ 84 | $ 78,590 | $ 22,261,217 | $ (112,469) | $ (19,812,798) | $ 2,414,624 |
Ending balance, shares at Sep. 30, 2022 | 82,554 | 78,591,667 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash Flows from Operating Activities | ||
Net income (loss) | $ (3,340,169) | $ 6,087,315 |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of right to use asset | 83,717 | |
Common stock issued for prepaid services | 135,000 | |
Depreciation | 173,110 | 286,038 |
Gain on sale of marketable securities | (9,857,429) | |
Gain on disposition of assets | (337,460) | |
Provision for income taxes | 277,000 | |
Gain on sale of assets | (364,877) | |
Stock based compensation | 7,373 | 122,772 |
Common stock issued for services | (283) | 88,389 |
Common stock to be issued for wages payable | 129 | |
Common stock to be issued for termination of rights participation agreement | 630,000 | |
Loss on conversion of related party note payable | 310,526 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (85,239) | (15,508) |
Prepaid expenses | (156,250) | |
Deposits | (1,010,000) | |
Accounts payable and accrued liabilities | 324,664 | (606,805) |
Contract liabilities | 27,919 | 1,621,112 |
Other current assets | ||
Other current liabilities | (1,328,438) | |
Operating lease liability | (89,348) | |
Net cash used in operating activities | (3,048,875) | (3,967,867) |
Cash Flows from Investing Activities | ||
Purchase of property and equipment | (137,442) | (125,077) |
Loan receivable - related party | (142,304) | |
Proceeds from sale of commercial building | 1,627,500 | |
Acquisition of MJH Research, Inc. | 529,505 | (200,000) |
Issuance of convertible note receivable | (500,000) | |
Proceeds from the sale of marketable securities | 10,207,429 | |
Net cash provided by investing activities | 249,759 | 11,009,852 |
Financing activities | ||
Proceeds from notes payable | 121,282 | 300,000 |
Proceeds from notes payable – related party | ||
Repayment of notes payable | (1,731,278) | |
Proceeds from common stock issued for cash | 50,000 | |
Net cash provided by (used in) financing activities | 121,282 | (1,381,278) |
Net change in cash | (2,677,834) | 5,660,707 |
Cash, beginning of period | 4,699,372 | 117,536 |
Cash, end of period | 2,021,538 | 5,778,243 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 110,918 | |
Income taxes paid | ||
Non-cash investing and financing activities: | ||
Common stock issued for prior period debt conversion | ||
Issuance of stock for conversion of related party note payable | 100,000 | |
Common stock issued for stock subscriptions payable |
Nature of the Business
Nature of the Business | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of the Business | Note 1 — Nature of the Business MJ Holdings, Inc. (OTCQB: 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 1,800,000 MJH Research, Inc. Acquisition On July 8, 2022, MJ Holdings, Inc. (the “Buyer”) entered into a Common Stock Purchase Agreement (the “Agreement”) with MJH Research, Inc. (the “Company”), a Florida corporation, and Sunstate Futures, LLC (the “Seller”), a Florida limited liability company. Under the terms of the Agreement, the Seller agreed to sale all issued and outstanding shares of common stock ( 100,000 7,000,000 500,000 1,955,000 see Note 6 — Acquisition of MJH Research, Inc. 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. MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) Note 1 — Nature of the Business (continued) 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 | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 — Summary of Significant Accounting Policies Basis of Presentation The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and with Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2022 and the results of operations, changes in stockholders’ equity, and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the operating results for the full fiscal year or any future period. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the Securities and Exchange Commission on June 21, 2022. The Company’s accounting policies are described in the Notes to Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2021, and updated, as necessary, in this Quarterly Report on Form 10-Q. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, MJH Research, Inc., Icon Management, LLC, Condo Highrise Management, LLC, Prescott Management, LLC, Q Brands, LLC, Farm Road, LLC, Red Earth Holdings, LLC and its majority owned subsidiary, Alternative Hospitality, Inc. 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. At September 30, 2022, the Company had $ 1,771,538 Fair Value of Financial Instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2022 and December 31, 2021. 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. MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) Note 2 — Summary of Significant Accounting Policies (continued) 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. 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. Schedule of Accounts Receivable and Allowance for Doubtful Accounts September 30, December 31, Accounts receivable $ 135,418 $ 50,179 Less allowance (42,190 ) (42,190 ) Net accounts receivable $ 93,228 $ 7,989 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 is comprised of raw materials, finished goods and work-in-process such as pre-harvested cannabis plants and by-products to be extracted. The costs of growing cannabis, including but not limited to labor, utilities, nutrition and supplies, are capitalized into inventory until the time of harvest. All direct and indirect costs related to inventory are capitalized when incurred, and subsequently classified to cost of goods sold in the Consolidated Statements of Operations. Work-in-process is stated at the lower of cost or net realizable value, determined using the weighted average cost. Raw materials and finished goods inventory are stated at the lower of cost or net realizable value, with cost being determined on the first-in, first-out (“FIFO”) method of accounting. Net realizable value is determined as the estimated selling price in the ordinary course of business less estimated costs to sell. The Company periodically reviews physical inventory for excess, obsolete, and potentially impaired items and reserves. The Company reviews inventory for obsolete, redundant and slow-moving goods and any such inventory is written down to net realizable value. Packaging and supplies are initially valued at cost. The reserve estimate for excess and obsolete inventory is based on expected future use. The reserve estimates have historically been consistent with actual experience as evidenced by actual sale or disposal of the goods. 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. MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) Note 2 — Summary of Significant Accounting Policies (continued) Property and equipment are depreciated over their estimated useful lives as follows: Schedule of Property and Equipment Estimated Useful Lives Buildings 12 Land Not depreciated Construction in progress Not depreciated Leasehold Improvements Lessor of lease term or 5 years Machinery and Equipment 5 Furniture and Fixtures 5 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 $ 0 14,845 Contract Balances The Company receives payments for new Cultivation and Sales Agreements (the “Agreements”) upon signing and defers revenue recognition for these payments until certain milestones are met as per the terms of the Agreements. In addition, the Company sold its luxury suite at the Raiders Stadium and amortizes the income from this sale at each home game. These payments represent contract liabilities and are recorded as such on the balance sheet. As of September 30, 2022 and December 31, 2021, the Company had $ 1,360,000 1,404,444 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 49 MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) Note 2 — Summary of Significant Accounting Policies (continued) 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 overtime. MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) Note 2 — Summary of Significant Accounting Policies (continued) For the nine months ended September 30, 2022, the majority of the Company’s revenue was derived from its newly acquired subsidiary, MJH Research, Inc. For the nine months ended September 30, 2021, t he 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 is recognized when the lease agreement is entered into and control of the equipment has passed to the customer. The Company’s remaining revenue is derived from its rental property in Nye County, Nevada. Schedule of Rental Revenue Recognition 2022 2021 For the nine months ended September 30, 2022 2021 Revenues: Rental income (i) $ 111,987 $ 59,749 Management income from MJH Research, Inc. (ii) 661,475 - Management income from Acres Cultivation (iii) - 341,398 Management income - 341,398 Equipment lease income (iii) - 134,814 Total $ 773,462 $ 535,961 (i) The rental income is from the Company’s THC Park. (ii) On July 11, 2022, the Company purchased MJH Research, Inc. (“MJH”) through a stock exchange agreement. MJH is a Florida corporation whose operations center around providing consulting services for growing techniques, management and cultivation of crops, as well as licensing support, production and asset and infrastructure development. (iii) 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. On January 21, 2021, the Company received a Notice of Termination, effective immediately, from Acres Cultivation, LLC. The Company will not generate any further revenue under the Acres relationship. 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 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. MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) Note 2 — Summary of Significant Accounting Policies (continued) 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. MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) |
