Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 18, 2015 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | MJ Holdings, Inc. | ||
Entity Central Index Key | 1456857 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $15,111,290 | ||
Entity Common Stock, Shares Outstanding | 13,886,794 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Real estate property: | ||
Land | $551,251 | |
Buildings and improvements | 2,442,188 | |
Real estate property, gross | 2,993,439 | |
Accumulated depreciation | -38,173 | |
Real estate property, net | 2,955,266 | |
Cash | 175,792 | 478 |
Deferred leasing costs | 202,545 | |
Deferred rent receivable | 6,936 | |
Prepaid expenses and other assets | 73,377 | |
Total Assets | 3,413,916 | 478 |
Liabilities | ||
Note payable - related party | 1,800,000 | |
Security deposits | 102,045 | |
Stockholder loans | 82,362 | |
Accounts payable and accrued liabilities | 195,582 | 21,338 |
Total Liabilities | 2,097,627 | 103,700 |
Stockholders' Equity (Deficit) | ||
Preferred stock, par value $0.001, 5,000,000 shares authorized; 0 shares issued and outstanding | ||
Common stock, par value $0.001, 95,000,000 shares authorized; 13,878,522 and 12,218,205 shares issued and outstanding, respectively | 13,879 | 12,218 |
Additional paid-in capital | 2,640,120 | 57,190 |
Accumulated deficit | -1,337,710 | -172,630 |
Total Stockholders' Equity (Deficit) | 1,316,289 | -103,222 |
Total Liabilities and Stockholders' Equity (Deficit) | $3,413,916 | $478 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Consolidated Balance Sheets [Abstract] | ||
Preferred stock, par value per share | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $0.00 | $0.00 |
Common stock, shares authorized | 95,000,000 | 95,000,000 |
Common stock, shares issued | 13,878,522 | 12,218,205 |
Common stock, shares outstanding | 13,878,522 | 12,218,205 |
Consolidated_Statement_of_Oper
Consolidated Statement of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | ||
Rental income | $108,871 | |
Operating Expenses: | ||
Property expenses | 72,859 | |
General and administrative expenses | 1,058,569 | 24,958 |
Depreciation expense | 38,173 | |
Total operating expenses | 1,169,601 | 24,958 |
Operating loss | -1,060,730 | -24,958 |
Interest expense - related party | -104,350 | -4,200 |
Loss on disposal of fixed assets | -3,788 | |
Loss before income taxes | -1,165,080 | -32,946 |
Provision for income taxes | ||
Net Loss | ($1,165,080) | ($32,946) |
Basic and diluted net loss per common share: | ||
Weighted average shares outstanding | 13,457,822 | 12,218,315 |
Net loss per common share | ($0.09) | $0 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholders' Equity (Deficit) (USD $) | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2012 | ($70,276) | $12,218 | $57,190 | ($139,684) | |
Balance, shares at Dec. 31, 2012 | 12,218,205 | ||||
Net Loss | -32,946 | -32,946 | |||
Balance at Dec. 31, 2013 | -103,222 | 12,218 | 57,190 | -172,630 | |
Balance, shares at Dec. 31, 2013 | 12,218,205 | ||||
Sale of common stock | 1,615,000 | 1,615 | 1,613,385 | ||
Sale of common stock, shares | 1,615,000 | ||||
Common stock issued for services | 77,500 | 15 | 77,485 | ||
Common stock issued for services, shares | 14,602 | ||||
Warrants issued to consultant | 784,976 | 784,976 | |||
Cashless exercise of warrants | 11 | -11 | |||
Cashless exercise of warrants, shares | 10,825 | ||||
Accounts payable paid by principal stockholders | 7,665 | 7,665 | |||
Conversion of notes payable and accrued interest to common stock | 99,450 | 20 | 99,430 | ||
Conversion of notes payable and accrued interest to common stock, shares | 19,890 | ||||
Net Loss | -1,165,080 | -1,165,080 | |||
Balance at Dec. 31, 2014 | $1,316,289 | $13,879 | $2,640,120 | ($1,337,710) | |
Balance, shares at Dec. 31, 2014 | 13,878,522 |
Consolidated_Statement_of_Cash
Consolidated Statement of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flow from operating activities: | ||
Net Loss | ($1,165,080) | ($32,946) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 38,173 | 1,427 |
Stock-based compensation | 862,476 | |
Deferred rental income | -6,936 | |
Amortization of deferred leasing and debt costs | 7,750 | |
Loss on disposal of fixed assets | 3,788 | |
Changes in operating assets and liabilities: | ||
Deferred leasing costs | -205,077 | |
Prepaid and other assets | -59,443 | |
Security deposits | 102,045 | |
Accounts payable and accrued liabilities | 198,797 | 5,000 |
Net Cash Used in Operating Activities | -227,295 | -22,731 |
Cash flow from investing activities: | ||
Acquisition of real estate property | -2,993,439 | |
Net Cash Used in Investing Activities | -2,993,439 | |
Cash flow from financing activities: | ||
Proceeds from the sale of common stock | 1,615,000 | |
Proceeds from note payable - related party | 1,800,000 | |
Payment for debt issuance costs | -19,152 | |
Proceeds from loans from stockholders | 200 | 22,910 |
Net Cash Provided by Financing Activities | 3,396,048 | 22,910 |
Net increase in cash | 175,314 | 179 |
Cash at beginning of period | 478 | 299 |
Cash at end of period | 175,792 | 478 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest to related party | 80,918 | |
Supplemental schedule of non-cash financing activities: | ||
Accounts payable paid by principal stockholders | 7,665 | |
Stockholder loans and accrued interest converted to common stock | $99,450 |
Description_of_Business
Description of Business | 12 Months Ended |
Dec. 31, 2014 | |
Description of Business [Abstract] | |
Description of Business | Note 1 - Description of Business |
MJ Holdings acquires real estate zoned for legalized marijuana operations and leases the acquired real estate to licensed marijuana operators, including but not limited to providing complete turnkey growing space and related facilities to licensed marijuana growers and dispensary owners. Additionally, MJ Holdings plans to explore ancillary opportunities in the regulated marijuana industry. | |
The Company does not and will not, until such time as Federal law allows, grow, harvest, distribute or sell marijuana or any substances that violate the laws of the United States of America. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2014 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies |
Principles of Consolidation | |
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, 5353 Joliet, LLC and MJ Havana, LLC. Intercompany 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 long-lived and indefinite-lived assets. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. | |
Fair Value of Financial Instruments | |
Financial instruments include cash, payables, and debt obligations. Except as described below, due to the short-term nature of the financial instruments, the book value is representative of their fair value. | |
Warrants to Purchase Common Stock and Other Derivative Financial Instruments | |
We classify as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net-cash settlement or settlement in our own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock. We classify as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). We assess the classification of warrants issued to purchase our common stock and any other financial instrument at each reporting date to determine whether a change in classification between assets and liabilities is required. | |
Cash | |
