Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 30, 2018 | Feb. 28, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | MARIMED INC. | ||
Entity Central Index Key | 1,522,767 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 51,300,000 | ||
Entity Common Stock, Shares Outstanding | 179,705,933 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 1,290,231 | $ 569,356 |
Accounts receivable, net | 1,453,484 | 532,607 |
Deferred rents receivable | 610,789 | 536,248 |
Due from third parties | 1,196,918 | 556,680 |
Due from related parties | 134,781 | 187,508 |
Note receivable, current portion | 45,444 | 40,130 |
Other current assets | 357,019 | 16,003 |
Total current assets | 5,088,666 | 2,438,532 |
Property and equipment, net | 25,954,931 | 5,305,060 |
Note receivable, long-term portion | 578,831 | 624,167 |
Other assets | 579,587 | 195,342 |
Total assets | 32,202,015 | 8,563,101 |
Current liabilities: | ||
Accounts payable | 2,831,658 | 472,164 |
Accrued expenses | 1,405,336 | 1,686,966 |
Due to related parties | 400,996 | 148,337 |
Mortgages payable, current portion | 118,556 | 113,115 |
Notes payable | 10,665,899 | 3,475,000 |
Deferred revenue | 226,950 | |
Total current liabilities | 15,422,445 | 6,122,532 |
Mortgages payable, long-term portion | 5,532,397 | 2,751,997 |
Other liabilities | 240,013 | 240,013 |
Total liabilities | 21,194,855 | 9,114,542 |
Stockholders' equity: | ||
Series A convertible preferred stock, $0.001 par value; 50,000,000 and 5,000,000 shares authorized at December 31, 2017 and 2016, respectively; no shares issued or outstanding at December 31, 2017 and 2016 | ||
Series A convertible preferred stock subscribed but not issued; 500,000 and 300,000 shares at December 31, 2017 and 2016, respectively | 500 | 300 |
Common stock, $0.001 par value; 500,000,000 and 100,000,000 shares authorized at December 31, 2017 and 2016, respectively; 176,940,331 and 64,074,683 shares issued at December 31, 2017 and 2016, respectively; 176,850,331 and 64,074,683 shares outstanding at December 31, 2017 and 2016, respectively | 176,940 | 64,075 |
Common stock subscribed but not issued; 1,000,000 and 400,000 shares at December 31, 2017 and 2016, respectively | 370,000 | 400 |
Subscriptions receivable | (25,000) | (25,000) |
Common stock warrants | 2,176,379 | 1,172,028 |
Treasury stock, at cost; 90,000 and zero shares at December 31, 2017 and 2016, respectively | (45,000) | |
Additional paid-in capital | 20,149,591 | 8,457,407 |
Accumulated deficit | (11,971,740) | (10,777,657) |
Noncontrolling interests | 175,490 | 557,006 |
Total stockholders' equity | 11,007,160 | (551,441) |
Total liabilities and stockholders' equity | $ 32,202,015 | $ 8,563,101 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Series A convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Series A convertible preferred stock, shares authorized | 50,000,000 | 5,000,000 |
Series A convertible preferred stock, shares issued | ||
Series A convertible preferred stock, shares outstanding | ||
Series A convertible preferred stock, shares subscribed but unissued | 500,000 | 300,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 100,000,000 |
Common stock, shares issued | 176,940,331 | 64,074,683 |
Common stock, shares outstanding | 176,850,331 | 64,074,683 |
Common stock, shares subscribed but unissued | 1,000,000 | 400,000 |
Treasury stock, shares | 90,000 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||
Revenues | $ 6,067,853 | $ 3,564,120 |
Cost of revenues, including depreciation | 2,555,502 | 1,617,488 |
Gross profit | 3,512,351 | 1,946,632 |
Operating expenses: | ||
Personnel | 737,011 | 226,779 |
Marketing and promotion | 130,087 | 293,490 |
General and administrative | 1,439,350 | 651,059 |
Total operating expenses | 2,306,448 | 1,171,328 |
Operating income | 1,205,903 | 775,304 |
Non-operating expenses: | ||
Interest expense, net | 511,519 | 290,833 |
Equity compensation | 1,078,253 | 163,574 |
Loss on debt settlements, net | 645,193 | |
Unrealized gain on trading securities | (268) | |
Total non-operating expenses | 2,234,965 | 454,139 |
Net income (loss) | (1,029,062) | 321,165 |
Net income (loss) to noncontrolling interests | 165,021 | 520,017 |
Net income (loss) attributable to MariMed Inc. | $ (1,194,083) | $ (198,852) |
Net income (loss) per share | $ (0.010) | $ (0.004) |
Weighted average common shares outstanding | 116,275,301 | 52,018,689 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Series A Convertible Preferred Stock [Member] | Series A Convertible Preferred Stock Subscribed But Not Issued [Member] | Common Stock [Member] | Common Stock Subscribed But Not Issued [Member] | Subscriptions Receivable [Member] | Common Stock Warrants [Member] | Treasury Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Noncontrolling Interest [Member] | Total |
Balance at Dec. 31, 2015 | $ 32,120 | $ 32,354 | $ (25,000) | $ 1,165,563 | $ 7,005,164 | $ (10,196,094) | $ 54,109 | $ (1,931,784) | |||
Balance, shares at Dec. 31, 2015 | 32,120,447 | 32,354,236 | |||||||||
Issuance of common stock subscribed | $ 31,954,236 | $ (31,954,236) | |||||||||
Issuance of common stock subscribed, shares | 31,954 | (31,954) | |||||||||
Subscribed Series A preferred stock | $ 300 | 299,700 | 300,000 | ||||||||
Subscribed Series A preferred stock, shares | 300,000 | ||||||||||
Issuance of warrants | 6,465 | 157,118 | 163,583 | ||||||||
Conversion of subsidiary ownership | 995,425 | 995,425 | |||||||||
Distributions | (399,831) | (399,831) | |||||||||
NCI balance sheet changes | 17,120 | (17,120) | |||||||||
Net income (loss) | (198,852) | 520,017 | 321,165 | ||||||||
Balance at Dec. 31, 2016 | $ 300 | $ 64,075 | $ 400 | (25,000) | 1,172,028 | 8,457,407 | (10,777,657) | 557,006 | (551,441) | ||
Balance, shares at Dec. 31, 2016 | 300,000 | 64,074,683 | 400,000 | ||||||||
Subscribed Series A preferred stock | $ 200 | 199,800 | 200,000 | ||||||||
Subscribed Series A preferred stock, shares | 200,000 | ||||||||||
Issuance of warrants | 1,004,351 | 1,004,351 | |||||||||
Distributions | (577,730) | (577,730) | |||||||||
Sales of common stock | $ 26,671 | 6,551,329 | $ 6,578,000 | ||||||||
Sales of common stock, shares | 26,672,228 | 26,672,228 | |||||||||
Common stock issued to settle obligations | $ 1,008 | $ (400) | $ 327,964 | $ 328,571 | |||||||
Common stock issued to settle obligations, shares | 1,007,597 | (400,000) | |||||||||
Option grants | 73,902 | 73,902 | |||||||||
Exercise of options | $ 4,800 | $ (45,000) | $ 47,700 | $ 7,500 | |||||||
Exercise of options, shares | 4,800,000 | 90,000 | |||||||||
Purchase of subsidiary ownership interests | $ 75,000 | (75,000) | |||||||||
Purchase of subsidiary ownership interests, shares | 75,000,000 | ||||||||||
Sales of subsidiary ownership interests | 1,118,807 | 31,193 | 1,150,000 | ||||||||
Betty's Eddies™ Asset Purchase | $ 370,000 | 370,000 | |||||||||
Betty's Eddies™ Asset Purchase, shares | 1,000,000 | ||||||||||
Conversion of promissory notes | $ 4,386 | 2,758,683 | 2,763,069 | ||||||||
Conversion of promissory notes, shares | 4,385,823 | ||||||||||
Pay down of promissory notes | $ 1,000 | 689,000 | 690,000 | ||||||||
Pay down of promissory notes, shares | 1,000,000 | ||||||||||
Net income (loss) | (1,194,083) | 165,021 | (1,029,062) | ||||||||
Balance at Dec. 31, 2017 | $ 500 | $ 176,940 | $ 370,000 | $ (25,000) | $ 2,176,379 | $ (45,000) | $ 20,149,591 | $ (11,971,740) | $ 175,490 | $ 11,007,160 | |
Balance, shares at Dec. 31, 2017 | 500,000 | 176,940,331 | 1,000,000 | 90,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) attributable to MariMed Inc. | $ (1,194,083) | $ (198,852) |
Net income (loss) attributable to noncontrolling interests | 165,021 | 520,017 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation | 362,691 | 265,746 |
Equity compensation | 1,078,253 | 163,574 |
Loss on debt settlements, net | 645,193 | |
Interest paid via issuance of promissory note | 50,000 | |
Unrealized trading losses, net | (268) | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (920,877) | (601,507) |
Deferred rents receivable | (74,541) | |
Due from third parties | (640,238) | (530,294) |
Due from related parties | 52,727 | (31,900) |
Other current assets | (341,016) | (198,908) |
Other assets | (384,245) | |
Accounts payable | 2,359,494 | (106,067) |
Accrued expenses | (265,730) | 447,359 |
Due to related parties | 252,659 | 22,435 |
Other liabilities | 50,732 | |
Net cash provided by (used in) operating activities | 1,277,075 | (197,933) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (21,012,563) | (3,364,070) |
Betty's Eddies™ asset purchase | 370,000 | |