Going Concern
Going Concern | 9 Months Ended |
Sep. 30, 2022 | |
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 $ 19,812,798 3,048,875 The Company’s current capital resources include cash. Historically, the Company has financed its operations principally through equity and debt financing. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 4 — Inventory Inventory at September 30, 2022 and December 31, 2021 consisted of the following: Schedule of Inventory September 30, 2022 December 31, 2021 Inventory – finished goods (i) $ 1,271,402 $ 1,271,402 Storage inventory (ii)(iii) 498,675 498,675 Less reserve (1,770,077 ) (1,770,077 ) Inventory, net $ - $ - (i) On January 21, 2021, the Company received a Notice of Termination, effective immediately, from Acres Cultivation, LLC. During the year ended December 31, 2021, the Company relocated all of its equipment utilized on the Acres lease to its 260 (ii) On April 14, 2021, the Company entered into a storage work order with TapRoot Labs (“TapRoot”). Under the terms of the work order, the Company stored 1827 lbs. of fresh frozen flower (“Product”) with TapRoot at a rate of $ 6,000 (iii) On April 13, 2021, the Company entered into a Storage & Purchase Agreement (the “Agreement”) with AP Management, LLC (“AP”). Under the terms of the Agreement, the Company stored 1827 lbs. of fresh frozen flower (“Product”) with AP. AP was granted the exclusive right to purchase the Product at a rate of $175/lb for the first 30 days of storage. After 30 days, the Company had the right to make sales to third parties. At September 30, 2022, the Company had 1827 lbs. stored with AP. The Company has elected to reserve the full amount of Product stored with AP as it does not anticipate any future sales will be made. Please see Item 1. Legal Proceedings MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) |
Note Receivable
Note Receivable | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Note Receivable | Note 5 — Note Receivable Note receivable at September 30, 2022 and December 31, 2021 consisted of the following: Schedule of Note Receivable September 30, 2022 December 31, 2021 Note receivable- GeneRx (i) $ 500,000 $ 500,000 Total $ 500,000 $ 500,000 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 one year March 12, 2022 2 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 80 20 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”). 300,000 150,000 50,000 500,000 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. |
Acquisition of MJH Research, In
Acquisition of MJH Research, Inc. | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition of MJH Research, Inc. | Note 6 — Acquisition of MJH Research, Inc. On July 8, 2022, MJ Holdings, Inc. (the “Buyer”) entered into a Common Stock Purchase Agreement (the “Agreement”) with MJH Research, Inc. (the “Company”), a Florida corporation, and Sunstate Futures, LLC (the “Seller”), a Florida limited liability company. Under the terms of the Agreement, the Seller agreed to sale all issued and outstanding shares of common stock ( 100,000 7,000,000 Details regarding the book values and fair values of the net assets acquired are as follows: Schedule Of Fair Value Of Net Assets Acquired Book Value Fair Value Difference Cash $ 504,685 $ 504,685 $ - Total $ 504,685 $ 504,685 $ - Goodwill and Intangibles Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. Intangible assets other than goodwill are recorded at fair value at the time acquired or at cost, if applicable. Intangible assets that do not have indefinite lives are amortized in line with the pattern in which the economic benefits of the intangible asset are consumed. If the pattern of economic benefit cannot be reliably determined, the intangible assets are amortized on a straight-line basis over the shorter of the legal or estimated life. Goodwill and indefinite-lived intangibles assets are not amortized but are tested for impairment in the fourth quarter using the same dates each year or more frequently if changes in circumstances or the occurrence of events indicate potential impairment. In performing the annual impairment test, the fair value of each indefinite-lived intangible asset is compared to its carrying value and an impairment charge is recorded if the carrying value exceeds the fair value. For goodwill, the Company first assesses qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its’ carrying amount, and whether it is necessary to perform the quantitative goodwill impairment test. The quantitative test is required only if the Company concludes that it is more-likely-than-not that a reporting unit’s fair value is less than its’ carrying amount. For quantitative testing, the Company compares the fair value of each reporting unit with its’ carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. Fair values are determined using established business valuation techniques and models developed by the Company, estimates of market participant assumptions of future cash flows, future growth rates and discount rates to value estimated cash flows. Changes in economic and operating conditions, actual growth below the assumed market participant assumptions or an increase in the discount rate could result in an impairment charge in a future period. Acquisitions Upon acquisition of a business, the Company uses the income, market or cost approach (or a combination thereof) for the valuation as appropriate. The valuation inputs in these models and analyses are based on market participant assumptions. Market participants are considered to be buyers and sellers unrelated to the Company in the principal or most advantageous market for the asset or liability. Fair value estimates are based on a series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. Management values property, plant and equipment using the cost approach supported where available by observable market data, which includes consideration of obsolescence. Management values acquired intangible assets using the relief from royalty method or excess earnings method, forms of the income approach supported by observable market data for peer companies. The significant assumptions used to estimate the value of the acquired intangible assets include discount rates and certain assumptions that form the basis of future cash flows (such as revenue growth rates, customer attrition rates, and royalty rates). Acquired inventories are marked to fair value for valuation of the total purchase price. For certain items, the carrying value is determined to be a reasonable approximation of fair value based on information available to the Company. Schedule Of Assets Acquired Assets acquired As of July 11, 2022 Cash $ 504,685 Goodwill (i) 1,451,815 Total purchase price $ 1,956,500 (i) Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. The changes in the carrying amount of goodwill for the period from July 11, 2022 through September 30, 2022 were as follows: Schedule Of Goodwill Balance as of July 11, 2022 $ 1,451,815 Additions and adjustments - Balance as of June 30, 2022 $ 1,451,815 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 7 — Property and Equipment Property and equipment at September 30, 2022 and December 31, 2021 consisted of the following: Schedule of Property and Equipment September 30, December 31, Leasehold Improvements $ 257,824 $ 654,628 Machinery and Equipment 780,863 244,583 Building and Land 1,650,000 1,650,000 Furniture and Fixtures 561,350 566,220 Total property and equipment 3,250,037 3,115,431 Less: Accumulated depreciation (706,774 ) (536,500 ) Property and equipment, net $ 2,543,263 $ 2,578,931 Depreciation expense for the nine months ended September 30, 2022 and 2021 was $ 173,110 286,038 MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 8 — Intangible Assets In October 2016, Red Earth, LLC (“Red Earth”), a Nevada limited liability company, 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 25,000 The Provisional Grow License remains in a provisional status until the Company has completed the buildout 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. On December 15, 2017, the Company acquired 100 52,732,969 0.001 900,000 On or about May 7, 2021, the Subsidiary, received an inquiry from the State of Nevada Cannabis Compliance Board (“CCB”) regarding the transfer of ownership of the Subsidiary from its previous owners to the Company. The CCB has determined that the transfer was not formally approved, thus a Category II violation. On July 27, 2021, the Subsidiary entered into a Stipulation and Order for Settlement of Disciplinary Action (the “Stipulation Order”) with the CCB. Under the terms of the Stipulation Order, the Subsidiary has agreed to present to the CCB, by not later than August 31, 2021, a plan pursuant to which the ownership of the Subsidiary will be returned to the original owners. The Parties to the Stipulation Order resolved the matter without the necessity of taking formal action. The Subsidiary agreed to pay a civil penalty of $ 10,000 On August 1, 2021, the Company entered into a Memorandum of Understanding and Agreement for Technical Services and Short-Term Funding (the “Agreement”) with Red Earth, LLC (hereinafter, “Red Earth”), an entity controlled by its Chief Cultivation Officer, Paris Balaouras. Under the terms of the Agreement, the Company will provide a short-term loan (the “Loan”) to Red Earth for expenses related to the activation and operation of Red Earth’s cultivation license. The Loan shall bear interest at 12 18 5,000 7,500 182,469 70,000 On August 26, 2021, the Company and the Company’s Chief Cultivation Officer and previous owner of the Subsidiary, Paris Balaouras, entered into a Termination Agreement. Under the terms of the Termination Agreement, the Purchase Agreement (the “Purchase Agreement”), dated December 15, 2017, entered into between the Company and the Subsidiary was terminated as of the date of the Termination Agreement resulting in the return of ownership of the Subsidiary to Mr. Balaouras. Neither party shall have any further obligation to one another pursuant to the terms of the Purchase Agreement. Please see Note 14 — Related Party Transactions On September 2, 2021, the Company received approval of the Termination Agreement from the CCB. |