At times the Company has cash in financial institutions in excess of federally insured limits. However, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on its cash balances. | |
Deferred Leasing Costs | |
Commissions and other direct costs associated with the acquisition of tenants, or lessees, are capitalized and amortized on a straight-line basis over the terms of the related leases. Costs associated with unsuccessful leasing opportunities are expensed. | |
Leasing commissions of $205,077 and $0 were deferred during the years ended December 31, 2014 and 2013, respectively. Deferred leasing costs charged to property expenses for the years ended December 31, 2014 and 2013, were $2,532 and $0, respectively. As of December 31, 2014, $202,545 of deferred leasing costs are included on the Balance Sheet as a deferred asset. | |
Debt Issuance Costs | |
Costs associated with obtaining, closing, and modifying loans and/or debt instruments such as, but not limited to placement agent fees, attorney fees and state documentary fees are capitalized and charged to interest expense over the term of the loan. | |
Debt issuance costs of $19,152 and $0 were capitalized during the years ended December 31, 2014 and 2013, respectively. Debt issuance costs charged to interest expense for the years ended December 31, 2014 and 2013, were $5,218 and $0, respectively. As of December 31, 2014, $13,934 of debt issuance costs are included on the Balance Sheet within the Prepaid expenses and other assets. | |
Real Estate Property | |
Real estate property is recorded at cost, less accumulated depreciation and amortization. Real estate property, excluding land, is depreciated using the straight-line method over the estimated useful life of the respective assets. Leasehold improvements are amortized using the straight-line method over the shorter of the related lease term or useful life. Maintenance, repairs, and minor improvements are charged to expense as incurred; major renewals and betterments that extend the useful life of the associated asset are capitalized. When real estate property is sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in results of operations for the period. | |
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. We did not record any impairments of long-lived assets during the year ended December 31, 2014. | |
Revenue Recognition | |
Before revenue can be recognized, four basic criteria must be met: persuasive evidence of an arrangement exists; the delivery has occurred or services have been rendered; the fee is fixed or determinable; and collectability is reasonably assured. | |
The Company's revenues are rental income generated by leasing acquired real estate properties to licensed marijuana operators. All leases are classified as operating leases. Rental income is recognized on a straight-line basis over the terms of the leases. Straight-line rent is recognized for all tenants with contractual fixed increases in rent. Deferred rent receivable represents rental revenue recognized on a straight-line basis in excess of billed rents. Reimbursements from tenants for real estate taxes and other recoverable operating expenses are recognized as rental income in the period the applicable costs are incurred. | |
Stock-Based Compensation | |
The Company estimates the fair values of share-based payments on the date of grant using a Black-Scholes option pricing model, which requires assumptions for the expected volatility of the share price of our common stock, the expected dividend yield, and a risk-free interest rate over the expected term of the stock-based financial instrument. | |
Since the number of outstanding and free-trading shares of the Company's common stock is limited and the trading volume is relatively low, we do not have sufficient company specific information regarding the volatility of our share price on which to base an estimate of expected volatility. As a result, we use the average historical volatilities of similar entities within our industry as the expected volatility of our share price. | |
The expected dividend yield is 0% as the Company has not paid any dividends on its common stock and does not anticipate it will pay any dividends in the foreseeable future. | |
The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant date with a remaining term equal to the expected term of the stock-based award. | |
For stock-based financial instruments issued to parties other than employees, we use 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 our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future. | |
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 carryforwards. 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 | |
In May 2014, the Financial Accounting Standards Board (the "FASB") issued guidance to clarify the principles for recognizing revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a comprehensive framework for revenue recognition that supersedes current general revenue guidance and most industry-specific guidance. In addition, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. The new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. An entity should apply the guidance either retrospectively to each prior reporting period presented or retrospectively with the cumulative adjustment at the date of the initial application. The Company is currently in the process of evaluating the impact of adoption of the new accounting guidance on its consolidated financial statements and has not determined the impact of adoption on its financial statements. | |
In June 2014, FASB issued guidance that eliminates the definition of a development stage entity thereby removing the incremental financial reporting requirements from U.S. GAAP for development stage entities, primarily the presentation of inception to date financial statements. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2014. Early adoption is permitted. The Company elected to adopt the new guidance for development stage entities for the interim period ended June 30, 2014, and accordingly, is no longer presenting the inception-to-date financial information and disclosures formerly required. | |
In August 2014, FASB issued guidance that requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. The new guidance is effective for the annual period ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. Since this guidance primarily addresses certain disclosures to the financial statements, we anticipate no impact on our financial position, results of operations or cash flows from adopting this standard. The Company is currently in the process of evaluating the additional disclosure requirements of the new guidance and has not determined the impact of adoption on its financial statement disclosures. | |
Going_Concern
Going Concern | 12 Months Ended |
Dec. 31, 2014 | |
Going Concern [Abstract] | |
Going Concern | Note 3 - Going Concern |
The Company's financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. During the year ended December 31, 2014, the Company incurred a net loss of $1,165,080. The Company | |
had an accumulated deficit of $1,337,710 as of December 31, 2014. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. | |
The Company's future success is dependent upon its ability to achieve profitable operations, generate cash from operating activities and obtain additional financing. Although we can provide no assurances, we believe our cash on hand, coupled with revenues generated by rental income and our ability to refinance our equity in the real estate we own, will provide sufficient liquidity and capital resources to fund our business for the next twelve months. | |