Interest on notes receivable | 40,022 | 24,062 |
Net cash used in investing activities | (20,602,541) | (3,340,008) |
Cash flows from financing activities: | ||
Proceeds from subscribed preferred stock | 200,000 | 300,000 |
Issuance of common stock | 6,578,000 | 406,157 |
Issuance of interest in wholly-owned subsidiary | 1,000,000 | |
Issuance of promissory notes | 9,475,000 | 775,000 |
Proceeds from mortgages payable, net | 2,785,841 | 2,865,112 |
Exercise of stock options | 7,500 | |
Distributions | (399,831) | |
Net cash provided by financing activities | 20,046,341 | 3,946,438 |
Net change to cash and cash equivalents | 720,875 | 408,497 |
Cash and cash equivalents at beginning of period | 569,356 | 160,859 |
Cash and cash equivalents at end of period | 1,290,231 | 569,356 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 586,584 | 233,673 |
Cash paid for taxes | 1,781 | 456 |
Non-cash activities: | ||
Equity issued to settle debt | $ 3,453,068 | $ 589,332 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS MariMed Inc., (the “Company”), a Delaware corporation, is a professional management company in the emerging medical cannabis industry. The Company advises its clients in securing cannabis licenses, and in turn, develops and manages state-of-the-art, regulatory-compliant facilities for the cultivation, production, and dispensing of legal cannabis and cannabis-infused products. Along with this operational oversight, the Company provides its clients with legal, accounting, human resources, and other corporate and administrative services. In addition, the Company licenses and distributes a custom brand of cannabis-infused products, under the brand name Kalm Fusion™, which are precision-dosed and designed for specific medical conditions and related symptoms. In 2017, the Company expanded its product line with the acquisition of the Betty’s Eddies™ brand of cannabis-infused fruit chews, The Company’s stock is quoted on the OTCQB market under the ticker symbol MRMD. The Company was originally incorporated in January 2011 under the name Worlds Online Inc., using the ticker symbol WORX. In early 2017, the Company name and ticker were changed to its current name and ticker. Since inception, the Company has operated an online portal that offers multi-user virtual environments to users. This segment of the business has had insignificant operations since early 2014. In May 2014, the Company, through its subsidiary MariMed Advisors Inc. (“MMA”), acquired Sigal Consulting LLC in exchange for (i) an aggregate amount of the Company’s common stock equal to 50% of the Company’s outstanding shares on the closing date, (ii) options to purchase three million shares of the Company’s common stock, exercisable over five years with exercise prices ranging from $0.15 to $0.35, and (iii) a 49% ownership interest in MMA. This transaction was accounted for as a purchase acquisition where the Company was both the legal and accounting acquirer. Accordingly, the Company recorded as goodwill the value of the common stock and options issued in excess of the Sigal assets acquired and liabilities assumed. This goodwill was subsequently deemed impaired in full and written down to zero. In June 2017, the Company acquired the remaining 49% interest in MMA in exchange for 75 million shares of common stock. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Certain reclassifications have been made to prior periods’ data to conform to the current period presentation. These reclassifications had no effect on reported income (losses) or cash flows. Principles of Consolidation The accompanying consolidated financial statements include the accounts of MariMed Inc. and its subsidiaries, all of which are wholly-owned. Intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts within the financial statements and disclosures thereof. Actual results could differ from these estimates or assumptions. Cash Equivalents The Company considers all highly liquid investments with a maturity date of three months or less to be cash equivalents. The fair values of these investments approximate their carrying values. Revenue Recognition The Company’s main sources of revenue are comprised of: subleasing contracts with our medical cannabis clients; consulting services to companies operating in the legal and medical cannabis industries; production arrangements for the procurement of cannabis resources; and licensing revenues from the sale of our branded products. The Company recognizes revenue when all of the following criteria are met: evidence of an arrangement exists such as a signed contract, delivery has occurred, the price is fixed or determinable, and collectability is reasonably assured. This will usually be in the form of a receipt of customer acceptance and satisfaction with delivered product, or in the case of development and service revenue, when services have been performed. Deferred revenue represents cash payments received before revenue is earned; the corresponding costs are also deferred until such revenue is ultimately recognized. Research and Development Costs Research and development costs are charged to operations as incurred. Property and Equipment Property and equipment are stated at cost less accumulated depreciation, with depreciation recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term, if applicable. When assets are retired or disposed, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income. Repairs and maintenance are charged to expense in the period incurred. The estimated useful lives of property and equipment are generally as follows: buildings and building improvements, seven to thirty-nine years; tenant improvements, the remaining duration of the related lease; furniture and fixtures, seven years; machinery and equipment, five to ten years. Land is not depreciated. The Company’s property and equipment are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an undiscounted basis. An impairment loss is measured based on the excess of the asset’s carrying amount over its estimated fair value. Impairment analyses are based on management’s current plans, intended holding periods and available market information at the time the analyses are prepared. If these criteria change, the Company’s evaluation of impairment losses may be different and could have a material impact to the consolidated financial statements. For the years ended December 31, 2017 and 2016, based on its impairment analyses, the Company did not have any impairment losses. Impairment of Long Lived Assets The Company evaluates the recoverability of its fixed assets and other assets in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 360-10-15, Impairment or Disposal of Long-Lived Assets Fair Value of Financial Instruments The Company follows the provisions of ASC 820, Fair Value Measurement Financial Instruments, Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amounts of the Company’s financial assets and liabilities, such as cash and accounts payable approximate their fair values due to the short maturity of these instruments. The fair value of option and warrant issuances are determined utilizing the binomial options pricing model and employing the following inputs: life of instrument, exercise price, value of the underlying security on issuance date, and 2-year volatility of underlying security. Extinguishment of Liabilities The Company accounts for extinguishment of liabilities in accordance with ASC 405-20, Extinguishments of Liabilities. Stock-Based Compensation The Company accounts for stock-based compensation using the fair value method as set forth in ASC 718, Compensation—Stock Compensation, Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. The Company did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits for the years ended December 31, 2017 and 2016. Related Party Transactions The Company follows ASC 850, Related Party Disclosures In accordance with ASC 850, the Company’s financial statements include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business, as well as transactions that are eliminated in the preparation of financial statements. Comprehensive Income The Company reports comprehensive income and its components following guidance set forth by ASC 220, Comprehensive Income Earnings Per Share Earnings per common share is computed pursuant to ASC 260, Earnings Per Share As of December 31, 2017 and 2016, there were 8,399,000 and 10,375,000 potentially dilutive securities in the form of options and warrants. In addition, there were 500,000 shares of convertible preferred stock