Deposits
Deposits | 9 Months Ended |
Sep. 30, 2022 | |
Disclosure Deposits Abstract | |
Deposits | Note 9 — Deposits Deposits as of September 30, 2022 and December 31, 2021 consist of the following: Schedule of Deposits September 30, 2022 December 31, 2021 MJ Distributing, Inc. (i) $ 1,016,184 $ 1,016,184 Total $ 1,016,184 $ 1,016,184 (i) On February 5, 2021, the Company (the “Purchaser”) executed a Membership Interest Purchase Agreement (“MIPA3”) with MJ Distributing, Inc. (the “Seller”) to acquire all of the outstanding membership interests of MJ Distributing C202, LLC and MJ Distributing P133, LLC, each the holder of a State of Nevada provisional medical and recreational cultivation license and a provisional medical and recreational production license. In consideration of the sale, transfer, assignment and delivery of the Membership Interests to Purchaser, and the covenants made by Seller under the MIPA3, Purchaser agreed to pay a combination of cash, promissory notes, and stock in the amount of One-Million-Two-Hundred-Fifty Thousand Dollars ($ 1,250,000.00 200,000 Purchase Price (i) a non-refundable down payment in the amount of $300,000 was made on January 15, 2021, (ii) the second payment in the amount of $200,000 was made on February 5, 2021, (iii) a deposit in the amount of $310,000 was paid on February 22, 2021 ($210,000 was a pre-payment against future compensation due under the MIPA3), (iv) $200,000 was deposited on June 24, 2021, (v) $200,000 shall be deposited on or before June 12, 2021, and (vi) $250,000 shall be deposited within five (5) business days after the Nevada Cannabis Compliance Board (“CCB”) provides notice on its agenda that the Licenses are set for hearing to approve the transfer of ownership from the Seller to the Purchaser. MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 10 — Notes Payable Notes payable as of September 30, 2022 and December 31, 2021 consist of the following: Schedule of Notes Payable September 30, December 31, $ 885,893 $ 750,000 Note payable bearing interest at 5.0 January 31, 2022 750,000 $ 885,893 $ 750,000 Note payable bearing interest at 6.5 March 31, 2022 250,000 (iv) 110,117 124,728 Total notes payable $ 996,010 $ 874,728 Less: current portion (996,010 ) (874,728 ) Long-term notes payable $ - $ - (i) On January 17, 2019, the Company executed a promissory note for $ 750,000 5.0 3,125 beginning February 1, 2019 until January 31, 2022 750,000 0 750,000.00 500,000.00 1,250,000.00 357,342.88 900,000 7 Future payments shall be calculated on a 20-year amortization with a balloon payment in three years. 6,977.69 885,893 (ii) On April 1, 2019, the Company executed a promissory note for $ 250,000 6.5 2,178 beginning May 1, 2019 until March 31, 2020 50,000 the payments shall be re-amortized (15-year amortization) 50,000 110,117 Schedule of Minimum Loan Payments Amount Fiscal year ending December 31: 2022 (excluding the nine months ended September 30, 2022) $ 996,010 2023 - 2024 - 2025 - Thereafter - Total minimum loan payments $ 996,010 MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11 — Commitments and Contingencies Employment Agreements 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 ( 3 105,000 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 disc retion, 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 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. Effective upon the resignation of Mr. Bloss as the Company’s Chief Executive Officer, Mr. Balaouras assumed the role of Interim Chief Executive Officer. 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 ( 3 105,000 100 rd 500,000 .75 On September 24, 2022, Mr. Bloss submitted his resignation as the Company’s Chief Executive Officer and Director effective as of September 24, 2022 . On September 24, 2022, the Company and Mr. Bloss entered into a Settlement and Mutual Release, whereby Mr. Bloss would receive $ 20,000 and the Company’s 51 20,000 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 60,000 200 500,000 rd 500,000 .75 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 15,000 On March 26, 2021, the Company’s Board of Directors elected to revise the terms of the Board of Directors Services Agreement for each director. Section 2 (Compensation) was revised such that the directors’ cash compensation was revised to stock compensation in the following manner: $ 3,750 On September 30, 2021, the Company’s Board of Directors elected to revise Section 2 (Compensation) of the Agreement back to the original terms. Each of the Directors shall receive compensation as follows: (i) Fifteen Thousand and no/100 dollars ($ 15,000.00 15,000 On October 17, 2022, the Company’s Board of Directors elected to revise Section 2 (Compensation) of the Agreement such that each Director shall receive $ 1,500 On September 22, 2022, David Dear submitted his resignation as a director effective as of September 22, 2022. On October 26, 2022, the Company’s Board of Directors appointed two new directors, Tom Valensuela and Timothy Luff, effective as of October 26, 2022. On October 27, 2022, the Company changed the composition of its Compensation Committee to include Messrs. Valensuela, Luff, Balaouras and Radcliffe. Mr. Balaouras will serve as the committee’s Chairman. Please see Note 16 — Subsequent Events MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) Note 11 — Commitments and Contingencies (continued) 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 September 30, 2022, the Company recorded operating lease liabilities of $ 769,684 0 0 3.6 Rent expense, incurred pursuant to operating leases for the nine months ended September 30, 2022 and 2021, was $ 144,000 203,242 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. MJ Holdings, Inc. Complaint On December 14, 2021, MJ Holdings, Inc. (the “Plaintiff”) filed a Complaint against NCMM, LLC, AP Management, LLC and Valerie Small (collectively, the “Defendants”)( together, the “Parties”). In the Complaint, the Plaintiff alleges that the Defendants have refused to return the cannabis that was being stored for Plaintiff under a Storage and Purchase Agreement entered into with AP Management. By failing to return the cannabis to Plaintiff, or Plaintiff’s designee, the Defendants have deprived Plaintiff of the ability to sell, transfer or market the product. In addition, the Defendants have sought to unlawfully extort the Plaintiff for illicit payments of thousands of dollars in money and/or cannabis in exchange for returning the cannabis. The Parties are in active discussions to settle the dispute. Gappy and Shaba Compliant On December 3, 2021, a Complaint was filed against MJ Holdings, Inc., HDGLV, LLC, Red Earth, LLC (collectively, the “Defendants”) by Ziad Gappy and David Shaba (collectively, the “Plaintiffs”). In the Complaint, the Plaintiffs allege the Defendants made misleading statements and/or omissions relating to the Company in the Plaintiffs’ negotiation to purchase shares of MJ Holdings, Inc. In addition, the Plaintiffs allege that the Defendants have not honored the 2018 Agreements negotiated between the Plaintiffs and Defendants and that MJ Holdings, Inc. has failed to issue an additional $125,000 in stock due to the Plaintiffs as was agreed to in writing and the Defendants have failed to start the Western Project 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 an appropriate and timely answer to the Complaint including a lengthy and comprehensive series of affirmative defenses and liability and damage avoidances. As of the date of this filing, discovery has commenced and written discovery has been exchanged between the parties. Tierney Arbitration On March 9, 2021, Terrence Tierney (“Claimant”), the Company’s former President and Secretary, who was terminated by the Company for Cause on August 7, 2020, 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 62,392 59,583 2,854 8,307.60 MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders’ Equity (Deficit) | Note 12 — Stockholders’ Equity (Deficit) General The Company is currently authorized to issue up to 95,000,000 5,000,000 0.001 Common Stock Of the 95,000,000 78,591,667 Common Stock Issuances For the nine months ended September 30, 2022, the Company issued and/or sold the following unregistered securities: On July 8, 2022, the Company issued 7,000,000 On July 15, 2022, the Company issued a total of 45,000 1 3,072 On August 2, 2022, the Company issued a total of 45,000 12,128 MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) Note 12 — Stockholders’ Equity (Deficit) (continued) At September 30, 2022 and December 31, 2021, there are 78,591,667 71,501,667 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 0.001 2,500 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 . The Series A Preferred Stock has no voting rights; however, as long as any shares of Series A Preferred Stock are outstanding, we are not permitted, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series A Preferred Stock to (i) alter or change adversely the powers, preferences, or rights given to the Series A Preferred Stock or alter or amend the Series A Preferred Stock Certificate of Designation, (ii) amend our Articles of Incorporation or other charter documents in any manner that adversely affects any rights of the holders, (iii) increase the number of authorized shares of Series A Preferred Stock, or (iv) enter into any agreement with respect to any of the forgoing. MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) Note 12 — Stockholders’ Equity (Deficit) (continued) Preferred Stock Issuances For the nine months ended September 30, 2022 None At September 30, 2022 and December 31, 2021, there were 0 0 |
