Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Jan. 29, 2021 | |
Document And Entity Information | ||
Entity Registrant Name | Generation Hemp, Inc. | |
Entity Central Index Key | 0001527102 | |
Amendment Flag | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Entity Filer Category | Non-accelerated Filer | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Incorporation State Country Code | CO | |
Entity Interactive data current | Yes | |
Entity File Number | 000-55019 | |
Entity Common Stock, Shares Outstanding | 24,130,332 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash | $ 82,766 | $ 101,337 |
Current assets of discontinued operations held for sale | 20,835 | |
Total Current Assets | 82,766 | 122,172 |
Property and Equipment | ||
Property and equipment | 1,222,430 | 1,223,353 |
Accumulated depreciation | (86,899) | (32,322) |
Total Property and Equipment, Net | 1,135,531 | 1,191,031 |
Noncurrent assets of discontinued operations held for sale | 1,196,161 | |
Investment in common stock, at cost | 18,223 | 32,959 |
Total Assets | 1,236,520 | 2,542,323 |
Current Liabilities | ||
Accounts payable | 1,039,080 | 685,692 |
Accrued liabilities | 284,393 | 269,410 |
Accrued interest – related parties | 389,995 | 247,500 |
Notes payable – related parties | 2,048,874 | 1,708,874 |
Mortgage payable | 614,346 | 626,086 |
Common stock units issuable | 150,000 | |
Current liabilities of discontinued operations held for sale | 133,193 | 1,315,581 |
Total Current Liabilities | 4,659,881 | 4,853,143 |
Lease liability | 44,333 | |
SBA PPP loan | 25,200 | |
Long-term liabilities of discontinued operations held for sale | 122,222 | 119,657 |
Total Liabilities | 4,807,303 | 5,017,133 |
Commitments and Contingencies | ||
Equity (Deficit) | ||
Series A preferred stock, no par value; $1.00 stated value; 6,500,000 shares authorized, 6,328,948 shares issued and outstanding | 4,975,503 | 4,975,503 |
Common stock, no par value; 100,000,000 shares authorized, 17,380,317 and 17,130,317 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 6,083,480 | 6,029,328 |
Common stock warrants | 3,472,794 | 3,426,946 |
Accumulated deficit | (17,873,743) | (16,722,036) |
Generation Hemp equity | (3,341,966) | (2,290,259) |
Noncontrolling interest | (228,817) | (184,551) |
Total Equity (Deficit) | (3,570,783) | (2,474,810) |
Total Liabilities and Equity (Deficit) | $ 1,236,520 | $ 2,542,323 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Common stock, par value | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 17,380,317 | 17,130,317 |
Common stock, shares outstanding | 17,380,317 | 17,130,317 |
Series A Preferred Stock | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 6,500,000 | 6,500,000 |
Preferred stock, shares issued | 6,328,948 | 6,328,948 |
Preferred stock, shares outstanding | 6,328,948 | 6,328,948 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenue | $ 22,500 | $ 67,500 | ||
Costs and Expenses | ||||
Depreciation and amortization | 16,038 | 3,264 | 54,961 | 9,798 |
Impairment expense | 247,574 | |||
Merger and acquisition costs | 6,856 | 183,103 | 99,880 | 360,858 |
General and administrative | 108,728 | 91,083 | 883,565 | 707,694 |
Total costs and expenses | 131,622 | 277,450 | 1,038,406 | 1,325,924 |
Operating loss | (109,122) | (277,450) | (970,906) | (1,325,924) |
Other expense (income) | ||||
Interest and other income | (154) | (1) | (963) | |
Change in fair value of marketable security | (1,826) | 9,630 | 14,736 | 234,309 |
Interest expense | 68,475 | 49,378 | 204,875 | 135,837 |
Total other expense | 66,649 | 58,854 | 219,610 | 369,183 |
Loss from continuing operations | (175,771) | (336,304) | (1,190,516) | (1,695,107) |
(Loss) income from discontinued operations | (7,989) | (47,232) | (5,457) | 2,215,442 |
Net (loss) income | (183,760) | (383,536) | (1,195,973) | 520,335 |
Less: net loss attributable to noncontrolling interests | (4,904) | (44,266) | ||
Net (loss) income attributable to Generation Hemp | $ (178,856) | $ (383,536) | $ (1,151,707) | $ 520,335 |
Loss from continuing operations | ||||
Basic | $ (0.01) | $ (0.65) | $ (0.07) | $ (3.74) |
Diluted | (0.01) | (0.65) | (0.07) | (3.74) |
(Loss) income from discontinued operations | ||||
Basic | 0 | (0.09) | 0 | 4.89 |
Diluted | 0 | (0.09) | 0 | 0.03 |
Earnings (loss) per share | ||||
Basic | (0.01) | (0.74) | (0.07) | 1.15 |
Diluted | $ (0.01) | $ (0.74) | $ (0.07) | $ 0.01 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) | EHR Series A Redeemable Preferred Stock | Preferred Stock | Common Stock | Common Stock Warrants | Accumulated Deficit | Noncontrolling Interest | Total |
Balance at Dec. 31, 2018 | $ 9,118,691 | $ 4,975,503 | $ 889,697 | $ (6,411,483) | $ (546,283) | ||
Balance, shares at Dec. 31, 2018 | 412,500 | 6,328,948 | 418,342 | ||||
Cancellation of Series A preferred stock in disposal of oil & gas property interests | $ (9,118,691) | ||||||
Cancellation of Series A preferred stock in disposal of oil & gas property interests, shares | (412,500) | ||||||
Net income (loss) | 1,197,003 | 1,197,003 | |||||
Balance at Mar. 31, 2019 | $ 4,975,503 | $ 889,697 | (5,214,480) | 650,720 | |||
Balance, shares at Mar. 31, 2019 | 6,328,948 | 418,342 | |||||
Balance at Dec. 31, 2018 | $ 9,118,691 | $ 4,975,503 | $ 889,697 | (6,411,483) | (546,283) | ||
Balance, shares at Dec. 31, 2018 | 412,500 | 6,328,948 | 418,342 | ||||
Net income (loss) | 520,335 | ||||||
Balance at Sep. 30, 2019 | $ 5,825,503 | $ 1,014,697 | (5,891,148) | 949,052 | |||
Balance, shares at Sep. 30, 2019 | 6,362,948 | 583,953 | |||||
Balance at Mar. 31, 2019 | $ 4,975,503 | $ 889,697 | (5,214,480) | 650,720 | |||
Balance, shares at Mar. 31, 2019 | 6,328,948 | 418,342 | |||||
Net income (loss) | (293,132) | (293,132) | |||||
Balance at Jun. 30, 2019 | $ 4,975,503 | $ 889,697 | (5,507,612) | 357,588 | |||
Balance, shares at Jun. 30, 2019 | 6,328,948 | 418,342 | |||||
Private placement of common stock | $ 125,000 | 125,000 | |||||
Private placement of common stock, shares | 165,611 | ||||||
Series C convertible preferred stock issuance | $ 850,000 | 850,000 | |||||
Series C convertible preferred stock issuance, shares | 34,000 | ||||||
Net income (loss) | (383,536) | (383,536) | |||||
Balance at Sep. 30, 2019 | $ 5,825,503 | $ 1,014,697 | (5,891,148) | 949,052 | |||
Balance, shares at Sep. 30, 2019 | 6,362,948 | 583,953 | |||||
Balance at Dec. 31, 2019 | $ 4,975,503 | $ 6,029,328 | 3,426,946 | (16,722,036) | (184,551) | (2,474,810) | |
Balance, shares at Dec. 31, 2019 | 6,328,948 | 17,130,317 | |||||
Issuance of common stock units | $ 54,152 | 45,848 | 100,000 | ||||
Issuance of common stock units, shares | 250,000 | ||||||
Net income (loss) | (712,566) | (30,075) | (742,641) | ||||
Balance at Mar. 31, 2020 | $ 4,975,503 | $ 6,083,480 | 3,472,794 | (17,434,602) | (214,626) | (3,117,451) | |
Balance, shares at Mar. 31, 2020 | 6,328,948 | 17,380,317 | |||||
Balance at Dec. 31, 2019 | $ 4,975,503 | $ 6,029,328 | 3,426,946 | (16,722,036) | (184,551) | (2,474,810) | |
Balance, shares at Dec. 31, 2019 | 6,328,948 | 17,130,317 | |||||
Net income (loss) | (1,195,973) | ||||||
Balance at Sep. 30, 2020 | $ 4,975,503 | $ 6,083,480 | 3,472,794 | (17,873,743) | (228,817) | (3,570,783) | |
Balance, shares at Sep. 30, 2020 | 6,328,948 | 17,380,317 | |||||
Balance at Mar. 31, 2020 | $ 4,975,503 | $ 6,083,480 | 3,472,794 | (17,434,602) | (214,626) | (3,117,451) | |
Balance, shares at Mar. 31, 2020 | 6,328,948 | 17,380,317 | |||||
Net income (loss) | (260,285) | (9,287) | (269,572) | ||||
Balance at Jun. 30, 2020 | $ 4,975,503 | $ 6,083,480 | 3,472,794 | (17,694,887) | (223,913) | (3,387,023) | |
Balance, shares at Jun. 30, 2020 | 6,328,948 | 17,380,317 | |||||
Net income (loss) | (178,856) | (4,904) | (183,760) | ||||
Balance at Sep. 30, 2020 | $ 4,975,503 | $ 6,083,480 | $ 3,472,794 | $ (17,873,743) | $ (228,817) | $ (3,570,783) | |
Balance, shares at Sep. 30, 2020 | 6,328,948 | 17,380,317 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash Flows From Operating Activities | ||
Net (loss) income | $ (1,195,973) | $ 520,335 |
Income from discontinued operations | (5,457) | 2,215,442 |