In the event the Company experiences liquidity and capital resource constraints because of unanticipated operating losses, we may need to raise additional capital in the form of equity and/or debt financing. If such additional capital is not available on terms acceptable to us or at all, then we may need to curtail our operations and/or take additional measures to conserve and manage our liquidity and capital resources, any of which would have a material adverse effect on our financial position, results of operations, and our ability to continue in existence. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. | |
Real_Estate_Property_Acquisiti
Real Estate Property Acquisitions | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Real Estate Property Acquisitions [Abstract] | ||||||||||||
Real Estate Property Acquisitions | Note 4 - Real Estate Property Acquisitions | |||||||||||
5353 Joliet Street | ||||||||||||
In June 2014, through its wholly-owned subsidiary, 5353 Joliet LLC, the Company acquired an owner-occupied 22,144 square foot industrial building situated on 1.4 acres of land in Denver, Colorado for $2,214,000. The acquisition was funded with proceeds from the issuance of a secured promissory note in the amount of $1,800,000 and $414,000 of cash on-hand. The promissory note is held by Chemtov Mortgage Group ("CMG"), an entity wholly-owned by the Company's co-CEO, Shawn Chemtov. CMG has assigned all ownership and security interest granted to it pursuant to the promissory note to 5353 Mortgage Loan, LLC, a single purpose entity created solely for the purpose of this transaction. CMG invested $100,000 of the $1,800,000 of funds used to finance the purchase of the promissory note. CMG acts as the loan servicing entity for the promissory note, administering the note, processing payments from the Company, and transferring all payments to 5353 Mortgage Loan, LLC. CMG charges no administration fees for servicing the promissory note. | ||||||||||||
The promissory note bears interest at 10% per annum, provides for cash interest payments on a monthly basis, matures on June 1, 2016, and is callable at the option of the Company at any time after June 19, 2015. The Company has guaranteed the promissory note and has pledged its ownership interest in 5353 Joliet LLC, and as such its fee-simple ownership interest in the property as security for the promissory note. The promissory note does not restrict the Company's ability to incur future indebtedness. | ||||||||||||
In June 2014, the Company entered into a short-term lease agreement with the previous property owner for monthly rent of $11,070, excluding contractual payments for real estate taxes and other recoverable operating expenses. The lease expired in September 2014. | ||||||||||||
In September 2014, the Company entered into a lease agreement contingent upon the lessee obtaining city and state licenses and permits for its intended operations at the premises. The contingencies were met by the lessee, and the lease agreement became effective December 1, 2014. The lease agreement is for a term of seven years and a monthly rent obligation of $25,835, subject to annual increases of 2% per year. Insurance and real property taxes shall be paid by the Company and, subsequently, charged to the lessee as additional rent based on the actual expenses incurred - see Note 5 below for additional lease details. | ||||||||||||
503 Havana Street | ||||||||||||
In September 2014, through its wholly-owned subsidiary, MJ Havana LLC, acquired an owner-occupied 1,250 square foot building situated on 23,625 square feet of land in Aurora, Colorado for $756,000, exclusive of closing costs. The acquisition was funded with cash on-hand. The property is zoned B-2 and has been approved by the city of Aurora as a retail dispensary for recreational marijuana. | ||||||||||||
Prior to closing on the property acquisition, the company had pre-negotiated a 10-year lease agreement with a third-party, a licensed marijuana dispensary company serving both medical and adult (21+) customers in Colorado. Once the closing of the property was completed with the seller, the pre-negotiated lease was executed in September 2014 with the third-party - see Note 5 below for additional lease details. | ||||||||||||
A summary of real estate property at December 31, 2014, is as follows: | ||||||||||||
Estimated | December 31, | |||||||||||
Life | 2014 | |||||||||||
Buildings and improvements | 30 years | $ | 2,442,188 | |||||||||
Land | Not depreciated | 551,251 | ||||||||||
Total real estate property | 2,993,439 | |||||||||||
Less: Accumulated depreciation | (38,173 | ) | ||||||||||
Real estate property, net | $ | 2,955,266 |
Operating_Leases
Operating Leases | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Operating Leases [Abstract] | ||||||||||||
Operating Leases | Note 5 - Operating Leases | |||||||||||
The Company generates revenues by leasing its acquired real estate properties through operating leasing arrangements. A summary of revenues generated from our rental properties for the years ended December 31, 2014 and 2013, is as follows: | ||||||||||||
2014 | 2013 | |||||||||||
Revenues: | ||||||||||||
Rental payments | $ | 88,778 | $ | — | ||||||||
Reimbursed operating expenses | 13,157 | — | ||||||||||
Deferred rental income | 6,936 | — | ||||||||||
Total revenues from rental properties | $ | 108,871 | $ | — | ||||||||
503 Havana Street | ||||||||||||
In September 2014, the Company entered into a non-cancelable operating lease agreement with a marijuana dispensary (the "Lessee") to move into the Company's acquired property located at 503 Havana Street in Aurora, Colorado. The lease agreement is for a term of ten years and a monthly rent obligation of $11,250, subject to annual increases of 3% per year. Insurance and real property taxes shall be paid by the Company and, subsequently, charged to the Lessee as additional rent based on the actual expenses incurred. Pursuant to the terms of the lease agreement, the Company has agreed to contribute $150,000 to improvements to the property. | ||||||||||||
Upon the expiration of the term of ten years, the Lessee has the option to renew the lease agreement for one additional ten-year term, on the same terms as provided in the lease agreement. During the third year of the lease agreement, the Lessee may exercise an option to purchase the Property. | ||||||||||||
5353 Joliet Street | ||||||||||||
In September 2014, the Company entered into a lease agreement for its property and warehouse building located at 5353 Joliet Street in Denver, Colorado. The lease agreement is for a term of seven years and a monthly rent obligation of $25,835, subject to annual increases of 2% per year. Insurance and real property taxes shall be paid by the Company and, subsequently, charged to the lessee as additional rent based on the actual expenses incurred. | ||||||||||||
The lease was contingent upon the lessee, obtaining city and state licenses and permits for its intended operations at the premises, within the dates provided in the lease agreement. The contingencies were met by the lessee, and the lease agreement became effective December 1, 2014. | ||||||||||||