Basic and Diluted Earnings (Los
Basic and Diluted Earnings (Loss) per Common Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings (Loss) per Common Share | Note 13 — 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 nine months ended September 30, 2022, basic and diluted loss per common share were the same since there were no potentially dilutive shares outstanding during the respective periods. The outstanding options as of September 30, 2022, to purchase 1,500,000 For the nine months ended September 30, 2022, basic and diluted income per common share were based on 73,701,945 71,501,667 |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Based Compensation | Note 14 — Stock Based Compensation Warrants and Options A summary of the warrants and options issued, exercised and expired are below: Stock Options On September 15, 2020, the Company issued an option to purchase 500,000 0.75 A summary of the options issued, exercised and expired are below: Schedule of Options Issued, Exercised and Expired Options: Shares Weighted Avg. Exercise Price Remaining Contractual Life in Years Balance at December 31, 2021 1,500,000 $ 0.75 1.68 Issued - - - Exercised - - - Expired - - - Balance at September 30, 2022 1,500,000 $ 0.75 1.00 Exercisable at September 30, 2022 1,500,000 $ 0.75 1.00 Options outstanding as of September 30, 2022 and December 31, 2021 were 1,500,000 1,500,000 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 0.10 4 A summary of the warrants issued, exercised and expired are below: Schedule of Warrants Issued, Exercised and Expired Warrants: Shares Weighted Avg. Remaining Life in Years Balance at December 31, 2021 250,000 $ 0.10 3.3 Issued - - - Exercised - - - Expired - - - Balance at September 30, 2022 250,000 $ 0.10 2.4 Warrants outstanding as of September 30, 2022 and December 31, 2021 were 250,000 250,000 MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 15 — Related Party Transactions On August 1, 2021, the Company entered into a Memorandum of Understanding and Agreement for Technical Services and Short-Term Funding (the “Agreement”) with Red Earth, LLC (hereinafter, “Red Earth”), an entity controlled by its Chief Cultivation Officer, Paris Balaouras. Under the terms of the Agreement, the Company will provide a short-term loan (the “Loan”) to Red Earth for expenses related to the activation and operation of Red Earth’s cultivation license. The Loan shall bear interest at 12 18 5,000 7,500 182,469 70,000 On September 5, 2022, the Company entered into an Amendment (the “Amendment”) with Highland Brothers, LLC (together, the “Parties’) to amend the original agreement (the “Agreement”) between the Parties dated February 15, 2019. Under the terms of the Amendment, the term of the Agreement has been extended to fifteen years and the Company shall pay Highland Brothers, LLC $ 150,000 150,000 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 16 — Subsequent Events The Company has evaluated events subsequent to the balance sheet through the date the financial statements were issued and noted the following events requiring disclosure: On October 26, 2022, the Company’s board of directors appointed two new directors, Tom Valensuela and Timothy Luff, effective as of October 26, 2022. On October 27, 2022, the Company changed the composition of its Compensation Committee to include Messrs. Valensuela, Luff, Balaouras and Radcliffe. Mr. Balaouras will serve as the committee’s Chairman. On November 9, 2022, David Radcliffe submitted his resignation as a director effective as of November 9, 2022. On November 10, 2022, the Company’s board of directors elected a new director, Christopher Reasonover, effective as of November 10, 2022. |
Restatement
Restatement | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Restatement | Note 17 — Restatement The Company reversed a $ 500,000 500,000 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and with Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2022 and the results of operations, changes in stockholders’ equity, and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the operating results for the full fiscal year or any future period. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the Securities and Exchange Commission on June 21, 2022. The Company’s accounting policies are described in the Notes to Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2021, and updated, as necessary, in this Quarterly Report on Form 10-Q. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, MJH Research, Inc., Icon Management, LLC, Condo Highrise Management, LLC, Prescott Management, LLC, Q Brands, LLC, Farm Road, LLC, Red Earth Holdings, LLC and its majority owned subsidiary, Alternative Hospitality, Inc. 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. At September 30, 2022, the Company had $ 1,771,538 |
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 September 30, 2022 and December 31, 2021. 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. MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) Note 2 — Summary of Significant Accounting Policies (continued) 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. |
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. Schedule of Accounts Receivable and Allowance for Doubtful Accounts September 30, December 31, Accounts receivable $ 135,418 $ 50,179 Less allowance (42,190 ) (42,190 ) Net accounts receivable $ 93,228 $ 7,989 |
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 Inventory is comprised of raw materials, finished goods and work-in-process such as pre-harvested cannabis plants and by-products to be extracted. The costs of growing cannabis, including but not limited to labor, utilities, nutrition and supplies, are capitalized into inventory until the time of harvest. All direct and indirect costs related to inventory are capitalized when incurred, and subsequently classified to cost of goods sold in the Consolidated Statements of Operations. Work-in-process is stated at the lower of cost or net realizable value, determined using the weighted average cost. Raw materials and finished goods inventory are stated at the lower of cost or net realizable value, with cost being determined on the first-in, first-out (“FIFO”) method of accounting. Net realizable value is determined as the estimated selling price in the ordinary course of business less estimated costs to sell. The Company periodically reviews physical inventory for excess, obsolete, and potentially impaired items and reserves. The Company reviews inventory for obsolete, redundant and slow-moving goods and any such inventory is written down to net realizable value. Packaging and supplies are initially valued at cost. The reserve estimate for excess and obsolete inventory is based on expected future use. The reserve estimates have historically been consistent with actual experience as evidenced by actual sale or disposal of the goods. |
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. MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) Note 2 — Summary of Significant Accounting Policies (continued) Property and equipment are depreciated over their estimated useful lives as follows: Schedule of Property and Equipment Estimated Useful Lives Buildings 12 Land Not depreciated Construction in progress Not depreciated Leasehold Improvements Lessor of lease term or 5 years Machinery and Equipment 5 Furniture and Fixtures 5 |
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 $ 0 14,845 |
Contract Balances | Contract Balances The Company receives payments for new Cultivation and Sales Agreements (the “Agreements”) upon signing and defers revenue recognition for these payments until certain milestones are met as per the terms of the Agreements. In addition, the Company sold its luxury suite at the Raiders Stadium and amortizes the income from this sale at each home game. These payments represent contract liabilities and are recorded as such on the balance sheet. As of September 30, 2022 and December 31, 2021, the Company had $ 1,360,000 1,404,444 |
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 49 MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) Note 2 — Summary of Significant Accounting Policies (continued) |