and $1,350,000 of convertible promissory notes that were potentially dilutive whose conversion into common stock will be based on a discount to the market value of common stock on or about the future conversion date. All potentially dilutive securities had an anti-dilutive effect on earnings per share, and in accordance with ASC 260, were excluded from the diluted net income per share calculation. For that reason, the calculations of basic and fully diluted net income per share were identical for the years ended December 31, 2017 and 2016. These options and warrants may dilute earnings per share in the future. Commitments and Contingencies The Company follows ASC 450, Contingencies If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. While not assured, and based upon information available at this time, management does not believe that a loss contingency exists that will have material adverse effect on the Company’s financial position, results of operations or cash flows. Risk and Uncertainties The Company is subject to risks common to companies operating within the legal and medical marijuana industries, including, but not limited to, federal laws, government regulations and jurisdictional laws. Noncontrolling Interests Noncontrolling interests represent third-party minority ownership of the Company’s consolidated subsidiaries. Net income attributable to noncontrolling interests is shown in the consolidated statements of operations; the value of net assets owned by noncontrolling interests are presented as a component of equity within the balance sheets. Off-Balance Sheet Arrangements The Company does not have any off-balance sheet arrangements. Recent Accounting Pronouncements The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements will have a material impact on its financial condition or the results of its operations. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Equity | NOTE 3 – EQUITY Preferred Stock In January 2017, the Company increased the number of authorized shares of preferred stock from 5 million to 50 million shares. During the years ended December 31, 2017 and 2016, the Company issued subscriptions on 200,000 shares and 300,000 shares, respectively, of Series A convertible preferred stock at $1.00 per share. This preferred stock accrues an annual dividend of six percent until conversion. The Series A convertible preferred stock shall be convertible, along with any accrued dividends, into common stock at a twenty-five percent discount to the selling price of the common stock in a qualified offering, as defined in the subscription agreement. In addition, the Company shall have the ability to force the conversion of preferred stock at such time the Company has a market capitalization in excess of $50 million for ten consecutive trading days. In such event, the conversion price shall be a 25% discount to the average closing price of the Company’s common stock over the ten trading days prior to the Company’s notice of its intent to convert. Common Stock In January 2017, the Company increased the number of authorized shares of common stock from 100 million to 500 million shares. During the year ended December 31, 2017, the Company issued 26,672,228 shares of common stock, at prices ranging from $0.18 to $0.50 per share, resulting in total proceeds of $6,578,000. In June 2017, the Company issued 75 million shares of common stock to acquire the remaining 49% interest in its subsidiary MariMed Advisors Inc. During the year ended December 31, 2017, the Company issued 1,007,597 shares in exchange for services rendered by third-parties or to otherwise settle outstanding obligations. Based on the market value of the common stock on the date of issuance, the Company recorded a non-cash loss on conversion of approximately $31,000. In August 2017, $2.05 million in principal and approximately $262,000 of accrued interest on promissory notes were converted into 4,385,823 shares of common stock. Based on the market value of the common stock on the conversion date, the Company recorded a non-cash loss on conversion of approximately $451,000. In October 2017, the Company issued subscriptions on 1,000,000 shares of common stock as part of the purchase price of the Betty’s Eddies™ acquired assets as further disclosed in Note 9. In December 2017, the Company retired promissory notes consisting of $300,000 in principal and $50,000 in accrued interest by the issuance of 1,000,000 shares of commons stock. Based on the market value of the common stock on the date of retirement, the Company recorded a non-cash loss on conversion of $390,000. In April 2016, the Company issued 31,954,237 shares of common stock as part of the purchase price of the Sigal acquisition disclosed in Note 1. These shares represented the aggregate amount of shares equal to 50% of the Company’s outstanding common stock on the closing date of this acquisition. Membership Interests During 2017 and 2016, the Company issued 12,778 and 2,500 Class A membership units of Mari Holdings MD LLC, a majority-owned subsidiary, for $1,150,000 and $200,000, respectively. These units represented ownership of 3.05% and 0.75% in this subsidiary at December 31, 2017 and 2016, respectively. During 2016, the Company issued 4,123 Class A membership units of Mia Development LLC, a majority-owned subsidiary, for approximately $206,000, representing 0.82% ownership of this subsidiary. Also during 2016, the Company issued 11,786 Class A membership units, representing 2.36% of this subsidiary, to retire approximately $589,000 of promissory notes and accrued interest. |
Deferred Revenue
Deferred Revenue | 12 Months Ended |
Dec. 31, 2017 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Deferred Revenue | NOTE 4 – DEFERRED REVENUE Deferred revenue represented the conversion of a promissory note issued to a third party by the Company’s former parent, which was assumed by the Company in 201l, for future products and services of the Company’s dormant online portal business. No products or services were provided by the Company in 2017 or 2016. In July 2017, the Company wrote off the entire carrying amount of deferred revenue of approximately $227,000 based on an agreement with the third party whereby the Company was released from all of its obligations to the third party and any actions or demands related thereto. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 5 – PROPERTY AND EQUIPMENT At December 31, 2017 and 2016, property and equipment consisted of the following: Description 2017 2016 Land $ 3,392,710 $ 592,210 Buildings and building improvements 18,464,544 3,587,064 Tenant improvements 4,223,903 1,923,890 Furniture and fixtures 99,138 109,560 Machinery and equipment 1,273,514 228,523 Less: accumulated depreciation (1,498,878 ) (1,136,187 ) Property and equipment, net $ 25,954,931 $ 5,305,060 During the years ended December 31, 2017 and 2016, additions to property and equipment were approximately $21.0 million and $3.4 million, respectively. These purchases included the acquisition of properties in Hagerstown, MD and Middleborough, MA, and the buildout of facilities in Lewes, DE, Clark County, NV, and Hagerstown, MD. Depreciation and amortization for the years ended December 31, 2017 and 2016 was approximately $363,000 and $266,000, respectively. |
Stock Options and Warrants
