Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Apr. 12, 2022 | Jun. 30, 2021 | |
Document Information Line Items | |||
Entity Registrant Name | Generation Hemp, Inc. | ||
Trading Symbol | GENH | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 113,114,002 | ||
Entity Public Float | $ 24,359,385 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001527102 | ||
Entity Current Reporting Status | No | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Annual Report | true | ||
Entity File Number | 333-176154 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 26-3119496 | ||
Entity Address, Address Line One | 8533 Midway Road | ||
Entity Address, City or Town | Dallas | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 75209 | ||
City Area Code | (469) | ||
Local Phone Number | 209-6154 | ||
Title of 12(b) Security | Common Stock, par value $0.00001 per share | ||
Entity Interactive Data Current | Yes | ||
Auditor Firm ID | 688 | ||
Auditor Name | Marcum llp | ||
Auditor Location | Houston, Texas | ||
Document Transition Report | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash | $ 20,656 | $ 2,776,425 |
Inventories | 212,518 | |
Prepaid expenses | 4,723 | |
Total Current Assets | 237,897 | 2,776,425 |
Property and Equipment | ||
Property and equipment | 3,206,107 | 1,222,430 |
Accumulated depreciation | (625,445) | (102,938) |
Total Property and Equipment, Net | 2,580,662 | 1,119,492 |
Operating lease right-of-use asset | 263,065 | |
Intangible assets, net | 1,857,908 | |
Goodwill | 799,888 | |
Other assets | 407,000 | 23,077 |
Total Assets | 6,146,420 | 3,918,994 |
Current Liabilities | ||
Accounts payable | 883,485 | 1,053,542 |
Accrued liabilities | 410,990 | 337,588 |
Payables to related parties | 204,007 | 448,271 |
Operating lease liability - related party | 101,238 | |
Notes payable – related parties | 2,183,551 | 3,336,592 |
Other indebtedness - current | 501,668 | 619,461 |
Common stock issuable | 50,000 | |
Current liabilities of discontinued operations held for sale | 153,482 | 140,068 |
Total Current Liabilities | 4,438,421 | 5,985,522 |
Operating lease liability - related party, net of current portion | 161,827 | |
Other indebtedness - long-term | 25,200 | |
Long-term liabilities of discontinued operations held for sale | 162,948 | 144,149 |
Total Liabilities | 4,763,196 | 6,154,871 |
Commitments and Contingencies | ||
Series B redeemable preferred stock, no par value, $10,000 stated value, 300 shares authorized, 118 and 135 shares issued and outstanding at December 31, 2021 and 2020 | 591,558 | 729,058 |
Equity (Deficit) | ||
Series A preferred stock, $0.00001 par value; $1.00 stated value; 6,500,000 shares authorized, none and 6,328,948 shares issued and outstanding at December 31, 2021 and 2020 | 4,975,503 | |
Common stock, $0.00001 par value; 200,000,000 shares authorized, 113,094,002 shares issued and outstanding at December 31, 2021 | 1,131 | |
Common stock, no par value; 100,000,000 shares authorized, 17,380,317 shares issued and outstanding at December 31, 2020 | 6,083,480 | |
Additional paid-in capital | 29,150,258 | 4,436,018 |
Accumulated deficit | (28,118,245) | (18,220,705) |
Generation Hemp equity | 1,033,144 | (2,725,704) |
Noncontrolling interest | (241,478) | (239,231) |
Total Equity (Deficit) | 791,666 | (2,964,935) |
Total Liabilities and Equity (Deficit) | $ 6,146,420 | $ 3,918,994 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Common stock, par value (in Dollars per share) | $ 0.00001 | |
Common stock, shares authorized | 200,000,000 | 100,000,000 |
Common stock, shares issued | 113,094,002 | 17,380,317 |
Common stock, shares outstanding | 113,094,002 | 17,380,317 |
Series B Redeemable Preferred Stock | ||
Preferred stock par value (in Dollars per share) | ||
Preferred stock, Stated Value (in Dollars) | $ 10,000 | $ 10,000 |
Preferred stock, shares authorized | 300 | 300 |
Preferred stock, shares issued | 118 | 135 |
Preferred stock, shares outstanding | 118 | 135 |
Series A Preferred Stock | ||
Preferred stock par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 6,500,000 | 6,500,000 |
Preferred stock, shares issued | 6,328,948 | |
Preferred stock, shares outstanding | 6,328,948 | |
Preferred stock, stated value (in Dollars per share) | $ 1 | $ 1 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue | ||
Post-harvest and midstream services | $ 592,024 | |
Rental | 82,500 | 90,000 |
Total revenue | 674,524 | 90,000 |
Costs and Expenses | ||
Cost of revenue (exclusive of items shown separately below) | 652,521 | |
Depreciation and amortization | 1,340,425 | 71,000 |
Merger and acquisition costs | 16,115 | 99,880 |
General and administrative | 7,787,081 | 1,141,957 |
Total costs and expenses | 9,796,142 | 1,312,837 |
Operating loss | (9,121,618) | (1,222,837) |
Other expense (income) | ||
Interest and other income | (25,424) | (1) |
Change in fair value of marketable security | (11,770) | 9,882 |
Interest expense | 708,338 | 286,372 |
Total other expense | 671,144 | 296,253 |
Loss from continuing operations | (9,792,762) | (1,519,090) |
Loss from discontinued operations | (32,213) | (34,259) |
Net loss | (9,824,975) | (1,553,349) |
Less: net loss attributable to noncontrolling interests | (2,247) | (54,680) |
Net loss attributable to Generation Hemp | $ (9,822,728) | $ (1,498,669) |
Loss from continuing operations | ||
Basic (in Dollars per share) | $ (0.17) | $ (0.08) |
Diluted (in Dollars per share) | (0.17) | (0.08) |
Loss from discontinued operations | ||
Basic (in Dollars per share) | ||
Diluted (in Dollars per share) | ||
Earnings (loss) per share | ||
Basic (in Dollars per share) | (0.17) | (0.09) |
Diluted (in Dollars per share) | $ (0.17) | $ (0.09) |
Statements of Changes in Stockh
Statements of Changes in Stockholders’ Equity (Deficit) - USD ($) | Series B Redeemable Preferred Stock | Series A Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Noncontrolling Interest | Total |
Balance at Dec. 31, 2019 | $ 4,975,503 | $ 6,029,328 | $ 3,426,946 | $ (16,722,036) | $ (184,551) | $ (2,474,810) | |
Balance (in Shares) at Dec. 31, 2019 | 6,328,948 | 17,130,317 | |||||
Issuances of common stock units | $ 54,152 | 45,848 | 100,000 | ||||
Issuances of common stock units (in Shares) | 250,000 | ||||||
Issuance of Series B preferred units | $ 729,058 | 620,942 | 620,942 | ||||
Issuance of Series B preferred units (in Shares) | 135 | ||||||
Issuance of warrants with subordinated note | 114,094 | 114,094 | |||||
Issuance of warrants with secured note | 228,188 | 228,188 | |||||
Net loss | (1,498,669) | (54,680) | (1,553,349) | ||||
Balance at Dec. 31, 2020 | $ 729,058 | $ 4,975,503 | $ 6,083,480 | 4,436,018 | (18,220,705) | (239,231) | (2,964,935) |
Balance (in Shares) at Dec. 31, 2020 | 135 | 6,328,948 | 17,380,317 | ||||
Acquisition of Certain Assets of Halcyon Thruput, LLC | $ 2,500,000 | 2,500,000 | |||||
Acquisition of Certain Assets of Halcyon Thruput, LLC (in Shares) | 6,250,000 | ||||||
Issuances of common stock units | $ 136,717 | 838,283 | 975,000 | ||||
Issuances of common stock units (in Shares) | 1,758,333 | ||||||
Warrant exercises | $ 4,771,679 | (1,429,679) | 3,342,000 | ||||
Warrant exercises (in Shares) | 9,494,316 | ||||||
Issuance of common shares for Convertible Promissory Note | $ 217,769 | 217,769 | |||||
Issuance of common shares for Convertible Promissory Note (in Shares) | 618,660 | ||||||
Issuance of common shares for Senior Secured Promissory Note | $ 1,942,500 | 1,942,500 | |||||
Issuance of common shares for Senior Secured Promissory Note (in Shares) | 1,000,000 | ||||||
Common shares issued to vendor for services | $ 117,500 | 117,500 | |||||
Common shares issued to vendor for services (in Shares) | 125,000 | ||||||
Issuance of common shares for extension of secured note | $ 18,000 | 18,000 | |||||
Issuance of common shares for extension of secured note (in Shares) | 20,000 | ||||||
Change in common stock par value due to change in corporate domicile | $ (15,868,273) | 15,868,273 | |||||
Conversion of Series A preferred stock | $ (4,975,503) | $ 759 | 4,974,744 | ||||
Conversion of Series A preferred stock (in Shares) | (6,328,948) | 75,947,376 | |||||
Series B preferred stock redemptions | $ (137,500) | ||||||
Series B preferred stock redemptions (in Shares) | (17) | ||||||
Series B preferred stock dividend | (74,812) | (74,812) | |||||
Stock-based compensation | $ 81,000 | 4,462,619 | 4,543,619 | ||||
Stock-based compensation (in Shares) | 500,000 | ||||||
Net loss | (9,822,728) | (2,247) | (9,824,975) | ||||
Balance at Dec. 31, 2021 | $ 591,558 | $ 1,131 | $ 29,150,258 | $ (28,118,245) | $ (241,478) | $ 791,666 | |
Balance (in Shares) at Dec. 31, 2021 | 118 | 113,094,002 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows From Operating Activities | ||
Net loss | $ (9,824,975) | $ (1,553,349) |
Loss from discontinued operations | (32,213) | (34,259) |
Net loss from continuing operations | (9,792,762) | (1,519,090) |
Adjustments to reconcile net loss from continuing operations to net cash from operating activities: | ||
Depreciation and amortization | 1,340,425 | 71,000 |
Amortization of debt discount | 380,282 | |
Stock-based compensation | 4,543,619 | |
Common shares issued to vendor for services | 117,500 | |
Other income - PPP Loan forgiveness | (25,424) | |
Loss on disposal of property and equipment | 6,938 | 539 |
Change in fair value of marketable securities | (11,770) | 9,882 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 75,470 | |
Inventories | (212,518) | |
Prepaid expenses | (4,723) | |
Accounts payable and accrued liabilities | 85,939 | 572,466 |
Net cash from operating activities – continuing operations | (3,497,024) | (865,203) |
Net cash from operating activities – discontinued operations | 31,716 | |
Net cash from operating activities | (3,497,024) | (833,487) |
Cash Flows From Investing Activities | ||
Capital expenditures | (77,715) | |
Acquisition of certain assets of Halcyon Thruput, LLC, net of acquired cash of $224,530 | (1,525,470) | |