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 overtime. MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) Note 2 — Summary of Significant Accounting Policies (continued) For the nine months ended September 30, 2022, the majority of the Company’s revenue was derived from its newly acquired subsidiary, MJH Research, Inc. For the nine months ended September 30, 2021, t he 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 is recognized when the lease agreement is entered into and control of the equipment has passed to the customer. The Company’s remaining revenue is derived from its rental property in Nye County, Nevada. Schedule of Rental Revenue Recognition 2022 2021 For the nine months ended September 30, 2022 2021 Revenues: Rental income (i) $ 111,987 $ 59,749 Management income from MJH Research, Inc. (ii) 661,475 - Management income from Acres Cultivation (iii) - 341,398 Management income - 341,398 Equipment lease income (iii) - 134,814 Total $ 773,462 $ 535,961 (i) The rental income is from the Company’s THC Park. (ii) On July 11, 2022, the Company purchased MJH Research, Inc. (“MJH”) through a stock exchange agreement. MJH is a Florida corporation whose operations center around providing consulting services for growing techniques, management and cultivation of crops, as well as licensing support, production and asset and infrastructure development. (iii) 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. On January 21, 2021, the Company received a Notice of Termination, effective immediately, from Acres Cultivation, LLC. The Company will not generate any further revenue under the Acres relationship. 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 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. MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) Note 2 — Summary of Significant Accounting Policies (continued) 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. MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) |
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 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. MJ HOLDINGS, INC. and SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2022 and 2021 (Unaudited) Note 2 — Summary of Significant Accounting Policies (continued) |
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) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Accounts Receivable and Allowance for Doubtful Accounts | Schedule of Accounts Receivable and Allowance for Doubtful Accounts September 30, December 31, Accounts receivable $ 135,418 $ 50,179 Less allowance (42,190 ) (42,190 ) Net accounts receivable $ 93,228 $ 7,989 |
Schedule of Property and Equipment Estimated Useful Lives | Property and equipment are depreciated over their estimated useful lives as follows: Schedule of Property and Equipment Estimated Useful Lives Buildings 12 Land Not depreciated Construction in progress Not depreciated Leasehold Improvements Lessor of lease term or 5 years Machinery and Equipment 5 Furniture and Fixtures 5 |
Schedule of Rental Revenue Recognition | Schedule of Rental Revenue Recognition 2022 2021 For the nine months ended September 30, 2022 2021 Revenues: Rental income (i) $ 111,987 $ 59,749 Management income from MJH Research, Inc. (ii) 661,475 - Management income from Acres Cultivation (iii) - 341,398 Management income - 341,398 Equipment lease income (iii) - 134,814 Total $ 773,462 $ 535,961 (i) The rental income is from the Company’s THC Park. (ii) On July 11, 2022, the Company purchased MJH Research, Inc. (“MJH”) through a stock exchange agreement. MJH is a Florida corporation whose operations center around providing consulting services for growing techniques, management and cultivation of crops, as well as licensing support, production and asset and infrastructure development. (iii) 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. On January 21, 2021, the Company received a Notice of Termination, effective immediately, from Acres Cultivation, LLC. The Company will not generate any further revenue under the Acres relationship. |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory at September 30, 2022 and December 31, 2021 consisted of the following: Schedule of Inventory September 30, 2022 December 31, 2021 Inventory – finished goods (i) $ 1,271,402 $ 1,271,402 Storage inventory (ii)(iii) 498,675 498,675 Less reserve (1,770,077 ) (1,770,077 ) Inventory, net $ - $ - (i) On January 21, 2021, the Company received a Notice of Termination, effective immediately, from Acres Cultivation, LLC. During the year ended December 31, 2021, the Company relocated all of its equipment utilized on the Acres lease to its 260 (ii) On April 14, 2021, the Company entered into a storage work order with TapRoot Labs (“TapRoot”). Under the terms of the work order, the Company stored 1827 lbs. of fresh frozen flower (“Product”) with TapRoot at a rate of $ 6,000 (iii) On April 13, 2021, the Company entered into a Storage & Purchase Agreement (the “Agreement”) with AP Management, LLC (“AP”). Under the terms of the Agreement, the Company stored 1827 lbs. of fresh frozen flower (“Product”) with AP. AP was granted the exclusive right to purchase the Product at a rate of $175/lb for the first 30 days of storage. After 30 days, the Company had the right to make sales to third parties. At September 30, 2022, the Company had 1827 lbs. stored with AP. The Company has elected to reserve the full amount of Product stored with AP as it does not anticipate any future sales will be made. Please see Item 1. Legal Proceedings |
Note Receivable (Tables)
Note Receivable (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Schedule of Note Receivable | Note receivable at September 30, 2022 and December 31, 2021 consisted of the following: Schedule of Note Receivable September 30, 2022 December 31, 2021 Note receivable- GeneRx (i) $ 500,000 $ 500,000 Total $ 500,000 $ 500,000 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 one year March 12, 2022 2 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 80 20 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”). 300,000 150,000 50,000 500,000 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. |
Acquisition of MJH Research, _2
Acquisition of MJH Research, Inc. (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule Of Fair Value Of Net Assets Acquired | Details regarding the book values and fair values of the net assets acquired are as follows: Schedule Of Fair Value Of Net Assets Acquired Book Value Fair Value Difference Cash $ 504,685 $ 504,685 $ - Total $ 504,685 $ 504,685 $ - |
Schedule Of Assets Acquired | Schedule Of Assets Acquired Assets acquired As of July 11, 2022 Cash $ 504,685 Goodwill (i) 1,451,815 Total purchase price $ 1,956,500 (i) Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. |
Schedule Of Goodwill | The changes in the carrying amount of goodwill for the period from July 11, 2022 through September 30, 2022 were as follows: Schedule Of Goodwill Balance as of July 11, 2022 $ 1,451,815 Additions and adjustments - Balance as of June 30, 2022 $ 1,451,815 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment at September 30, 2022 and December 31, 2021 consisted of the following: Schedule of Property and Equipment September 30, December 31, Leasehold Improvements $ 257,824 $ 654,628 Machinery and Equipment 780,863 244,583 Building and Land 1,650,000 1,650,000 Furniture and Fixtures 561,350 566,220 Total property and equipment 3,250,037 3,115,431 Less: Accumulated depreciation (706,774 ) (536,500 ) Property and equipment, net $ 2,543,263 $ 2,578,931 |
Deposits (Tables)
Deposits (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Disclosure Deposits Abstract | |
Schedule of Deposits | Deposits as of September 30, 2022 and December 31, 2021 consist of the following: Schedule of Deposits September 30, 2022 December 31, 2021 MJ Distributing, Inc. (i) $ 1,016,184 $ 1,016,184 Total $ 1,016,184 $ 1,016,184 (i) On February 5, 2021, the Company (the “Purchaser”) executed a Membership Interest Purchase Agreement (“MIPA3”) with MJ Distributing, Inc. (the “Seller”) to acquire all of the outstanding membership interests of MJ Distributing C202, LLC and MJ Distributing P133, LLC, each the holder of a State of Nevada provisional medical and recreational cultivation license and a provisional medical and recreational production license. In consideration of the sale, transfer, assignment and delivery of the Membership Interests to Purchaser, and the covenants made by Seller under the MIPA3, Purchaser agreed to pay a combination of cash, promissory notes, and stock in the amount of One-Million-Two-Hundred-Fifty Thousand Dollars ($ 1,250,000.00 200,000 Purchase Price (i) a non-refundable down payment in the amount of $300,000 was made on January 15, 2021, (ii) the second payment in the amount of $200,000 was made on February 5, 2021, (iii) a deposit in the amount of $310,000 was paid on February 22, 2021 ($210,000 was a pre-payment against future compensation due under the MIPA3), (iv) $200,000 was deposited on June 24, 2021, (v) $200,000 shall be deposited on or before June 12, 2021, and (vi) $250,000 shall be deposited within five (5) business days after the Nevada Cannabis Compliance Board (“CCB”) provides notice on its agenda that the Licenses are set for hearing to approve the transfer of ownership from the Seller to the Purchaser. |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable as of September 30, 2022 and December 31, 2021 consist of the following: Schedule of Notes Payable September 30, December 31, $ 885,893 $ 750,000 Note payable bearing interest at 5.0 January 31, 2022 750,000 $ 885,893 $ 750,000 Note payable bearing interest at 6.5 March 31, 2022 250,000 (iv) 110,117 124,728 Total notes payable $ 996,010 $ 874,728 Less: current portion (996,010 ) (874,728 ) Long-term notes payable $ - $ - (i) On January 17, 2019, the Company executed a promissory note for $ 750,000 5.0 3,125 beginning February 1, 2019 until January 31, 2022 750,000 0 750,000.00 500,000.00 1,250,000.00 357,342.88 900,000 7 Future payments shall be calculated on a 20-year amortization with a balloon payment in three years. 6,977.69 885,893 (ii) On April 1, 2019, the Company executed a promissory note for $ 250,000 6.5 2,178 beginning May 1, 2019 until March 31, 2020 50,000 the payments shall be re-amortized (15-year amortization) 50,000 110,117 |