Upon the expiration of the seven-year term, the lessee has the option to renew the lease for two separate five-year terms, subject to rent reviews and adjustments, as set out in the lease agreement. | ||||||||||||
Future minimum rental payments, excluding the reimbursement of specified operating expenses, for non-cancelable operating lease agreements are as follows as of December 31, 2014: | ||||||||||||
2015 | $ | 447,579 | ||||||||||
2016 | 457,890 | |||||||||||
2017 | 468,449 | |||||||||||
2018 | 479,261 | |||||||||||
2019 | 490,332 | |||||||||||
Thereafter | 1,368,512 | |||||||||||
Total minimal rental payments | $ | 3,712,023 |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 6 - Related Party Transactions |
In February 2014, in connection with the change in control of the Company, the principal stockholders paid $7,665 of the Company's accounts payable, which was recorded as a capital contribution to the Company. | |
During year ended December 31, 2014, the Company borrowed $5,277 from its principal stockholders and repaid $5,077 of the borrowings to its principal shareholders, resulting in $200 of net borrowings from related parties. | |
During the year ended December 31, 2014, the Company paid $80,918 for interest due pursuant to the $1.8 million promissory note held by CMG, wholly-owned by the Company's co-CEO and shareholder, Shawn Chemtov - see Note 4 above for additional details regarding promissory note held by related party. | |
Stockholder_Loans_Payable
Stockholder Loans Payable | 12 Months Ended |
Dec. 31, 2014 | |
Stockholder Loans Payable [Abstract] | |
Stockholder Loans Payable | Note 7 - Stockholder Loans Payable |
Stockholder loans payable consisted of three promissory notes with two of its stockholders in which the company may borrow up to $25,000, $20,000, and $10,000, respectively. These borrowings accrued interest at 5%, 8%, and 8% per annum, respectively. They were due in part in December 2014 and December 2016. The Company paid no interest to the stockholders as of December 31, 2014. | |
For the year ended December 31, 2014 and 2013, the Company had accrued interest of $16,888 and $13,674, respectively. | |
In February 2014, in connection with the change of control of the Company, Messrs. Chemtov and Laufer, purchased the Stock holder loans from Messrs. Peraman and Sarfoh. | |
On August 31, 2014, the outstanding balance of $99,450 for the stockholder loans and the associated accrued interest were converted to 19,890 shares of the Company's common stock at a conversion price of $5.00 per share. | |
Sale_of_Unregistered_Securitie
Sale of Unregistered Securities | 12 Months Ended |
Dec. 31, 2014 | |
Sale of Unregistered Securities [Abstract] | |
Sale of Unregistered Securities | Note 8 - Sale of Unregistered Securities |
The Company conducted a private placement of its shares of common stock, whereby we sold 1,615,000 shares of common stock for an aggregate of $1,615,000. We began accepting subscriptions on March 24, 2014 and closed the private placement on April 9, 2014. | |
For the year ended December 31, 2014, the Company received proceeds from the private placement of $1,615,000. | |
The shares were issued pursuant to an exemption from the registration requirements under Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D promulgated thereunder (“Regulation D”) since, among other things, the transactions did not involve a public offering and the securities were acquired for investment purposes only and not with a view to or for sale in connection with any distribution thereof. Offers and sales were made solely to persons qualifying as “accredited investors” (as such term is defined by Rule 501 of Regulation D). | |
The securities offered will not be and have not been registered under the Securities Act, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. | |
Stock_Based_Compensation
Stock Based Compensation | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Stock Based Compensation [Abstract] | ||||||||||
Stock Based Compensation | Note 9 - Stock Based Compensation | |||||||||
Warrants | ||||||||||
In May 2014, the Company entered into a consulting services agreement for the generation of qualified leads and referrals for the Company's real estate financing products, with a wholly-owned subsidiary of Medbox, Inc ("Medbox"), a leader in dispensing technologies and consulting services in the regulated marijuana industry. | ||||||||||
During the term of the Agreement, the Company had agreed to pay Medbox (i) 50% of any management fee and (ii) 50% of the Net Revenue generated by the Medbox clients. Additionally, during the term of the agreement, Medbox was to receive warrants to purchase 33,333 shares of the Company's common stock each month until Medbox had been issued an aggregate of 600,000 warrants. The warrants have a five-year term. The exercise price for each monthly warrant was determined based on the volume weighted average price of the Company's common stock for the thirty days prior to the grant date of the warrant. | ||||||||||
The Agreement's initial term was for six months, and was to renew automatically for successive one month terms and could be canceled by either party with 5 days written notice. In October 2014, the agreement with Medbox was terminated and no additional warrants after the warrants issued in October 2014 were issued to Medbox pursuant to the agreement. | ||||||||||
The fair values of the warrants granted during the year ended December 31, 2014, were determined using the Black-Scholes option pricing model with the following weighted-average assumptions: | ||||||||||
Risk-free interest rate: | 1.64 | % | ||||||||
Expected term: | 5 years | |||||||||
Expected dividend yield: | 0 | % | ||||||||
Expected volatility: | 131.22 | % | ||||||||
For the year ended December 31, 2014, the Company recorded $784,976 of stock-based compensation expense related to warrants issued for services, which has been classified as General and administrative expenses. | ||||||||||
In May 2014, Medbox exercised 33,333 shares of warrants pursuant to a cashless exercise provision, in which Medbox received 10,825 shares of the Company's common stock based on an exercise price of $6.42 per share. | ||||||||||
A summary of warrants issued, exercised and expired during the year ended December 31, 2014, is as follows: | ||||||||||
Weighted | ||||||||||
Avg. | ||||||||||
Exercise | ||||||||||
Warrants: | Shares | Price | ||||||||
Balance at January 1, 2014 | — | $ | — | |||||||
Issued | 199,998 | 5.97 | ||||||||
Exercised | (33,333 | ) | 6.42 | |||||||
Expired | — | — | ||||||||
Balance at September 30, 2014 | 166,665 | $ | 5.88 | |||||||
Common Stock | ||||||||||
During the year ended December 31, 2014, the Company issued 14,602 shares of common stock for consulting services and recorded $77,500 of stock-based compensation expense for these consulting services, which has been classified as General and administrative expenses. The stock-based compensation expense was calculated based on the grant date fair value of the common stock shares issued in exchange for the consulting services. | ||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Income Taxes [Abstract] | ||||||||||||||
Income Taxes | Note 10 - Income Taxes | |||||||||||||
The Company did not incur any federal or state income tax expense or benefit for the years ended December 31, 2014 and 2013. | ||||||||||||||