Net loss from continuing operations | (1,190,516) | (1,695,107) |
Adjustments to reconcile net loss from continuing operations to net cash from operating activities: | ||
Depreciation expense | 54,961 | 9,798 |
Loss on disposal of property and equipment | 539 | |
Impairment expense | 247,574 | |
Change in fair value of marketable securities | 14,736 | 234,309 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | 182,295 | |
Accounts payable and accrued liabilities | 466,533 | 351,871 |
Net cash from operating activities – continuing operations | (653,747) | (669,260) |
Net cash from operating activities – discontinued operations | 31,716 | 37,976 |
Net cash from operating activities | (622,031) | (631,284) |
Cash Flows From Investing Activities | ||
Additions to property and equipment | (394) | |
Proceeds from disposal of property and equipment | 1,000 | |
Net cash from investing activities – continuing operations | 606 | |
Net cash from investing activities – discontinued operations | (17,333) | |
Net cash from investing activities | (16,727) | |
Cash Flows From Financing Activities | ||
Proceeds from third party for shares to be issued | 150,000 | |
Proceeds from issuance of common stock units | 100,000 | |
Proceeds from private placement of common stock | 125,000 | |
Proceeds from Series C convertible preferred stock issuance | 850,000 | |
Proceeds from SBA PPP loan | 25,200 | |
Proceeds from subordinated promissory note | 340,000 | |
Payment of note payable | (11,740) | |
Net cash from financing activities – continuing operations | 603,460 | 975,000 |
Net cash from financing activities – discontinued operations | ||
Net cash from financing activities | 603,460 | 975,000 |
Net change in cash | (18,571) | 326,989 |
Cash, beginning of period | 101,337 | 426,952 |
Cash, end of period | $ 82,766 | $ 753,941 |
Business
Business | 9 Months Ended |
Sep. 30, 2020 | |
Business [Abstract] | |
BUSINESS | 1. BUSINESS Generation Hemp, Inc. (the "Company"), formerly known as Home Treasure Finders, Inc. ("HTF"), was initially incorporated on July 28, 2008 in the State of Colorado. On March 3, 2014, the Company formed a wholly-owned subsidiary, HMTF Cannabis Holdings, Inc. to purchase properties that qualify for legal cultivation of cannabis. The Company generates income from its real estate holdings. On November 27, 2019, HTF completed the purchase of approximately 68% of the common stock of Energy Hunter Resources, Inc. ("EHR") through the issuance of 6,328,948 shares of the Company's Series A Preferred Stock ("Series A Preferred"). Each share of the Series A Preferred; (a) converts into 12 shares of common stock of the Company, (b) possesses full voting rights, on an as-converted basis, with the common stock of the Company, and (c) has no dividend rate. The acquisition, together with the other transactions contemplated by the Stock Purchase Agreement, dated August 15, 2019 are referred to herein as the "Transaction". In connection with the closing of the Transaction, HTF changed its name to Generation Hemp, Inc. In an exchange transaction also effective November 27, 2019, the Company acquired an additional 26% of the common stock of EHR through the issuance of common stock and warrants. The Company owns approximately 94% of the issued and outstanding common stock of EHR. Thus, EHR is a majority-owned subsidiary of the Company. EHR is an oil and gas exploration and production company whose core properties as of September 30, 2020 were located in the Cochran County, Texas within the Slaughter-Levelland Field of the San Andres formation in the Northwest Shelf of West Texas. EHR held an 8.0% interest in certain oil and gas and/ or oil, gas and mineral leases, lands interests, and other properties located in Cochran County. EHR's oil & gas activities are currently held for sale and are presented in these consolidated financial statements as discontinued operations for each of the periods presented. Going Concern and Management's Plans – The Company is dependent upon obtaining additional funding to continue ongoing operations, pursue its new strategy and execute its acquisition plans. The Company currently has limited revenue. Management plans to continue to pursue additional funding opportunities, in order for the Company to meet its obligations as they become due and may not be successful in obtaining additional financing. In the event financing cannot be obtained, the Company may not be able to satisfy its obligations as they become due. Based on these factors, there is substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Response to the Coronavirus Disease 2019 (COVID-19) Pandemic on Our Business — On March 11, 2020, the World Health Organization declared the current COVID-19 outbreak to be a global pandemic, and on March 13, 2020, the United States declared a national emergency. In an effort to contain COVID-19 or slow its spread, governments around the world have enacted various measures, including orders to close all businesses not deemed "essential," isolate residents to their homes or places of residence and practice social distancing when engaging in essential activities. These actions and the global health crisis caused by COVID-19 have created significant volatility, uncertainty and economic disruption. Our business, results of operations and financial condition were adversely affected by the COVID-19 pandemic, especially beginning in mid-March, and such impact has materially worsened to date in the second and third quarters. The COVID-19 pandemic and measures taken to contain it have subjected our business, results of operations, financial condition, stock price and liquidity to a number of material risks and uncertainties, all of which may continue or worsen. The extent of the potential effect of the COVID-19 pandemic will depend on future actions and outcomes, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the outbreak, the short-term and long-term economic impact of the outbreak (including the effect on consumer discretionary spending and our employees in the markets in which we operate), the actions taken to mitigate the impact of the virus, and the pace of economic and financial market recovery when the COVID-19 pandemic subsides, among others. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation —These interim financial statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Certain disclosures have been condensed or omitted from these financial statements. Accordingly, they do not include all the information and notes required by accounting principles generally accepted in the United States of America ("GAAP") for complete consolidated financial statements, and should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary to fairly present the financial position as of, and the results of operations for, all periods presented. In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the condensed consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results. Certain reclassifications have been made to the prior period's consolidated financial statements and related footnotes to conform them to the current period presentation. Intercompany balances and transactions between consolidated entities are eliminated. Common stock units issuable —From time to time, the Company accepts payment from investors for common stock unit subscriptions pursuant to approved offerings of securities. Amounts received before completion and closing of the offerings are reported as liabilities. Fair Value Measurement —Our financial assets and liabilities consist of cash, accounts receivable, accounts payable and notes payable. The fair values of these instruments approximate their carrying amounts at each reporting date. The Company's non-financial assets measured at fair value on non-recurring basis include impairment measurements of oil and gas properties and the Company's investment in common stock before it became publicly traded. These are considered Level 3 measurements as they involve significant unobservable inputs. Major Customer and Concentration of Credit Risk —We have a limited number of customers. We estimate an allowance for doubtful accounts based on an analysis of specific customers, taking into consideration the age of past due accounts and an assessment of the customer's ability to pay. An allowance for doubtful accounts was not needed as of September 30, 2020 or December 31, 2019. Our rental income is derived from a single lessee on a commercial warehouse owned by the Company. There were no amounts due from this customer at September 30, 2020 or December 31, 2019. Recent Accounting Pronouncements— In February 2016, the FASB issued ASU 2016-02, Leases, |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations [Abstract] | |