Schedule of Minimum Loan Payments | Schedule of Minimum Loan Payments Amount Fiscal year ending December 31: 2022 (excluding the nine months ended September 30, 2022) $ 996,010 2023 - 2024 - 2025 - Thereafter - Total minimum loan payments $ 996,010 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Options Issued, Exercised and Expired | A summary of the options issued, exercised and expired are below: Schedule of Options Issued, Exercised and Expired Options: Shares Weighted Avg. Exercise Price Remaining Contractual Life in Years Balance at December 31, 2021 1,500,000 $ 0.75 1.68 Issued - - - Exercised - - - Expired - - - Balance at September 30, 2022 1,500,000 $ 0.75 1.00 Exercisable at September 30, 2022 1,500,000 $ 0.75 1.00 |
Schedule of Warrants Issued, Exercised and Expired | A summary of the warrants issued, exercised and expired are below: Schedule of Warrants Issued, Exercised and Expired Warrants: Shares Weighted Avg. Remaining Life in Years Balance at December 31, 2021 250,000 $ 0.10 3.3 Issued - - - Exercised - - - Expired - - - Balance at September 30, 2022 250,000 $ 0.10 2.4 |
Nature of the Business (Details
Nature of the Business (Details Narrative) - USD ($) | Jul. 11, 2022 | Jul. 08, 2022 | Jan. 10, 2017 |
Common Stock Purchase Agreement [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Sale of stock | 100,000 | ||
Issuance of shares | 7,000,000 | ||
Common Stock Purchase Agreement [Member] | MJH Research Inc [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Sale of stock | 100,000 | ||
Issuance of shares | 7,000,000 | ||
Business combination, assets acquired and liabilities assumed, net | $ 500,000 | ||
Payment to acquire asset | $ 1,955,000 | ||
MJ Real Eatste Partners [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Number of common stock exchanged during period | 1,800,000 |
Schedule of Accounts Receivable
Schedule of Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Accounts receivable | $ 135,418 | $ 50,179 |
Less allowance | (42,190) | (42,190) |
Net accounts receivable | $ 93,228 | $ 7,989 |
Schedule of Property and Equipm
Schedule of Property and Equipment Estimated Useful Lives (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Furniture and Fixtures | 12 years |
Land [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives, description | Not depreciated |
Construction in Progress [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives, description | Not depreciated |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives, description | Lessor of lease term or 5 years |
Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Furniture and Fixtures | 5 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Furniture and Fixtures | 5 years |
Schedule of Rental Revenue Reco
Schedule of Rental Revenue Recognition (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
Defined Benefit Plan Disclosure [Line Items] | |||
Rental income | $ 111,987 | $ 59,749 | |
Management income | 341,398 | ||
Equipment lease income | 134,814 | ||
Total | 773,462 | 535,961 | |
MJH Research Inc [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Management income | 661,475 | ||
Acres Cultivation, LLC [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Management income | [1] | $ 341,398 | |
[1]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. On January 21, 2021, the Company received a Notice of Termination, effective immediately, from Acres Cultivation, LLC. The Company will not generate any further revenue under the Acres relationship. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Cash | $ 1,771,538 | |
Impairment of long lived assets | 0 | $ 14,845 |
Contract with customer, liability, current | $ 1,360,000 | $ 1,404,444 |
Expected dividend yield | 0% | |
Stockholder [Member] | ||
Non-controlling interest percentage | 49% | |
Alternative Hospitality, Inc [Member] | ||
Equity method ownership percentage | 51% |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accumulated deficit | $ 19,812,798 | $ 16,472,629 | |
Net cash used in operating activities | $ 3,048,875 | $ 3,967,867 |
Schedule of Inventory (Details)
Schedule of Inventory (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |||
Inventory – finished goods (i) | [1] | $ 1,271,402 | $ 1,271,402 |
Storage inventory (ii)(iii) | [2],[3] | 498,675 | 498,675 |
Less reserve | (1,770,077) | (1,770,077) | |
Inventory, net | |||
[1]On January 21, 2021, the Company received a Notice of Termination, effective immediately, from Acres Cultivation, LLC. During the year ended December 31, 2021, the Company relocated all of its equipment utilized on the Acres lease to its 260 see Item 1. Legal Proceedings 6,000 |
Schedule of Inventory (Detail_2
Schedule of Inventory (Details) (Parenthetical) | 9 Months Ended | |||
Apr. 14, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 a | |
Inventory Disclosure [Abstract] | ||||
Lease acres | a | 260 | |||
Rent payable | $ | $ 6,000 | $ 144,000 | $ 203,242 |
Schedule of Note Receivable (De
Schedule of Note Receivable (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | |
Total | $ 500,000 | $ 500,000 | |
GeneRx [Member] | |||
Total | [1] | $ 500,000 | $ 500,000 |
[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 one year March 12, 2022 2 The Note is convertible, at the option of the Holder, into shares of common stock of the Borrower at a fixed conversion price of $1.00 80 20 the Issue Date of this Note (representing a discount rate of 20%) or (ii) 80% multiplied by the Market Price (as defined herein) (representing a discount rate of 20%). “Market Price” means the average of the three lowest daily VWAPs for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date thereof until the same is paid (the “Default Interest”). 300,000 150,000 50,000 500,000 |
Schedule of Note Receivable (_2
Schedule of Note Receivable (Details) (Parenthetical) | 9 Months Ended | ||||||
Apr. 07, 2021 USD ($) | Apr. 02, 2021 USD ($) | Mar. 15, 2021 USD ($) | Mar. 12, 2021 USD ($) d | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Short-Term Debt [Line Items] | |||||||
Proceeds from notes payable | $ 50,000 | $ 150,000 | $ 300,000 | $ 121,282 | $ 300,000 | ||
Convertible note receivable | $ 500,000 | $ 500,000 | |||||
Convertible Debt [Member] | GeneRx [Member] | |||||||
Short-Term Debt [Line Items] | |||||||
Debt face amount | $ 300,000 | ||||||
Debt term | 1 year | ||||||
Maturity date | Mar. 12, 2022 | ||||||
Debt interest rate | 2% | ||||||
Debt conversion, description | The Note is convertible, at the option of the Holder, into shares of common stock of the Borrower at a fixed conversion price of $1.00 | ||||||
Debt, weighted average interest rate | 80% | ||||||
Debt instrument, convertible, threshold trading days | d | 20 | ||||||
Debt instrument, description | the Issue Date of this Note (representing a discount rate of 20%) or (ii) 80% multiplied by the Market Price (as defined herein) (representing a discount rate of 20%). “Market Price” means the average of the three lowest daily VWAPs for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date thereof until the same is paid (the “Default Interest”). |
Schedule Of Fair Value Of Net A
Schedule Of Fair Value Of Net Assets Acquired (Details) | Jul. 11, 2022 USD ($) |
Business Acquisition [Line Items] | |
Cash | $ 504,685 |
Book Value [Member] | |
Business Acquisition [Line Items] | |
Cash | 504,685 |
Total | 504,685 |
Fair Value [Member] | |
Business Acquisition [Line Items] | |
Cash | 504,685 |
Total | 504,685 |
Difference [Member] | |
Business Acquisition [Line Items] | |
Cash | |
Total |
Schedule Of Assets Acquired (De
Schedule Of Assets Acquired (Details) - USD ($) | Sep. 30, 2022 | Jul. 11, 2022 | Jul. 09, 2022 | Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |||||
Cash | $ 504,685 | ||||
Goodwill | $ 1,451,815 | 1,451,815 | [1] | $ 1,451,815 | |
Total purchase price | $ 1,956,500 | ||||
[1]Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. |
Schedule Of Goodwill (Details)
Schedule Of Goodwill (Details) | 3 Months Ended |
Sep. 30, 2022 USD ($) | |
Business Combination and Asset Acquisition [Abstract] | |
Balance as of July 11, 2022 | $ 1,451,815 |
Additions and adjustments | |
Balance as of June 30, 2022 | $ 1,451,815 |
Acquisition of MJH Research, _3
Acquisition of MJH Research, Inc. (Details Narrative) - Common Stock Purchase Agreement [Member] | Jul. 08, 2022 shares |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Sale of stock | 100,000 |
Issuance of common stock for cash, shares | 7,000,000 |
Schedule of Property and Equi_2
Schedule of Property and Equipment (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 3,250,037 | $ 3,115,431 |
Less: Accumulated depreciation | (706,774) | (536,500) |
Property and equipment, net | 2,543,263 | 2,578,931 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 257,824 | 654,628 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 780,863 | 244,583 |