The provision for income taxes differs from the amounts which would result from applying the federal statutory rate of 34% to the Company's loss before income taxes as follows: | ||||||||||||||
For the years ended December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Computed "expected" income tax benefit | $ | (396,127 | ) | $ | (11,202 | ) | ||||||||
State income tax benefit, net of federal benefit | (31,398 | ) | — | |||||||||||
Change in valuation allowance | 323,344 | 11,202 | ||||||||||||
Write-off of prior year net operating losses | 57,406 | — | ||||||||||||
Nondeductible expenses | 27,523 | — | ||||||||||||
True-up of deferred tax asset for stock compensation | 19,481 | — | ||||||||||||
Prior year differences | (229 | ) | — | |||||||||||
Provision for income taxes | $ | — | $ | — | ||||||||||
Temporary differences that give rise to the components of deferred tax assets and liabilities are as follows: | ||||||||||||||
As of December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Deferred tax assets: | ||||||||||||||
Deferred expenses | $ | 191,915 | $ | — | ||||||||||
Net operating loss carry-forwards | 184,747 | 57,406 | ||||||||||||
Property and equipment | 4,088 | — | ||||||||||||
Deferred tax assets | 380,750 | 57,406 | ||||||||||||
Less: Valuation allowance | (380,750 | ) | (57,406 | ) | ||||||||||
Net deferred tax assets | $ | — | $ | — | ||||||||||
As of December 31, 2014, the Company had net operating losses of approximately $499,000 for federal and state income tax purposes that can be carried forward for up to twenty years and deducted against future federal taxable income. The net operating loss carryforwards expire in 2034. All of the federal and state net operating losses incurred prior to 2014 are subject to 100 percent limitation under the provisions of Internal Revenue Code section 382 due to an ownership change and the continuity of business requirement. | ||||||||||||||
As of December 31, 2014 and 2013, management determined a valuation allowance against the net deferred tax assets of $380,750 and $57,406, respectively. In assessing the ability to realize a portion of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities and projected future taxable income in making the assessment. | ||||||||||||||
The Company files federal and state income tax returns. These returns remain subject to examination by taxing authorities for all years after December 31, 2010. | ||||||||||||||
Schedule_III_Real_Estate_and_A
Schedule III - Real Estate and Accumulated Depreciation | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule III - Real Estate and Accumulated Depreciation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule III - Real Estate and Accumulated Depreciation | MJ Holdings, Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule III - Real Estate and Accumulated Depreciation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Initial Cost | Total Cost | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description / | Encumbrances | Land | Buildings & | Improvement | Land | Buildings & | Total | Accumulated | Net | Year of | Date | |||||||||||||||||||||||||||||||||||||||||||||||||
Location of Property | Improvements | Costs | Improvements | Depreciation | Construction | Acquired | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capitalized | Real Estate | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsequent to | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5353 Joliet Street | $ | 1,800,000 | $ | 324,912 | $ | 1,889,088 | $ | — | $ | 324,912 | $ | 1,889,088 | $ | 2,214,000 | $ | 33,409 | $ | 2,180,591 | 1980 | 6/19/14 | ||||||||||||||||||||||||||||||||||||||||
Industrial Building | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Denver, Colorado | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
503 Havana Street | — | 226,339 | 530,467 | 22,633 | 226,339 | 553,100 | 779,439 | 4,764 | 774,675 | 1967 | 9/24/14 | |||||||||||||||||||||||||||||||||||||||||||||||||
Retail Store | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aurora, Colorado | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | 1,800,000 | $ | 551,251 | $ | 2,419,555 | $ | 22,633 | $ | 551,251 | $ | 2,442,188 | $ | 2,993,439 | $ | 38,173 | $ | 2,955,266 | |||||||||||||||||||||||||||||||||||||||||||
The following table reconciles the change in the balance of real estate during the year ended December 31, 2014: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additions: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions during period | 2,970,806 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Improvements | 22,633 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deductions: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dispositions during period | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at end of period | $ | 2,993,439 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The following table reconciles the change in the balance of accumulated depreciation during the year ended December 31, 2014: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation expense during period | 38,173 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dispositions during period | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at end of period | $ | 38,173 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation |
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, 5353 Joliet, LLC and MJ Havana, LLC. Intercompany 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 long-lived and indefinite-lived assets. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments |
Financial instruments include cash, payables, and debt obligations. Except as described below, due to the short-term nature of the financial instruments, the book value is representative of their fair value. | |
Warrants to Purchase Common Stock and Other Derivative Financial Instruments | Warrants to Purchase Common Stock and Other Derivative Financial Instruments |
We classify as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net-cash settlement or settlement in our own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock. We classify as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). We assess the classification of warrants issued to purchase our common stock and any other financial instrument at each reporting date to determine whether a change in classification between assets and liabilities is required. | |
Cash | Cash |
At times the Company has cash in financial institutions in excess of federally insured limits. However, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on its cash balances. | |
Deferred Leasing Costs | Deferred Leasing Costs |
Commissions and other direct costs associated with the acquisition of tenants, or lessees, are capitalized and amortized on a straight-line basis over the terms of the related leases. Costs associated with unsuccessful leasing opportunities are expensed. | |
Leasing commissions of $205,077 and $0 were deferred during the years ended December 31, 2014 and 2013, respectively. Deferred leasing costs charged to property expenses for the years ended December 31, 2014 and 2013, were $2,532 and $0, respectively. As of December 31, 2014, $202,545 of deferred leasing costs are included on the Balance Sheet as a deferred asset. | |
Debt Issuance Costs | Debt Issuance Costs |
Costs associated with obtaining, closing, and modifying loans and/or debt instruments such as, but not limited to placement agent fees, attorney fees and state documentary fees are capitalized and charged to interest expense over the term of the loan. | |