DISCONTINUED OPERATIONS | 3. DISCONTINUED OPERATIONS In connection with the Transaction, management determined to fully divest of EHR's oil and gas activities. These activities are presented as discontinued operations for each of the periods presented and are being actively marketed for sale. The following is a summary of the carrying amounts of major classes of assets and liabilities of the discontinued operations to assets and liabilities held for sale: September 30, December 31, 2020 2019 Assets Accounts receivable - Current assets of discontinued operations held for sale $ - $ 20,835 Oil and Natural Gas Properties held for sale, at cost, using the successful efforts method 1,874,849 5,285,340 Accumulated DD&A (1,874,849 ) (4,089,179 ) Total oil and gas properties, net of discontinued operations held for sale - 1,196,161 Total assets of discontinued operations held for sale $ - $ 1,216,996 Liabilities Accrued liabilities $ 24,242 $ 92,196 Asset retirement obligations 56,834 52,776 Revenue payable 52,117 70,609 Note payable - 1,100,000 Current liabilities of discontinued operations held for sale 133,193 1,315,581 Asset retirement obligations - Long term liabilities of discontinued operations held for sale 122,222 119,657 Total liabilities of discontinued operations held for sale $ 255,415 $ 1,435,238 The following is a summary of the major classes of line items constituting loss on discontinued operations shown in the consolidated statements of operations: For the three months ended For the nine months ended 2020 2019 2020 2019 Revenue - Oil and gas sales $ 13,036 $ 50,044 $ 93,361 $ 417,431 Costs and Expenses Lease operating expense 16,762 66,555 77,099 303,780 Depreciation, depletion & amortization - 13,005 9,942 60,722 Accretion 4,263 3,966 12,868 29,008 Gain on disposal of oil & gas property interests - - (24,008 ) (1,666,790 ) Impairment & abandonment - - - 229,466 Mergers & acquisition costs - - - 100,000 Total costs and expenses 21,025 83,526 75,901 (943,814 ) Other income - - - (881,697 ) Interest expense - 13,750 22,917 27,500 Income from discontinued operations $ (7,989 ) $ (47,232 ) $ (5,457 ) $ 2,215,442 2019 Disposal of Oil & Gas Property Interests — On March 1, 2019, the Company entered into a Termination, Repurchase and Release Agreement (the "Agreement") with Lubbock Energy Partners LLC ("LEP") wherein the Company reassigned a 52% working interest in the oil & gas assets acquired in the San Andres Acquisition #1 back to LEP (with the Company continuing to hold an 8% working interest in those assets) in exchange for the return and cancellation of 412,500 shares of the Company's Series A Preferred Stock plus all accrued and unpaid dividends thereon and LEP's assumption of the Company's obligations under its Senior Subordinated Debentures totaling $400,000. Operatorship of the oil & gas assets was transferred by the Company to LEP, and amounts owed by the Company to LEP and all trade payables associated with the assets were memorialized in the form of a non-recourse promissory note totaling $1.1 million. The Company and LEP also entered into certain financial arrangements and mutual releases in order to settle all existing disputes relating to the assets arising prior to the effective date. The promissory note was due March 1, 2020, bore interest at 5% per annum and required no payments until maturity. The Company recognized a gain on disposal of $1,666,790 within the loss from discontinued operations in the consolidated statements of operations. In May 2020, the $1.1 million non-recourse promissory note and accrued interest thereon was settled upon LEP's foreclosure of the Company's Gap Band property interest. Impairment of Oil & Gas Property Interests — In the fourth quarter of 2019, the Company's oil and gas properties became impaired due to the market decline and the Company's determination to exit the oil and gas business. The Company's interest in the San Andres Acquisition #1 was determined to be fully impaired and its interest in the Gap Band property was determined to have a fair value of $1.2 million. Impairment expense totaling $3,730,678 was recorded in the fourth quarter of 2019 within the loss from discontinued operations in the consolidated statements of operations to reduce the carrying values of the Company's oil and gas property interests to their estimated fair values. 2020 Disposal of Gap Band Property Interest — In May 2020, LEP completed the foreclosure of the Company's remaining ownership interest in the Gap Band property due to the Company's default on its $1.1 million non-recourse promissory note and accrued interest thereon. The Company recognized a gain of $24,008 in the second quarter of 2020 as a result of this disposal. |
Notes Payable_Related Parties
Notes Payable—Related Parties | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
NOTES PAYABLE—RELATED PARTIES | 4. NOTES PAYABLE—RELATED PARTIES Senior Secured Promissory Note — On March 31, 2017, the Company entered into a subscription agreement under which we issued a $3,000,000 10% Senior Secured Promissory Note with an initial maturity of September 1, 2017 to Satellite Overseas (Holdings) Limited ("SOHL"), a stockholder of the Company's common shares. The Senior Secured Promissory Note was funded through three equal monthly draws of $1 million made in April, May, and June 2017. Upon maturity, at the option of the holder, the Senior Secured Promissory Note may either become due and payable or convert into shares of common stock at 75% of the share price in a qualified equity offering. The Company and SOHL agreed to nine interim extensions of the maturity date. As extended, the maturity date was April 30, 2020. There have been no formal demands of repayment since this maturity. The interest rate of the Senior Secured Promissory Note is 12%. The contingent put option in the Senior Secured Promissory Note is an embedded derivative that is recorded at fair value. The fair value calculation includes Level 3 inputs including the estimated fair value of the Company's common stock and assumptions regarding the probability that the contingent put will be exercised. Management determined that the probability that the convertible note will be settled in shares was near zero at inception and has remained near zero during the term of the promissory note. The holder has indicated to the Company that they do not intend to exercise the conversion option. Therefore, the Company concluded that the fair value of the embedded derivative was near zero throughout the term of the convertible note. The outstanding balance of the Senior Secured Promissory Note was $1,500,000 at September 30, 2020 and December 31, 2019. Accrued interest and fees on the Senior Secured Promissory Note were $372,500 and $247,500 at September 30, 2020 and December 31, 2019, respectively. Convertible Promissory Note — In October 2019, HTF issued a convertible promissory note to EHR in exchange for EHR's payment of HTF's accounts payable and Transaction expenses. The convertible promissory note bears interest at 4% per annum and matures on November 1, 2021. Commencing 180 days subsequent to the date of the convertible promissory note, any portion or all of the principal and accrued interest payable is convertible by the holder at any time prior to payment into the common stock of the Company at a rate of $0.352 of principal and/or interest per share. EHR distributed the convertible promissory note receivable to its shareholders prior to consummation of the Transaction. The outstanding balance owed by the Company under this convertible promissory note was $208,874 at September Subordinated Promissory Note — Our CEO made advances totaling $340,000 during the first nine months of 2020 under a subordinated promissory note due September 30, 2021. The note bears interest at 10% per annum. Accrued interest on this subordinated promissory note totaled $17,495 at September |