Land, Buildings and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,650,000 | 1,650,000 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 561,350 | $ 566,220 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 42,930 | $ 91,781 | $ 173,110 | $ 286,038 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Aug. 01, 2021 | Jul. 29, 2021 | Dec. 15, 2017 | Oct. 31, 2016 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Note payable | $ 996,010 | $ 996,010 | $ 874,728 | ||||||
Civil penalty amount | $ 10,000 | ||||||||
Other income | $ 88,888 | $ 1,494,408 | |||||||
Red Earth LLC [Member] | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Number of common stocks exchanged during period | 52,732,969 | ||||||||
Common stock, par value | $ 0.001 | ||||||||
Note payable | $ 900,000 | ||||||||
Red Earth LLC [Member] | Maximum [Member] | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Outstanding membership interests acquired percentage | 100% | ||||||||
Red Earth LLC [Member] | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Debt Instrument, Interest Rate During Period | 12% | ||||||||
Debt Instrument, Interest Rate, Increase (Decrease) | 18% | ||||||||
Short term borrowings | $ 182,469 | 182,469 | |||||||
Other income | $ 70,000 | ||||||||
Red Earth LLC [Member] | Maximum [Member] | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Debt Instrument, Periodic Payment | $ 7,500 | ||||||||
Red Earth LLC [Member] | Minimum [Member] | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Debt Instrument, Periodic Payment | $ 5,000 | ||||||||
Red Earth LLC [Member] | Provisional Grow License [Member] | Asset Purchase and Sale Agreement [Member] | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Agreement amount received from seller | $ 300,000 | ||||||||
Payment for deposit | $ 25,000 |
Schedule of Deposits (Details)
Schedule of Deposits (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | |
Total | $ 1,016,184 | $ 1,016,184 | |
MJ Distributing Inc [Member] | |||
Total | [1] | $ 1,016,184 | $ 1,016,184 |
[1]On February 5, 2021, the Company (the “Purchaser”) executed a Membership Interest Purchase Agreement (“MIPA3”) with MJ Distributing, Inc. (the “Seller”) to acquire all of the outstanding membership interests of MJ Distributing C202, LLC and MJ Distributing P133, LLC, each the holder of a State of Nevada provisional medical and recreational cultivation license and a provisional medical and recreational production license. In consideration of the sale, transfer, assignment and delivery of the Membership Interests to Purchaser, and the covenants made by Seller under the MIPA3, Purchaser agreed to pay a combination of cash, promissory notes, and stock in the amount of One-Million-Two-Hundred-Fifty Thousand Dollars ($ 1,250,000.00 200,000 Purchase Price (i) a non-refundable down payment in the amount of $300,000 was made on January 15, 2021, (ii) the second payment in the amount of $200,000 was made on February 5, 2021, (iii) a deposit in the amount of $310,000 was paid on February 22, 2021 ($210,000 was a pre-payment against future compensation due under the MIPA3), (iv) $200,000 was deposited on June 24, 2021, (v) $200,000 shall be deposited on or before June 12, 2021, and (vi) $250,000 shall be deposited within five (5) business days after the Nevada Cannabis Compliance Board (“CCB”) provides notice on its agenda that the Licenses are set for hearing to approve the transfer of ownership from the Seller to the Purchaser. |
Schedule of Deposits (Details)
Schedule of Deposits (Details) (Parenthetical) - Membership Interest Purchase Agreement Member [Member] - MJ Distributing Inc [Member] | Feb. 05, 2021 USD ($) shares |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Cash distributions paid | $ | $ 1,250,000 |
Net of forfeitures shares | shares | 200,000 |
Distribution payment description | (i) a non-refundable down payment in the amount of $300,000 was made on January 15, 2021, (ii) the second payment in the amount of $200,000 was made on February 5, 2021, (iii) a deposit in the amount of $310,000 was paid on February 22, 2021 ($210,000 was a pre-payment against future compensation due under the MIPA3), (iv) $200,000 was deposited on June 24, 2021, (v) $200,000 shall be deposited on or before June 12, 2021, and (vi) $250,000 shall be deposited within five (5) business days after the Nevada Cannabis Compliance Board (“CCB”) provides notice on its agenda that the Licenses are set for hearing to approve the transfer of ownership from the Seller to the Purchaser. |
Schedule of Notes Payable (Deta
Schedule of Notes Payable (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | |
Short-Term Debt [Line Items] | |||
Total notes payable | $ 996,010 | $ 874,728 | |
Notes payable, current | (996,010) | (874,728) | |
Long term notes payable | |||
Note Payable One [Member] | |||
Short-Term Debt [Line Items] | |||
Total notes payable | [1] | 885,893 | 750,000 |
Note Payable Two [Member] | |||
Short-Term Debt [Line Items] | |||
Total notes payable | [2] | $ 110,117 | $ 124,728 |
[1]On January 17, 2019, the Company executed a promissory note for $ 750,000 5.0 3,125 beginning February 1, 2019 until January 31, 2022 750,000 0 750,000.00 500,000.00 1,250,000.00 357,342.88 900,000 7 Future payments shall be calculated on a 20-year amortization with a balloon payment in three years. 6,977.69 885,893 250,000 6.5 2,178 beginning May 1, 2019 until March 31, 2020 50,000 the payments shall be re-amortized (15-year amortization) 50,000 110,117 |
Schedule of Notes Payable (De_2
Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | Feb. 04, 2022 | Apr. 02, 2019 | Jan. 17, 2019 | Sep. 30, 2022 | Dec. 31, 2021 |
Short-Term Debt [Line Items] | |||||
Secured note principal amount | $ 996,010 | ||||
Note payable | 996,010 | $ 874,728 | |||
FR Holdings, LLC [Member] | Note Modification Agreement [Member] | |||||
Short-Term Debt [Line Items] | |||||
Debt instrument face amount | $ 900,000 | ||||
Secured note | 750,000 | ||||
Consulting fee | 500,000 | ||||
Secured note principal amount | 1,250,000 | ||||
Payments for debt | $ 357,342.88 | ||||
Debt percentage | 700% | ||||
Payments terms description | Future payments shall be calculated on a 20-year amortization with a balloon payment in three years. | ||||
Debt instrument, periodic payment | $ 6,977.69 | ||||
Note payable | 885,893 | ||||
Promissory Note [Member] | John T. Jacobs and Teresa D. Jacobs [Member] | |||||
Short-Term Debt [Line Items] | |||||
Debt instrument interest rate | 6.50% | ||||
Debt maturity date | Mar. 31, 2022 | ||||
Debt instrument face amount | $ 250,000 | $ 110,117 | |||
Debt instrument monthly installments | $ 2,178 | ||||
Debt instrument maturity date, description | beginning May 1, 2019 until March 31, 2020 | ||||
Promissory Note [Member] | John T. Jacobs and Teresa D. Jacobs [Member] | Second Payment [Member] | |||||
Short-Term Debt [Line Items] | |||||
Debt instrument principal payment reduction | $ 50,000 | ||||
Promissory Note [Member] | John T. Jacobs and Teresa D. Jacobs [Member] | Second Payment [Member] | March 31, 2021 [Member] | |||||
Short-Term Debt [Line Items] | |||||
Debt instrument principal payment reduction | $ 50,000 | ||||
Debt instrument, interest rate terms | the payments shall be re-amortized (15-year amortization) | ||||
Promissory Note [Member] | FR Holdings, LLC [Member] | |||||
Short-Term Debt [Line Items] | |||||
Debt instrument interest rate | 5% | ||||
Debt maturity date | Jan. 31, 2022 | ||||
Debt instrument face amount | $ 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 | $ 0 |
Schedule of Minimum Loan Paymen
Schedule of Minimum Loan Payments (Details) | Sep. 30, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2022 (excluding the nine months ended September 30, 2022) | $ 996,010 |
2023 | |
2024 | |
2025 | |
Thereafter | |
Total minimum loan payments | $ 996,010 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 9 Months Ended | |||||||||||
Sep. 24, 2022 | Dec. 03, 2021 | Sep. 30, 2021 | May 09, 2021 | Apr. 14, 2021 | Apr. 07, 2021 | Sep. 15, 2020 | Sep. 01, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Oct. 17, 2022 | Mar. 26, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Stock option exercisable price | $ 0.75 | |||||||||||
Stock issued during period, value, new issues | $ 50,000 | |||||||||||
Dividends payable | $ 1,771,538 | |||||||||||
Operating lease description | The Company leases a two production / warehouse facility under a non-cancelable operating lease that expires in June 2027 and September 2029, respectively | |||||||||||
Operating lease, liability | $ 769,684 | |||||||||||
Operating lease, right-of-use asset | 0 | |||||||||||
Operating lease, payments | $ 0 | |||||||||||
Lessee, operating lease, remaining lease term | 3 years 7 months 6 days | |||||||||||
Rent payable | $ 6,000 | $ 144,000 | $ 203,242 | |||||||||
Loss contingency allegations | the Plaintiffs allege that the Defendants have not honored the 2018 Agreements negotiated between the Plaintiffs and Defendants and that MJ Holdings, Inc. has failed to issue an additional $125,000 in stock due to the Plaintiffs as was agreed to in writing and the Defendants have failed to start the Western Project | |||||||||||
Excess alleged damages | $ 15,000 | |||||||||||
Alternative Hospitality, Inc [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Ownership percentage | 51% | |||||||||||
Board Of Directors [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Deferred compensation expense | $ 15,000 | |||||||||||
Shares issued for compensation | 15,000 | 15,000 | ||||||||||
Former Secretary and President [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Deferred compensation expense | $ 501,085 | |||||||||||
Payments to employees | $ 62,392 | |||||||||||