Debt issuance costs of $19,152 and $0 were capitalized during the years ended December 31, 2014 and 2013, respectively. Debt issuance costs charged to interest expense for the years ended December 31, 2014 and 2013, were $5,218 and $0, respectively. As of December 31, 2014, $13,934 of debt issuance costs are included on the Balance Sheet within the Prepaid expenses and other assets. | |
Real Estate Property | Real Estate Property |
Real estate property is recorded at cost, less accumulated depreciation and amortization. Real estate property, excluding land, is depreciated using the straight-line method over the estimated useful life of the respective assets. Leasehold improvements are amortized using the straight-line method over the shorter of the related lease term or useful life. Maintenance, repairs, and minor improvements are charged to expense as incurred; major renewals and betterments that extend the useful life of the associated asset are capitalized. When real estate property is sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in results of operations for the period. | |
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. We did not record any impairments of long-lived assets during the year ended December 31, 2014. | |
Revenue Recognition | Revenue Recognition |
Before revenue can be recognized, four basic criteria must be met: persuasive evidence of an arrangement exists; the delivery has occurred or services have been rendered; the fee is fixed or determinable; and collectability is reasonably assured. | |
The Company's revenues are rental income generated by leasing acquired real estate properties to licensed marijuana operators. All leases are classified as operating leases. Rental income is recognized on a straight-line basis over the terms of the leases. Straight-line rent is recognized for all tenants with contractual fixed increases in rent. Deferred rent receivable represents rental revenue recognized on a straight-line basis in excess of billed rents. Reimbursements from tenants for real estate taxes and other recoverable operating expenses are recognized as rental income in the period the applicable costs are incurred. | |
Stock-Based Compensation | Stock-Based Compensation |
The Company estimates the fair values of share-based payments on the date of grant using a Black-Scholes option pricing model, which requires assumptions for the expected volatility of the share price of our common stock, the expected dividend yield, and a risk-free interest rate over the expected term of the stock-based financial instrument. | |
Since the number of outstanding and free-trading shares of the Company's common stock is limited and the trading volume is relatively low, we do not have sufficient company specific information regarding the volatility of our share price on which to base an estimate of expected volatility. As a result, we use the average historical volatilities of similar entities within our industry as the expected volatility of our share price. | |
The expected dividend yield is 0% as the Company has not paid any dividends on its common stock and does not anticipate it will pay any dividends in the foreseeable future. | |
The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant date with a remaining term equal to the expected term of the stock-based award. | |
For stock-based financial instruments issued to parties other than employees, we use 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 our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future. | |
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 carryforwards. 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 |
In May 2014, the Financial Accounting Standards Board (the "FASB") issued guidance to clarify the principles for recognizing revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a comprehensive framework for revenue recognition that supersedes current general revenue guidance and most industry-specific guidance. In addition, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. The new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. An entity should apply the guidance either retrospectively to each prior reporting period presented or retrospectively with the cumulative adjustment at the date of the initial application. The Company is currently in the process of evaluating the impact of adoption of the new accounting guidance on its consolidated financial statements and has not determined the impact of adoption on its financial statements. | |
In June 2014, FASB issued guidance that eliminates the definition of a development stage entity thereby removing the incremental financial reporting requirements from U.S. GAAP for development stage entities, primarily the presentation of inception to date financial statements. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2014. Early adoption is permitted. The Company elected to adopt the new guidance for development stage entities for the interim period ended June 30, 2014, and accordingly, is no longer presenting the inception-to-date financial information and disclosures formerly required. | |
In August 2014, FASB issued guidance that requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. The new guidance is effective for the annual period ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. Since this guidance primarily addresses certain disclosures to the financial statements, we anticipate no impact on our financial position, results of operations or cash flows from adopting this standard. The Company is currently in the process of evaluating the additional disclosure requirements of the new guidance and has not determined the impact of adoption on its financial statement disclosures. | |
Real_Estate_Property_Acquisiti1
Real Estate Property Acquisitions (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Real Estate Property Acquisitions [Abstract] | ||||||||||||
Summary of Real Estate Property | Estimated | December 31, | ||||||||||
Life | 2014 | |||||||||||
Buildings and improvements | 30 years | $ | 2,442,188 | |||||||||
Land | Not depreciated | 551,251 | ||||||||||
Total real estate property | 2,993,439 | |||||||||||
Less: Accumulated depreciation | (38,173 | ) | ||||||||||
Real estate property, net | $ | 2,955,266 |
Operating_Leases_Tables
Operating Leases (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Operating Leases [Abstract] | ||||||||||||
Summary of Revenues From Rental Properties | 2014 | 2013 | ||||||||||
Revenues: | ||||||||||||
Rental payments | $ | 88,778 | $ | — | ||||||||
Reimbursed operating expenses | 13,157 | — | ||||||||||
Deferred rental income | 6,936 | — | ||||||||||
Total revenues from rental properties | $ | 108,871 | $ | — | ||||||||
Schedule of Future Minimum Rental Payments | 2015 | $ | 447,579 | |||||||||
2016 | 457,890 | |||||||||||
2017 | 468,449 | |||||||||||
2018 | 479,261 | |||||||||||
2019 | 490,332 | |||||||||||
Thereafter | 1,368,512 | |||||||||||
Total minimal rental payments | $ | 3,712,023 |
Stock_Based_Compensation_Table
Stock Based Compensation (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Stock Based Compensation [Abstract] | ||||||||||
Schedule of weighted-average assumptions used in determining fair values of the warrants granted using the Black-Scholes option pricing model | Risk-free interest rate: | 1.64 | % | |||||||