Other Indebtedness
Other Indebtedness | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
OTHER INDEBTEDNESS | 5. OTHER INDEBTEDNESS Mortgage Payable and Operating Lease — The Company is obligated under a mortgage payable, dated September 15, 2014 and as amended October 1, 2019, secured by its warehouse property located in Denver, Colorado. The note provides for a 25 year amortization period and an initial interest rate of 9% annually. As amended, the note matured on July 15, 2020 but was extended under terms of the amendment to January 15, 2021 after payment by the Company of a extension fee of 1% of the then outstanding principal. The rate during this first extension period is 10% annually and the monthly payment is $5,590. The maturity date may be subsequently extended at the Company's option to July 15, 2021 after payment again of a extension fee of 1% of the then outstanding principal. The interest rate will increase to 11% annually if this extension is made. As of September The Company leases the Denver warehouse property to a tenant under an operating leases expiring June 30, 2021 for a monthly rent of $7,500. The lease requires the tenant reimburse us for property taxes and insurance and maintains the interior and exterior of the warehouse (except for the roof). Minimum future rents for the remainder of 2020 are $22,500 and for 2021 are $45,000. Paycheck Protection Program Loan — Congress created the Paycheck Protection Program ("PPP") under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") to provide forgivable loans to eligible small businesses facing economic hardship to retain U.S. employees on their payroll during the Coronavirus Disease 2019 ("COVID-19") pandemic. PPP loan recipients may be eligible to have their loans forgiven if the funds were used for eligible expenses over the eight-week coverage period commencing when the loan was originally disbursed. The amount of forgiveness may be reduced if the percentage of eligible expenses attributed to nonpayroll expenses exceeds 25% of the loan, if employee headcount decreases, or compensation decreases by more than 25% for each employee making less than $100,000 per year, unless the reduced headcount or compensation levels are restored. On April 29, 2020, Generation Hemp, Inc. received disbursement of an approved PPP loan in the amount of $25,200. The Company anticipates that this entire disbursement amount will be forgiven under the current program requirements for forgiveness eligibility. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 6. COMMITMENTS AND CONTINGENCIES Leases — On March 31, 2019, the Company abandoned its office lease. This office lease required monthly payments of $10,802 until its expiration on May 31, 2021. No rent payments have been made since abandonment. The lessor has made a claim for rent and the Company has made a counterclaim due to the premises being uninhabitable due to the actions of other tenants located on the floor. At September Rent expense for the three and nine months ended September September Litigation — From time to time, we are subject to various litigation and other claims in the normal course of business. We cannot estimate the ultimate outcome of these matters. JDONE, LLC v. Grand Traverse Holdings, LLC and John Gallegos, Denver District Court Case No. 2019CV33723 JDONE is a wholly owned subsidiary of the Company and landlord of a commercial warehouse building that was leased to Grand Traverse on December 31, 2018 for a term of 61 months, with a personal guaranty from Defendant John Gallegos. On April 12, 2019, Grand Traverse presented JDONE with a forged, signed copy of the draft early termination amendment that JDONE had previously rejected. JDONE has suffered damages due to Defendant's misconduct of $823,504 plus interest and attorney's fees. A court ordered mediation was held in May 2020 without success. All material defendant motions have been denied by the court. The case is set for jury trial in calendar year 2021. KBSIII Tower at Lake Carolyn, LLC and Prime US-Tower at Lake Carolyn, LLC (collectively – "KBSIII") vs. Energy Hunter Resources, Inc. Plaintiff/Counterdefendant KBSIII is seeking lost rent on office space for periods after EHR vacated office premises located in Las Colinas, Texas. EHR has filed a counter suit alleging specific damages due to uninhabitable premises of the office space due to the intolerable conduct of other tenants located on the same floor. On December 23, 2020, the trial court entered a summary judgment against EHR for $230,712. The judgment provides for post-judgment interest at a rate of 5% per annum until paid and further provides for additional amounts owed should EHR pursue unsuccessful appeals to higher courts. The previous judge who entered the judgment has left the bench. A new judge has been appointed to this court and the Company has filed a motion for a new trial based upon erroneous amounts awarded in the summary judgment. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
EQUITY | 7. EQUITY Issuance of common stock units — In February 2020, the Company issued 250,000 common units for $100,000. Each unit consisted of one share of common stock and a warrant for purchase of one common share for $0.40 per share. The warrant expires March 1, 2022 and contain certain anti-dilution provisions requiring a downward adjustment to the exercise price of the warrant if dilutive instruments are issued at prices less than the warrant exercise price. Proceeds of this issuance were used for general corporate purposes. The common stock issued in the exchange was valued using the traded price of the common stock on February 20, 2020. The warrants were valued at $45,848 using a binomial lattice valuation model using inputs as of the exchange date. Our expected volatility assumption was based on the historical volatility of the Company's common stock (252%). The expected life assumption was based on the expiration date of the warrant (two years). The risk-free interest rate for the expected term of the warrant was based on the U.S.Treasury yield curve in effect at the time of measurement (1.39%). The warrants are classified within equity in the consolidated balance sheets. Under GAAP, the anti-dilution provisions will be accounted for if and when these provisions are triggered. Common stock warrants outstanding— Following is a summary of warrants outstanding as of September 30, 2020: # of Exercise Expiration Method of Issued upon exchange of EHR Series C Preferred Stock (1) 7,244,319 $ 0.352 November 27, 2021 Cash Issued upon exchange of EHR Series C Preferred Stock (1) 7,244,319 $ 0.352 November 27, 2021 Cashless Issued in February 2020 with common stock units (2) 250,000 $ 0.400 March 1, 2022 Cash (1) May be redeemed beginning October 1, 2020 for $0.0001 per warrant at the Company's option with 30 days advanced notice should the weighted average market price of common stock exceed $1.00 for any five out of seven consecutive trading days with a minimum average daily trading volume for such seven-day period of at least 25,000 shares of common stock. (2) Contains certain anti-dilution provisions requiring a downward adjustment to the exercise price of the warrant if dilutive instruments are issued at prices less than the warrant exercise price. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 8. INCOME TAXES Income tax provisions for interim quarterly periods are generally based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent or unusual items related specifically to interim periods. An income tax benefit for the three or nine months ended September 30, 2020 was not recognized because the Company expects to incur a tax loss in the current year. This tax loss is expected to result in a net operating loss carryforward at year-end; which is expected to be fully offset by a valuation allowance. The Company did not recognize any income tax benefit for the three or nine months ended September 30, 2019 because tax losses incurred for the year were fully offset by a valuation allowance against deferred tax assets. There were no uncertain tax positions as of September 30, 2020. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | 9. SUPPLEMENTAL CASH FLOW INFORMATION For the nine months ended 2020 2019 Cash paid for interest $ - $ - Cash paid for taxes - - Noncash investing and financing activities: Initial recognition of right to use asset and lease liabilities - 279,111 Right of use asset amortization - 31,537 Apply deposit against lease liability - 10,690 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | 10. EARNINGS (LOSS) PER SHARE The following is the computation of earnings (loss) per basic and diluted share: For the three months ended For the nine months ended 2020 2019 2020 2019 Amounts attributable to Generation Hemp: Numerator Net loss from continuing operations attributable to common stockholders $ (171,367 ) $ (336,304 ) $ (1,146,592 ) $ (1,695,107 ) (Loss) income from discontinued operations (7,489 ) (47,232 ) (5,115 ) 2,215,442 Net (loss) income attributable to common stockholders $ (178,856 ) $ (383,536 ) $ (1,151,707 ) $ 520,335 Denominator Weighted average shares used to compute basic EPS 17,380,317 520,949 17,500,308 452,920 Dilutive effect of preferred stock 75,947,376 75,947,376 75,947,376 75,947,376 Dilutive effect of common stock warrants - - - - Weighted average shares used to compute diluted EPS 93,327,693 76,468,325 93,447,684 76,400,296 Earnings (loss) per share: Loss from continuing operations Basic $ (0.01 ) $ (0.65 ) $ (0.07 ) $ (3.74 ) Diluted $ (0.01 ) $ (0.65 ) $ (0.07 ) $ (3.74 ) (Loss) income from discontinued operations Basic $ (0.00 ) $ (0.09 ) $ (0.00 ) $ 4.89 Diluted $ (0.00 ) $ (0.09 ) $ (0.00 ) $ 0.03 Earnings (loss) per share Basic $ (0.01 ) $ (0.74 ) $ (0.07 ) $ 1.15 Diluted $ (0.01 ) $ (0.74 ) $ (0.07 ) $ 0.01 The computation of diluted earnings per common share excludes the assumed conversion of the Series A Preferred Stock and exercise of common stock warrants in periods when we report a loss. The dilutive effect of the assumed exercise of outstanding warrants was calculated using the treasury stock method. A total of 14,738,638 outstanding warrants are excluded from the computation of diluted shares for the three months ended September 30, 2020 because their effect would be anti-dilutive. A total of 14,693,018 warrants were similarly excluded in the computation for the nine months ended September 30, 2020. The computation for the three and nine months ended September 30, 2019 excluded 14,488,638 outstanding warrants. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 11. SUBSEQUENT EVENTS Issuance of Subordinated Promissory Note to Our CEO — Our CEO made additional advances through 2020 under a subordinated promissory note due September 30, 2021. The total outstanding balance at January 29, 2021 was $490,000. Issuance of Preferred Stock Units — On December 30, 2020, the Company sold to certain accredited investors, including Gary C. Evans, Chief Executive Officer, an aggregate of 135 common stock units comprised of (i) one share of Series B Redeemable Convertible Preferred Stock, no par value, and (ii) one warrant exercisable for 50,000 shares of common stock of the Company. The sale of the preferred stock units for $10,000 each resulted in aggregate gross proceeds of approximately $1.35 million, before deducting estimated offering expenses payable by the Company. Substantially all of the proceeds raised in the offering were used to fund the acquisition of assets of Halcyon Thruput, LLC, expenses related thereto and for general corporate purposes. Each share of Series B Preferred Stock is initially convertible into 25,000 shares of common stock, subject to adjustment. Holders of Series B Preferred Stock are entitled to receive dividends of 6.00% per annum based on the stated value equal to $10,000 per share. Except as otherwise required by law, the Series B Preferred Stock does not have voting rights. However, as long as any shares of Series B Preferred Stock are outstanding, the Company will not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series B Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series B Preferred Stock, (b) alter or amend the related certificate of designation, (c) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series B Preferred Stock, (d) repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its common stock, (e) enter into any agreement with respect to any of the foregoing, or (f) pay cash dividends or distributions on any equity securities of the Company other than pursuant to the terms of the its outstanding Series B Preferred Stock. The Series B Preferred Stock does not have a preference upon any liquidation, dissolution or winding-up of the Company. Beginning the later of June 30, 2021 or the effectiveness of any registration statement registering the underlying common shares, all or any portion of the Series B Preferred Stock may be converted, at their holder's option, into 25,000 shares of common stock, as adjusted for any stock dividends, splits, combinations or similar events. At any time after the occurrence of a "Qualifying Event," the Company, upon 5-day written notice, shall have the right to cause each share of Series B Preferred Stock (and all accrued in-kind dividends with respect thereto) to be converted into common stock. For purposes this automatic conversion of the Series B Preferred Stock, a "Qualifying Event" shall have occurred if (A) (1) the rolling five (5)-trading day volume-weighted average trading price of shares of the common stock exceeds $1.00, and (2) there shall be an effective registration statement under the Securities Act of 1933, as amended covering all of the shares of common stock which would be issuable upon conversion of all of the outstanding shares of Series B Preferred Stock or (B) the Company closes a firm commitment underwriting of the common stock on a Form S-1 Registration Statement with aggregate gross proceeds of at least $5,000,000 at a price per share equal to or greater than $1.00. The Series B Preferred Stock may be redeemed by the Company for its stated value, plus accrued and unpaid dividends, at any time. On March 31, 2021, and June 30, 2021, September 30, 2021, December 31, 2021, a payment of 12.5% of the total amount of Series B Preferred Stock then outstanding plus accrued dividends will be due from the Company to each Holder of Series B Preferred Stock as a partial redemption by the Company of such Holder. Each warrant is exercisable until the 24-month anniversary of the date of issuance at an exercise price of $0.352 per share. The exercise price of the warrants will be subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction. The warrants may only be exercised for cash. Issuance of Subordinated Promissory Note and Warrants to Investor — On December 30, 2020, the Company issued a subordinated promissory note in principal amount of $500,000 to an accredited investor. The unpaid balance of the Subordinated Note bears interest at a rate of 10% per annum. The subordinated note and accrued and unpaid interest are due September 30, 2021. The Company will make payments of principal of $250,000 on March 30 and September 30, 2021. If at any time prior to September 30, 2021, the Company raises new equity capital in the amount of $5,000,000 or more, then within five (5) business days of closing, repayment of all outstanding principal and interest on the Subordinated Note will be due. In addition, the holder of the Subordinated Note received a warrant to purchase 500,000 shares of Common Stock on terms and conditions substantially similar to those provided in the above described warrant. Acquisition of Assets of Halcyon Thruput, LLC — On January 11, 2021, the