Stock Options and Warrants | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stock Options and Warrants | NOTE 6 – STOCK OPTIONS AND WARRANTS During 2017, the Company granted options to purchase 550,000 shares of common stock at exercise prices ranging from $0.26 to $0.55, vesting from the grant date through March 2019, and expiring between September 2020 and October 2021. The fair value of these options on grant date of approximately $159,000 shall be recorded as non-cash compensation expense over the vesting periods, with approximately $74,000 incurred during 2017. No warrants were exercised in 2017. During 2017, options to purchase 4.8 million shares of common stock were exercised at prices ranging from $0.01 to $0.025. Of this amount, 4.5 million shares were exercised by the former CEO of the Company, who is currently a Board member. This individual’s exercise price of $0.01 per share, or $45,000 in total, was paid with the surrender of 90,000 shares of common stock. These surrendered shares were classified as treasury stock. In December 2017, options to purchase 200,000 shares of commons stock at an exercise price of $0.025 were forfeited by the CEO and by an independent Board member (100,000 shares forfeited by each individual). Stock options outstanding and exercisable as of December 31, 2017 were: Exercise Price Shares Under Option Remaining per Share Outstanding Exercisable Life in Years $ 0.025 200,000 200,000 0.01 $ 0.080 250,000 250,000 1.08 $ 0.080 200,000 200,000 1.97 $ 0.130 600,000 600,000 2.50 $ 0.150 1,000,000 1,000,000 1.74 $ 0.250 1,000,000 1,000,000 1.74 $ 0.260 50,000 50,000 3.25 $ 0.330 50,000 - 3.19 $ 0.350 1,000,000 1,000,000 1.74 $ 0.450 250,000 - 3.76 $ 0.550 200,000 50,000 2.74 4,800,000 4,350,000 During 2017, the Company issued warrants to purchase approximately 3.1 million shares of common stock at exercise prices ranging from $0.40 to $0.62, expiring between March and December of 2020. The Company recorded non-cash compensation expense of approximately $1,004,000 on such issuances, representing the estimated fair value of these instruments on the issuance date. During 2016, the Company issued warrants to purchase 1.07 million shares of common stock at exercise prices ranging from $0.10 to $0.20, expiring between February 2019 and August 2021. The Company recorded non-cash compensation expense of approximately $164,000, representing the estimated fair value of these instruments on the issuance date. During 2016 no stock options were issued, nor were any stock options or warrants exercised. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 7 – INCOME TAXES Due to operating losses, there is no required provision for federal or state income taxes for the years ended December 31, 2017 or 2016. At December 31, 2017, the Company had federal and state net operating loss carry forwards of approximately $4.1 million. The Company’s deferred tax asset at December 31, 2017 consisted of a net operating loss calculated using federal and state effective tax rates, equating to approximately $1,753,000, which was fully offset by a valuation allowance as shown in the following table: Deferred tax asset $ 1,753,000 Valuation allowance (1,753,000 ) Net deferred tax asset $ — The reconciliation of income taxes computed at the federal and state statutory income tax rate to total income taxes for the periods ended December 31, 2017 and 2016 was as follows: 2017 2016 Income tax computed at the federal statutory rate 34 % 34 % Income tax computed at the state statutory rate 5 % 5 % Valuation allowance (39 )% (39 )% Total deferred tax asset 0 % 0 % |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 8 – RELATED PARTY TRANSACTIONS As disclosed in Note 1, the Company acquired Sigal Consulting LLC in May 2014. At the time of the transaction, Sigal Consulting LLC was partially owned by a director of the Company and by individuals who became the Company’s CEO and CFO in 2018. On June 2017, the Company acquired the remaining 49% interest in MariMed Advisors Inc. from its ownership group, which included a director of the Company and individuals who became the CEO and CFO of the Company in 2018, for an aggregate 75 million shares of common stock. In September 2017, the former CEO of the Company, who is a currently a Board member, exercised options to purchase 4.5 million shares of common stock at an exercise price of $0.01 per share, as disclosed in Note 6 above. In October 2017, the Company acquired the intellectual property, formulations, recipes, proprietary equipment, and know-how of the Betty’s Eddies™ brand of cannabis-infused products from a company that is minority-owned by the Company’s chief operating officer. The purchase price was $140,000 plus subscriptions on 1,000,000 shares of the Company’s common stock. In addition, the selling company shall be paid a royalty based on a percentage of the Company’s revenue associated with the Betty’s Eddies™ product line, commencing at 25% and decreasing to 2.5% as certain sales thresholds are met. For the year ended December 31, 2017, the Company earned approximately $40,000 of revenue and paid royalties of approximately $10,000. After applying the total purchase price, which consisted of the cash paid plus the fair value of the subscribed common stock on the date of the transaction, to the assessed fair values of the assets purchased, the transaction gave rise to goodwill of approximately $333,000. At December 31, 2017, the Company reviewed the goodwill for impairment and determined that, based on the present value of future cash flows of the acquired assets, there was no impairment. The goodwill is included in other assets in the financial statements. In December 2017, options to purchase 200,000 shares of commons stock at an exercise price of $0.025 were forfeited by the CEO and by an independent Board member (100,000 shares forfeited by each individual). At December 31, 2017, the Company owed approximately $19,000 and $14,000 to the CEO and CFO, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 9 – COMMITMENTS AND CONTINGENCIES An employment agreement with the former CEO of the Company, which was terminated in 2017, provided this individual with salary, car allowances, bonuses based on the Company reaching certain milestones, life insurance, stock options and a death benefit. The Company has recorded approximately $1,043,000 and $872,000 at December 31, 2017 and 2016, respectively, under accrued expenses for any amounts that may be owed under this agreement. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | NOTE 10 – SEGMENT REPORTING The Company follows paragraph 280 of the FASB Accounting Standards Codification for disclosures about segment reporting. This statement requires companies to report information about operating segments in interim and annual financial statements. It also requires segment disclosures about products and services, geographic areas, and major customers. The Company has two reportable operating segments as determined by management using the “management approach” as defined by the authoritative guidance on Disclosures about Segments of an Enterprise and Related Information Summarized in the following tables are net sales and operating revenues, depreciation and amortization expense, income from continuing operations before taxes, capital expenditures and assets for the Company’s reportable segments as of and for the fiscal years ended December 31, 2017 and December 31, 2016: 2017 2016 Revenues: Online portal operations $ 289 $ 618 Cannabis operations 6,067,564 3,563,502 Consolidated revenues $ 6,067,853 $ 3,564,120 Depreciation and amortization: Online portal operations $ — $ — Cannabis operations 362,691 265,746 Depreciation and amortization $ 362,691 $ 265,746 Net income (loss): Online portal operations $ 122,636 $ 589,844 Cannabis operations (1,151,698 ) (268,679 ) Net income (loss) $ (1,029,062 ) $ 321,165 Capital expenditures: Online portal operations $ — $ — Cannabis operations (21,012,563 ) 3,364,070 Combined capital expenditures $ (21,012,563 ) $ 3,364,070 Assets: Online portal operations $ 928 $ 709 Cannabis operations 32,201,087 8,562,392 Combined assets $ 32,202,015 $ 8,563,101 |
Real Estate Transactions
Real Estate Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Real Estate Transactions | |
Real Estate Transactions | NOTE 11 – REAL ESTATE TRANSACTIONS In November 2017, the Company closed on a 137,500 square foot industrial property located on 21.95 acres in New Bedford, Massachusetts. Approximately half of the available square footage is leased to a non-cannabis manufacturing company under a 5-year lease. The Company has started development of the remaining half of the building into a cannabis cultivation and processing facility which will be leased to a cannabis licensee under a 20-year lease, the term of which will start after the completion of construction. In July 2017 the Company purchased a 22,700 square foot retail and warehouse building located on the main street of Middleborough, Massachusetts. The Company is currently constructing a 10,000 square foot retail dispensary which will be leased to the same cannabis licensee tenant of our New Bedford location, under a 20-year lease starting mid-2018. In January 2017, the Company purchased a long-standing 180,000 square foot former manufacturing facility in Hagerstown, Maryland, which was rehabilitated by the Company into a cultivation and processing facility for a licensed cannabis tenant under a 20-year lease that started January 1, 2018. In 2016, the Company finalized construction of two free-standing retail dispensaries, each approximately 3,400 square feet, in the cities of Anna and Harrisburg in Illinois. The facilities are leased to licensed cannabis dispensary companies under 20-year leases with 18 years remaining. The Company leases approximately10,000 square feet of an industrial building that it has built out into a cannabis cultivation facility. This facility is subleased to a licensed cannabis company under a sub-lease which is coterminous with the Company’s lease for 10 years with 6.25 years remaining. The Company owns a 45,070 square foot facility on 2.25 acres in Wilmington, Delaware, which was purchased in September 2016, and developed into a cannabis cultivation, processing, and dispensary facility. The facility is leased to a cannabis licensee company occupying 100% of the space under a 20-year lease with 16 years remaining. The Company leases 4,122 square feet of retail space in a newly-built multi-use building in Lewes, Delaware. This five-year lease with a five-year option to extend the term commenced in October 2016. The Company built out the space into a cannabis dispensary which is sub-leased to the same licensed cannabis company occupying the Wilmington facility, under a five-year lease with a five-year option to extend. The Company’s corporate office is located in Newton, Massachusetts. The space is subleased from a related party at a cost of $24,000 per year. The lease for this office will expire in July 2018. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 12 – DEBT In 2017, convertible promissory notes totaling $2.05 million in principal and approximately $262,000 of accrued interest were converted into 4,385,823 shares of common stock; and promissory notes totaling $300,000 in principal and $50,000 of accrued interest were retired via the issuance of 1,000,000 shares of commons stock. Both transactions are further disclosed in Note 3 above. During 2017, the Company raised 9,475,000 from the issuance of promissory notes with interest rates ranging from 4.5% to 12%, all with maturity dates of 12 months or less from the date of issue. In October 2017, the Company entered into a mortgage agreement with Bank of New England for its New Bedford, Massachusetts location. The principal balance on the mortgage was $2,895,000 with an interest rate of 6.5%. During 2016, the Company issued $950,000 of promissory notes with interest rates between 10% and 12%, and repaid $175,000 in promissory notes. Also during 2016, the Company converted two promissory notes plus accrued interest into Class A units of Mia Development LLC, a majority-owned subsidiary. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 13 – SUBSEQUENT EVENTS The following equity and debt transactions occurred subsequent to December 31, 2017: ● All 500,000 outstanding shares of subscribed Series A convertible preferred stock, plus accrued dividends on such shares, were converted by the Company into 970,989 shares of common stock. ● Warrants to purchased 89,416 shares of common stock were exercised at exercise prices ranging from $0.20 to $0.40. ● Options to purchase 300,000 shares of commons stock at exercise prices ranging from $0.025 to $0.55 were forfeited. Of this amount, 200,000 shares at an exercise price of $0.025 were forfeited by the CEO and by an independent Board member (100,000 shares forfeited by each individual). ● Options to purchase 300,000 shares of common stock were exercised at an exercise price of $0.13 per share. ● Two noteholders with principal balances totaling $875,000 converted their promissory notes at a conversion rate of $0.65 per share. Accordingly, 1,346,154 shares in total of common stock were issued to these note holders. ● The Company issued 2,430,768 shares of common stock, at prices ranging from $0.50 to $0.65 per share, resulting in total proceeds of $1,400,000. ● The Company issued warrants to purchase 237,500 shares of common stock at $0.65 per share pursuant to a previously issued promissory note. ● The Company issued 370,000 shares of common stock for the payment of services. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Certain reclassifications have been made to prior periods’ data to conform to the current period presentation. These reclassifications had no effect on reported income (losses) or cash flows. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of MariMed Inc. and its subsidiaries, all of which are wholly-owned. Intercompany accounts and transactions have been eliminated. |
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 reported amounts within the financial statements and disclosures thereof. Actual results could differ from these estimates or assumptions. |
Cash Equivalents | Cash Equivalents The Company considers all highly liquid investments with a maturity date of three months or less to be cash equivalents. The fair values of these investments approximate their carrying values. |
Revenue Recognition | Revenue Recognition The Company’s main sources of revenue are comprised of: subleasing contracts with our medical cannabis clients; consulting services to companies operating in the legal and medical cannabis industries; production arrangements for the procurement of cannabis resources; and licensing revenues from the sale of our branded products. The Company recognizes revenue when all of the following criteria are met: evidence of an arrangement exists such as a signed contract, delivery has occurred, the price is fixed or determinable, and collectability is reasonably assured. This will usually be in the form of a receipt of customer acceptance and satisfaction with delivered product, or in the case of development and service revenue, when services have been performed. Deferred revenue represents cash payments received before revenue is earned; the corresponding costs are also deferred until such revenue is ultimately recognized. |
Research and Development Costs | Research and Development Costs Research and development costs are charged to operations as incurred. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation, with depreciation recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term, if applicable. When assets are retired or disposed, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income. Repairs and maintenance are charged to expense in the period incurred. The estimated useful lives of property and equipment are generally as follows: buildings and building improvements, seven to thirty-nine years; tenant improvements, the remaining duration of the related lease; furniture and fixtures, seven years; machinery and equipment, five to ten years. Land is not depreciated. The Company’s property and equipment are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an undiscounted basis. An impairment loss is measured based on the excess of the asset’s carrying amount over its estimated fair value. Impairment analyses are based on management’s current plans, intended holding periods and available market information at the time the analyses are prepared. If these criteria change, the Company’s evaluation of impairment losses may be different and could have a material impact to the consolidated financial statements. For the years ended December 31, 2017 and 2016, based on its impairment analyses, the Company did not have any impairment losses. |
Impairment of Long Lived Assets | Impairment of Long Lived Assets The Company evaluates the recoverability of its fixed assets and other assets in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 360-10-15, Impairment or Disposal of Long-Lived Assets |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows the provisions of ASC 820, Fair Value Measurement Financial Instruments, Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amounts of the Company’s financial assets and liabilities, such as cash and accounts payable approximate their fair values due to the short maturity of these instruments. The fair value of option and warrant issuances are determined utilizing the binomial options pricing model and employing the following inputs: life of instrument, exercise price, value of the underlying security on issuance date, and 2-year volatility of underlying security. |
Extinguishment of Liabilities | Extinguishment of Liabilities The Company accounts for extinguishment of liabilities in accordance with ASC 405-20, Extinguishments of Liabilities. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation using the fair value method as set forth in ASC 718, Compensation—Stock Compensation, |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. The Company did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits for the years ended December 31, 2017 and 2016. |
Related Party Transactions | Related Party Transactions The Company follows ASC 850, Related Party Disclosures In accordance with ASC 850, the Company’s financial statements include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business, as well as transactions that are eliminated in the preparation of financial statements. |
