Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 09, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Andina Gold Corp. | |
Entity Central Index Key | 0001533030 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 93,970,152 | |
Entity File Number | 000-56155 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | NV |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents (Note 2) | $ 614,205 | $ 3,473,770 |
Accounts receivable, net (Note 2) | 684,000 | |
Prepaid expenses | 171,963 | 100,555 |
Inventory, net (Note 2) | 340,000 | |
Assets held for sale, current | 6,916,380 | 11,845,681 |
Total current assets | 8,386,548 | 15,760,006 |
Total assets | 8,386,548 | 15,760,006 |
Current liabilities: | ||
Accounts payable and accrued expenses (Note 2) | 1,598,203 | 754,850 |
Loans payable | 600,000 | |
Taxes payable | 771 | |
Liabilities held for sale, current | 1,524,284 | 1,913,433 |
Total current liabilities | 3,723,258 | 2,668,283 |
Notes payable | 20,833 | |
Deferred tax liability | 7,676 | 4,691 |
Total liabilities | 3,751,767 | 2,672,974 |
Commitments and contingencies (Note 16) | ||
Shareholders’ equity: | ||
Preferred stock, $0.001 par value, 100,000 shares authorized, no shares issued and outstanding respectively | ||
Common stock, $0.001 par value, 500,000,000 shares authorized, 93,470,152 and 106,216,708 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 93,470 | 106,216 |
Additional paid-in capital | 18,764,904 | 16,894,103 |
Accumulated deficit | (14,223,593) | (3,913,287) |
Total shareholders’ equity | 4,634,781 | 13,087,032 |
Total liabilities and shareholders’ equity | $ 8,386,548 | $ 15,760,006 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 93,470,152 | 106,216,708 |
Common stock, shares outstanding | 93,470,152 | 106,216,708 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 781,455 | |||
Cost of goods sold, inclusive of provision for inventory loss of $0 and $400,787 for the three and nine months, respectively, ended September 30, 2020 | 744,279 | |||
Gross profit | 37,176 | |||
Operating expenses: | ||||
Personnel costs | 509,031 | 295,504 | 1,925,716 | 295,504 |
Sales and marketing | 5,225 | 14,854 | 5,225 | |
General and administrative | 382,869 | (73,331) | 2,182,631 | 196,530 |
Legal and professional fees | 289,484 | 708,364 | 1,216,799 | 708,363 |
Research and development | 477,585 | 477,585 | ||
Total operating expenses | 1,181,384 | 1,413,347 | 5,340,000 | 1,683,207 |
Loss from operations | (1,181,384) | (1,413,347) | (5,302,824) | (1,683,207) |
Other income (expenses): | ||||
Interest expense | (85,040) | (85,040) | ||
Loss on foreign exchange | (36,500) | (52,511) | (430) | |
Total other expenses | (121,540) | (137,551) | (430) | |
Net loss from continuing operations, before taxes | (1,302,924) | (1,413,347) | (5,440,375) | (1,683,637) |
Income taxes | 2,559 | 90,305 | 7,676 | 90,305 |
Net loss from continuing operations | (1,305,483) | (1,503,652) | (5,448,051) | (1,773,942) |
Net gain / (loss) from discontinued operations, net of tax | (4,634,506) | 204,135 | (4,862,255) | 181,856 |
Net loss | (5,939,989) | (1,299,517) | (10,310,306) | (1,592,086) |
Comprehensive loss from discontinued operations | (5,370) | |||
Comprehensive loss | $ (5,939,989) | $ (1,299,517) | $ (10,310,306) | $ (1,597,456) |
Net loss per common share: | ||||
Loss from continuing operations - basic and diluted | $ (0.01) | $ (0.01) | $ (0.05) | $ (0.02) |
Gain / (loss) from discontinued operations - basic and diluted | (0.05) | 0 | (0.05) | 0 |
Loss per common share - basic and diluted | $ (0.06) | $ (0.01) | $ (0.1) | $ (0.02) |
Weighted average common shares outstanding-basic and diluted | 93,060,753 | 100,363,796 | 101,611,540 | 84,627,790 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||
Provision for inventory loss | $ 0 | $ 400,787 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Common Stock to Be Issued | Accumulated Deficit | NCI | AOCL | Total |
Balance at Dec. 31, 2018 | $ 76,400 | $ 1,425,885 | $ (840,656) | $ (15,097) | $ 646,532 | ||
Balance, shares at Dec. 31, 2018 | 76,400,016 | ||||||
Net loss | (71,338) | 454 | (70,884) | ||||
Balance at Mar. 31, 2019 | $ 76,400 | 1,425,885 | (911,994) | (14,643) | 575,648 | ||
Balance, shares at Mar. 31, 2019 | 76,400,016 | ||||||
Balance at Dec. 31, 2018 | $ 76,400 | 1,425,885 | (840,656) | (15,097) | 646,532 | ||
Balance, shares at Dec. 31, 2018 | 76,400,016 | ||||||
Net loss | (1,592,086) | ||||||
Balance at Sep. 30, 2019 | $ 106,216 | 16,246,645 | (2,453,209) | 1,182,487 | 15,082,139 | ||
Balance, shares at Sep. 30, 2019 | 106,216,708 | ||||||
Balance at Mar. 31, 2019 | $ 76,400 | 1,425,885 | (911,994) | (14,643) | 575,648 | ||
Balance, shares at Mar. 31, 2019 | 76,400,016 | ||||||
Common stock issued pursuant to private placement, net of issuance costs | $ 5,437 | 2,665,813 | 2,671,250 | ||||
Common stock issued pursuant to private placement, net of issuance costs, shares | 5,437,000 | ||||||
Common stock to be issued pursuant to private placement | 438,400 | 438,400 | |||||
Net loss | (221,231) | (5,824) | (227,055) | ||||
Balance at Jun. 30, 2019 | $ 81,837 | 4,091,698 | 438,400 | (1,133,225) | (20,467) | 3,458,243 | |
Balance, shares at Jun. 30, 2019 | 81,837,016 | ||||||
Common stock issued pursuant to private placement, net of issuance costs | $ 8,888 | 4,424,594 | (438,400) | 3,995,082 | |||
Common stock issued pursuant to private placement, net of issuance costs, shares | 8,888,005 | ||||||
Common stock issued in connection with business combination | $ 13,553 | 6,763,064 | 6,776,617 | ||||
Common stock issued in connection with business combination, shares | 13,553,233 | ||||||
Common stock issued pursuant to advisory agreements | $ 790 | 394,210 | 395,000 | ||||
Common stock issued pursuant to advisory agreements, shares | 790,000 | ||||||
Common stock issued in connection with conversion of debt and accounts payable | $ 1,148 | 573,079 | 574,227 | ||||
Common stock issued in connection with conversion of debt and accounts payable, shares | 1,148,454 | ||||||
Consolidation of variable interest entity | 1,182,487 | 1,182,487 | |||||
Deconsolidation of former subsidiary | (20,467) | (20,467) | |||||
Net loss | (1,299,517) | (1,299,517) | |||||
Balance at Sep. 30, 2019 | $ 106,216 | 16,246,645 | (2,453,209) | 1,182,487 | 15,082,139 | ||
Balance, shares at Sep. 30, 2019 | 106,216,708 | ||||||
Balance at Dec. 31, 2019 | $ 106,216 | 16,894,103 | (3,913,287) | 13,087,032 | |||
Balance, shares at Dec. 31, 2019 | 106,216,708 | ||||||
Issuance of common stock pursuant to separation agreement | $ 1,176 | 763,049 | 764,225 | ||||
Issuance of common stock pursuant to separation agreement, shares | 1,175,549 | ||||||
Issuance of common stock pursuant to accelerated vesting of RSU’s | $ 600 | 389,460 | 390,060 | ||||
Issuance of common stock pursuant to accelerated vesting of RSU’s, shares | 600,000 | ||||||
Stock-based compensation | 159,529 | 159,529 | |||||
Net loss | (3,597,309) | (3,597,309) | |||||
Balance at Mar. 31, 2020 | $ 107,992 | 18,206,141 | (7,510,596) | 10,803,537 | |||
Balance, shares at Mar. 31, 2020 | 107,992,257 | ||||||
Balance at Dec. 31, 2019 | $ 106,216 | 16,894,103 | (3,913,287) | 13,087,032 | |||
Balance, shares at Dec. 31, 2019 | 106,216,708 | ||||||
Net loss | (10,310,306) | ||||||
Balance at Sep. 30, 2020 | $ 93,470 | 18,764,904 | (14,223,593) | 4,634,781 | |||
Balance, shares at Sep. 30, 2020 | 93,470,152 | ||||||
Balance at Mar. 31, 2020 | $ 107,992 | 18,206,141 | (7,510,596) | 10,803,537 | |||
Balance, shares at Mar. 31, 2020 | 107,992,257 | ||||||
Share cancellations | |||||||
Share cancellations, shares | (15,050,000) | ||||||
Stock-based compensation | 58,842 | 58,842 | |||||
Net loss | (773,008) | (773,008) | |||||
Balance at Jun. 30, 2020 | $ 107,992 | 18,264,983 | (8,283,604) | 10,089,371 | |||
Balance, shares at Jun. 30, 2020 | 92,942,257 | ||||||
Share cancellations | $ (15,350) | 15,350 | |||||
Share cancellations, shares | (300,000) | ||||||
Share issuance | $ 70 | 14,930 | 15,000 | ||||
Share issuance, shares | 70,000 | ||||||
Stock-based compensation | $ 758 | 219,641 | 220,399 | ||||
Stock-based compensation, shares | 757,895 | ||||||