Company completed the acquisition of 100% of the assets of Halcyon Thruput, LLC ("Halcyon Thruput") pursuant to the Asset Purchase Agreement dated March 7, 2020, as amended on January 11, 2021. The purchase consideration totaled approximately $5.1 million consisting of 6,250,000 shares of Company common stock valued at $2.5 million (valued at $0.40 per share; restricted from trading for a period of up to one year), $1.75 million in cash, a promissory note for $850 thousand issued by the Company's subsidiary, GenH Halcyon Acquisition, LLC, and guaranteed by Gary C. Evans, CEO of the Company, and assumption of approximately $1.0 million of new indebtedness of Halcyon Thruput. The Company will continue Halcyon Thruput's business of providing post-harvest and midstream services to growers by drying, processing, cleaning, stripping harvested hemp directly from the field and wetbaled at its 48,000 square foot facility located in Hopkinsville, Kentucky. Concurrent with the closing of the asset acquisition, the Company entered into term employment agreements with Jack Sibley and Watt Stephens to serve as Vice Presidents of GenH Halcyon Acquisition, LLC for a term of at least two years. The term employment agreements each provide for the issuance of 250,000 shares of restricted common stock of the Company as a signing bonus. Such shares are subject to restrictions on the trading or transfer of such common stock as described therein. Further, the term employment agreements each provide for the payment by the executives of liquidated damages if the employee terminates his employment without good reason during the initial term, other than due to the employee's death or disability. Such liquidated damages total $600,000 if such termination occurs on or prior to January 11, 2022 or $375,000 if such termination occurs after January 11, 2022 and prior to January 11, 2023. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary to fairly present the financial position as of, and the results of operations for, all periods presented. In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the condensed consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results. Certain reclassifications have been made to the prior period's consolidated financial statements and related footnotes to conform them to the current period presentation. Intercompany balances and transactions between consolidated entities are eliminated. |
Common stock units issuable | Common stock units issuable |
Fair Value Measurement | Fair Value Measurement The Company's non-financial assets measured at fair value on non-recurring basis include impairment measurements of oil and gas properties and the Company's investment in common stock before it became publicly traded. These are considered Level 3 measurements as they involve significant unobservable inputs. |
Major Customer and Concentration of Credit Risk | Major Customer and Concentration of Credit Risk —We have a limited number of customers. We estimate an allowance for doubtful accounts based on an analysis of specific customers, taking into consideration the age of past due accounts and an assessment of the customer's ability to pay. An allowance for doubtful accounts was not needed as of September 30, 2020 or December 31, 2019. Our rental income is derived from a single lessee on a commercial warehouse owned by the Company. There were no amounts due from this customer at September 30, 2020 or December 31, 2019. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements— Leases, |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations [Abstract] | |
Schedule of discontinued operations to assets and liabilities | September 30, December 31, 2020 2019 Assets Accounts receivable - Current assets of discontinued operations held for sale $ - $ 20,835 Oil and Natural Gas Properties held for sale, at cost, using the successful efforts method 1,874,849 5,285,340 Accumulated DD&A (1,874,849 ) (4,089,179 ) Total oil and gas properties, net of discontinued operations held for sale - 1,196,161 Total assets of discontinued operations held for sale $ - $ 1,216,996 Liabilities Accrued liabilities $ 24,242 $ 92,196 Asset retirement obligations 56,834 52,776 Revenue payable 52,117 70,609 Note payable - 1,100,000 Current liabilities of discontinued operations held for sale 133,193 1,315,581 Asset retirement obligations - Long term liabilities of discontinued operations held for sale 122,222 119,657 Total liabilities of discontinued operations held for sale $ 255,415 $ 1,435,238 |
Schedule of discontinued operations shown in the consolidated statements of operations | For the three months ended For the nine months ended 2020 2019 2020 2019 Revenue - Oil and gas sales $ 13,036 $ 50,044 $ 93,361 $ 417,431 Costs and Expenses Lease operating expense 16,762 66,555 77,099 303,780 Depreciation, depletion & amortization - 13,005 9,942 60,722 Accretion 4,263 3,966 12,868 29,008 Gain on disposal of oil & gas property interests - - (24,008 ) (1,666,790 ) Impairment & abandonment - - - 229,466 Mergers & acquisition costs - - - 100,000 Total costs and expenses 21,025 83,526 75,901 (943,814 ) Other income - - - (881,697 ) Interest expense - 13,750 22,917 27,500 Income from discontinued operations $ (7,989 ) $ (47,232 ) $ (5,457 ) $ 2,215,442 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of warrants outstanding | # of Exercise Expiration Method of Issued upon exchange of EHR Series C Preferred Stock (1) 7,244,319 $ 0.352 November 27, 2021 Cash Issued upon exchange of EHR Series C Preferred Stock (1) 7,244,319 $ 0.352 November 27, 2021 Cashless Issued in February 2020 with common stock units (2) 250,000 $ 0.400 March 1, 2022 Cash (1) May be redeemed beginning October 1, 2020 for $0.0001 per warrant at the Company's option with 30 days advanced notice should the weighted average market price of common stock exceed $1.00 for any five out of seven consecutive trading days with a minimum average daily trading volume for such seven-day period of at least 25,000 shares of common stock. (2) Contains certain anti-dilution provisions requiring a downward adjustment to the exercise price of the warrant if dilutive instruments are issued at prices less than the warrant exercise price. |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of supplemental cash flow information | For the nine months ended 2020 2019 Cash paid for interest $ - $ - Cash paid for taxes - - Noncash investing and financing activities: Initial recognition of right to use asset and lease liabilities - 279,111 Right of use asset amortization - 31,537 Apply deposit against lease liability - 10,690 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of earnings (loss) per basic and diluted share | For the three months ended For the nine months ended 2020 2019 2020 2019 Amounts attributable to Generation Hemp: Numerator Net loss from continuing operations attributable to common stockholders $ (171,367 ) $ (336,304 ) $ (1,146,592 ) $ (1,695,107 ) (Loss) income from discontinued operations (7,489 ) (47,232 ) (5,115 ) 2,215,442 Net (loss) income attributable to common stockholders $ (178,856 ) $ (383,536 ) $ (1,151,707 ) $ 520,335 Denominator Weighted average shares used to compute basic EPS 17,380,317 520,949 17,500,308 452,920 Dilutive effect of preferred stock 75,947,376 75,947,376 75,947,376 75,947,376 Dilutive effect of common stock warrants - - - - Weighted average shares used to compute diluted EPS 93,327,693 76,468,325 93,447,684 76,400,296 Earnings (loss) per share: Loss from continuing operations Basic $ (0.01 ) $ (0.65 ) $ (0.07 ) $ (3.74 ) Diluted $ (0.01 ) $ (0.65 ) $ (0.07 ) $ (3.74 ) (Loss) income from discontinued operations Basic $ (0.00 ) $ (0.09 ) $ (0.00 ) $ 4.89 Diluted $ (0.00 ) $ (0.09 ) $ (0.00 ) $ 0.03 Earnings (loss) per share Basic $ (0.01 ) $ (0.74 ) $ (0.07 ) $ 1.15 Diluted $ (0.01 ) $ (0.74 ) $ (0.07 ) $ 0.01 |
Business (Details)
Business (Details) - shares | 1 Months Ended | 9 Months Ended |
Nov. 27, 2019 | Sep. 30, 2020 | |
Common stock purchase of approximately | 68.00% | |
Exchange transaction effective acquired additional, percentage | 26.00% | |