Comprehensive Income | Comprehensive Income The Company reports comprehensive income and its components following guidance set forth by ASC 220, Comprehensive Income |
Earnings Per Share | Earnings Per Share Earnings per common share is computed pursuant to ASC 260, Earnings Per Share As of December 31, 2017 and 2016, there were 8,399,000 and 10,375,000 potentially dilutive securities in the form of options and warrants. In addition, there were 500,000 shares of convertible preferred stock and $1,350,000 of convertible promissory notes that were potentially dilutive whose conversion into common stock will be based on a discount to the market value of common stock on or about the future conversion date. All potentially dilutive securities had an anti-dilutive effect on earnings per share, and in accordance with ASC 260, were excluded from the diluted net income per share calculation. For that reason, the calculations of basic and fully diluted net income per share were identical for the years ended December 31, 2017 and 2016. These options and warrants may dilute earnings per share in the future. |
Commitments and Contingencies | Commitments and Contingencies The Company follows ASC 450, Contingencies If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. While not assured, and based upon information available at this time, management does not believe that a loss contingency exists that will have material adverse effect on the Company’s financial position, results of operations or cash flows. |
Risk and Uncertainties | Risk and Uncertainties The Company is subject to risks common to companies operating within the legal and medical marijuana industries, including, but not limited to, federal laws, government regulations and jurisdictional laws. |
Noncontrolling Interests | Noncontrolling Interests Noncontrolling interests represent third-party minority ownership of the Company’s consolidated subsidiaries. Net income attributable to noncontrolling interests is shown in the consolidated statements of operations; the value of net assets owned by noncontrolling interests are presented as a component of equity within the balance sheets. |
Off-Balance Sheet Arrangements | Off-Balance Sheet Arrangements The Company does not have any off-balance sheet arrangements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements will have a material impact on its financial condition or the results of its operations. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Assets | At December 31, 2017 and 2016, property and equipment consisted of the following: Description 2017 2016 Land $ 3,392,710 $ 592,210 Buildings and building improvements 18,464,544 3,587,064 Tenant improvements 4,223,903 1,923,890 Furniture and fixtures 99,138 109,560 Machinery and equipment 1,273,514 228,523 Less: accumulated depreciation (1,498,878 ) (1,136,187 ) Property and equipment, net $ 25,954,931 $ 5,305,060 |
Stock Options and Warrants (Tab
Stock Options and Warrants (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of Stock Options Outstanding and Exercisable | Stock options outstanding and exercisable as of December 31, 2017 were: Exercise Price Shares Under Option Remaining per Share Outstanding Exercisable Life in Years $ 0.025 200,000 200,000 0.01 $ 0.080 250,000 250,000 1.08 $ 0.080 200,000 200,000 1.97 $ 0.130 600,000 600,000 2.50 $ 0.150 1,000,000 1,000,000 1.74 $ 0.250 1,000,000 1,000,000 1.74 $ 0.260 50,000 50,000 3.25 $ 0.330 50,000 - 3.19 $ 0.350 1,000,000 1,000,000 1.74 $ 0.450 250,000 - 3.76 $ 0.550 200,000 50,000 2.74 4,800,000 4,350,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Asset | The Company’s deferred tax asset at December 31, 2017 consisted of a net operating loss calculated using federal and state effective tax rates, equating to approximately $1,753,000, fully offset by a valuation allowance as shown in the following table: Deferred tax asset $ 1,753,000 Valuation allowance (1,753,000 ) Net deferred tax asset $ — |
Schedule of Reconciliation of Income Taxes | The reconciliation of income taxes computed at the federal and state statutory income tax rate to total income taxes for the periods ended December 31, 2017 and 2016 was as follows: 2017 2016 Income tax computed at the federal statutory rate 34 % 34 % Income tax computed at the state statutory rate 5 % 5 % Valuation allowance (39 )% (39 )% Total deferred tax asset 0 % 0 % |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Operating Segments | Summarized in the following tables are net sales and operating revenues, depreciation and amortization expense, income from continuing operations before taxes, capital expenditures and assets for the Company’s reportable segments as of and for the fiscal years ended December 31, 2017 and December 31, 2016: 2017 2016 Revenues: Online portal operations $ 289 $ 618 Cannabis operations 6,067,564 3,563,502 Consolidated revenues $ 6,067,853 $ 3,564,120 Depreciation and amortization: Online portal operations $ — $ — Cannabis operations 362,691 265,746 Depreciation and amortization $ 362,691 $ 265,746 Net income (loss): Online portal operations $ 122,636 $ 589,844 Cannabis operations (1,151,698 ) (268,679 ) Net income (loss) $ (1,029,062 ) $ 321,165 Capital expenditures: Online portal operations $ — $ — Cannabis operations (21,012,563 ) 3,364,070 Combined capital expenditures $ (21,012,563 ) $ 3,364,070 Assets: Online portal operations $ 928 $ 709 Cannabis operations 32,201,087 8,562,392 Combined assets $ 32,202,015 $ 8,563,101 |
Organization and Description 25
Organization and Description of Business (Details Narrative) - $ / shares | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | May 31, 2014 | Dec. 31, 2017 | |
Options to purchase of shares | 73,902 | ||
Ownership percentage | 100.00% | ||
MariMed Advisors Inc. [Member] | |||
Common stock outstanding shares percentage | 50.00% | ||
Options to purchase of shares | 3,000,000 | ||
Exercisable contractual term | 5 years | ||
Ownership percentage | 49.00% | 49.00% | |
Common stock shares acquired | 75,000,000 | ||
MariMed Advisors Inc. [Member] | Minimum [Member] | |||
Exercise price per share | $ 0.15 | ||
MariMed Advisors Inc. [Member] | Maximum [Member] | |||
Exercise price per share | $ 0.35 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2017 | |
Impairment losses | |||
Unrecognized tax liabilities or benefits | |||
Potentially dilutive securities | 8,399,000 | 10,375,000 | |
Fair value instrument, volatility term | 2 years | ||
Convertible Promissory Notes [Member] | |||
Potentially dilutive securities | 1,350,000 | ||
Convertible Preferred Stock [Member] | |||
Potentially dilutive securities | 500,000 | ||
Buildings [Member] | Minimum [Member] | |||
Useful lives of property plant and equipment | 7 years | ||
Buildings [Member] | Maximum [Member] | |||
Useful lives of property plant and equipment | 39 years | ||
Furniture and Fixtures [Member] | |||
Useful lives of property plant and equipment | 7 years | ||
Machinery and Equipment [Member] | Minimum [Member] | |||
Useful lives of property plant and equipment | 10 years | ||
Machinery and Equipment [Member] | Maximum [Member] | |||
Useful lives of property plant and equipment | 5 years |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2017 | Oct. 31, 2017 | Aug. 31, 2017 | Jun. 30, 2017 | Apr. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 31, 2017 | |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 5,000,000 | |||||
Number of shares issued during period | 4,385,823 | 26,672,228 | ||||||
Share issued price | $ 0.63 | |||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 100,000,000 | |||||
Number of shares issued during period, value | $ 6,578,000 | |||||||
Number of common stock issued related to acquisition | 75,000,000 | |||||||
Common stock, acquisition percentage | 49.00% | |||||||
Loss on conversion | $ 390,000 | $ 451,000 | 645,193 | |||||
Promissory notes | 300,000 | 2,050,000 | $ 300,000 | |||||
Accrued interest | $ 50,000 | $ 262,000 | ||||||
Debt converted into common shares | 1,000,000 | 4,385,823 | ||||||
Ownership interest | 100.00% | 100.00% | ||||||
Class A Membership Units [Member] | ||||||||
Number of shares issued during period | 11,786 | |||||||
Promissory notes | $ 589,000 | |||||||
Ownership interest | 2.36% | |||||||
Sigal Consulting LLC [Member] | ||||||||
Number of common stock issued related to acquisition | 31,954,237 | |||||||
Common stock, acquisition percentage | 50.00% | |||||||