Proceeds from sale of investment in common stock | 34,847 | |
Net cash from investing activities – continuing operations | (1,568,338) | |
Net cash from investing activities – discontinued operations | ||
Net cash from investing activities | (1,568,338) | |
Cash Flows From Financing Activities | ||
Proceeds for common stock issuable | 50,000 | |
Issuance of common stock units | 925,000 | 100,000 |
Proceeds from Series B redeemable preferred stock | 1,350,000 | |
Redemptions of Series B preferred stock | (137,500) | |
Series B preferred stock dividends paid | (16,500) | |
Proceeds from warrant exercises | 3,342,000 | |
Repayment of Halcyon bank note | (995,614) | |
Proceeds from SBA PPP Loan | 25,200 | |
Proceeds from secured note | 1,000,000 | |
Proceeds from subordinated notes | 410,000 | 990,000 |
Repayment of subordinated notes | (1,100,000) | |
Payment of mortgage payable | (117,793) | (6,625) |
Net cash from financing activities – continuing operations | 2,309,593 | 3,508,575 |
Net cash from financing activities – discontinued operations | ||
Net cash from financing activities | 2,309,593 | 3,508,575 |
Net change in cash | (2,755,769) | 2,675,088 |
Cash, beginning of period | 2,776,425 | 101,337 |
Cash, end of period | $ 20,656 | $ 2,776,425 |
Description of the Business
Description of the Business | 12 Months Ended |
Dec. 31, 2021 | |
Business [Abstract] | |
Description of the Business | 1. Description of the Business Generation Hemp, Inc. (the “Company”), formerly known as Home Treasure Finders, Inc. (“HTF”), was incorporated on August 21, 2021 in the State of Delaware. The Company was originally incorporated on July 28, 2008 in the State of Colorado. On November 27, 2019, HTF purchased approximately 94% of the common stock of Energy Hunter Resources, Inc. (“EHR”) in a series of transactions accounted for as a reverse merger (the “Transaction”). Upon closing of the Transaction, HTF changed its name to Generation Hemp, Inc. On January 11, 2021, we completed the acquisition of certain assets of Halcyon Thruput, LLC (“Halcyon”). With this acquisition, we commenced providing post-harvest and midstream services to growers by drying, processing, cleaning and stripping harvested hemp directly from the field and wetbaled at our 48,000 square foot leased facility located in Hopkinsville, Kentucky. Additionally, the Company offers safe storage services for processed hemp, which enables farmers to maximize strategic market timing. In August 2021, the Company launched its small animal bedding consumer goods product line (“Rowdy Rooster”) made from the hemp hurd byproduct that is produced from its hemp processing operations. We also generate revenue from rental of our “Cannabis Zoned” (Hemp) warehouse property located in Denver, Colorado currently leased to an unaffiliated hemp seed company. As of December 31, 2021, EHR held an approximate 8% working interest in an oil & gas property located in Cochran County, Texas within the Slaughter-Levelland Field of the San Andres formation in the Northwest Shelf of West Texas. 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. Our management team has been and continues to actively review acquisition candidates involved in the hemp industry that operate within a number of vertical businesses, predominantly within the midstream sector that are attractive to us and are within the hemp supply chain. Going Concern and Management’s Plans – In 2021, the Company used $3.5 million of cash for its operating activities. At December 31, 2021, the Company’s current liabilities, including financing obligations due within one year, totaled $4.4 million as compared with its current assets of $238 thousand. The Company will continue to pursue additional capital raising opportunities in order to fund future acquisitions and meet its obligations as they become due. We may not be successful in obtaining additional financing needed. In the event financing cannot be obtained, the Company may not be able to satisfy these plans and obligations. These factors raise 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. Impact of COVID-19 Pandemic on Our Business |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation – Business Combinations – Use of Estimates – Revenue Recognition – Rental revenue is recognized based on the contractual cash rental payments for the period. Cash – Inventories Property and Equipment – p Leases Intangible Assets Impairment of Long-Lived Assets Common Stock Units Issuable – Noncontrolling Interest Stock-based Compensation – Income Taxes – The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which a change in judgment occurs. The Company had no material uncertain tax positions as of December 31, 2021 or 2020. Income tax returns we file may be routinely examined by tax authorities. The statute of limitations is currently open for tax returns filed after 2017. The Company is subject to the Texas margin tax; however, tax expense was zero for the years ended December 31, 2021 and 2020. Discontinued Operations – The Company follows the successful efforts method of accounting for its oil and gas properties. Costs to acquire mineral interests in oil and gas properties and to drill and equip new development wells and related asset retirement costs are capitalized. In 2019, the Company’s oil and gas properties became fully impaired and the carrying amount of the properties was expensed to the market decline and the Company’s determination to exit the oil and gas business. The oil & gas properties have limited production and operations for which the Company recognizes its share as a non-operating working interest owner. Oil & gas revenue is recognized for discontinued operations based on delivered quantities in the amount of the consideration to which the Company is entitled. The Company records a liability for the plugging, abandonment and remediation of its properties at the end of their productive lives. The Company computes the liability for asset retirement obligations by calculating the present value of estimated future cash flows related to each property. This requires the Company to use significant assumptions, including current estimates of plugging and abandonment costs, annual inflation of these costs, the productive lives of wells and its risk-adjusted interest rate. Changes in any of these assumptions can result in significant revisions to the estimated asset retirement obligations. Asset retirement obligations are recorded as a liability at their estimated present value at the asset’s inception, with an offsetting increase to producing properties in the accompanying balance sheet which is amortized to expense on a unit-of-production basis. Periodic accretion of the discount on asset retirement obligations is recorded as expense. Fair Value Measurements – Level 1 — Observable inputs such as quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The estimated fair values of cash, accounts receivable, accounts payable and indebtedness approximate their carrying amounts due to the relatively short maturity of these instruments. Earnings (loss) per Share – Major Customer and Concentration of Credit Risk – During 2021, one customer accounted for approximately 91% of our post-harvest and midstream services revenue, respectively. No amounts were due from this customer at December 31, 2021. Our rental revenue is derived from a single lessee on a commercial warehouse owned by the Company. There were no amounts due from this customer at December 31, 2021 or 2020. Reclassifications Recent Accounting Pronouncements – Income Taxes In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisition | 3. Acquisition On January 11, 2021, the Company completed the acquisition of certain assets of Halcyon pursuant to the Asset Purchase Agreement dated March 7, 2020, as amended on January 11, 2021 and October 8, 2021. The purchase consideration totaled approximately $6.1 million consisting of 6,250,000 shares of Company common stock valued at $2.5 million ($0.40 per share; restricted from trading for a period of up to one year), $1.75 million in cash, a promissory note for $850,000 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. The Company was granted an option to purchase the real estate occupied by Halcyon for $993,000. This option is exercisable at any time before its expiration on January 11, 2022. This purchase option was subsequently amended and extended as disclosed in Note 14. The acquisition was accounted for as a business combination where the Company is the acquirer and the acquisition method of accounting was applied in accordance with GAAP. Accordingly, the aggregate value of the consideration we paid to complete the acquisition was allocated to the assets acquired based upon their estimated fair values on the acquisition date. The following table summarizes the purchase price allocation for the assets acquired: Accounts receivable $ 75,470 Other working capital 224,530 Property and equipment, other 1,912,900 Intangibles: Non-competition agreements 63,176 Customer relationships 2,612,650 Other assets - Purchase option on real estate 407,000 Goodwill 799,888 Assets acquired $ 6,095,614 Intangible assets consist of customer relationships and non-compete agreements, each having definite-lives. These intangible assets are being amortized over the estimated useful life on an accelerated basis reflecting the anticipated future cash flows of the Company post acquisition of Halcyon. The weighted-average useful life assigned to the intangible assets is three The results of operations for the acquired Halcyon assets have been included in the Company’s consolidated financial statements since the January 11, 2021 acquisition date. Concurrent with the closing of the asset acquisition, the Company entered into term employment agreements with two executives to serve as vice presidents of the Company for a term of at least two years and 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. 