Beneficial Conversion Feature of Note Payable | 250,000 | 250,000 | |||||
Net loss | (5,939,989) | (5,939,989) | |||||
Balance at Sep. 30, 2020 | $ 93,470 | $ 18,764,904 | $ (14,223,593) | $ 4,634,781 | |||
Balance, shares at Sep. 30, 2020 | 93,470,152 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (5,448,051) | $ (1,592,086) |
Adjustments to reconcile net loss to net cash used in operating activities from continuing operations: | ||
Amortization of debt discount | 20,833 | |
Fair value of common stock issued | 15,000 | 395,000 |
Research and development expenses associated with asset acquisition | 477,585 | |
Provision for inventory loss | 400,787 | |
Stock-based compensation expense | 1,593,055 | |
Deferred income tax expense | 2,985 | 90,305 |
Change in operating assets and liabilities: | ||
Accounts receivable | (684,000) | |
Prepaid expenses | (71,408) | (143,651) |
Inventory, net | (60,787) | |
Accounts payable and accrued expenses | 843,353 | 115,549 |
Due to related party | (346) | |
Assets held for sale | 7,134 | |
Taxes payable | 771 | |
Net cash used in operating activities from continuing operations | (3,380,328) | (657,644) |
Net cash provided by operating activities from discontinued operations | 132,937 | 50,622 |
Net cash used in operating activities | (3,247,391) | (607,022) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Payments for CMI business combination, net of cash acquired | (1,863,117) | |
Cash acquired as part of General Extract asset acquisition | 4,506 | |
Net cash used in investing activities from continuing operations | (1,858,611) | |
Net cash used in investing activities from discontinued operations | (462,174) | (39,597) |
Net cash used in investing activities | (462,174) | (1,898,208) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from sale of common stock pursuant to private placement, net of issuance costs | 7,104,732 | |
Proceeds from loans payable | 600,000 | |
Proceeds from notes payable | 250,000 | |
Net cash provided by financing activities from continuing operations | 850,000 | 7,104,732 |
Net cash used in financing activities from discontinued operations | (100,000) | |
Net cash provided by financing activities | 850,000 | 7,004,732 |
Net increase / (decrease) in cash from continuing operations | (2,530,328) | 4,588,477 |
Net decrease in cash from discontinued operations | (329,237) | (88,975) |
Effect of exchange rate changes on cash | (3,914) | |
Cash at beginning of period | 3,473,770 | 207,313 |
Cash at end of period | 614,205 | 4,702,901 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 46,038 | 12,715 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Common stock issued pursuant to separation agreement | 764,225 | |
Common stock issued pursuant to vesting of restricted stock units | 390,060 | 503,475 |
Common stock issued in connection with conversion of accounts payable | 70,752 | |
Disposal of First Colombia Devco S.A.S. | 20,467 | |
Consolidation of variable interest entity | 1,182,487 | |
Equity issued pursuant to CMI Transaction | $ 6,776,617 |
Nature of the Business
Nature of the Business | 9 Months Ended |
Sep. 30, 2020 | |
Nature of Business and Basis of Presentation [Abstract] | |
Nature of the Business | 1. Nature of the Business Andina Gold Corp (“Andina Gold” or the “Company”) began as Auto Tool Technologies Inc., which was incorporated under the laws of the State of Nevada on May 10, 2011. The Company’s name was changed to AFC Building Technologies Inc. effective January 10, 2014. Effective April 26, 2018, the Company changed its name to First Colombia Development Corp. Effective October 14, 2019, the Company changed its name to Redwood Green Corp. Effective September 1, 2020, the Company changed its name to Andina Gold Corp. On May 10, 2018, the Company acquired all the issued and outstanding share capital of First Colombia Devco S.A.S. (“Devco”) a Colombian company, and began to establish various business ventures in Colombia in the agriculture and real estate development, tourism, and infrastructure sectors before commencing to phase them out in April 2019. On July 1, 2019, the Company acquired 100% of the membership interests in General Extract, LLC (“General Extract”), a Colorado limited liability company. General Extract was founded in 2015 as an importer, distributor, broker and postprocessor of hemp and hemp derivatives. The Company acquired all of the issued and outstanding membership interests, including business plans and access to contacts. On July 15, 2019, the Company, through its wholly owned subsidiary Good Acquisition Co., entered into a Membership Interest Purchase Agreement to acquire cannabis brands and other assets of Critical Mass Industries LLC DBA Good Meds (“CMI” and/or “Good Meds”), a Colorado limited liability company (“CMI Transaction”). CMI is licensed by the Marijuana Enforcement Division of Colorado Department of Revenue to produce cannabis and cannabis products under its six licenses. These licenses allow for cultivation, manufacturing of infused products and retail distribution. At the time the Company entered into the Membership Interest Purchase Agreement, Colorado law prohibited public companies, including the Company, from owning cannabis licenses. Therefore, CMI spun off certain assets acquired by the Company. Under the terms of the Membership Interest Purchase Agreement, CMI retained the cannabis license, inventory and accounts receivable (the “Cannabis License Assets”) and will continue to operate the cannabis business related to those assets. In consideration for the transfer of the acquired assets, the Company delivered 13,553,233 shares of the Company common stock, in addition to $1,999,770 in cash to CMI. An additional 1,500,000 shares of Andina Gold common stock were held and retained by the Company until the Cannabis License Assets can be purchased (see Note 2 and Note 7). Good Meds, the operating unit of CMI, is based in Denver, CO, and operates in a 60,000-square-foot cultivation and processing facility. Good Meds also owns and operates two medical cannabis dispensaries located in Lakewood, CO and Englewood, CO. The business has been in operation since 2009. The Denver facility produces cannabis for sale as dry flower and biomass input for processing into Marijuana-Infused Products (“MIP”), such as live resin, wax and shatter. Andina Gold operates two medical marijuana dispensaries and related businesses in Colorado (see Note 2). Our mission is to deliver high-quality, safely manufactured, sustainable, innovative, and accessible cannabis products which support individual well-being. In August 2020, the Company merged with its wholly owned Nevada subsidiary, Andina Gold Corp., and changed its name to Andina Gold Corp. On October 21, 2020 FINRA issued an advisory accepting the company’s name change from Redwood Green Corp to Andina Gold Corp and ticker symbol change to AGOL effective as of October 22, 2020 at the opening of the U.S. OTC market. As of October 15, 2020 the Company has redirected its business strategy to seek financing for general operating expenses from the Company’s current shareholders in the form of share subscription and warrants as specifically authorized by the Board in writing on October 15, 2020. Further, the Company is actively pursuing divestiture of its Colorado-based subsidiaries and assets. In August 2020, the Company established a wholly owned Colombian subsidiary, Andina Gold Colombia SAS. Subject to further discussions, obtaining the necessary local regulatory approvals and regulatory developments, the Company shall identify and pursue gold exploration in Colombia. The Company will need substantial additional capital in order to execute this strategy and there can be no assurance that such quantities of capital can be sourced on reasonable terms, if at all. In addition, there can be no assurance that the Company will be successful in pursuing this strategy. |
Variable Interest Entity
Variable Interest Entity | 9 Months Ended |
Sep. 30, 2020 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |
Variable Interest Entity | 2. Variable Interest Entity Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Section 810 , Consolidation Under ASC 810, a reporting entity has a controlling financial interest in a VIE, and must consolidate that VIE, if the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support provided by any parties, including equity holders. As of July 15, 2019, the Company consolidates CMI as a VIE pursuant to certain intellectual property, administrative and consulting agreements in which the Company is deemed the primary beneficiary of CMI. Accordingly, the results of CMI have been included in the accompanying condensed consolidated financial statements. Furthermore, the Company notes it does not own the Cannabis License Assets; however, pursuant to accounting principles generally accepted in the United States (“GAAP”), the Cannabis License Assets are consolidated in the accompanying consolidated financial statements along with certain liabilities and the associated revenues and expenses of CMI. See Note 8 for further information regarding CMI. Balance Sheet Description As of As of Current assets Cash and cash equivalents $ 399,011 $ 467,460 Accounts receivable, net 60,312 113,599 Inventory, net 597,935 768,633 Total current assets 1,057,258 1,349,692 Total assets $ 1,057,258 $ 1,349,692 Current liabilities Accounts payable and accrued expenses $ 171,991 $ 337,386 Total current liabilities 171,991 337,386 Total liabilities 171,991 337,386 Net assets $ 885,267 $ 1,012,306 Income Statement Description For the Three Months Ended For the Nine Months Ended Net sales $ 1,858,202 $ 5,187,069 Cost of goods sold, inclusive of depreciation 1,354,626 3,982,677 Gross profit $ 503,576 $ 1,204,392 Operating expenses Personnel costs 104,021 286,788 Sales and marketing 224,382 699,080 General and administrative 54,904 186,614 Legal and professional fees 56,436 77,667 Amortization expense 8,967 26,901 Total operating expenses 448,710 1,277,050 Gain / (loss) from operations $ 54,866 $ (72,658 ) Interest expense 25,858 126,083 Goodwill impairment 4,663,514 4,663,514 Total other expenses 4,689,372 4,789,597 Net income $ (4,634,506 ) $ (4,862,255 ) |
Revision of Prior Period Financ
Revision of Prior Period Financial Statements | 9 Months Ended |
Sep. 30, 2020 | |
Revision of Prior Period Financial Statements [Abstract] | |
Revision of Prior Period Financial Statements | 3. Revision of Prior Period Financial Statements On the consolidated balance sheet for the year ended December 31, 2019 and the quarter ended September 30, 2019, the Cannabis License Assets of CMI, a VIE in which the Company is deemed the primary beneficiary (Note 2), was presented as non-controlling interest pursuant to and in conjunction with the CMI Transaction. The Company does not own the Cannabis License Assets; however, they are included in the accompanying consolidated financial statements for GAAP reporting purposes. The Company revised its consolidated financial statements in which this line item was adjusted to correct the classification by reflecting accounts receivable, net of $113,599, inventory, net of $768,633, and accounts payable and accrued expenses of $337,386 in addition to a decrease in goodwill of $1,192,234 and an increase in additional-paid-in capital of $647,458. The impact of these adjustments on the Company’s consolidated financial statements was as follows: December 31, Previously Reported Non-controlling Interest Adjustment Revised (1) Inventory, net (2) $ 340,000 $ 768,633 $ 1,108,633 Accounts receivable, net (2) $ - $ 113,599 $ 113,599 Total current assets $ 3,933,047 $ 882,232 $ 4,815,279 Goodwill $ 5,855,748 $ (1,192,234 ) $ 4,663,514 Total assets $ 16,070,008 $ (310,002 ) $ 15,760,006 Accounts payable and accrued expenses $ 754,850 $ 337,386 $ 1,092,236 Total current liabilities $ 1,558,821 $ 337,386 $ 1,896,207 Total liabilities $ 2,335,588 $ 337,386 $ 2,672,974 Additional paid-in capital $ 16,246,645 $ 647,458 $ 16,894,103 Non-controlling interests in consolidated variable interest entity $ 1,294,846 $ (1,294,846 ) $ - Total shareholders’ equity $ 13,734,420 $ (647,388 ) $ 13,087,032 Total liabilities and shareholders’ equity $ 16,070,008 $ (310,002 ) $ 15,760,006 (1) There was no impact to the Company’s consolidated statements of operations. (2) The Company does not own the VIE’s portion of this asset. Amounts relating to the VIE are accounts receivable, net of $113,599 and inventory, net of $768,633. |
Going Concern Uncertainty, Fina
Going Concern Uncertainty, Financial Conditions and Management's Plans | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern Uncertainty, Financial Conditions and Management's Plans | 4. Going Concern Uncertainty, Financial Conditions and Management's Plans The Company believes that there is substantial doubt about the Company's ability to continue as a going concern. The Company believes that its available cash balance as of the date of this filing will not be sufficient to fund its anticipated level of operations for at least the next twelve months. The Company believes that, at the present time, its ability to continue operations depends on the sale of assets as well as its ability to access capital markets when necessary to accomplish the Company's strategic objectives. The Company believes that the Company will continue to incur losses in the future. The Company expects to finance future cash needs from the results of operations and, depending on the results of operations, the Company will need additional equity, debt financing or assets sales until the Company can achieve profitability and positive cash flows from operating activities, if ever. There can be no assurance that the Company will be able to attract needed financing or be able to sell assets on reasonable terms, if at all. On March 11, 2020, the 2019 novel coronavirus ("COVID-19) was characterized as a "pandemic." The Company's operations were impacted during the quarter in the United States. The impact of COVID-19 developments and uncertainty with respect to the economic effects of the pandemic has introduced significant volatility in the financial markets. The Company assessed certain accounting matters that require consideration of forecasted financial information, including, but not limited to, the carrying value of the Company's goodwill, intangible assets, and other long-lived assets, and valuation allowances in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of September 30, 2020 and through the date of this report. The Company's future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Condensed Consolidated Financial Statements in future reporting periods. Our unaudited financial statements for the nine months ended September 30, 2020 have been prepared on a going concern basis and contain an additional explanatory paragraph which identifies issues that raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. The continuation of our company as a going concern is dependent upon the continued financial support from its shareholders, the ability of our company to obtain necessary equity or debt financing to continue operations, the sale of assets, and ultimately the attainment of profitable operations. For the nine months ended September 30, 2020, our company used $3,247,391 of cash for operating activities, incurred a net loss of $10,310,306 and has an accumulated deficit of $14,223,593 since inception. These factors raise substantial doubt regarding our company's ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should our company be unable to continue as a going concern. The (COVID-19) pandemic and responses to this crisis, including actions taken by federal, state and local governments, have had an impact on the operations of the company, including, without limitation, the following: reduced staffing due to employee suspected conditions and social distancing measures; constraints on productivity; management and staff non-essential business-related travel was constrained due to stay-at-home orders; most employees have shifted to remote work resulting in possible loss of productivity; consumers visiting dispensaries operated under license impacted by stay-at-home orders. Management continues to monitor the COVID-19 pandemic situation and federal, state and local recommendations and will provide updates as appropriate. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 5. Summary of Significant Accounting Policies Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the Securities and Exchange Commission (“SEC”) for interim reporting. Accordingly, they do not include certain footnotes and financial presentations normally required under GAAP for complete financial statements. The condensed consolidated financial statements include the accounts of the Andina Gold, General Extract and CMI, a VIE for which the Company is deemed to be the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation. The Company operates as one segment from its corporate headquarters in Colorado. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements, with exception to the revision as described in Note 3 and reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial position and the results of operations and cash flows. The results for the three- and nine-month periods ended September 30, 2020 are not necessarily indicative of the results to be expected for any subsequent period or the entire year ending December 31, 2020. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s annual audited financial statements and notes thereto for the year ended December 31, 2019, included in the Company’s Form 10-K filed on April 3, 2020 with the SEC. Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these financial statements include, but are not limited to determining the fair value of the assets acquired and liabilities assumed in acquisition, determining the fair value and potential impairment of inventory, determining the useful lives and potential impairment of long-lived assets and potential impairment of goodwill. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. Reclassifications Certain items in the interim condensed consolidated financial statements were reclassified from prior periods for presentation purposes. Variable Interest Entities The Company accounts for variable interest entities in accordance with FASB ASC Topic 810, Consolidation Accounts Receivable, net Accounts receivable, net is comprised of balances due from customers and are recorded at the invoiced amount. Past due balances are determined based on the contractual terms of the arrangements. Accounts receivable are accrued against when management determines, after considering economic and business conditions and all means of collection efforts have been exhausted and the potential for recovery is considered remote, that the collection of receivables is doubtful. Accounts receivable amounts, net of allowance for doubtful accounts, were $744,312 and $113,599 as of September 30, 2020 and December 31, 2019, respectively. This includes $60,312 and $113,599, respectively, related to the VIE, which is classified as held for sale. Uncollectible accounts previously recorded as receivables are recognized as bad debt expense, with a corresponding decrease to accounts receivable. Bad debt expense was $34,765 and $42,118 for the three and nine months ended September 30, 2020, respectively. This amount includes $(1,235) and $2,118, respectively, related to the VIE, which is classified as discontinued operations. Bad debt expense for the three and nine months ended September 30, 2019 was $(1,200). This related entirely to the VIE and was classified as discontinued operations. Inventory, net Inventory, net is comprised of work-in-process and finished goods consisting of cannabis and cannabidiol products. Cost includes expenditures directly related to the manufacturing process as well as suitable portions of related production overheads, based on normal operating capacity. Inventory, net is stated at the lower of cost or net realizable value. The Company compares the cost of inventory with market value and writes down inventories to net realizable value, if lower. In evaluating whether inventories are stated at lower of cost or net realizable value, management considers such factors as inventories on hand, physical deterioration, obsolescence, changes in price levels, estimated time to sell such inventories and current market conditions. Due to changing market conditions, management conducted a thorough review of its inventory. As a result, a provision for inventory losses of $0 and $400,787 was charged against cost of goods sold during the three and nine months ended September 30, 2020, respectively, due to a write down of inventory to its net realizable value. This was based on the Company’s best estimates of product sales prices and customer demand patterns. It is at least reasonably possible that the estimates used by the Company to determine its provision for inventory losses will be materially different from the actual amounts or results. These differences could result in materially higher than expected inventory provisions, which could have a materially adverse effect on the Company’s results of operations and financial conditions in the near term. Revenue Recognition Under FASB Topic 606, Revenue from Contacts with Customers The Company’s revenue consists of sales of cannabis and ancillary products to both retail consumers and wholesale customers. Revenue for retail customers is recognized upon completion of the transaction in the point of sale system and satisfaction of the sale by providing the corresponding inventory at the retail location. Revenue for wholesale customers is recognized upon acceptance of the physical goods and confirmation by acceptance of the inventory in the regulatory marijuana enforcement tracking reporting compliance (“METRC”) system. Revenue is recognized upon transfer of control of promised products to customers, generally as risk of loss passes, in an amount that reflects the consideration the Company expects to receive in exchange for those products. Taxes collected from customers, which are subsequently remitted to governmental authorities, are excluded from revenue. Retail customer loyalty liabilities are recognized in the period in which they are incurred and will often be retired without being utilized. Shipping and handling costs are expensed as incurred and are included in cost of sales, which were not material for the three and nine months ended September 30, 2020. The Company operates in a highly regulated environment in which state regulatory approval is required prior to the customer being able to purchase the product, either through the Colorado Marijuana Enforcement Division for wholesale clients or the Colorado Department of Public Health and Environment for medical patients. Stock-Based Compensation The fair value of restricted stock units (“RSUs”) granted are measured on the grant date using the closing price of the Company’s common shares on the grant date. The Company accounts for forfeitures as they occur, rather than estimating expected forfeitures over the course of a vesting period. All stock-based compensation costs are recorded in general and administrative expenses in the condensed consolidated statements of operations. Income Taxes The Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes Comprehensive Loss ASC 220, Comprehensive Income Fair Value Measurements Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: ● Level 1 — Quoted prices in active markets for identical assets or liabilities. ● Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, 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 that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying values reported in the condensed consolidated balance sheets for cash, prepaid expenses, inventories, accounts payable, notes payable, and taxes payable approximate fair values because of the immediate or short-term maturities of these financial instruments. There were no other assets or liabilities that require fair value to be recalculated on a recurring basis. Net Loss per Share The Company follows ASC 260, Earnings Per Share Assets and Liabilities of Discontinued Operations Held for Sale Assets and liabilities are classified as held for sale when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the assets; (2) the assets are available for immediate sale, in their present condition, subject only to terms that are usual and customary for sales of such assets; (3) an active program to locate a buyer and other actions required to complete the plan to sell the assets have been initiated; (4) the sale of the assets is probable and is expected to be completed within one year; (5) the assets are being actively marketed for a price that is reasonable in relation to their current fair value; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. When all of these criteria have been met, the assets (and liabilities) are classified as held for sale in the balance sheet. Assets classified as held for sale are reported at the lower of their carrying value or fair value less costs to sell. Depreciation of assets ceases upon designation as held for sale. See Note 8. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2020 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | 6. Revenue Recognition Disaggregated Revenue For the Three Months Ended 2020 2019 Types of Revenues: Medical retail (amounts related to VIE discontinued operations of $1,259,120 and $1,023,480) $ 1,259,120 $ 1,023,480 Medical wholesale (amounts related to VIE discontinued operations of $455,521 and $200,250) 455,521 200,250 Recreational wholesale (amounts related to VIE discontinued operations of $143,561 and $381,746) 143,561 381,746 Other revenues (amounts related to VIE discontinued operations of $0 and $0) - - Total revenues $ 1,858,202 $ 1,605,476 For the Nine Months Ended 2020 2019 Types of Revenues: Medical retail (amounts related to VIE discontinued operations of $3,531,304 and $1,023,480) $ 3,542,504 $ 1,023,480 Medical wholesale (amounts related to VIE discontinued operations of $1,054,748 and $200,250) 1,055,448 200,250 Recreational wholesale (amounts related to VIE discontinued operations of $598,276 and $381,746) 1,367,831 381,746 Other revenues (amounts related to VIE discontinued operations of $2,741 and $0) 2,741 - Total revenues $ 5,968,524 $ 1,605,476 |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Business Combination | 7. Business Combination Effective July 15, 2019, the Company acquired cannabis brands and other assets of CMI. In consideration of the sale and transfer of the acquired assets, the Company delivered 13,553,233 shares of Andina Gold common stock, in addition to $1,999,770 in cash to the members of CMI. The CMI Transaction was accounted for as a business combination in accordance with ASC 805, Business Combinations Cash $ 1,999,770 Common stock 6,776,617 Total purchase price $ 8,776,387 Description Fair Value Weighted average useful life (in years) Assets acquired: Cash $ 136,654 Other current assets 74 Property and equipment, net 1,985,738 Intangible assets: Customer relationships 215,900 6 Trademark/trade name 1,340,000 Indefinite Developed manufacturing process 1,330,000 Indefinite Goodwill 4,663,514 Right of use asset 1,411,461 Deposits 12,348 Total assets acquired $ 11,095,689 Liabilities assumed: Notes payable $ 147,268 Notes payable, related parties 760,573 Right of use liability 1,411,461 Total liabilities assumed 2,319,302 Estimated fair value of net assets acquired $ 8,776,387 Unaudited Pro Forma Results CMI contributed a net loss of $4,634,506 and $4,862,255 for the three and nine months ended September 30, 2020, respectively, included in discontinued operations in the Company’s consolidated statements of operations. The following table below represents the revenue, net loss and loss per share effect of the acquired company, as reported in our pro forma basis as if the acquisition occurred on January 1, 2019. These pro forma results are not necessarily indicative of the results that actually would have occurred if the acquisition had occurred on the first day of the periods presented, nor does the pro forma financial information purport to represent the results of operations for future periods. For the Three Months Ended For the Nine Months Ended 2020 2019 2020 2019 Net Sales $ 1,858,202 $ 1,907,323 $ 5,968,524 $ 4,964,507 Net loss $ (5,939,989 ) $ (782,412 ) $ (10,310,306 ) $ (1,464,115 ) Net loss per common share $ (0.06 ) $ (0.01 ) $ (0.10 ) $ (0.02 ) |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2020 | |
Cash, Including Discontinued Operations [Abstract] | |
Discontinued Operations | 8. Discontinued Operations In April 2019, the Company began to reposition itself into the cannabis industry. On July 1, 2019, the Company disposed of its Colombian subsidiary, Devco, in exchange for its acquisition of 100% of the membership units of General Extract. Devco’s net assets primarily consisted of approximately 13 hectares of undeveloped land. The operations of the Colombian business and land were accounted for as discontinued operations through the date of divestiture. The accompanying condensed consolidated balance sheets include the following carrying amounts of assets and liabilities related to these Devco discontinued operations: September 30, July 1, Assets Cash $ - $ 18,472 Inventory, net - - Prepaid expenses and advances - 29,980 Current assets held for sale - 48,452 Property and equipment, net - 456,762 Total assets held for sale - 505,214 Liabilities Accounts payable and accrued liabilities - 23,123 Total liabilities held for sale - 23,123 Net assets $ - $ 482,091 * - Date of Devco disposition The condensed consolidated statements of operations include the following operating results related to these Devco discontinued operations: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Selling, marketing and administrative $ - $ - $ - $ 19,716 Impairment loss - - - 903 Interest expense - - - 310 Net loss from discontinued operations, before taxes - - - (20,929 ) Income taxes - - - 1,350 Net loss from discontinued operations, net of tax $ - $ - $ - $ (22,279 ) Foreign currency translation adjustments - - - (5,370 ) Comprehensive loss from discontinued operations, net of tax $ - $ - $ - $ (27,649 ) For the nine months ended September 30, 2019, statements of cash flows include non-cash impairment charges of $903 and depreciation expense of $368 related to these Devco discontinued operations. In June 2020, the Company’s board of directors adopted a plan to exit the cultivation, manufacturing of infused products and retail distribution businesses through the sale of Good Meds. The Company determined that the intended sale represented a strategic shift that will have a major effect on the Company’s operations and financial results and therefore, for financial statement reporting purposes classified Good Meds and its consolidated VIE CMI as held for sale at September 30, 2020 and December 31, 2019. The accompanying condensed consolidated balance sheets include the following carrying amounts of assets and liabilities related to these CMI discontinued operations: September 30, December 31, Assets Accounts receivable, net $ 60,312 $ 113,599 Prepaid expenses 2,639 11,588 Inventory, net 597,935 768,633 Property and equipment, net 2,483,690 2,152,626 Goodwill - 4,663,514 Intangible assets, net 2,842,346 2,869,247 Security deposits 15,608 15,608 Right of use asset, net 913,850 1,243,732 Total current assets held for sale 6,916,380 11,838,547 Total assets held for sale $ 6,916,380 $ 11,838,547 Liabilities Accounts payable and accrued expenses 171,991 337,386 Taxes payable 22,233 24,865 Notes payable, related parties 431,090 307,450 Right of use liability 898,970 1,243,732 Total liabilities held for sale 1,524,284 1,913,433 Net assets $ 5,392,096 $ 9,925,114 The condensed consolidated statements of operations include the following operating results related to these CMI discontinued operations: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Net sales $ 1,858,202 $ 1,605,476 $ 5,187,069 $ 1,605,476 Cost of goods sold, inclusive of depreciation 1,354,626 981,890 3,982,677 981,890 Gross profit 503,576 623,586 1,204,392 623,586 Operating expenses: Personnel costs 104,021 112,028 286,788 112,028 Sales and marketing 224,382 164,629 699,080 164,629 General and administrative 54,904 76,175 186,614 76,175 Legal and professional fees 56,436 43,311 77,667 43,311 Amortization expense 8,967 10,593 26,901 10,593 Total operating expenses 448,710 406,736 1,277,050 406,736 Gain / (loss) from operations 54,866 216,850 (72,658 ) 216,850 Other income (expenses): Interest expense (25,858 ) (12,715 ) (126,083 ) (12,715 ) Goodwill impairment (4,663,514 ) - (4,663,514 ) - Total other expenses (4,689,372 ) (12,715 ) (4,789,597 ) (12,715 ) Net loss from discontinued operations, before taxes (4,634,506 ) 204,135 (4,862,255 ) 204,135 Income taxes - - - - Net loss from discontinued operations $ (4,634,506 ) $ 204,135 $ (4,862,255 ) $ 204,135 |