Mari Holdings MD LLC [Member] | Class A Membership Units [Member] | ||||||||
Number of shares issued during period | 12,778 | 2,500 | ||||||
Number of shares issued during period, value | $ 1,150,000 | $ 200,000 | ||||||
Ownership interest | 3.05% | 3.05% | 0.75% | |||||
Mia Development LLC [Member] | Class A Membership Units [Member] | ||||||||
Number of shares issued during period | 4,123 | |||||||
Number of shares issued during period, value | $ 206,000 | |||||||
Ownership interest | 0.82% | |||||||
Betty's Eddies [Member] | ||||||||
Common stock issued for purchase of assets | 1,000,000 | |||||||
Third Parties [Member] | ||||||||
Shares in exchange for services | 1,007,597 | |||||||
Loss on conversion | $ 31,000 | |||||||
Series A Preferred Stock [Member] | ||||||||
Number of shares issued during period | 200,000 | 300,000 | ||||||
Share issued price | $ 1 | $ 1 | $ 1 | |||||
Preferred stock dividend, rate | 6.00% | 6.00% | ||||||
Series A convertible Preferred [Member] | ||||||||
Discount to selling price, percentage | 25.00% | |||||||
Market capitalization | $ 50,000,000 | $ 50,000,000 | ||||||
Minimum [Member] | ||||||||
Preferred stock, shares authorized | 5,000,000 | |||||||
Share issued price | $ 0.18 | $ 0.18 | ||||||
Common stock, shares authorized | 100,000,000 | |||||||
Maximum [Member] | ||||||||
Preferred stock, shares authorized | 50,000,000 | |||||||
Share issued price | $ 0.50 | $ 0.50 | ||||||
Common stock, shares authorized | 500,000,000 |
Deferred Revenue (Details Narra
Deferred Revenue (Details Narrative) | 1 Months Ended |
Jul. 31, 2017USD ($) | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Deferred revenue written off | $ 227,000 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Additions to property and equipment | $ 21,012,563 | $ 3,364,070 |
Depreciation and amortization | $ 362,691 | $ 265,746 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Fixed Assets (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Less: accumulated depreciation | $ (1,498,878) | $ (1,136,187) |
Property and equipment, net | 25,954,931 | 5,305,060 |
Land [Member] | ||
Property plant and equipment, gross | 3,392,710 | 592,210 |
Buildings and Building Improvements [Member] | ||
Property plant and equipment, gross | 18,464,544 | 3,587,064 |
Tenant Improvements [Member] | ||
Property plant and equipment, gross | 4,223,903 | 1,923,890 |
Furniture and Fixtures [Member] | ||
Property plant and equipment, gross | 99,138 | 109,560 |
Machinery and Equipment [Member] | ||
Property plant and equipment, gross | $ 1,273,514 | $ 228,523 |
Stock Options and Warrants (Det
Stock Options and Warrants (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Non-cash equity compensation | $ 1,078,253 | $ 163,574 | |
Treasury stock, surrendered | 90,000 | 90,000 | 0 |
Number of warrants issued to purchase common stock | 3,100,000 | 3,100,000 | |
Warrant expiration description | expiring between March and December of 2020. | ||
Number of warrants issued | |||
Individual's [Member] | |||
Exercise price of common stock | $ 0.01 | $ 0.01 | |
Payments to surrender of common stock | $ 45,000 | ||
Options One [Member] | |||
Options to purchase shares of common stock | 550,000 | ||
Stock options expiration period, description | expiring between September 2020 to October 2021 | ||
Non-cash equity compensation | $ 74,000 | ||
Stock options vesting period, description | vesting from the grant date through March 2019 | ||
Options One [Member] | March 2019 [Member] | |||
Non-cash equity compensation | $ 159,000 | ||
Options Two [Member] | |||
Options to purchase shares of common stock | 4,800,000 | ||
Treasury stock, surrendered | 90,000 | 90,000 | |
Number of warrants exercised | |||
Options Three [Member] | |||
Options to purchase shares of common stock | 200,000 | ||
Exercise price of common stock | $ 0.025 | $ 0.025 | |
Warrant [Member] | |||
Non-cash equity compensation | $ 1,004,000 | $ 164,000 | |
Number of warrants issued to purchase common stock | 1,070,000 | ||
Warrant expiration description | expiring between February 2019 and August 2021 | ||
Minimum [Member] | |||
Warrants exercise price | 0.40 | $ 0.40 | |
Minimum [Member] | Options One [Member] | |||
Exercise price of common stock | 0.26 | 0.26 | |
Minimum [Member] | Options Two [Member] | |||
Exercise price of common stock | 0.01 | 0.01 | |
Minimum [Member] | Warrant [Member] | |||
Warrants exercise price | $ 0.10 | ||
Maximum [Member] | |||
Warrants exercise price | 0.62 | 0.62 | |
Maximum [Member] | Options One [Member] | |||
Exercise price of common stock | 0.55 | 0.55 | |
Maximum [Member] | Options Two [Member] | |||
Exercise price of common stock | $ 0.025 | $ 0.025 | |
Maximum [Member] | Warrant [Member] | |||
Warrants exercise price | $ 0.20 |
Stock Options and Warrants - Sc
Stock Options and Warrants - Schedule of Stock Options Outstanding and Exercisable (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Outstanding shares under option | 4,800,000 |
Exercisable shares under option | 4,350,000 |
Range One [Member] | |
Outstanding and exercisable exercise price per share | $ / shares | $ 0.025 |
Outstanding shares under option | 200,000 |
Exercisable shares under option | 200,000 |
Outstanding remaining life in years | 4 days |
Range Two [Member] | |
Outstanding and exercisable exercise price per share | $ / shares | $ 0.080 |
Outstanding shares under option | 250,000 |
Exercisable shares under option | 250,000 |
Outstanding remaining life in years | 1 year 29 days |
Range Three [Member] | |
Outstanding and exercisable exercise price per share | $ / shares | $ 0.080 |
Outstanding shares under option | 200,000 |
Exercisable shares under option | 200,000 |
Outstanding remaining life in years | 1 year 11 months 19 days |
Range Four [Member] | |
Outstanding and exercisable exercise price per share | $ / shares | $ 0.130 |
Outstanding shares under option | 600,000 |
Exercisable shares under option | 600,000 |
Outstanding remaining life in years | 2 years 6 months |
Range Five [Member] | |
Outstanding and exercisable exercise price per share | $ / shares | $ 0.150 |
Outstanding shares under option | 1,000,000 |
Exercisable shares under option | 1,000,000 |
Outstanding remaining life in years | 1 year 8 months 26 days |
Range Six [Member] | |
Outstanding and exercisable exercise price per share | $ / shares | $ 0.250 |
Outstanding shares under option | 1,000,000 |
Exercisable shares under option | 1,000,000 |
Outstanding remaining life in years | 1 year 8 months 26 days |
Range Seven [Member] | |
Outstanding and exercisable exercise price per share | $ / shares | $ 0.260 |
Outstanding shares under option | 50,000 |
Exercisable shares under option | 50,000 |
Outstanding remaining life in years | 3 years 2 months 30 days |
Range Eight [Member] | |
Outstanding and exercisable exercise price per share | $ / shares | $ 0.330 |
Outstanding shares under option | 50,000 |
Exercisable shares under option | |
Outstanding remaining life in years | 3 years 2 months 8 days |
Range Nine [Member] | |
Outstanding and exercisable exercise price per share | $ / shares | $ 0.350 |
Outstanding shares under option | 1,000,000 |
Exercisable shares under option | 1,000,000 |
Outstanding remaining life in years | 1 year 8 months 26 days |
Range Ten [Member] | |
Outstanding and exercisable exercise price per share | $ / shares | $ 0.450 |
Outstanding shares under option | 250,000 |
Exercisable shares under option | |
Outstanding remaining life in years | 3 years 9 months 3 days |
Range Eleven [Member] | |
Outstanding and exercisable exercise price per share | $ / shares | $ 0.550 |
Outstanding shares under option | 200,000 |
Exercisable shares under option | 50,000 |
Outstanding remaining life in years | 2 years 8 months 26 days |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Income Tax Disclosure [Abstract] | |
Net operating loss carry forwards | $ 4,100,000 |
Net operating loss federal and state effective tax rates | $ 1,753,000 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Asset (Details) | Dec. 31, 2017USD ($) |
Income Tax Disclosure [Abstract] | |
Deferred tax asset | $ 1,753,000 |
Valuation allowance | (1,753,000) |
Net deferred tax asset |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Income Taxes (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Income tax computed at the federal statutory rate | 34.00% | 34.00% |
Income tax computed at the state statutory rate | 5.00% | 5.00% |
Valuation allowance | (39.00%) | (39.00%) |
Total deferred tax asset | 0.00% | 0.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2017 | Oct. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2017 | Aug. 31, 2017 | Dec. 31, 2016 | May 31, 2014 | |