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 $375,000 if termination occurs prior to January 11, 2023. On March 3, 2021, the Company repaid the outstanding principal and interest balance on the $850,000 promissory note issued in connection with the acquisition. Supplemental Pro Forma Information The supplemental pro forma financial information reflects pro forma adjustments to present the combined pro forma results of operations as if the acquisition had occurred on January 1, 2020, to give effect to certain events that management believes to be directly attributable to the acquisition. These pro forma adjustments primarily include: ● an increase to depreciation and amortization expense that would have been recognized due to acquired tangible and intangible assets; and ● an adjustment to interest expense to reflect the reduced borrowings due to the repayment of Halcyon’s historical debt in conjunction with the acquisition; The supplemental pro forma financial information for the periods presented is as follows: For the year ended 2021 2020 Revenue, continuing operations $ 675,762 $ 3,050,017 Income (loss) from continuing operations (9,847,650 ) (841,518 ) Earnings (loss) per common share: Basic and diluted $ (0.17 ) $ (0.05 ) |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment Property and equipment consisted of the following: Useful December 31, Life (yrs) 2021 2020 Land $ 96,000 $ 96,000 Warehouse 30 916,500 916,500 Leasehold Improvements 3 473,601 - Machinery and equipment 5-7 1,506,447 - Vehicles 4 149,440 149,440 Computer equipment and software 3 46,825 43,196 Office furniture and equipment 3-5 17,294 17,294 Subtotal 3,206,107 1,222,430 Less accumulated depreciation and amortization (625,445 ) (102,938 ) Total property and equipment, net $ 2,580,662 $ 1,119,492 |
Notes Payable _ Related Parties
Notes Payable – Related Parties | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Notes Payable – Related Parties | 5. Notes Payable – Related Parties Notes payable – related parties consisted of the following: December 31, 2021 2020 Senior Secured Promissory Note $ - $ 1,500,000 Convertible Promissory Note - 208,874 Subordinated Promissory Note to CEO 523,551 490,000 Convertible Promissory Note to CEO 410,000 - Secured Promissory Note to Coventry Asset Management, LTD. 1,000,000 1,000,000 Subordinated Promissory Note to Investor 250,000 500,000 Total 2,183,551 3,698,874 Less debt discounts - (362,282 ) Total notes payable – related parties $ 2,183,551 $ 3,336,592 Senior Secured Promissory Note – Convertible Promissory Note Subordinated Promissory Note to CEO – Convertible Promissory Note to CEO Secured Promissory Note and Warrants to Coventry Asset Management, LTD. – The holder of the secured promissory note received a warrant to purchase 1,000,000 shares of common stock exercisable at an exercise price of $0.352 per share upon origination of the promissory note in 2020. This warrant was subsequently exercised in the first quarter of 2021. Subordinated Promissory Note and Warrants to Investor – The holder of the subordinated note received a warrant to purchase 500,000 shares of common stock exercisable for cash until December 30, 2022 at an exercise price of $0.352 per share. |
Other Indebtedness
Other Indebtedness | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Other Indebtedness | 6. Other Indebtedness Other indebtedness consisted of the following: December 31, 2021 2020 Mortgage Payable $ 501,668 $ 619,461 Paycheck Protection Program Loan - 25,200 Total 501,668 644,661 Less current portion (501,668 ) (619,461 ) Total other indebtedness - long-term $ - $ 25,200 Mortgage Payable and Operating Lease – The Company leases the Denver warehouse property to a tenant under an operating lease which was renewed with a new tenant and extended to August 1, 2023 for a monthly rent of $7,500. The lease requires a true-up with the tenant for property taxes and insurance paid by the Company and requires the tenant to maintain the interior and exterior of the warehouse (except for the roof). The lease provides for a rent abatement in the first and last month of the contracted extension. Minimum future rents for 2022 are $90,000 and for 2023 are $52,500. Paycheck Protection Program Loan – 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, we received disbursement of an approved PPP loan in the amount of $25,200. The Company received notice that the PPP Loan principal and interest thereon was fully forgiven on April 20, 2021. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Leases – The Company leases its operating facility in Kentucky from Oz Capital, LLC, a related party, under a lease expiring May 31, 2024. The lease provides for monthly payments of $10,249. Oz Capital, LLC is responsible for all taxes and maintenance under the lease. Lease expense for this facility totaled $119,351 in 2021. A right-of-use asset and lease liability is recorded for this lease. As the lease does not provide an implicit rate, the Company used its estimated incremental borrowing rate of 10% in determining the present value of the lease payments. Pending Insurance Claim – Litigation – Generation Hemp, Inc. v. Colorado Mills Equipment, LLC, Dallas, Texas Small Claims Court Case No. JS 22.00018A The Defendant sold to the Company a faulty piece of equipment for $16,000 and will not refund the Company the purchase price after repeated attempts to return their equipment. A lawsuit was filed by the Company against Colorado Mills in January 2022. Halcyon Thruput, LLC, Plaintiff v. United National Insurance Company, Defendant, United States District Court for the Northern District of Texas, Dallas Division, Case No. 3:21-CV-3136-K. Halcyon Thruput, LLC (Halcyon) obtained an all-risks commercial insurance policy, including an Equipment Breakdown Endorsement (Policy) from United National Insurance Company (UNIC) to provide substantial coverages for Halcyon Thruput LLC’s (Halcyon) $1,203,735 hemp processing dryer (Dryer) at its facility in Hopkinsville, Kentucky. During the Policy period, the Dryer caught fire due to the Dryer being defectively designed. While UNIC paid a number of Halcyon’s claims, Halcyon’s claim for the cost of the replacement Dryer of $1,380,374 was denied as described below. Buyer, a wholly owned subsidiary of the Company, pursuant to an Asset Purchase Agreement as twice amended, then acquired all the assets of Halcyon, except for the right to the proceeds of UNIC’s insurance policy since the Policy prohibited assignment. Halcyon and Buyer agreed that Buyer’s principal, Gary C. Evans, had the right to control the litigation, engage counsel for Halcyon and make all decisions relating to any proceeds received in the litigation by settlement or otherwise. Halcyon’s suit against UNIC, which was removed to federal court, seeks $796,865.53 (the cost of the replacement dryer of $1,380,374, less a credit for $583,508.47 previously paid by UNIC to Halcyon for the Dryer fire=$796,865.53) plus statutory interest on that sum from August 10, 2020 for violating the Texas Insurance Code’s requirement that claims be promptly paid, additional statutory penalties, and attorneys’ fees. Certain documents have been executed between the Company, Halcyon and legal counsel, which provide for a sharing of costs and expenses and awards, if any, against UNIC. Mediation of the case is set for April 12, 2022. JDONE, LLC v. Grand Traverse Holdings, LLC and John Gallegos, Denver District Court Case No. 2019CV33723 JDONE, LLC (“JDONE”) is a wholly owned subsidiary of the Company and landlord of a commercial warehouse building that was previously leased to Grand Traverse Holdings, LLC 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 an alleged forged, signed copy of the draft early termination amendment that JDONE had previously rejected. JDONE has suffered damages due to Defendant’s alleged misconduct of approximately $823,504 plus interest and attorney’s fees exceeding $400,000. 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 July 2022. We believe that Grand Traverse Holdings, LLC and John Gallegos are jointly liable for the asserted damages which exceed $1 million plus attorney’s fees and we continue to vigorously pursue our claims. KBSIII Tower at Lake Carolyn, LLC and Prime US-Tower at Lake Carolyn, LLC (collectively – “KBSIII” v. Energy Hunter Resources, Inc.) Plaintiff/Counterdefendant KBSIII was seeking lost rent on office space for periods after EHR vacated office premises located in Las Colinas, Texas. EHR 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. At December 31, 2021, the Company had accrued $252,583 for this judgment, which is exclusively an EHR obligation. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes No amounts were recorded for income tax expense during the years ended December 31, 2021 or 2020. A reconciliation of the expected statutory federal tax and the total income tax expense from continuing operations was as follows: Year Ended December 31, 2021 2020 Federal statutory rate $ (2,056,480 ) $ (319,008 ) State income taxes, net (198,940 ) (31,480 ) Change in valuation allowance 3,655,210 312,464 Change in state tax rates (178,644 ) - True-up of prior year deferred items (929,450 ) - Other, net (291,696 ) 38,024 Total income tax expense $ - $ - The tax effect of temporary differences that gave rise to significant components of deferred tax assets and liabilities consisted of the following: December 31, 2021 2020 Assets: Net operating loss carryforwards $ 4,960,487 $ 2,200,036 Stock-based compensation 1,046,464 - Property and equipment 33,803 27,847 Intangible assets 135,012 - Other - 292,673 Subtotal 6,175,766 2,520,556 Valuation allowance (6,175,766 ) (2,520,556 ) Net deferred tax asset $ - $ - The Company has federal net operating loss (“NOL”) carryforwards of approximately $21.5 million at December 31, 2021, of which about $6.5 million begin to expire in 2034 and the remainder have no expiration. The Company estimates that a majority of its NOL carryforwards are subject to annual limitations under Internal Revenue Code Section 382 as a result of ownership changes at various times including in the Transaction. These NOL carryforwards may never be utilized by the Company. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Equity | 9. Equity Change of Corporate Domicile Series A Preferred Stock – Series B Preferred Stock Units – 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, 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 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. Any or all 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 of this automatic conversion of the Series B Preferred Stock, a “Qualifying Event” shall have occurred if (A) (1) the rolling five-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. In each instance, a conversion may not be made unless the Company has filed an amendment to its Articles of Incorporation effecting an increase in its authorized common stock so that the Company has a sufficient number of authorized and unissued shares of common stock so as to permit the conversion of all outstanding shares. The Series B Preferred Stock may be redeemed by the Company for its stated value, plus accrued and unpaid dividends, at any time. Initially, redemption payments of 12.5% each of the total amount of Series B Preferred Stock then outstanding plus accrued dividends were due from the Company to each Holder of Series B Preferred Stock at the end of each calendar quarter of 2021. The first required redemption payments totaling $137,500 were made in April 2021. In May, June and October of 2021, the three holders of the Series B Preferred Stock, including the Company’s chief executive officer, entered into transactions in which they accepted the mandatory redemption payment required pursuant to the Series B Preferred Stock certificate of designation in a number of Series B Units to effectively waive the redemption requirement. All other terms of the Series B Units remain unchanged and the holders’ ownership interest in the Series B Preferred Units remains the same as it was before such transactions. Common Stock – ● February 2020 Issuance of Common Stock Units – The common stock issued in the exchange was valued using the trading 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. ● Acquisition of Certain Assets of Halcyon ● 2021 First Quarter Issuances of Common Stock Units ● Warrant Exercises ● Issuances for Exchange or Conversion of Debt ● Issuance to Vendor for Services ● Issuance for Extension of Secured Note ● Issuance for Conversion of Series A Preferred Stock ● 2021 Fourth Quarter Issuances of Common Stock Units ● Stock-based Compensation Common Stock Warrants Outstanding – # of Exercise Expiration Date Method of Issued in February 2020 with common stock units (2) 250,000 $ 0.400 March 1, 2022 Cash Issued in December 2020 with Series B preferred units (1) 5,500,000 $ 0.352 December 30, 2022 Cash Issued in December 2020 with subordinated note to investor (1) 500,000 $ 0.352 December 30, 2022 Cash Issued in Q1 2021 with common stock units (1) 1,600,000 $ 0.500 January-February, 2023 Cash Issued in Q4 2021 with common stock units (1) 958,333 $ 0.600 Oct-Dec, 2023 Cash Total warrants outstanding at December 31, 2021 8,808,333 (1) May be redeemed 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. Following is a summary of outstanding stock warrants activity for the periods presented: Weighted Average # of Exercise Warrants as of January 1, 2020 14,488,638 $ 0.353 Issued 8,499,994 $ 0.353 Warrants as of December 31, 2020 22,988,632 $ 0.353 Issued 2,558,333 $ 0.537 Cancelled (7,244,316 ) $ 0.352 Exercised (9,494,316 ) $ 0.352 Warrants as of December 31, 2021 8,808,333 $ 0.407 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 10. Stock-Based Compensation We award restricted stock or stock options as incentive compensation to employees. Generally, these awards include vesting periods of up to three years from the date of grant. The 2021 Omnibus Incentive Plan (“2021 Plan”) was adopted by our Board on July 1, 2021. The 2021 Plan provides for the initial reservation of 15 million shares of common stock for issuance, and provides that the maximum number of shares that may be issued pursuant to the exercise of ISOs is 15 million. The number of shares of common stock available for issuance under the 2021 Plan constituted approximately 13.1% of the Company’s fully diluted common shares outstanding as of the date of Board approval, including shares issuable upon the conversion of preferred shares, as calculated on an as-converted basis. On the one-year anniversary date of the 2021 Plan, the number of shares of common stock reserved for issuance thereunder shall automatically increase to 20% of the fully diluted common shares outstanding, including shares issuable upon the conversion of preferred shares, as calculated on an as-converted basis. In the first quarter of 2021, the Company issued 500,000 restricted shares valued at $155,000 as incentive compensation to two executives who joined the Company. The awards vest after one year of service. Compensation expense related to these awards totaled $155,000 for 2021. In the fourth quarter of 2021, the Company awarded options for 13,850,000 shares of the Company’s common stock as incentive compensation. One-third of the awarded options vested immediately with the remaining options vesting in two equal annual tranches over the next two years. Vested options may be exercised at any time until their expiration after 10 years at an exercise price of $0.76 per share. Unvested options are forfeited upon termination of employment. Compensation expense for stock option grants was recognized based on the fair value at the date of grant using the Black-Scholes option pricing model. Key assumptions included a risk-free interest rate ranging from 1.18% to 1.28%, historical volatility ranging from 331% to 643% and an expected life of the stock options ranging from five to six years. We recognized $4.4 million of compensation expense for option awards in 2021. As of December 31, 2021, there was $6.1 million of total unrecognized compensation cost related to options to be recognized over a remaining weighted average period of 24 months. The following table summarizes options outstanding, as well as activity for the periods presented: Number of Weighted Weighted Aggregate Outstanding at January 1, 2021 - $ - $ - - Granted 13,850,000 $ 0.76 $ 0.76 - Outstanding at December 31, 2021 13,850,000 $ 0.76 $ 0.76 - The remaining weighted average contractual life of exercisable options at December 31, 2021 was 9.8 years. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 11. Discontinued Operations 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: December 31, 2021 2020 Assets - Oil and natural gas properties held for sale, at cost $ 1,874,849 $ 1,874,849 Accumulated DD&A (1,874,849 ) (1,874,849 ) Total assets of discontinued operations held for sale $ - $ - Liabilities Accrued liabilities $ 48,997 $ 31,117 Asset retirement obligations 52,368 56,834 Revenue payable 52,117 52,117 Current liabilities of discontinued operations held for sale 153,482 140,068 Asset retirement obligations - Long-term liabilities of discontinued operations held for sale 162,948 144,149 Total liabilities of discontinued operations held for sale $ 316,430 $ 284,217 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 year ended 2021 2020 Revenue - Oil and gas sales $ 116,710 $ 103,097 Costs and Expenses Lease operating expense 134,590 93,709 Depreciation, depletion & amortization - 9,942 Accretion 14,333 34,796 Gain on disposal of oil & gas property interests - (24,008 ) Total costs and expenses 148,923 114,439 Interest expense - 22,917 Loss from discontinued operations $ (32,213 ) $ (34,259 ) |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | 12. Supplemental Cash Flow Information For the year ended 2021 2020 Cash paid for interest $ 138,736 $ - Cash paid for taxes - - Noncash investing and financing activities: Acquisition of certain assets of Halcyon Thruput, LLC - issuance of common shares 2,500,000 - - issuance of subordinated note 850,000 - - assumption of Halcyon bank note 995,614 - Series B preferred stock dividend payable 58,312 - Issuance of common stock units previously subscribed 50,000 - Issuances of common shares for exchange or conversion of debt 2,160,269 - Conversion of Series A preferred stock into common stock 4,975,503 - |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) per Share | 13. Earnings (Loss) per Share The following table is a calculation of the earnings (loss) per basic and diluted share: For the year ended 2021 2020 Amounts attributable to Generation Hemp: Numerator Loss from continuing operations attributable to common stockholders $ (9,792,532 ) $ (1,466,555 ) Loss from discontinued operations (30,196 ) (32,114 ) Less: preferred stock dividends (74,812 ) - Net loss attributable to common stockholders $ (9,897,540 ) $ (1,498,669 ) Denominator Weighted average shares used to compute basic EPS 57,159,659 17,346,164 Dilutive effect of convertible note 1,164,773 1,164,773 Dilutive effect of preferred stock 55,075,900 75,965,819 Dilutive effect of common stock options 709,981 - Dilutive effect of common stock warrants 11,022,542 14,686,725 Weighted average shares used to compute diluted EPS 125,132,854 109,163,481 Earnings (loss) per share: Loss from continuing operations Basic $ (0.17 ) $ (0.08 ) Diluted $ (0.17 ) $ (0.08 ) (Loss) income from discontinued operations Basic $ - $ - Diluted $ - $ - Earnings (loss) per share Basic $ (0.17 ) $ (0.09 ) Diluted $ (0.17 ) $ (0.09 ) The computation of diluted earnings per common share excludes the assumed conversion of the Series B Preferred Stock and outstanding convertible notes and exercise of common stock options and warrants in periods when we report a loss. The dilutive effect of the assumed exercise of outstanding options and warrants was calculated using the treasury stock method. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events Advances under Promissory Note Joint-Venture With Crypt Solutions, Inc. – On February 23, 2022, the Company and Crypt executed the first Letter of Intent that specifically applies to their joint Green Energy project, to be located adjacent to the Company’s current hemp processing facility in Hopkinsville, Kentucky. This first project is being designed for two (2) megawatts of Bitcoin mining, which will include approximately 576 mining machines. The Bitcoin mining installation is expected to be running prior to the end of the second quarter 2022. Initial electricity needs for the project will come from the grid or the existing electricity provider until such time as biomass or other renewable methods are installed. Amendment of Real Estate Purchase Option |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation – |
Business Combinations | Business Combinations – |
Use of Estimates | Use of Estimates – |
Revenue Recognition | Revenue Recognition – Rental revenue is recognized based on the contractual cash rental payments for the period. |
Cash | Cash – |
Inventories | Inventories |
Property and Equipment | Property and Equipment – p |
Leases | Leases |
Intangible Assets | Intangible Assets |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets |
Common Stock Units Issuable | Common Stock Units Issuable – |
Noncontrolling Interest | Noncontrolling Interest |
Stock-based Compensation | Stock-based Compensation – |
Income Taxes | Income Taxes – The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which a change in judgment occurs. The Company had no material uncertain tax positions as of December 31, 2021 or 2020. Income tax returns we file may be routinely examined by tax authorities. The statute of limitations is currently open for tax returns filed after 2017. The Company is subject to the Texas margin tax; however, tax expense was zero for the years ended December 31, 2021 and 2020. |
Discontinued Operations | Discontinued Operations – The Company follows the successful efforts method of accounting for its oil and gas properties. Costs to acquire mineral interests in oil and gas properties and to drill and equip new development wells and related asset retirement costs are capitalized. In 2019, the Company’s oil and gas properties became fully impaired and the carrying amount of the properties was expensed to the market decline and the Company’s determination to exit the oil and gas business. The oil & gas properties have limited production and operations for which the Company recognizes its share as a non-operating working interest owner. Oil & gas revenue is recognized for discontinued operations based on delivered quantities in the amount of the consideration to which the Company is entitled. The Company records a liability for the plugging, abandonment and remediation of its properties at the end of their productive lives. The Company computes the liability for asset retirement obligations by calculating the present value of estimated future cash flows related to each property. This requires the Company to use significant assumptions, including current estimates of plugging and abandonment costs, annual inflation of these costs, the productive lives of wells and its risk-adjusted interest rate. Changes in any of these assumptions can result in significant revisions to the estimated asset retirement obligations. Asset retirement obligations are recorded as a liability at their estimated present value at the asset’s inception, with an offsetting increase to producing properties in the accompanying balance sheet which is amortized to expense on a unit-of-production basis. Periodic accretion of the discount on asset retirement obligations is recorded as expense. |
Fair Value Measurement | Fair Value Measurements – Level 1 — Observable inputs such as quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The estimated fair values of cash, accounts receivable, accounts payable and indebtedness approximate their carrying amounts due to the relatively short maturity of these instruments. |
Earnings (loss) per Share | Earnings (loss) per Share – |
Major Customer and Concentration of Credit Risk | Major Customer and Concentration of Credit Risk – During 2021, one customer accounted for approximately 91% of our post-harvest and midstream services revenue, respectively. No amounts were due from this customer at December 31, 2021. Our rental revenue is derived from a single lessee on a commercial warehouse owned by the Company. There were no amounts due from this customer at December 31, 2021 or 2020. |
Reclassifications | Reclassifications |
Recent Accounting Pronouncements | Recent Accounting Pronouncements – Income Taxes In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Schedule of purchase price allocation for the assets acquired | Accounts receivable $ 75,470 Other working capital 224,530 Property and equipment, other 1,912,900 Intangibles: Non-competition agreements 63,176 Customer relationships 2,612,650 Other assets - Purchase option on real estate 407,000 Goodwill 799,888 Assets acquired $ 6,095,614 |
Schedule of pro forma consolidated results of operations | For the year ended 2021 2020 Revenue, continuing operations $ 675,762 $ 3,050,017 Income (loss) from continuing operations (9,847,650 ) (841,518 ) Earnings (loss) per common share: Basic and diluted $ (0.17 ) $ (0.05 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and equipment | Useful December 31, Life (yrs) 2021 2020 Land $ 96,000 $ 96,000 Warehouse 30 916,500 916,500 Leasehold Improvements 3 473,601 - Machinery and equipment 5-7 1,506,447 - Vehicles 4 149,440 149,440 Computer equipment and software 3 46,825 43,196 Office furniture and equipment 3-5 17,294 17,294 Subtotal 3,206,107 1,222,430 Less accumulated depreciation and amortization (625,445 ) (102,938 ) Total property and equipment, net $ 2,580,662 $ 1,119,492 |
Notes Payable _ Related Parti_2
Notes Payable – Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of notes payable related parties | December 31, 2021 2020 Senior Secured Promissory Note $ - $ 1,500,000 Convertible Promissory Note - 208,874 Subordinated Promissory Note to CEO 523,551 490,000 Convertible Promissory Note to CEO 410,000 - Secured Promissory Note to Coventry Asset Management, LTD. 1,000,000 1,000,000 Subordinated Promissory Note to Investor 250,000 500,000 Total 2,183,551 3,698,874 Less debt discounts - (362,282 ) Total notes payable – related parties $ 2,183,551 $ 3,336,592 |
Other Indebtedness (Tables)
Other Indebtedness (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of other indebtedness | December 31, 2021 2020 Mortgage Payable $ 501,668 $ 619,461 Paycheck Protection Program Loan - 25,200 Total 501,668 644,661 Less current portion (501,668 ) (619,461 ) Total other indebtedness - long-term $ - $ 25,200 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation of the expected statutory federal tax | Year Ended December 31, 2021 2020 Federal statutory rate $ (2,056,480 ) $ (319,008 ) State income taxes, net (198,940 ) (31,480 ) Change in valuation allowance 3,655,210 312,464 Change in state tax rates (178,644 ) - True-up of prior year deferred items (929,450 ) - Other, net (291,696 ) 38,024 Total income tax expense $ - $ - |
Schedule of deferred tax assets and liabilities | December 31, 2021 2020 Assets: Net operating loss carryforwards $ 4,960,487 $ 2,200,036 Stock-based compensation 1,046,464 - Property and equipment 33,803 27,847 Intangible assets 135,012 - Other - 292,673 Subtotal 6,175,766 2,520,556 Valuation allowance (6,175,766 ) (2,520,556 ) Net deferred tax asset $ - $ - |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of warrants outstanding | # of Exercise Expiration Date Method of Issued in February 2020 with common stock units (2) 250,000 $ 0.400 March 1, 2022 Cash Issued in December 2020 with Series B preferred units (1) 5,500,000 $ 0.352 December 30, 2022 Cash Issued in December 2020 with subordinated note to investor (1) 500,000 $ 0.352 December 30, 2022 Cash Issued in Q1 2021 with common stock units (1) 1,600,000 $ 0.500 January-February, 2023 Cash Issued in Q4 2021 with common stock units (1) 958,333 $ 0.600 Oct-Dec, 2023 Cash Total warrants outstanding at December 31, 2021 8,808,333 (1) May be redeemed 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. |
Schedule of outstanding stock warrants activity | Weighted Average # of Exercise Warrants as of January 1, 2020 14,488,638 $ 0.353 Issued 8,499,994 $ 0.353 Warrants as of December 31, 2020 22,988,632 $ 0.353 Issued 2,558,333 $ 0.537 Cancelled (7,244,316 ) $ 0.352 Exercised (9,494,316 ) $ 0.352 Warrants as of December 31, 2021 8,808,333 $ 0.407 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of summarizes options outstanding | Number of Weighted Weighted Aggregate Outstanding at January 1, 2021 - $ - $ - - Granted 13,850,000 $ 0.76 $ 0.76 - Outstanding at December 31, 2021 13,850,000 $ 0.76 $ 0.76 - |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of discontinued operations shown in the consolidated statements of operation | December 31, 2021 2020 Assets - Oil and natural gas properties held for sale, at cost $ 1,874,849 $ 1,874,849 Accumulated DD&A (1,874,849 ) (1,874,849 ) Total assets of discontinued operations held for sale $ - $ - Liabilities Accrued liabilities $ 48,997 $ 31,117 Asset retirement obligations 52,368 56,834 Revenue payable 52,117 52,117 Current liabilities of discontinued operations held for sale 153,482 140,068 Asset retirement obligations - Long-term liabilities of discontinued operations held for sale 162,948 144,149 Total liabilities of discontinued operations held for sale $ 316,430 $ 284,217 |