Owns approximately, percentage | 94.00% | |
Description of business, description | Cochran County, Texas within the Slaughter-Levelland Field of the San Andres formation in the Northwest Shelf of West Texas. EHR held an 8.0% interest in certain oil and gas and/ or oil, gas and mineral leases, lands interests, and other properties located in Cochran County. EHR's oil & gas activities are currently held for sale and are presented in these consolidated financial statements as discontinued operations for each of the periods presented. | |
Converted common stock, shares | 12 | |
Series A Preferred Stock [Member] | ||
Issuance of shares | 6,328,948 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 1 Months Ended |
Jan. 02, 2019USD ($) | |
Summary of Significant Accounting Policies (Textual) | |
Right-of-use assets and lease liabilities | $ 279,111 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Current assets of discontinued operations held for sale | $ 20,835 | |
Oil and Natural Gas Properties held for sale, at cost, using the successful efforts method | 1,874,849 | 5,285,340 |
Accumulated DD&A | (1,874,849) | (4,089,179) |
Total oil and gas properties, net of discontinued operations held for sale | 1,196,161 | |
Total assets of discontinued operations held for sale | 1,216,996 | |
Liabilities | ||
Accrued liabilities | 24,242 | 92,196 |
Asset retirement obligations | 56,834 | 52,776 |
Revenue payable | 52,117 | 70,609 |
Note payable | 1,100,000 | |
Current liabilities of discontinued operations held for sale | 133,193 | 1,315,581 |
Asset retirement obligations | ||
Long term liabilities of discontinued operations held for sale | 122,222 | 119,657 |
Total liabilities of discontinued operations held for sale | $ 255,415 | $ 1,435,238 |
Discontinued Operations (Deta_2
Discontinued Operations (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue - | ||||
Oil and gas sales | $ 13,036 | $ 50,044 | $ 93,361 | $ 417,431 |
Costs and Expenses | ||||
Lease operating expense | 16,762 | 66,555 | 77,099 | 303,780 |
Depreciation, depletion & amortization | 13,005 | 9,942 | 60,722 | |
Accretion | 4,263 | 3,966 | 12,868 | 29,008 |
Gain on disposal of oil & gas property interests | (24,008) | (1,666,790) | ||
Impairment & abandonment | 229,466 | |||
Mergers & acquisition costs | 100,000 | |||
Total costs and expenses | 21,025 | 83,526 | 75,901 | (943,814) |
Other income | (881,697) | |||
Interest expense | 13,750 | 22,917 | 27,500 | |
Income from discontinued operations | $ (7,989) | $ (47,232) | $ (5,457) | $ 2,215,442 |
Discontinued Operations (Deta_3
Discontinued Operations (Details Textual) - USD ($) | Mar. 01, 2020 | Mar. 01, 2019 | Dec. 31, 2019 | Jun. 30, 2020 | May 31, 2020 |
Discontinued Operations (Textual) | |||||
Oil & gas assets acquired percentage | 52.00% | ||||
Working interest percentage | 5.00% | 8.00% | |||
Exchange for the return and cancellation | 412,500 | ||||
Debentures totaling | $ 400,000 | ||||
Promissory note, due date | Mar. 1, 2020 | ||||
Recognized a gain on disposal | $ 1,666,790 | $ 24,008 | |||
Promissory note and accrued interest | $ 1,100,000 | $ 1,100,000 | |||
Determined to have a fair value | $ 1,200,000 | ||||
Loss from discontinued operations | $ 3,730,678 |
Notes Payable_Related Parties (
Notes Payable—Related Parties (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 31, 2019 | Jun. 30, 2017 | May 31, 2017 | Apr. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2020 | Dec. 31, 2019 | |
Notes Payable—Related Parties (Textual) | |||||||
Interest rate | 4.00% | 12.00% | |||||
Maturity date | Nov. 1, 2021 | Apr. 30, 2020 | |||||
Monthly draws | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | ||||
Convertible interest rate | 75.00% | ||||||
Accrued interest and fees | $ 24,242 | $ 92,196 | |||||
Interest rate per share | $ 0.352 | ||||||
Outstanding balance amount | 208,874 | 208,874 | |||||
10% Senior Secured Promissory Note [Member] | |||||||
Notes Payable—Related Parties (Textual) | |||||||
Note Payable debt | $ 3,000,000 | ||||||
Maturity date | Sep. 1, 2017 | ||||||
Senior Secured Promissory Note [Member] | |||||||
Notes Payable—Related Parties (Textual) | |||||||
Note Payable debt | 1,500,000 | 1,500,000 | |||||
Accrued interest and fees | $ 372,500 | $ 247,500 | |||||
Subordinated Promissory Note [Member] | |||||||
Notes Payable—Related Parties (Textual) | |||||||
Interest rate | 10.00% | ||||||
Note Payable debt | $ 340,000 | ||||||
Note payable, description | Our CEO made advances totaling $340,000 during the first nine months of 2020 under a subordinated promissory note due September 30, 2021. The note bears interest at 10% per annum. Accrued interest on this subordinated promissory note totaled $17,495 at September 30, 2020. |
Other Indebtedness (Details)
Other Indebtedness (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 29, 2020 | |
Other Indebtedness (Textual) | |||||
Mortgage payable, description | The note provides for a 25 year amortization period and an initial interest rate of 9% annually. As amended, the note matured on July 15, 2020 but was extended under terms of the amendment to January 15, 2021 after payment by the Company of a extension fee of 1% of the then outstanding principal. The rate during this first extension period is 10% annually and the monthly payment is $5,590. The maturity date may be subsequently extended at the Company's option to July 15, 2021 after payment again of a extension fee of 1% of the then outstanding principal. The interest rate will increase to 11% annually if this extension is made. | ||||
Mortgage payable | $ 614,346 | $ 626,086 | |||
Mortgage maturity date | Jan. 15, 2021 | ||||
Operating leases expiration date | Jun. 30, 2021 | ||||
Monthly rent | $ 7,500 | ||||
PPP loan amount | $ 25,200 | ||||
PPP loan [Member] | |||||
Other Indebtedness (Textual) | |||||
Mortgage payable, description | The amount of forgiveness may be reduced if the percentage of eligible expenses attributed to nonpayroll expenses exceeds 25% of the loan, if employee headcount decreases, or compensation decreases by more than 25% for each employee making less than $100,000 per year, unless the reduced headcount or compensation levels are restored. | ||||
Forecast [Member] | |||||
Other Indebtedness (Textual) | |||||
Minimum future rents | $ 45,000 | $ 22,500 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Apr. 12, 2019 | Dec. 23, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 |
Commitments and Contingencies (Textual) | ||||||||
Accrued unpaid rent | $ 252,583 | $ 252,583 | ||||||
Rent expense | $ 0 | $ 5,904 | $ 8,380 | $ 60,980 | ||||
Subsequent Event [Member] | ||||||||
Commitments and Contingencies (Textual) | ||||||||
Amount of summary judgment | $ 230,712 | |||||||
Litigation Settlement interest percentage | 5.00% | |||||||
Office [Member] | ||||||||
Commitments and Contingencies (Textual) | ||||||||
Lease | $ 10,802 | |||||||
Lease expiration date | May 31, 2021 | |||||||
Grand Traverse [Member] | ||||||||
Commitments and Contingencies (Textual) | ||||||||
Lease term | 61 months | |||||||
Interest and attorney fees | $ 823,504 |
Equity (Details)
Equity (Details) | 9 Months Ended | |
Sep. 30, 2020$ / sharesshares | ||
Issued in February 2020 [Member] | Common Stock Units [Member] | ||
Number of warrants | shares | 250,000 | [1] |
Exercise Price (each) | $ / shares | $ 0.400 | [1] |
Expiration Date | Mar. 1, 2022 | [1] |
Method of Exercise | Cash | [1] |
Issued upon exchange of EHR [Member] | Series C Preferred Stock [Member] | ||
Number of warrants | shares | 7,244,319 | [2] |
Exercise Price (each) | $ / shares | $ 0.352 | [2] |
Expiration Date | Nov. 27, 2021 | [2] |
Method of Exercise | Cash | [2] |
Issued upon exchange of EHR [Member] | Series C Preferred Stock [Member] | ||
Number of warrants | shares | 7,244,319 | [2] |
Exercise Price (each) | $ / shares | $ 0.352 | [2] |
Expiration Date | Nov. 27, 2021 | [2] |
Method of Exercise | Cashless | [2] |
[1] | Contains certain anti-dilution provisions requiring a downward adjustment to the exercise price of the warrant if dilutive instruments are issued at prices less than the warrant exercise price. | |