Ownership percentage | 100.00% | 100.00% | ||||||
Common stock exercise price | $ 0.63 | |||||||
Purchase of common stock | 140,000 | |||||||
Additional number of common stock purchased | 1,000,000 | |||||||
Royalty percentage | 25.00% | |||||||
Decrease sales percentage | 2.50% | |||||||
Revenue | $ 40,000 | |||||||
Payments for royalties | 10,000 | |||||||
Increase in goodwill | 333,000 | |||||||
Impairment of goodwill | ||||||||
Due to related parties | $ 400,996 | $ 400,996 | $ 148,337 | |||||
Options [Member] | ||||||||
Options to purchase shares of common stock | 200,000 | |||||||
Exercise price of common stock | $ 0.025 | $ 0.025 | ||||||
Number of stock options shares forfeited | 100,000 | |||||||
CEO [Member] | ||||||||
Purchase exercised options | 4,500,000 | |||||||
Common stock exercise price | $ 0.01 | |||||||
Due to related parties | $ 19,000 | $ 19,000 | ||||||
Chief Financial Officer [Member] | ||||||||
Due to related parties | $ 14,000 | $ 14,000 | ||||||
MariMed Advisors Inc. [Member] | ||||||||
Ownership percentage | 49.00% | 49.00% | ||||||
Common stock shares acquired | 75,000,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Agreement term description | An employment agreement with the former CEO of the Company, which was terminated in 2017, provided this individual with salary, car allowances, bonuses based on the Company reaching certain milestones, life insurance, stock options and a death benefit. | |
Accrued expenses | $ 1,405,336 | $ 1,686,966 |
Employment Agreement [Member] | ||
Accrued expenses | $ 1,043,000 | $ 872,000 |
Segment Reporting (Details Narr
Segment Reporting (Details Narrative) | 12 Months Ended |
Dec. 31, 2017Segments | |
Segment Reporting [Abstract] | |
Number of reportable operating segments | 2 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Operating Segments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | $ 6,067,853 | $ 3,564,120 |
Depreciation and amortization | 362,691 | 265,746 |
Net income (loss) | (1,029,062) | 321,165 |
Capital expenditures | (21,012,563) | 3,364,070 |
Assets | 32,202,015 | 8,563,101 |
Online Portal Operations [Member] | ||
Revenues | 289 | 618 |
Depreciation and amortization | ||
Net income (loss) | 122,636 | 589,844 |
Capital expenditures | ||
Assets | 928 | 709 |
Cannabis Operations [Member] | ||
Revenues | 6,067,564 | 3,563,502 |
Depreciation and amortization | 362,691 | 265,746 |
Net income (loss) | (1,151,698) | (268,679) |
Capital expenditures | (21,012,563) | 3,364,070 |
Assets | $ 32,201,087 | $ 8,562,392 |
Real Estate Transactions (Detai
Real Estate Transactions (Details Narrative) | 1 Months Ended | 12 Months Ended | ||||
Nov. 30, 2017ft²a | Jul. 31, 2017ft² | Jan. 31, 2017ft² | Dec. 31, 2017USD ($)ft² | Dec. 31, 2016ft² | Sep. 30, 2016ft²a | |
Number of square foot | 10,000 | |||||
Lease licensee term | 10 years | |||||
Remaining lease licensee term | 6 years 3 months | |||||
Ownership percentage | 100.00% | |||||
New Bedford, Massachusetts [Member] | ||||||
Number of square foot | 137,500 | |||||
Property located area | a | 21.95 | |||||
Lease term | 5 years | |||||
Lease licensee term | 20 years | |||||
Middleborough, Massachusetts [Member] | ||||||
Number of square foot | 22,700 | |||||
New Bedford [Member] | ||||||
Number of square foot | 10,000 | |||||
Lease licensee term | 20 years | |||||
Hagerstown, Maryland [Member] | ||||||
Number of square foot | 180,000 | |||||
Lease licensee term | 20 years | |||||
Anna, Illinois [Member] | ||||||
Number of square foot | 3,400 | |||||
Lease licensee term | 20 years | |||||
Remaining lease licensee term | 18 years | |||||
Harrisburg, Illinois [Member] | ||||||
Number of square foot | 3,400 | |||||
Lease licensee term | 20 years | |||||
Remaining lease licensee term | 18 years | |||||
Wilmington, Delaware [Member] | ||||||
Number of square foot | 45,070 | |||||
Property located area | a | 2.25 | |||||
Lease term | 5 years | |||||
Lease licensee term | 20 years | |||||
Remaining lease licensee term | 16 years | |||||
Ownership percentage | 100.00% | |||||
Lease term, description | under a five year lease with a five-year option to extend. | |||||
Lewes, Delaware [Member] | ||||||
Number of square foot | 4,122 | |||||
Lease term | 5 years | |||||
Lease term, description | This five-year lease with a five-year option to extend the term commenced in October 2016. | |||||
Newton, Massachusetts [Member] | ||||||
Subleased space from related party, cost | $ | $ 24,000 | |||||
Lease expiration, description | The lease for this office will expire in July 2018. |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Oct. 31, 2017 | Aug. 31, 2017 | Dec. 31, 2016 | |
Debt principal amount | $ 300,000 | $ 2,050,000 | ||
Debt conversion of convertible shares | 1,000,000 | 4,385,823 | ||
Promissory notes issued | $ 950,000 | |||
Repayment of notes | $ 175,000 | |||
Mortgage Agreement [Member ] | ||||
Debt principal amount | $ 2,895,000 | |||
Interest rate | 6.50% | |||
Minimum [Member] | ||||
Interest rate | 10.00% | |||
Maximum [Member] | ||||
Interest rate | 12.00% | |||
Convertible Promissory Notes [Member] | ||||
Debt principal amount | $ 2,050,000 | |||
Accrued interest | $ 262,000 | |||
Debt conversion of convertible shares | 4,385,823 | |||
Convertible Promissory Notes [Member] | Minimum [Member] | ||||
Interest rate | 12.00% | |||
Convertible Promissory Notes [Member] | Maximum [Member] | ||||
Interest rate | 4.50% | |||
Convertible Promissory Notes One [Member] | ||||
Debt principal amount | $ 300,000 | |||
Accrued interest | $ 50,000 | |||
Debt conversion of convertible shares | 1,000,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Aug. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt conversion of convertible note | $ 2,763,069 | |||
Number of common stock shares issues | 4,385,823 | 26,672,228 | ||
Common stock price per share | $ 0.63 | |||
Proceeds from issuance of common stock | $ 6,578,000 | $ 406,157 | ||
Options [Member] | ||||
Options to purchase shares of common stock | 200,000 | |||
Number of stock options shares forfeited | 100,000 | |||
Options One [Member] | ||||
Options to purchase shares of common stock | 550,000 | |||
Minimum [Member] | ||||
Warrant exercise price per share | $ 0.40 | $ 0.40 | ||
Common stock price per share | 0.18 | 0.18 | ||
Minimum [Member] | Warrant [Member] | ||||
Warrant exercise price per share | $ 0.10 | |||
Maximum [Member] | ||||
Warrant exercise price per share | 0.62 | 0.62 | ||
Common stock price per share | $ 0.50 | $ 0.50 | ||
Maximum [Member] | Warrant [Member] | ||||
Warrant exercise price per share | $ 0.20 | |||
Subsequent Event [Member] | ||||
Preferred stock, shares converted | 500,000 | |||
Conversion of preferred stock into common stock, shares issued | 970,989 | |||
Warrant to purchase shares of common stock | 89,416 | 89,416 | ||
Number of common stock shares issues | 2,430,768 | |||
Proceeds from issuance of common stock | $ 1,400,000 | |||
Number of common stock shares issued for services | 370,000 | |||
Subsequent Event [Member] | Two Noteholders [Member] | ||||
Debt conversion of convertible note | $ 875,000 | |||
Debt conversion price per share | $ 0.65 | $ 0.65 | ||
Number of common stock shares issues | 1,346,154 | |||
Subsequent Event [Member] | Options [Member] | ||||
Options to purchase shares of common stock | 300,000 | |||
Subsequent Event [Member] | Options [Member] | CEO and Independent Board Member [Member] | ||||
Options to purchase shares of common stock | 200,000 | |||
Exercise price of common stock forfeited | $ 0.025 | |||
Number of stock options shares forfeited | 100,000 | |||
Subsequent Event [Member] | Options One [Member] | ||||
Options to purchase shares of common stock | 300,000 | |||
Stock options exercise price per share | $ 0.13 | $ 0.13 | ||
Subsequent Event [Member] | Warrant [Member] | ||||
Warrant to purchase shares of common stock | 237,500 | 237,500 | ||
Warrant exercise price per share | $ 0.65 | $ 0.65 | ||
Subsequent Event [Member] | Minimum [Member] | ||||
Warrant exercise price per share | 0.20 | 0.20 | ||
Common stock price per share | 0.50 | 0.50 | ||
Subsequent Event [Member] | Minimum [Member] | Options [Member] | ||||
Exercise price of common stock forfeited | 0.025 | |||
Subsequent Event [Member] | Maximum [Member] | ||||
Warrant exercise price per share | 0.40 | 0.40 | ||
Common stock price per share | $ 0.65 | 0.65 | ||
Subsequent Event [Member] | Maximum [Member] | Options [Member] | ||||
Exercise price of common stock forfeited | $ 0.55 |