Schedule of discontinued operations shown in the consolidated statements of operation | For the year ended 2021 2020 Revenue - Oil and gas sales $ 116,710 $ 103,097 Costs and Expenses Lease operating expense 134,590 93,709 Depreciation, depletion & amortization - 9,942 Accretion 14,333 34,796 Gain on disposal of oil & gas property interests - (24,008 ) Total costs and expenses 148,923 114,439 Interest expense - 22,917 Loss from discontinued operations $ (32,213 ) $ (34,259 ) |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of supplemental cash flow information | For the year ended 2021 2020 Cash paid for interest $ 138,736 $ - Cash paid for taxes - - Noncash investing and financing activities: Acquisition of certain assets of Halcyon Thruput, LLC - issuance of common shares 2,500,000 - - issuance of subordinated note 850,000 - - assumption of Halcyon bank note 995,614 - Series B preferred stock dividend payable 58,312 - Issuance of common stock units previously subscribed 50,000 - Issuances of common shares for exchange or conversion of debt 2,160,269 - Conversion of Series A preferred stock into common stock 4,975,503 - |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of earnings (loss) per basic and diluted share | For the year ended 2021 2020 Amounts attributable to Generation Hemp: Numerator Loss from continuing operations attributable to common stockholders $ (9,792,532 ) $ (1,466,555 ) Loss from discontinued operations (30,196 ) (32,114 ) Less: preferred stock dividends (74,812 ) - Net loss attributable to common stockholders $ (9,897,540 ) $ (1,498,669 ) Denominator Weighted average shares used to compute basic EPS 57,159,659 17,346,164 Dilutive effect of convertible note 1,164,773 1,164,773 Dilutive effect of preferred stock 55,075,900 75,965,819 Dilutive effect of common stock options 709,981 - Dilutive effect of common stock warrants 11,022,542 14,686,725 Weighted average shares used to compute diluted EPS 125,132,854 109,163,481 Earnings (loss) per share: Loss from continuing operations Basic $ (0.17 ) $ (0.08 ) Diluted $ (0.17 ) $ (0.08 ) (Loss) income from discontinued operations Basic $ - $ - Diluted $ - $ - Earnings (loss) per share Basic $ (0.17 ) $ (0.09 ) Diluted $ (0.17 ) $ (0.09 ) |
Description of the Business (De
Description of the Business (Details) $ in Thousands | Jan. 11, 2021$ / ft² | Nov. 27, 2019 | Dec. 31, 2021USD ($) |
Business [Abstract] | |||
Approximately percentage | 94.00% | ||
Square Foot Facility (in Dollars per Square Foot) | $ / ft² | 48,000 | ||
Description of business, description | EHR held an approximate 8% working interest in an oil & gas property located in Cochran County, Texas within the Slaughter-Levelland Field of the San Andres formation in the Northwest Shelf of West Texas. 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. | ||
Operating activities | $ 3,500 | ||
Financing obligations | 4,400 | ||
Current Assets | $ 238 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Summary of Significant Accounting Policies (Details) [Line Items] | |
Intangible gross carrying amount | $ 2,700 |
Accumulated amortization | 818 |
Future amortization expense | $ 250 |
Noncontrolling interest | 6.00% |
Income tax, percentage | 50.00% |
2022 [Member] | |
Summary of Significant Accounting Policies (Details) [Line Items] | |
Future amortization expense | $ 587 |
2023 [Member] | |
Summary of Significant Accounting Policies (Details) [Line Items] | |
Future amortization expense | 419 |
2024 [Member] | |
Summary of Significant Accounting Policies (Details) [Line Items] | |
Future amortization expense | 278 |
2025 [Meber] | |
Summary of Significant Accounting Policies (Details) [Line Items] | |
Future amortization expense | 194 |
2026 [Member] | |
Summary of Significant Accounting Policies (Details) [Line Items] | |
Future amortization expense | $ 130 |
One Customer [Member] | |
Summary of Significant Accounting Policies (Details) [Line Items] | |
Service revenue percentage | 91.00% |
Acquisition (Details)
Acquisition (Details) - USD ($) | Jan. 11, 2021 | Dec. 31, 2021 | Mar. 03, 2021 | Dec. 31, 2020 |
Acquisition (Details) [Line Items] | ||||
Company common stock (in Shares) | 113,094,002 | 17,380,317 | ||
Per share value (in Dollars per share) | $ 0.00001 | |||
Promissory note | $ 850,000 | |||
Weighted-average useful life | 3 years | |||
Employee terminates, description | 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 $375,000 if termination occurs prior to January 11, 2023. | |||
Halcyon [Member] | ||||
Acquisition (Details) [Line Items] | ||||
Consideration value | $ 6,100,000 | |||
Company common stock (in Shares) | 6,250,000 | |||
Common stock, value | $ 2,500,000 | |||
Per share value (in Dollars per share) | $ 0.4 | |||
Cash | $ 1,750,000 | |||
Promissory note | $ 850,000 | |||
Real estate occupied, description | the Company, and assumption of approximately $1.0 million of new indebtedness of Halcyon. The Company was granted an option to purchase the real estate occupied by Halcyon for $993,000. This option is exercisable at any time before its expiration on January 11, 2022. |
Acquisition (Details) - Schedul
Acquisition (Details) - Schedule of purchase price allocation for the assets acquired - Acquisitions [Member] | Dec. 31, 2021USD ($) |
Asset Acquisition [Line Items] | |
Accounts receivable | $ 75,470 |
Other working capital | 224,530 |
Property and equipment, other | 1,912,900 |
Intangibles: | |
Non-competition agreements | 63,176 |
Customer relationships | 2,612,650 |
Other assets - Purchase option on real estate | 407,000 |
Goodwill | 799,888 |
Assets acquired | $ 6,095,614 |
Acquisition (Details) - Sched_2
Acquisition (Details) - Schedule of pro forma consolidated results of operations - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of pro forma consolidated results of operations [Abstract] | ||
Revenue, continuing operations | $ 675,762 | $ 3,050,017 |
Income (loss) from continuing operations | $ (9,847,650) | $ (841,518) |
Earnings (loss) per common share: | ||
Basic and diluted (in Dollars per share) | $ (0.17) | $ (0.05) |
Property and Equipment (Details
Property and Equipment (Details) - Schedule of Property and equipment - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 3,206,107 | $ 1,222,430 |
Less accumulated depreciation and amortization | (625,445) | (102,938) |
Total property and equipment, net | 2,580,662 | 1,119,492 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 96,000 | 96,000 |
Warehouse [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Useful Life (years) | 30 years | |
Subtotal | $ 916,500 | 916,500 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Useful Life (years) | 3 years | |
Subtotal | $ 473,601 | |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 1,506,447 | |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Useful Life (years) | 4 years | |
Subtotal | $ 149,440 | 149,440 |
Computer equipment and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Useful Life (years) | 3 years | |
Subtotal | $ 46,825 | 43,196 |
Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 17,294 | $ 17,294 |
Minimum [Member] | Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Useful Life (years) | 5 years | |
Minimum [Member] | Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Useful Life (years) | 3 years | |
Maximum [Member] | Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Useful Life (years) | 7 years | |
Maximum [Member] | Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Useful Life (years) | 5 years |
Notes Payable _ Related Parti_3
Notes Payable – Related Parties (Details) - USD ($) | Apr. 07, 2022 | Oct. 31, 2019 | Apr. 30, 2022 | Mar. 09, 2021 | Dec. 30, 2020 | Mar. 31, 2017 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 30, 2022 | Jun. 30, 2021 | Apr. 30, 2021 |
Notes Payable – Related Parties (Details) [Line Items] | |||||||||||
Subscription agreement description | the Company entered into a subscription agreement under which we issued a $3,000,000 10% Senior Secured Promissory Note to Satellite Overseas (Holdings) Limited (“SOHL”), a stockholder of the Company’s common shares. The interest rate of the Senior Secured Promissory Note was 12%. | ||||||||||
Exchange of common shares (in Shares) | 1,000,000 | ||||||||||
Bears interest | 4.00% | 10.00% | 10.00% | ||||||||
Exercise price (in Dollars per share) | $ 0.352 | $ 0.352 | |||||||||
Converted into common shares (in Shares) | 618,660 | ||||||||||
New equity capital | $ 3,000,000 | ||||||||||
Accrued interest | 19,118 | ||||||||||
Convertible debt | $ 410,000 | ||||||||||
Conversion price (in Dollars per share) | $ 0.5 | ||||||||||
Restricted common shares (in Shares) | 20,000 | ||||||||||
Warrant to purchase of common stock (in Shares) | 1,000,000 | ||||||||||
Accrued and unpaid interest due date | Mar. 31, 2022 | ||||||||||
Maturity date | As subsequently amended, a payment of $50,000 is due March 31, 2022 and the remaining principal of $200,000 together with accrued interest is due on June 30, 2022. | ||||||||||
Equity capital amount | $ 5,000,000 | ||||||||||
Accrued interest | $ 18,699 | ||||||||||
Subordinated Promissory Note [Member] | |||||||||||
Notes Payable – Related Parties (Details) [Line Items] | |||||||||||
Bears interest | 10.00% | ||||||||||
Subordinated Promissory note due date | Sep. 30, 2021 | ||||||||||
New maturity date | Jun. 30, 2022 | ||||||||||
New equity capital | $ 3,000,000 | ||||||||||
Accrued interest | 7,602 | ||||||||||
Principal amount | $ 250,000 | ||||||||||
Interest rate | 10.00% | ||||||||||
Coventry Asset Management, LTD. [Member] | |||||||||||
Notes Payable – Related Parties (Details) [Line Items] | |||||||||||
Principal amount | $ 1,000,000 | ||||||||||
Accrued interest | $ 100,275 | ||||||||||
Accredited Investor [Member] | |||||||||||
Notes Payable – Related Parties (Details) [Line Items] | |||||||||||
Principal amount | $ 500,000 | ||||||||||
Forecast [Member] | |||||||||||
Notes Payable – Related Parties (Details) [Line Items] | |||||||||||
New equity capital | $ 10,000,000 | ||||||||||
Option exercisable | $250,000 | ||||||||||
Exercise price per share (in Dollars per share) | $ 0.6 | $ 0.352 | |||||||||
Warrant to purchase of common stock (in Shares) | 500,000 |
Notes Payable _ Related Parti_4