Former Secretary and President [Member] | Wages [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Payments to employees | 59,583 | |||||||||||
Former Secretary and President [Member] | Accrued Vacation [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Payments to employees | 2,854 | |||||||||||
Former Secretary and President [Member] | Statutory Penalties [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Payments to employees | $ 8,307.60 | |||||||||||
Employment Agreement [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Employment agreement description | 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. | |||||||||||
Term of employment agreement | 3 years | |||||||||||
Annual base compensation | $ 105,000 | |||||||||||
Annual discretionary bonus percentage | 100% | |||||||||||
Stock awarded options to purchase | 667,000 | |||||||||||
Deferred compensation expense | $ 224,000 | |||||||||||
Option to purchase common stock | 500,000 | |||||||||||
Stock option exercisable price | $ 0.75 | |||||||||||
Employment Agreement [Member] | Bernard Moyle [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
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 | |||||||||||
Term of employment agreement | 3 years | |||||||||||
Annual base compensation | $ 60,000 | |||||||||||
Annual discretionary bonus percentage | 200% | |||||||||||
Stock awarded options to purchase | 500,000 | |||||||||||
Option to purchase common stock | 500,000 | |||||||||||
Stock option exercisable price | $ 0.75 | |||||||||||
Employment Agreement [Member] | Alternative Hospitality, Inc [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Employee compensation | $ 20,000 | |||||||||||
Ownership percentage | 51% | |||||||||||
Employment Agreement [Member] | Chief Executive Officer [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Employment agreement description | 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 | |||||||||||
Term of employment agreement | 3 years | |||||||||||
Annual base compensation | $ 105,000 | |||||||||||
Annual discretionary bonus percentage | 100% | |||||||||||
Option to purchase common stock | 500,000 | |||||||||||
Stock option exercisable price | $ 0.75 | |||||||||||
Employee compensation | $ 20,000 | |||||||||||
Board of Directors Services Agreement [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Dividends payable | $ 3,750 | |||||||||||
Board of Directors Services Agreement [Member] | Subsequent Event [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Dividends payable | $ 1,500 | |||||||||||
Board of Directors Services Agreement [Member] | Directors [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Stock issued during period, value, new issues | $ 15,000 | |||||||||||
Stock issued during period, shares, new issues | 15,000 |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Aug. 02, 2022 | Jul. 15, 2022 | Jul. 08, 2022 | Jul. 08, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Common stock shares authorized | 95,000,000 | 95,000,000 | 95,000,000 | ||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | ||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Common stock, shares, issued | 78,591,667 | 78,591,667 | 71,501,667 | ||||||
Common stock shares outstanding | 78,591,667 | 78,591,667 | 71,501,667 | ||||||
Issuance of shares for services, value | $ 25,200 | $ 73,989 | $ 223,389 | ||||||
Preferred stock, par or stated value per share | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Preferred stock, shares issued | 0 | 0 | 0 | ||||||
Series A Convertible Preferred Stock [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Equity Method Investment, Ownership Percentage | 4.99% | 4.99% | |||||||
Series A Convertible Preferred Stock [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Preferred stock, shares authorized | 2,500 | 2,500 | 2,500 | ||||||
Preferred stock, par or stated value per share | $ 1,000 | $ 1,000 | $ 1,000 | ||||||
Preferred Stock, Convertible, Conversion Price | $ 0.75 | $ 0.75 | |||||||
Preferred stock, shares issued | 0 | 0 | 0 | ||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | ||||||
Series A Convertible Preferred Stock [Member] | Holder [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Description of principal activities | 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 61st day after such notice is given to us and shall apply only to such holder | ||||||||
Common Stock Purchase Agreement [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Issuance of common stock for cash, shares | 7,000,000 | ||||||||
Common Stock [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Common stock, shares, issued | 78,591,667 | 78,591,667 | |||||||
Common stock shares outstanding | 78,591,667 | 78,591,667 | |||||||
Issuance of common stock for cash, shares | 263,158 | ||||||||
Issuance of shares for services | 90,000 | 302,333 | 559,333 | ||||||
Issuance of shares for services, value | $ 90 | $ 302 | $ 560 | ||||||
Common Stock [Member] | Three Directors [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Issuance of shares for services | 45,000 | 45,000 | |||||||
Issuance of shares for services, value | $ 12,128 | $ 1 | |||||||
Common Stock [Member] | Common Stock Purchase Agreement [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Issuance of common stock for cash, shares | 7,000,000 |
Basic and Diluted Earnings (L_2
Basic and Diluted Earnings (Loss) per Common Share (Details Narrative) | 9 Months Ended |
Sep. 30, 2022 shares | |
Earnings Per Share [Abstract] | |
Earnings per share, amount | 1,500,000 |
Basic earnings (loss) per common share | 73,701,945 |
Diluted earnings (loss) per common share | 71,501,667 |
Schedule of Options Issued, Exe
Schedule of Options Issued, Exercised and Expired (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Options, Beginning Balance | 1,500,000 | |
Weighted Average Exercise Price, Beginning Balance | $ 0.75 | |
Remaining Contractual Life in Years | 1 year | 1 year 8 months 4 days |
Options, Issued | ||
Weighted Average Exercise Price, Issued | ||
Options, Exercised | ||
Weighted Average Exercise Price, Exercised | ||
Options, Expired | ||
Weighted Average Exercise Price, Expired | ||
Options, Ending Balance | 1,500,000 | 1,500,000 |
Weighted Average Exercise Price, Ending Balance | $ 0.75 | $ 0.75 |
Options, Exercisable, Ending Balance | 1,500,000 | |
Weighted Average Exercise Price, Exercisable, Ending Balance | $ 0.75 | |
Remaining Contractual Life in Years, Exercisable | 1 year |
Schedule of Warrants Issued, Ex
Schedule of Warrants Issued, Exercised and Expired (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Warrants Shares, Beginning Balance | 250,000 | |
Weighted Avg. Exercise Price Warrant, Beginning Balance | $ 0.10 | |
Remaining Contractual Life in Years | 2 years 4 months 24 days | 3 years 3 months 18 days |
Warrants Shares, Issued | ||
Weighted Avg. Exercise Price Warrant, Issued | ||
Warrants Shares, Exercised | ||
Weighted Avg. Exercise Price Warrant, Exercised | ||
Warrants Shares, Expired | ||
Weighted Avg. Exercise Price Warrant, Expired | ||
Warrants Shares, Ending Balance | 250,000 | 250,000 |
Weighted Avg. Exercise Price Warrant, Ending Balance | $ 0.10 | $ 0.10 |
Stock Based Compensation (Detai
Stock Based Compensation (Details Narrative) - $ / shares | 9 Months Ended | |||
Sep. 15, 2020 | Sep. 30, 2022 | Dec. 31, 2021 | Jan. 11, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of option granted, shares | ||||
Option exercise price per share | ||||
Options, outstanding, number | 1,500,000 | 1,500,000 | ||
Warrant outstanding | 250,000 | 250,000 | ||
Common Stock Purchase Warrant Agreement [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Warrant to purchase common stock | 250,000 | |||
Warrants exercise price | $ 0.10 | |||
Warrant term | 4 years | |||
Bernard Moyle [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of option granted, shares | 500,000 | |||
Option exercise price per share | $ 0.75 | |||
Paris Balaouras [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of option granted, shares | 500,000 | |||
Option exercise price per share | $ 0.75 | |||
Roger Bloss [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of option granted, shares | 500,000 | |||
Option exercise price per share | $ 0.75 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Oct. 06, 2022 | Sep. 05, 2022 | Aug. 01, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party Transaction [Line Items] | |||||||
Other income | $ 88,888 | $ 1,494,408 | |||||
The Agreement [Member] | Highland Brothers Llc [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Cash consideration | $ 150,000 | ||||||
The Agreement [Member] | Highland Brothers Llc [Member] | Subsequent Event [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Payments of related party | $ 150,000 | ||||||
Red Earth LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Interest rate | 12% | ||||||
Change in interest rate | 18% | ||||||
Short term borrowings | $ 182,469 | 182,469 | |||||
Other income | $ 70,000 | ||||||
Red Earth LLC [Member] | Minimum [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Periodic payment | $ 5,000 | ||||||
Red Earth LLC [Member] | Maximum [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Periodic payment | $ 7,500 |
Restatement (Details Narrative)
Restatement (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accumulated Deficit | $ (19,812,798) | $ (16,472,629) | |
Revision of Prior Period, Adjustment [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Payment for consulting fees | $ 500,000 | ||
Accumulated Deficit | $ 500,000 |