Expected term: | 5 years | |||||||||
Expected dividend yield: | 0 | % | ||||||||
Expected volatility: | 131.22 | % | ||||||||
Summary of warrants issued, exercised and expired | Weighted | |||||||||
Avg. | ||||||||||
Exercise | ||||||||||
Warrants: | Shares | Price | ||||||||
Balance at January 1, 2014 | — | $ | — | |||||||
Issued | 199,998 | 5.97 | ||||||||
Exercised | (33,333 | ) | 6.42 | |||||||
Expired | — | — | ||||||||
Balance at September 30, 2014 | 166,665 | $ | 5.88 | |||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Income Taxes [Abstract] | ||||||||||||||
Schedule of reconciliation between effective tax rate and statutory federal rate | For the years ended December 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Computed "expected" income tax benefit | $ | (396,127 | ) | $ | (11,202 | ) | ||||||||
State income tax benefit, net of federal benefit | (31,398 | ) | — | |||||||||||
Change in valuation allowance | 323,344 | 11,202 | ||||||||||||
Write-off of prior year net operating losses | 57,406 | — | ||||||||||||
Nondeductible expenses | 27,523 | — | ||||||||||||
True-up of deferred tax asset for stock compensation | 19,481 | — | ||||||||||||
Prior year differences | (229 | ) | — | |||||||||||
Provision for income taxes | $ | — | $ | — | ||||||||||
Schedule of components of deferred tax assets and liabilities | As of December 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Deferred tax assets: | ||||||||||||||
Deferred expenses | $ | 191,915 | $ | — | ||||||||||
Net operating loss carry-forwards | 184,747 | 57,406 | ||||||||||||
Property and equipment | 4,088 | — | ||||||||||||
Deferred tax assets | 380,750 | 57,406 | ||||||||||||
Less: Valuation allowance | (380,750 | ) | (57,406 | ) | ||||||||||
Net deferred tax assets | $ | — | $ | — |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Deferred Leasing Costs | ||
Deferred Leasing commissions | $205,077 | $0 |
Deferred leasing costs charged to property expenses | 2,532 | 0 |
Deferred leasing costs included in deferred asset | 202,545 | |
Debt Issuance Costs | ||
Debt issuance costs capitalized | 19,152 | 0 |
Debt issuance costs charged to interest expense | 5,218 | 0 |
Debt issuance costs included in Prepaid expenses and other assets | $13,934 | |
Stock-Based Compensation | ||
Expected dividend yield | 0.00% |
Going_Concern_Details
Going Concern (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Going Concern [Abstract] | ||
Net loss | $1,165,080 | $32,946 |
Accumulated deficit | $1,337,710 | $172,630 |
Real_Estate_Property_Acquisiti2
Real Estate Property Acquisitions (Narrative) (Details) (USD $) | 1 Months Ended | |
Sep. 30, 2014 | Jun. 30, 2014 | |
sqft | ||
acre | ||
Owner-occupied industrial building situated on land in Denver, Colorado [Member] | ||
PROPERTY ACQUISITION [Line Items] | ||
Area of building acquired (in square foot) | 22,144 | |
Area of land on which building is situated (in acres) | 1.4 | |
Purchase consideration | $2,214,000 | |
Proceeds from the issuance of a secured promissory note used to fund acquisition | 1,800,000 | |
Cash on-hand used to fund acquisition | 414,000 | |
Monthly rent to be paid to the previous property owner | 11,070 | |
Lease expiration date | 1-Sep-14 | |
Lease agreement term | 7 years | |
Monthly rent obligation | 25,835 | |
Annual increases percentage | 2.00% | |
Owner-occupied industrial building situated on land in Denver, Colorado [Member] | CMG [Member] | ||
PROPERTY ACQUISITION [Line Items] | ||
Amount invested to finance the purchase of the promissory note | 100,000 | |
Administration fees for servicing the promissory note | ||
Interest rate of promissory note | 10.00% | |
Promissory note, maturity date | 1-Jun-16 | |
Promissory note, date callable | 19-Jun-15 | |
Owner-occupied building situated on land in Aurora, Colorado [Member] | ||
PROPERTY ACQUISITION [Line Items] | ||
Area of building acquired (in square foot) | 1,250 | |
Area of land on which building is situated (in acres) | 23,625 | |
Purchase consideration | $756,000 |
Real_Estate_Property_Acquisiti3
Real Estate Property Acquisitions (Schedule of Real Estate Property) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |
Total real estate property | 2,993,439 |
Less: Accumulated depreciation | -38,173 |
Real estate property, net | 2,955,266 |
Buildings and improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Total real estate property | 2,442,188 |
Land [Member] | |
Property, Plant and Equipment [Line Items] | |
Total real estate property | 551,251 |
Buildings [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Life | 30 years |
Operating_Leases_Narrative_Det
Operating Leases (Narrative) (Details) (USD $) | 1 Months Ended |
Sep. 30, 2014 | |
503 Havana Street in Aurora, Colorado [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Lease agreement term | 10 years |
Monthly rent obligation | $11,250 |
Annual increases percentage | 3.00% |
Obligation to improvements to the property | 150,000 |
Option to renew term | 10 years |
5353 Joliet Street in Denver, Colorado [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Lease agreement term | 7 years |
Monthly rent obligation | $25,835 |
Annual increases percentage | 2.00% |
Option to renew term | 5 years |
Operating_Leases_Schedule_of_R
Operating Leases (Schedule of Revenues From Rental Properties) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | ||
Rental payments | $88,778 | |
Reimbursed operating expenses | 13,157 | |
Deferred rental income | 6,936 | |
Total revenues from rental properties | $108,871 |
Operating_Leases_Schedule_of_F
Operating Leases (Schedule of Future Minimum Rental Revenues) (Details) (USD $) | Dec. 31, 2014 |
Operating Leases [Abstract] | |
2015 | $447,579 |
2016 | 457,890 |
2017 | 468,449 |
2018 | 479,261 |
2019 | 490,332 |
Thereafter | 1,368,512 |
Total minimal rental payments | $3,712,023 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 12 Months Ended | 1 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | Feb. 28, 2014 | |
Related Party Transaction [Line Items] | |||
Accounts payable paid by principal stockholders | ($7,665) | ||
Net borrowings from related parties | 200 | 22,910 | |
Promissory note held by related party | 1,800,000 | ||
Principal Stockholders [Member] | |||
Related Party Transaction [Line Items] | |||
Accounts payable paid by principal stockholders | 7,665 | ||
Proceeds from loans from stockholders | 5,277 | ||
Borrowings from principal shareholders repaid | 5,077 | ||
Net borrowings from related parties | 200 | ||
CMG [Member] | |||
Related Party Transaction [Line Items] | |||
Interest paid to the promissory note held by CMG | 80,918 | ||
Promissory note held by related party | $1,800,000 |
Stockholder_Loans_Payable_Deta
Stockholder Loans Payable (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | ||
Accrued interest - stockholder loans | $16,888 | $13,674 |
Stockholder loans and accrued interest converted to common stock | 99,450 | |
Stockholder loans, shares converted | 19,890 | |
Stockholder loans, conversion price | $5 | |
Promissory Note One [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 5.00% | |
Promissory Note One [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | 25,000 | |
Promissory Note Two [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 8.00% | |
Promissory Note Two [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | 20,000 | |
Promissory Note Three [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 8.00% | |