Notes Payable – Related Parties (Details) - Schedule of notes payable related parties - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Notes Payable – Related Parties (Details) - Schedule of notes payable related parties [Line Items] | ||
Total | $ 2,183,551 | $ 3,698,874 |
Less debt discounts | (362,282) | |
Total notes payable – related parties | 2,183,551 | 3,336,592 |
Senior Secured Promissory Note [Member] | ||
Notes Payable – Related Parties (Details) - Schedule of notes payable related parties [Line Items] | ||
Total | 1,500,000 | |
Convertible Promissory Note [Member] | ||
Notes Payable – Related Parties (Details) - Schedule of notes payable related parties [Line Items] | ||
Total | 208,874 | |
Subordinated Promissory Note to CEO [Member] | ||
Notes Payable – Related Parties (Details) - Schedule of notes payable related parties [Line Items] | ||
Total | 523,551 | 490,000 |
Convertible Promissory Note to CEO [Member] | ||
Notes Payable – Related Parties (Details) - Schedule of notes payable related parties [Line Items] | ||
Total | 410,000 | |
Secured Promissory Note to Coventry Asset Management, LTD. [Member] | ||
Notes Payable – Related Parties (Details) - Schedule of notes payable related parties [Line Items] | ||
Total | 1,000,000 | 1,000,000 |
Subordinated Promissory Note to Investor [Member] | ||
Notes Payable – Related Parties (Details) - Schedule of notes payable related parties [Line Items] | ||
Total | $ 250,000 | $ 500,000 |
Other Indebtedness (Details)
Other Indebtedness (Details) - USD ($) | Aug. 01, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 29, 2020 |
Other Indebtedness (Details) [Line Items] | |||||
Mortgage payable, description | The note provided for a 25-year amortization period and an initial interest rate of 9% annually. The note has been amended several times to a maturity date of January 15, 2022. In January 2022, the note was again amended to a new maturity date of April 15, 2022. The Company is paying monthly extension fees of $1,000 each. | ||||
Interest expenses | $ 5,800 | ||||
Interest rate | 12.00% | ||||
Nonpayroll expenses | 25.00% | ||||
Compensation decreases percentage | 25.00% | ||||
Compensation levels amount | $ 100,000 | ||||
PPP loan amount | $ 25,200 | ||||
Forecast [Member] | |||||
Other Indebtedness (Details) [Line Items] | |||||
Lease and rental expense | $ 7,500 | ||||
Minimum future rents twelve months | $ 90,000 | ||||
Minimum future rents two years | $ 52,500 |
Other Indebtedness (Details) -
Other Indebtedness (Details) - Schedule of other indebtedness - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of other indebtedness [Abstract] | ||
Mortgage Payable | $ 501,668 | $ 619,461 |
Paycheck Protection Program Loan | 25,200 | |
Total | 501,668 | 644,661 |
Less current portion | (501,668) | (619,461) |
Total other indebtedness - long-term | $ 25,200 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Apr. 12, 2019 | Dec. 23, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Commitments and Contingencies (Details) [Line Items] | ||||||
Lease requires monthly payments | $ 2,000 | |||||
Lease expense | $ 22,000 | |||||
Estimated incremental borrowing rate | 10.00% | |||||
Cost of drying equipment total | $ 1,100,000 | |||||
Insurance proceeds | $ 595,000 | |||||
Purchase price of equipment | 16,000 | |||||
Insurance claim for replacement | 1,380,374 | |||||
Description of Suit against UNIC | which was removed to federal court, seeks $796,865.53 (the cost of the replacement dryer of $1,380,374, less a credit for $583,508.47 previously paid by UNIC to Halcyon for the Dryer fire=$796,865.53) plus statutory interest on that sum from August 10, 2020 for violating the Texas Insurance Code’s requirement that claims be promptly paid, additional statutory penalties, and attorneys’ fees. Certain documents have been executed between the Company, Halcyon and legal counsel, which provide for a sharing of costs and expenses and awards, if any, against UNIC. Mediation of the case is set for April 12, 2022. | |||||
Fees Exceeding | $ 400,000 | |||||
Amount of summary judgment | $ 230,712 | |||||
Litigation settlement interest percentage | 5.00% | |||||
Legal fees | $ 252,583 | |||||
Oz Capital, LLC [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Lease requires monthly payments | 10,249 | |||||
Lease expense | $ 119,351 | |||||
Halcyon Thruput LLC’s [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Substantial coverages | $ 1,203,735 | |||||
Grand Traverse Holdings, LLC [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Lease term | 61 months | |||||
Interest and attorney fees | 823,504 | |||||
Grand Traverse Holdings, LLC [Member] | John Gallegos [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Liable for the asserted damages | $ 1,000,000 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Income Tax Disclosure [Abstract] | |
Federal net operating loss not expiration | $ 21.5 |
Federal net operating loss expiration | $ 6.5 |
Expire description | begin to expire in 2034 and the remainder have no expiration. |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of reconciliation of the expected statutory federal tax - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of reconciliation of the expected statutory federal tax [Abstract] | ||
Federal statutory rate | $ (2,056,480) | $ (319,008) |
State income taxes, net | (198,940) | (31,480) |
Change in valuation allowance | 3,655,210 | 312,464 |
Change in state tax rates | (178,644) | |
True-up of prior year deferred items | (929,450) | |
Other, net | (291,696) | 38,024 |
Total income tax expense |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of deferred tax assets and liabilities - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Assets: | ||
Net operating loss carryforwards | $ 4,960,487 | $ 2,200,036 |
Stock-based compensation | 1,046,464 | |
Property and equipment | 33,803 | 27,847 |
Intangible assets | 135,012 | |
Other | 292,673 | |
Subtotal | 6,175,766 | 2,520,556 |
Valuation allowance | (6,175,766) | (2,520,556) |
Net deferred tax asset |
Equity (Details)
Equity (Details) - USD ($) | Dec. 30, 2020 | Dec. 31, 2021 | Aug. 21, 2021 | Apr. 30, 2021 | Dec. 31, 2020 |
Equity (Details) [Line Items] | |||||
Shares authorized | 200,000,000 | ||||
Preferred stock, par value (in Dollars per share) | $ 0.00001 | ||||
Sale of preferred stock units (in Dollars) | $ 10,000 | ||||
Aggregate gross proceeds (in Dollars) | $ 1,350,000 | ||||
Common stock shares Issued | 25,000 | ||||
Equity, description | For purposes of this automatic conversion of the Series B Preferred Stock, a “Qualifying Event” shall have occurred if (A) (1) the rolling five-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. | ||||
Redemption payments percentage | 12.50% | ||||
Redemption payments (in Dollars) | $ 137,500 | ||||
Weighted average market price of common stock exceed (in Dollars per share) | $ 1 | ||||
Shares of Common stock | 25,000 | ||||
Preferred Stock [Member] | |||||
Equity (Details) [Line Items] | |||||
Preferred stock, par value (in Dollars per share) | $ 0.00001 | ||||
Preferred stock, share issued | 20,000,000 | ||||
Common Stock [Member] | |||||
Equity (Details) [Line Items] | |||||
Equity, description | the Company had 113,094,002 common shares outstanding. Following is a discussion of common stock issuances during the periods presented: ● February 2020 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 expired March 1, 2022. Proceeds of this issuance were used for general corporate purposes. The common stock issued in the exchange was valued using the trading 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. ● Acquisition of Certain Assets of Halcyon – In January 2021, the Company issued 6,250,000 shares of common stock valued at $2.5 million ($0.40 per share; restricted from trading for a period of up to one year) in the acquisition. Refer to Note 3. ● 2021 First Quarter Issuances of Common Stock Units – In the first quarter of 2021, the Company issued 800,000 common stock units for total proceeds of $400,000. Each common stock unit consists of one share of common stock and a warrant for the purchase of two shares of common stock for $0.50 each. Each warrant is exercisable any time before its expiration on the second anniversary of its issuance. The Company allocated the total proceeds based on the relative fair values of the common stock and warrants. The fair value of the warrants was determined using an options valuation model with key assumptions including a risk-free interest rate of 0.11% and historical volatility of 272%. A total of $263,293 was allocated to the warrants and reported in additional paid-in capital. ● Warrant Exercises – In the first quarter of 2021, the Company received $2,967,000 for the exercise of 8,428,976 outstanding warrants. In the fourth quarter of 2021, the Company received $375,000 for the exercise of 1,065,340 outstanding warrants. ● Issuances for Exchange or Conversion of Debt – The Company issued a total of 1,618,660 common shares for the exchange or conversion of outstanding debt. Refer to Note 5. ● Issuance to Vendor for Services – In the third quarter of 2021, the Company issued 125,000 common shares to a vendor for services performed. ● Issuance for Extension of Secured Note – The Company issued 20,000 common shares as consideration to extend the maturity of a senior note in the third quarter of 2021. Refer to Note 5. ● Issuance for Conversion of Series A Preferred Stock – As noted above, in the third quarter of 2021, the Company issued 75,947,376 common shares for the conversion of all outstanding shares of its Series A Preferred Stock. ● 2021 Fourth Quarter Issuances of Common Stock Units – In the fourth quarter of 2021, the Company issued 958,333 common stock units to accredited investors for total proceeds of $575,000. Each common stock unit consists of one share of common stock and a warrant for the purchase of one share of common stock for $0.60 each. Each warrant is exercisable any time before its expiration on the second anniversary of its issuance. The Company allocated the total proceeds based on the relative fair values of the common stock and warrants. The fair value of the warrants was determined using an options valuation model with key assumptions including risk-free interest rates ranging from 0.48% to 0.70% and historical volatility ranging from 237% to 258%. A total of $276,947 was allocated to the warrants and reported in additional paid-in capital. ●Stock-based Compensation – The Company issued 500,000 restricted common shares valued at $155,000 as incentive compensation to two executives who joined the Company in the first quarter of 2021. | ||||