Inventory, Net
Inventory, Net | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory, Net | 9. Inventory, Net Inventory, net consisted of the following: September 30, December 31, Finished goods (amounts related to VIE discontinued operations of $252,553 and $416,871) $ 252,553 $ 920,671 Work-in-process inventory grow (amounts related to VIE discontinued operations of $345,382 and $351,762) 345,382 351,762 Provision for inventory losses - (163,800 ) $ 597,935 $ 1,108,633 The Company re-negotiated the selling price of the cannabidiol finished goods inventory from General Extract in 2019 and 2020. All remaining cannabidiol finished goods inventory was sold in 2020 Q2. Finished goods relating to cannabis and cannabidiol products had balances of $252,553 and $0 as of September 30, 2020 and 2019, respectively. |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 10. Property and Equipment, Net Property and equipment, net consisted of the following. All property and equipment is owned by CMI and classified as held for sale. September 30, December 31, Leasehold improvements $ 2,236,054 $ 2,223,609 Machinery and equipment 954,081 888,786 Furniture and fixtures 43,331 43,331 Construction in progress 643,049 258,615 3,876,515 3,414,341 Less: Accumulated depreciation (1,392,825 ) (1,261,715 ) $ 2,483,690 $ 2,152,626 Depreciation expense for the three and nine months ended September 30, 2020 was $0, and $131,110, respectively, and was $54,471 for the three and nine months ended September 30, 2019. Depreciation expense was recorded in cost of goods sold and general and administrative expense for the nine months ended September 30, 2020 and 2019, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 11. Goodwill and Intangible Assets The Company tests goodwill and definite-lived intangible assets for impairment annually as of October 1st, or more frequently whenever events or changes in circumstances indicate that the asset might be impaired. As the Company has marketed the CMI assets for sale, management determined it was more likely than not that the fair value was less than the carrying value. Therefore, the Company recorded an impairment loss of $4,663,514 in accordance with ASC 350-20-35 , Intangibles-Goodwill ASU 2017-04. The carrying value of goodwill was $0 and $4,663,514 as of September 30, 2020 and December 31, 2019, respectively. Goodwill is classified as held for sale as Of December 31, 2019. The following tables summarize information relating to the Company’s identifiable intangible assets, which are classified as held for sale, as of September 30, 2020 and December 31, 2019: September 30, Estimated Useful Life (Years) Gross Amount Accumulated Amortization Carrying Value Amortized: Customer relationships 6 years $ 215,900 $ (43,554 ) $ 172,346 215,900 (43,554 ) 172,346 Indefinite-lived Trademark/trade name Indefinite 1,340,000 - 1,340,000 Developed manufacturing process Indefinite 1,330,000 - 1,330,000 $ 2,885,900 $ (43,554 ) $ 2,842,346 December 31, Estimated Useful Life (Years) Gross Amount Accumulated Amortization Carrying Value Amortized: Customer relationships 6 years $ 215,900 $ (16,653 ) $ 199,247 215,900 (16,653 ) 199,247 Indefinite-lived Trademark/trade name Indefinite 1,340,000 - 1,340,000 Developed manufacturing process Indefinite 1,330,000 - 1,330,000 $ 2,885,900 $ (16,653 ) $ 2,869,247 Amortization expense, which is included in discontinued operations, was $8,967 and $26,901 for the three and nine months ended September 30, 2020, respectively, and was $9,309 for the three and nine months ended September 30, 2019. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 12. Debt On July 27, 2020, the Company entered into a subscription agreement consisting of 1) a convertible note and 2) warrants. The 1) convertible note has a face value of $250,000, matures August 1, 2022, and accrues interest at 8% per annum. The note is convertible into 2,500,000 shares of the Company’s common stock at a conversion price of $0.10 per share. The beneficial conversion feature is accounted for in accordance with ASC 470-20 Debt with Conversion and Other Options On August 26, 2020, the Company entered into a $600,000 loan agreement, which accrues interest at 84% per annum. The loan is repaid on a weekly basis up to the maturity date of April 7, 2021. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 13. Related Party Transactions In conjunction with the CMI Transaction, the Company assumed a note payable in which the note holder, John Knapp ("Knapp") is a significant shareholder in the Company. Additionally, Knapp is a former executive and board director of the Company. On August 6, 2020, the Company formalized the terms of this note payable. The note bears interest on an annual basis of 25% and is convertible into shares of common stock at a price of $0.25 per share. The note matures on January 31, 2021. As of September 30, 2020, the outstanding balance of the notes payable, related party was $431,090. Effective February 25, 2020, Knapp resigned as a director of Andina Gold, at which time 200,000 Restricted Stock Units were deemed to have vested and were converted into 200,000 common shares. Refer to Note 2 for additional details on the relationship of CMI as a VIE. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | 14. Shareholders’ Equity In February 2020, the Company issued 400,000 shares of common stock pursuant to accelerated vesting of RSU’s upon the resignation of a former executive. In February 2020, the Company issued 200,000 shares of common stock pursuant to accelerated vesting of RSU’s upon the resignation of a former board member. In March 2020, the Company issued 1,175,549 shares of common stock to a former executive per a separation agreement. In June 2020, four shareholders submitted 15,050,000 shares of common stock for cancellation pursuant to prior agreements among certain shareholders. Accordingly, the Company cancelled 15,050,000 shares of common stock. In July 2020, the Company issued 10,000 shares of common stock to a former employee per a separation agreement. In July 2020, one shareholder submitted 300,000 shares of common stock for cancellation pursuant to prior agreements. Accordingly, the Company cancelled 300,000 shares of common stock. In August 2020, the Company issued 60,000 shares of common stock in order to raise capital. In August 2020, the Company issued 757,895 shares of common stock to former board members per a separation agreement. Restricted Stock Unit Awards The Company adopted its 2019 Omnibus Stock Incentive Plan (the “2019 Plan”), which provides for the issuance of stock options, stock grants and RSUs to employees, directors and consultants. The primary purpose of the 2019 Plan is to enhance the ability to attract, motivate, and retain the services of qualified employees, officers and directors. Any RSUs granted under the 2019 Plan will be at the discretion of the Compensation Committee of the Board of Directors. A summary of the Company’s RSU award activity for the nine months ended September 30, 2020 is as follows: Restricted Stock Units Weighted Average Grant Date Fair Value Outstanding at December 31, 2019 - $ - Granted 4,000,000 0.63 Vested (600,000 ) 0.65 Forfeited (200,000 ) 0.65 Outstanding at March 31, 2020 3,200,000 0.62 Granted 1,442,895 0.29 Vested (10,000 ) 0.28 Forfeited (2,000,000 ) 0.60 Outstanding at June 30, 2020 2,632,895 0.46 Granted 757,895 0.19 Vested (757,895 ) 0.19 Forfeited (582,895 ) 0.44 Outstanding at September 30, 2020 2,050,000 $ 0.46 The total fair value of RSUs vested during the three and nine months ending September 30, 2020 was $144,000 and $536,810, respectively, and was $0 during the three and nine months ending September 30, 2019. As of September 30, 2020, there was $656,581 of unrecognized stock-based compensation cost related to non-vested RSU’s, which is expected to be recognized over the remaining vesting period. Stock-based compensation expense relating to RSU’s was $220,399 and $828,830 for the three and nine months ending September 30, 2020, respectively, and was $0 for the three and nine months ended September 30, 2019. Stock-based compensation for the nine months ending September 30, 2020 consisted of equity awards forfeited, granted and vested to employees, directors and consultants of the Company in the amount of $323,117, $450,440, and $55,273, respectively. Expenses for stock-based compensation is included on the accompanying consolidated statements of operations in general and administrative expense. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 15. Income Taxes In accordance with ASC 740-270, the Company calculates the interim tax expense based on an annual effective tax rate (“AETR”). The AETR represents the Company’s estimated effective tax rate for the year based on full year projection of tax expense, divided by the projection of full year pretax book loss, adjusted for discrete transactions occurring during the period. The annual effective tax rates for the nine months ended September 30, 2020 was (0.07%). The Company’s annual effective tax rate for the nine months ended September 30, 2020 is lower than the federal statutory tax rate of 21% primarily due to the disallowance of Company expenses due to Internal Revenue Code Section 280(E) coupled with the increase in future deductible tax differences not expected to be realized in future periods. For the period ending September 30, 2020, the Company has recorded a total income tax liability in the amount of $7,676. This number represents the actual pretax book income generated for the nine-month period ended September 30, 2020 multiplied by the AETR noted above. The total income tax liability recorded is in relation to the discontinued operations of the company and available for sale assets. For the three and nine months ended September 30, 2020, the Company has a net operating loss carry forward of approximately $1,046,749 and $583,001, respectively. Utilization of these net loss carry forwards is subject to the limitations of Internal Revenue Code Section 382. The Company applied a 100% valuation reserve against the deferred tax benefit as the realization of the benefit is not certain. |
Commitments & Contingencies
Commitments & Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments & Contingencies | 16. Commitments & Contingencies Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s condensed consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. Lease Commitments The Company accounts for lease transactions in accordance with Topic 842, Leases There are no other leases that meet the reporting standards of ASU Topic 842 as the Company does not have any other leases with a term exceeding twelve months. Other lease payments not accounted for under ASU Topic 842 total $19,584 and $55,471 for the three and nine months ended September 30, 2020, respectively. An ROU asset of $1,411,461 was recognized upon the CMI Transaction. The present value of the liabilities decreased by $123,530 and $344,762 for the three and nine months ended September 30, 2020, respectively. This balance is included in the operating section of the statement of cash flows for the nine months ended September 30, 2020. Operating lease cost was approximately $159,525 and $467,607 for the three and nine months ended September 30, 2020, respectively. The Company does not have any leases that have not yet commenced which are significant. Legal Proceedings We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our company. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events 1. On October 15, 2020, the Company commenced an offering of up to $2,000,000 of the Company's securities in order to raise capital to fund ongoing operations. The offering consists of one share of common stock plus a warrant to purchase an additional share of common stock, together at a price of $0.15. Each warrant is exercisable at a price of $0.30 per share for a period terminating on November 1, 2022. As of November 9, 2020, the Company had received gross proceeds of $75,000.00. 2. On October 29, 2020, the Board of Directors of the Company granted two officers stock options to purchase shares of common stock of the Company at an exercise price of $0.16. The stock options expire on October 29, 2030 if not exercised prior to that date. Dr. Delon Human, Chairman of the Board, received 1,500,000 stock options vesting on the grant date and Philip Mullin, Chief Financial Officer, received 2,000,000 stock options vesting on the grant date. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the Securities and Exchange Commission (“SEC”) for interim reporting. Accordingly, they do not include certain footnotes and financial presentations normally required under GAAP for complete financial statements. The condensed consolidated financial statements include the accounts of the Andina Gold, General Extract and CMI, a VIE for which the Company is deemed to be the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation. The Company operates as one segment from its corporate headquarters in Colorado. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements, with exception to the revision as described in Note 3 and reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial position and the results of operations and cash flows. The results for the three- and nine-month periods ended September 30, 2020 are not necessarily indicative of the results to be expected for any subsequent period or the entire year ending December 31, 2020. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s annual audited financial statements and notes thereto for the year ended December 31, 2019, included in the Company’s Form 10-K filed on April 3, 2020 with the SEC. |
Use of Estimates | Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these financial statements include, but are not limited to determining the fair value of the assets acquired and liabilities assumed in acquisition, determining the fair value and potential impairment of inventory, determining the useful lives and potential impairment of long-lived assets and potential impairment of goodwill. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. |
Reclassifications | Reclassifications Certain items in the interim condensed consolidated financial statements were reclassified from prior periods for presentation purposes. |
Variable Interest Entities | Variable Interest Entities The Company accounts for variable interest entities in accordance with FASB ASC Topic 810, Consolidation |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable, net is comprised of balances due from customers and are recorded at the invoiced amount. Past due balances are determined based on the contractual terms of the arrangements. Accounts receivable are accrued against when management determines, after considering economic and business conditions and all means of collection efforts have been exhausted and the potential for recovery is considered remote, that the collection of receivables is doubtful. Accounts receivable amounts, net of allowance for doubtful accounts, were $744,312 and $113,599 as of September 30, 2020 and December 31, 2019, respectively. This includes $60,312 and $113,599, respectively, related to the VIE, which is classified as held for sale. Uncollectible accounts previously recorded as receivables are recognized as bad debt expense, with a corresponding decrease to accounts receivable. Bad debt expense was $34,765 and $42,118 for the three and nine months ended September 30, 2020, respectively. This amount includes $(1,235) and $2,118, respectively, related to the VIE, which is classified as discontinued operations. Bad debt expense for the three and nine months ended September 30, 2019 was $(1,200). This related entirely to the VIE and was classified as discontinued operations. |