[2] | May be redeemed beginning October 1, 2020 for $0.0001 per warrant at the Company's option with 30 days advanced notice should the weighted average market price of common stock exceed $1.00 for any five out of seven consecutive trading days with a minimum average daily trading volume for such seven-day period of at least 25,000 shares of common stock. |
Equity (Details Textual)
Equity (Details Textual) - Common Stock [Member] - USD ($) | 1 Months Ended | |
Feb. 29, 2020 | Feb. 20, 2020 | |
Equity (Textual) | ||
Issued common units | 250,000 | |
Issued common units, value | $ 100,000 | |
Purchase of common share per share | $ 0.40 | |
Warrant expiry date | Mar. 1, 2022 | |
Warrants value | $ 45,848 | |
Expected volatility assumption | 252.00% | |
Expected life assumption | 2 years | |
Warrant yield curve | 1.39% | |
Warrants, description | May be redeemed beginning October 1, 2020 for $0.0001 per warrant at the Company’s option with 30 days advanced notice should the weighted average market price of common stock exceed $1.00 for any five out of seven consecutive trading days with a minimum average daily trading volume for such seven-day period of at least 25,000 shares of common stock. |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | ||
Cash paid for interest | ||
Cash paid for taxes | ||
Noncash investing and financing activities: | ||
Initial recognition of right to use asset and lease liabilities | 279,111 | |
Right of use asset amortization | 31,537 | |
Apply deposit against lease liability | $ 10,690 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator | ||||
Net loss from continuing operations attributable to common stockholders | $ (171,367) | $ (336,304) | $ (1,146,592) | $ (1,695,107) |
(Loss) income from discontinued operations | (7,489) | (47,232) | (5,115) | 2,215,442 |
Net (loss) income attributable to common stockholders | $ (178,856) | $ (383,536) | $ (1,151,707) | $ 520,335 |
Denominator | ||||
Weighted average shares used to compute basic EPS | 17,380,317 | 520,949 | 17,500,308 | 452,920 |
Dilutive effect of preferred stock | 75,947,376 | 75,947,376 | 75,947,376 | 75,947,376 |
Dilutive effect of common stock warrants | ||||
Weighted average shares used to compute diluted EPS | 93,327,693 | 76,468,325 | 93,447,684 | 76,400,296 |
Loss from continuing operations | ||||
Basic | $ (0.01) | $ (0.65) | $ (0.07) | $ (3.74) |
Diluted | (0.01) | (0.65) | (0.07) | (3.74) |
(Loss) income from discontinued operations | ||||
Basic | 0 | (0.09) | 0 | 4.89 |
Diluted | 0 | (0.09) | 0 | 0.03 |
Earnings (loss) per share | ||||
Basic | (0.01) | (0.74) | (0.07) | 1.15 |
Diluted | $ (0.01) | $ (0.74) | $ (0.07) | $ 0.01 |
Earnings (Loss) Per Share (De_2
Earnings (Loss) Per Share (Details Textual) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings (Loss) Per Share (Textual) | ||||
Warrants, shares | 14,738,638 | 14,488,638 | 14,693,018 | 14,488,638 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Jan. 11, 2021 | Sep. 30, 2021 | Mar. 30, 2021 | Jan. 29, 2021 | Dec. 30, 2020 | Oct. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Subordinated promissory note due date | Jan. 15, 2021 | |||||||
Aggregate gross proceeds | $ 100,000 | |||||||
Receive dividends per annum | 4.00% | 12.00% | ||||||
Subsequent event, description | At any time after the occurrence of a “Qualifying Event,” the Company, upon 5-day written notice, shall have the right to cause each share of Series B Preferred Stock (and all accrued in-kind dividends with respect thereto) to be converted into common stock. For purposes this automatic conversion of the Series B Preferred Stock, a “Qualifying Event” shall have occurred if (A) (1) the rolling five (5)-trading day volume-weighted average trading price of shares of the common stock exceeds $1.00, and (2) there shall be an effective registration statement under the Securities Act of 1933, as amended covering all of the shares of common stock which would be issuable upon conversion of all of the outstanding shares of Series B Preferred Stock or (B) the Company closes a firm commitment underwriting of the common stock on a Form S-1 Registration Statement with aggregate gross proceeds of at least $5,000,000 at a price per share equal to or greater than $1.00. | |||||||
Series B preferred stock redeemed, description | The Series B Preferred Stock may be redeemed by the Company for its stated value, plus accrued and unpaid dividends, at any time. On March 31, 2021, and June 30, 2021, September 30, 2021, December 31, 2021, a payment of 12.5% of the total amount of Series B Preferred Stock then outstanding plus accrued dividends will be due from the Company to each Holder of Series B Preferred Stock as a partial redemption by the Company of such Holder. | |||||||
Issuance of warrant exercise price | $ 0.352 | |||||||
New equity capital, description | If at any time prior to September 30, 2021, the Company raises new equity capital in the amount of $5,000,000 or more, then within five (5) business days of closing, repayment of all outstanding principal and interest on the Subordinated Note will be due. | |||||||
Warrant to purchase shares of common stock | 500,000 | |||||||
Shares of restricted common stock | 250,000 | |||||||
Term of employment agreements | Further, the term employment agreements each provide for the payment by the executives of liquidated damages if the employee terminates his employment without good reason during the initial term, other than due to the employee’s death or disability. Such liquidated damages total $600,000 if such termination occurs on or prior to January 11, 2022 or $375,000 if such termination occurs after January 11, 2022 and prior to January 11, 2023. | |||||||
Forecast [Member] | ||||||||
Sale of common stock units | $ 10,000 | |||||||
Aggregate gross proceeds | $ 1,350,000 | |||||||
Series B preferred stock convertible into common stock | 25,000 | |||||||
Receive dividends per annum | 6.00% | |||||||
Convertible common stock, description | Holders of Series B Preferred Stock are entitled to receive dividends of 6.00% per annum based on the stated value equal to $10,000 per share. | |||||||
Series B preferred stock converted, description | Beginning the later of June 30, 2021 or the effectiveness of any registration statement registering the underlying common shares, all or any portion of the Series B Preferred Stock may be converted, at their holder’s option, into 25,000 shares of common stock, as adjusted for any stock dividends, splits, combinations or similar events. | |||||||
Payments of principal | $ 250,000 | $ 250,000 | ||||||
Forecast [Member] | Gary C. Evans [Member] | ||||||||
Aggregate preferred stock sold | 135 | |||||||
Warrant exercisable for preferred stock | 50,000 | |||||||
Forecast [Member] | Halcyon Thruput, LLC [Member] | ||||||||
Acquisition of assets percentage | 100.00% | |||||||
Shares of common stock value | $ 2,500,000 | |||||||
Purchase consideration | $ 5,100,000 | |||||||
Shares of common stock | 6,250,000 | |||||||
Asset purchase agreement, description | (valued at $0.40 per share; restricted from trading for a period of up to one year), $1.75 million in cash, a promissory note for $850 thousand issued by the Company’s subsidiary, GenH Halcyon Acquisition, LLC, and guaranteed by Gary C. Evans, CEO of the Company, and assumption of approximately $1.0 million of new indebtedness of Halcyon Thruput. | |||||||
Chief Executive Officer [Member] | Forecast [Member] | ||||||||
Aggregate preferred stock sold | 135 | |||||||
Warrant exercisable for preferred stock | 50,000 | |||||||
Accredited Investor [Member] | Forecast [Member] | ||||||||
Subordinated promissory note due date | Sep. 30, 2021 | |||||||
Principal amount | $ 500,000 | |||||||
Note bears interest rate | 10.00% | |||||||
Subordinated Promissory Note [Member] | ||||||||
Receive dividends per annum | 10.00% | |||||||
Subordinated Promissory Note [Member] | Chief Executive Officer [Member] | Forecast [Member] | ||||||||
Subordinated promissory note due date | Sep. 30, 2021 | |||||||
Outstanding balance | $ 490,000 |