Warrant [Member] | |||||
Equity (Details) [Line Items] | |||||
Warrant per share (in Dollars per share) | $ 0.0001 | ||||
Series A Preferred Stock [Member] | |||||
Equity (Details) [Line Items] | |||||
Preferred stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 | |||
Preferred stock, share issued | 6,328,948 | ||||
Shares of preferred stock | 6,328,948 | ||||
Shares of common stock | 75,947,376 | ||||
Preferred Stock converting shares | 12 | ||||
Series B Preferred Stock [Member] | |||||
Equity (Details) [Line Items] | |||||
Preferred stock, description | the Company sold to certain accredited investors, including Gary C. Evans, our Chief Executive Officer, an aggregate of 135 preferred 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 until December 30, 2022 at an exercise price of $0.352 per share. | ||||
Preferred stock converted into common stock | 25,000 | ||||
Annual dividends rate | 6.00% | ||||
Preferred stock stated value (in Dollars) | $ 10,000 |
Equity (Details) - Schedule of
Equity (Details) - Schedule of warrants outstanding | 12 Months Ended | |
Dec. 31, 2021$ / sharesshares | ||
Class of Warrant or Right [Line Items] | ||
Number of Warrants | 8,808,333 | |
December 2020 [Member] | Subordinated note to investor [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number of Warrants | 500,000 | [1] |
Exercise Price (each) | $ / shares | $ 0.352 | [1] |
Expiration Date | December 30, 2022 | [1] |
Method of Exercise | Cash | [1] |
Common stock units [Member] | February 2020 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number of Warrants | 250,000 | [2] |
Exercise Price (each) | $ / shares | $ 0.4 | [2] |
Expiration Date | March 1, 2022 | [2] |
Method of Exercise | Cash | [2] |
Common stock units [Member] | Q1 2021 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number of Warrants | 1,600,000 | [1] |
Exercise Price (each) | $ / shares | $ 0.5 | [1] |
Expiration Date | January-February, 2023 | [1] |
Method of Exercise | Cash | [1] |
Common stock units [Member] | Q4 2021 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number of Warrants | 958,333 | [1] |
Exercise Price (each) | $ / shares | $ 0.6 | [1] |
Expiration Date | Oct-Dec, 2023 | [1] |
Method of Exercise | Cash | [1] |
Series B preferred units [Member] | December 2020 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number of Warrants | 5,500,000 | [1] |
Exercise Price (each) | $ / shares | $ 0.352 | [1] |
Expiration Date | December 30, 2022 | [1] |
Method of Exercise | Cash | [1] |
[1] | May be redeemed 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. |
Equity (Details) - Schedule o_2
Equity (Details) - Schedule of outstanding stock warrants activity - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of outstanding stock warrants activity [Abstract] | ||
Warrants, beginning | 22,988,632 | 14,488,638 |
Weighted Average Exercise Price, Warrants beginning | $ 0.407 | $ 0.353 |
Warrants, Issued | 2,558,333 | 8,499,994 |
Weighted Average Exercise Price, Issued | $ 0.537 | $ 0.353 |
Cancelled | (7,244,316) | |
Warrants, Weighted Average Exercise Price, Cancelled | $ 0.352 | |
Exercised | (9,494,316) | |
Warrants, Weighted Average Exercise Price, Exercised | $ 0.352 | |
Warrants, ending | 8,808,333 | 22,988,632 |
Warrants, Weighted Average Exercise Price, Warrants ending | $ 0.407 | $ 0.353 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2021 | |
Stock-Based Compensation (Details) [Line Items] | ||
Diluted common shares outstanding percentage | 20.00% | |
Compensation expense related to awards | $ 155,000 | |
Common stock incentive compensation | 13,850,000 | |
Weighted average contractual life | 10 years | |
Exercise price per share | 0.76 | |
Compensation expense | 4,400,000 | |
Total unrecognized compensation cost | $ 6,100,000 | |
Weighted average contractual life | 9 years 9 months 18 days | |
2021 Plan [Member] | ||
Stock-Based Compensation (Details) [Line Items] | ||
common stock for issuance | 15,000,000 | |
Number of shares | 15,000,000 | |
Diluted common shares outstanding percentage | 13.10% | |
Restricted Stock [Member] | ||
Stock-Based Compensation (Details) [Line Items] | ||
Restricted shares, issued | 500,000 | |
Restricted shares, value | $ 155,000 | |
Minimum [Member] | ||
Stock-Based Compensation (Details) [Line Items] | ||
Risk free interest rate | 1.18% | |
Volatility ranging | 331.00% | |
Stock options range | 5 years | |
Maximum [Member] | ||
Stock-Based Compensation (Details) [Line Items] | ||
Risk free interest rate | 1.28% | |
Volatility ranging | 643.00% | |
Stock options range | 6 years |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details) - Schedule of summarizes options outstanding | 12 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
Schedule of summarizes options outstanding [Abstract] | |
Number of Options Beginning (in Shares) | shares | |
Weighted Average Grant Date Fair Value Beginning | |
Weighted Average Exercise Price Beginning | |
Aggregate Intrinsic Value Beginning (in Dollars) | $ | |
Number of Options Ending (in Shares) | shares | 13,850,000 |
Weighted Average Grant Date Fair Value Ending | $ 0.76 |
Weighted Average Exercise Price Ending | $ 0.76 |
Aggregate Intrinsic Value Ending (in Dollars) | $ | |
Number of Options Granted (in Shares) | shares | 13,850,000 |
Weighted Average Grant Date Fair Value Granted | $ 0.76 |
Weighted Average Exercise Price Granted | $ 0.76 |
Aggregate Intrinsic Value Granted (in Dollars) | $ |
Discontinued Operations (Detail
Discontinued Operations (Details) - Schedule of discontinued operations to assets and liabilities held for sale - Discontinued Operations [Member] - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Assets - | ||
Oil and natural gas properties held for sale, at cost | $ 1,874,849 | $ 1,874,849 |
Accumulated DD&A | (1,874,849) | (1,874,849) |
Total assets of discontinued operations held for sale | ||
Liabilities | ||
Accrued liabilities | 48,997 | 31,117 |
Asset retirement obligations | 52,368 | 56,834 |
Revenue payable | 52,117 | 52,117 |
Current liabilities of discontinued operations held for sale | 153,482 | 140,068 |
Asset retirement obligations - | ||
Long-term liabilities of discontinued operations held for sale | 162,948 | 144,149 |
Total liabilities of discontinued operations held for sale | $ 316,430 | $ 284,217 |
Discontinued Operations (Deta_2
Discontinued Operations (Details) - Schedule of discontinued operations shown in the consolidated statements of operation - Discontinued Operations [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue - | ||
Oil and gas sales | $ 116,710 | $ 103,097 |
Costs and Expenses | ||
Lease operating expense | 134,590 | 93,709 |
Depreciation, depletion & amortization | 9,942 | |
Accretion | 14,333 | 34,796 |
Gain on disposal of oil & gas property interests | (24,008) | |
Total costs and expenses | 148,923 | 114,439 |
Interest expense | 22,917 | |
Loss from discontinued operations | $ (32,213) | $ (34,259) |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - Schedule of supplemental cash flow information - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of supplemental cash flow information [Abstract] | ||
Cash paid for interest | $ 138,736 | |
Cash paid for taxes | ||
Acquisition of certain assets of Halcyon Thruput, LLC | ||
- issuance of common shares | 2,500,000 | |
- issuance of subordinated note | 850,000 | |
- assumption of Halcyon bank note | 995,614 | |
Series B preferred stock dividend payable | 58,312 | |
Issuance of common stock units previously subscribed | 50,000 | |
Issuances of common shares for exchange or conversion of debt | 2,160,269 | |
Conversion of Series A preferred stock into common stock | $ 4,975,503 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - Schedule of earnings (loss) per basic and diluted share - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator | ||
Loss from continuing operations attributable to common stockholders | $ (9,792,532) | $ (1,466,555) |
Loss from discontinued operations | (30,196) | (32,114) |
Less: preferred stock dividends | (74,812) | |
Net loss attributable to common stockholders | $ (9,897,540) | $ (1,498,669) |
Denominator | ||
Weighted average shares used to compute basic EPS | 57,159,659 | 17,346,164 |
Dilutive effect of convertible note | 1,164,773 | 1,164,773 |
Dilutive effect of preferred stock | 55,075,900 | 75,965,819 |
Dilutive effect of common stock options | 709,981 | |
Dilutive effect of common stock warrants | 11,022,542 | 14,686,725 |
Weighted average shares used to compute diluted EPS | 125,132,854 | 109,163,481 |
Loss from continuing operations | ||
Basic | $ (0.17) | $ (0.08) |
Diluted | (0.17) | (0.08) |
(Loss) income from discontinued operations | ||
Basic | ||
Diluted | ||
Earnings (loss) per share | ||
Basic | (0.17) | (0.09) |
Diluted | $ (0.17) | $ (0.09) |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | ||
Jun. 30, 2022 | Mar. 25, 2022 | Dec. 31, 2021 | |
Subsequent Events (Details) [Line Items] | |||
Equity capital | $ 3,000,000 | ||
Interest percentage | 10.00% | ||
Subsequent Event [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Purchase lease | $ 993,000 | ||
Purchase price | $ 1,293,000 | ||
Amended agreement | $ 46,000 | ||
Forecast [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Advances | $ 449,000 |