Promissory Note Three [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $10,000 |
Sale_of_Unregistered_Securitie1
Sale of Unregistered Securities (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Issuance of common stock | $1,615,000 | |
Proceeds from the sale of common stock | 1,615,000 | |
Common Stock [Member] | ||
Issuance of common stock (in shares) | 1,615,000 | |
Issuance of common stock | $1,615 |
Stock_Based_Compensation_Detai
Stock Based Compensation (Details) (Narrative) (USD $) | 12 Months Ended | 1 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | 31-May-14 | |
STOCK-BASED COMPENSATION [Line Items] | |||
Stock-based compensation expense | $862,476 | ||
Common Stock [Member] | |||
STOCK-BASED COMPENSATION [Line Items] | |||
Shares of common stock for consulting services | 14,602 | ||
Stock-based compensation expense | 77,500 | ||
Consulting services agreement [Member] | Medbox, Inc [Member] | |||
STOCK-BASED COMPENSATION [Line Items] | |||
Percentage of management fee payable to counterparty | 50.00% | ||
Percentage of net revenue generated by counterparties client payable to counterparty | 50.00% | ||
Initial term of agreement | 6 months | ||
Renewal term of agreement | 1 month | ||
Period of written notice required to cancel agreement by either party | 5 days | ||
Consulting services agreement [Member] | Medbox, Inc [Member] | Warrants [Member] | |||
STOCK-BASED COMPENSATION [Line Items] | |||
Shares of common stock that can be purchased with warrants issued to counterparty each month | 166,665 | 33,333 | |
Aggregate warrants that can be issued to counterparty | 600,000 | ||
Term of warrants | 5 years | ||
Period prior to the date of issuance of warrants used to calculate the volume weighted average price of the common stock | 30 days | ||
Stock-based compensation expense | $784,976 | ||
Warrants exercised | 33,333 | 33,333 | |
Shares of common stock issued upon exercise of warrants | 199,998 | 10,825 | |
Exercise price of warrants | $6.42 | 6.42 |
Stock_Based_Compensation_Sched
Stock Based Compensation (Schedule of Assumptions in Determining the Fair Value of Warrants Granted) (Consulting services agreement [Member], Medbox, Inc [Member], Warrants [Member]) | 12 Months Ended |
Dec. 31, 2014 | |
Consulting services agreement [Member] | Medbox, Inc [Member] | Warrants [Member] | |
Weighted-average assumptions used in determining fair values of the warrants granted using the Black-Scholes option pricing model | |
Risk-free interest rate: | 1.64% |
Expected term: | 5 years |
Expected dividend yield: | 0.00% |
Expected volatility: | 131.22% |
Stock_Based_Compensation_Sched1
Stock Based Compensation (Schedule of Warrants Issued, Exercised and Expired)) (Consulting services agreement [Member], Medbox, Inc [Member], Warrants [Member], USD $) | 1 Months Ended | 12 Months Ended |
31-May-14 | Dec. 31, 2014 | |
Consulting services agreement [Member] | Medbox, Inc [Member] | Warrants [Member] | ||
Shares | ||
Balance at the beginning of the period | ||
Issued | 10,825 | 199,998 |
Exercised | -33,333 | -33,333 |
Expired | ||
Balance at the end of the period | 33,333 | 166,665 |
Weighted Avg. Exercise Price | ||
Balance at the beginning of the period | ||
Issued | $5.97 | |
Exercised | $6.42 | $6.42 |
Expired | ||
Balance at the end of the period | $5.88 |
Income_Taxes_Schedule_of_Recon
Income Taxes (Schedule of Reconciliation Between Effective Tax Rate And Statutory Federal Rate) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes [Abstract] | ||
Computed "expected" income tax benefit | ($396,127) | ($11,202) |
State income tax benefit, net of federal benefit | -31,398 | |
Change in valuation allowance | 323,344 | 11,202 |
Write-off of prior year net operating losses | 57,406 | |
Nondeductible expenses | 27,523 | |
True-up of deferred tax asset for stock compensation | 19,481 | |
Prior year differences | -229 | |
Provision for income taxes |
Income_Taxes_Schedule_of_Compo
Income Taxes (Schedule of Components Of Deferred Tax Assets And Liabilities) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets: | ||
Deferred expenses | $191,915 | |
Net operating loss carry-forwards | 184,747 | 57,406 |
Property and equipment | 4,088 | |
Deferred tax assets | 380,750 | 57,406 |
Less: Valuation allowance | -380,750 | -57,406 |
Net deferred tax assets |
Income_Taxes_Narratives_Detail
Income Taxes (Narratives) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Loss Carryforwards [Line Items] | ||
Federal statutory rate (as a percent) | 34.00% | 34.00% |
Net operating losses | $499,000 | |
Operating loss carryforwards,expiration period | 20 years | |
Operating loss carryforwards,expiration date | 31-Dec-34 | |
Limitation on use of operating loss carryforwards | All of the federal and state net operating losses incurred prior to 2014 are subject to 100 percent limitation under the provisions of Internal Revenue Code section 382 due to an ownership change and the continuity of business requirement. |
Schedule_III_Real_Estate_and_A1
Schedule III - Real Estate and Accumulated Depreciation (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule III - Real Estate and Accumulated Depreciation [Line Items] | ||
Encumbrances | $1,800,000 | |
Initial Cost | ||
Land | 551,251 | |
Buildings & Improvements | 2,419,555 | |
Improvement Costs Capitalized Subsequent to Acquisition | 22,633 | |
Total Cost | ||
Land | 551,251 | |
Buildings & Improvements | 2,442,188 | |
Total | 2,993,439 | |
Accumulated Depreciation | 38,173 | |
Net Real Estate | 2,955,266 | |
5353 Joliet Street in Denver, Colorado [Member] | ||
Schedule III - Real Estate and Accumulated Depreciation [Line Items] | ||
Encumbrances | 1,800,000 | |
Initial Cost | ||
Land | 324,912 | |
Buildings & Improvements | 1,889,088 | |
Improvement Costs Capitalized Subsequent to Acquisition | ||
Total Cost | ||
Land | 324,912 | |
Buildings & Improvements | 1,889,088 | |
Total | 2,214,000 | |
Accumulated Depreciation | 33,409 | |
Net Real Estate | 2,180,591 | |
Year of Construction | 31-Dec-80 | |
Date Acquired | 19-Jun-14 | |
503 Havana Street in Aurora, Colorado [Member] | ||
Schedule III - Real Estate and Accumulated Depreciation [Line Items] | ||
Encumbrances | ||
Initial Cost | ||
Land | 226,339 | |
Buildings & Improvements | 530,467 | |
Improvement Costs Capitalized Subsequent to Acquisition | 22,633 | |
Total Cost | ||
Land | 226,339 | |
Buildings & Improvements | 553,100 | |
Total | 779,439 | |
Accumulated Depreciation | 4,764 | |
Net Real Estate | $774,675 | |
Year of Construction | 31-Dec-67 | |
Date Acquired | 24-Sep-14 |
Schedule_III_Real_Estate_and_A2
Schedule III - Real Estate and Accumulated Depreciation (Schedule of change in the balance of real estate) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Change in the balance of real estate | |
Balance at beginning of period | |
Additions: | |
Acquisitions during period | 2,970,806 |
Improvements | 22,633 |
Deductions: | |
Dispositions during period | |
Balance at end of period | $2,993,439 |
Schedule_III_Real_Estate_and_A3
Schedule III - Real Estate and Accumulated Depreciation (Schedule of change in the balance of accumulated depreciation) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Change in the balance of accumulated depreciation | |
Balance at beginning of period | |
Depreciation expense during period | 38,173 |
Dispositions during period | |
Balance at end of period | $38,173 |