Inventory, net | Inventory, net Inventory, net is comprised of work-in-process and finished goods consisting of cannabis and cannabidiol products. Cost includes expenditures directly related to the manufacturing process as well as suitable portions of related production overheads, based on normal operating capacity. Inventory, net is stated at the lower of cost or net realizable value. The Company compares the cost of inventory with market value and writes down inventories to net realizable value, if lower. In evaluating whether inventories are stated at lower of cost or net realizable value, management considers such factors as inventories on hand, physical deterioration, obsolescence, changes in price levels, estimated time to sell such inventories and current market conditions. Due to changing market conditions, management conducted a thorough review of its inventory. As a result, a provision for inventory losses of $0 and $400,787 was charged against cost of goods sold during the three and nine months ended September 30, 2020, respectively, due to a write down of inventory to its net realizable value. This was based on the Company’s best estimates of product sales prices and customer demand patterns. It is at least reasonably possible that the estimates used by the Company to determine its provision for inventory losses will be materially different from the actual amounts or results. These differences could result in materially higher than expected inventory provisions, which could have a materially adverse effect on the Company’s results of operations and financial conditions in the near term. |
Revenue Recognition | Revenue Recognition Under FASB Topic 606, Revenue from Contacts with Customers The Company’s revenue consists of sales of cannabis and ancillary products to both retail consumers and wholesale customers. Revenue for retail customers is recognized upon completion of the transaction in the point of sale system and satisfaction of the sale by providing the corresponding inventory at the retail location. Revenue for wholesale customers is recognized upon acceptance of the physical goods and confirmation by acceptance of the inventory in the regulatory marijuana enforcement tracking reporting compliance (“METRC”) system. Revenue is recognized upon transfer of control of promised products to customers, generally as risk of loss passes, in an amount that reflects the consideration the Company expects to receive in exchange for those products. Taxes collected from customers, which are subsequently remitted to governmental authorities, are excluded from revenue. Retail customer loyalty liabilities are recognized in the period in which they are incurred and will often be retired without being utilized. Shipping and handling costs are expensed as incurred and are included in cost of sales, which were not material for the three and nine months ended September 30, 2020. The Company operates in a highly regulated environment in which state regulatory approval is required prior to the customer being able to purchase the product, either through the Colorado Marijuana Enforcement Division for wholesale clients or the Colorado Department of Public Health and Environment for medical patients. |
Stock-Based Compensation | Stock-Based Compensation The fair value of restricted stock units (“RSUs”) granted are measured on the grant date using the closing price of the Company’s common shares on the grant date. The Company accounts for forfeitures as they occur, rather than estimating expected forfeitures over the course of a vesting period. All stock-based compensation costs are recorded in general and administrative expenses in the condensed consolidated statements of operations. |
Income Taxes | Income Taxes The Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes |
Comprehensive Loss | Comprehensive Loss ASC 220, Comprehensive Income |
Fair Value Measurements | Fair Value Measurements Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: ● Level 1 — Quoted prices in active markets for identical assets or liabilities. ● Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, 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 that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying values reported in the condensed consolidated balance sheets for cash, prepaid expenses, inventories, accounts payable, notes payable, and taxes payable approximate fair values because of the immediate or short-term maturities of these financial instruments. There were no other assets or liabilities that require fair value to be recalculated on a recurring basis. |
Net Loss per Share | Net Loss per Share The Company follows ASC 260, Earnings Per Share |
Assets and Liabilities of Discontinued Operations Held for Sale | Assets and Liabilities of Discontinued Operations Held for Sale Assets and liabilities are classified as held for sale when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the assets; (2) the assets are available for immediate sale, in their present condition, subject only to terms that are usual and customary for sales of such assets; (3) an active program to locate a buyer and other actions required to complete the plan to sell the assets have been initiated; (4) the sale of the assets is probable and is expected to be completed within one year; (5) the assets are being actively marketed for a price that is reasonable in relation to their current fair value; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. When all of these criteria have been met, the assets (and liabilities) are classified as held for sale in the balance sheet. Assets classified as held for sale are reported at the lower of their carrying value or fair value less costs to sell. Depreciation of assets ceases upon designation as held for sale. See Note 8. |
Variable Interest Entity (Table
Variable Interest Entity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |
Schedule of Variable Interest Entity | Balance Sheet Description As of As of Current assets Cash and cash equivalents $ 399,011 $ 467,460 Accounts receivable, net 60,312 113,599 Inventory, net 597,935 768,633 Total current assets 1,057,258 1,349,692 Total assets $ 1,057,258 $ 1,349,692 Current liabilities Accounts payable and accrued expenses $ 171,991 $ 337,386 Total current liabilities 171,991 337,386 Total liabilities 171,991 337,386 Net assets $ 885,267 $ 1,012,306 |
Schedule of description of operating results of Variable Interest Entities | Income Statement Description For the Three Months Ended For the Nine Months Ended Net sales $ 1,858,202 $ 5,187,069 Cost of goods sold, inclusive of depreciation 1,354,626 3,982,677 Gross profit $ 503,576 $ 1,204,392 Operating expenses Personnel costs 104,021 286,788 Sales and marketing 224,382 699,080 General and administrative 54,904 186,614 Legal and professional fees 56,436 77,667 Amortization expense 8,967 26,901 Total operating expenses 448,710 1,277,050 Gain / (loss) from operations $ 54,866 $ (72,658 ) Interest expense 25,858 126,083 Goodwill impairment 4,663,514 4,663,514 Total other expenses 4,689,372 4,789,597 Net income $ (4,634,506 ) $ (4,862,255 ) |
Revision of Prior Period Fina_2
Revision of Prior Period Financial Statements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revision of Prior Period Financial Statements [Abstract] | |
Schedule of impact of these adjustments on consolidated financial statements | December 31, Previously Reported Non-controlling Interest Adjustment Revised (1) Inventory, net (2) $ 340,000 $ 768,633 $ 1,108,633 Accounts receivable, net (2) $ - $ 113,599 $ 113,599 Total current assets $ 3,933,047 $ 882,232 $ 4,815,279 Goodwill $ 5,855,748 $ (1,192,234 ) $ 4,663,514 Total assets $ 16,070,008 $ (310,002 ) $ 15,760,006 Accounts payable and accrued expenses $ 754,850 $ 337,386 $ 1,092,236 Total current liabilities $ 1,558,821 $ 337,386 $ 1,896,207 Total liabilities $ 2,335,588 $ 337,386 $ 2,672,974 Additional paid-in capital $ 16,246,645 $ 647,458 $ 16,894,103 Non-controlling interests in consolidated variable interest entity $ 1,294,846 $ (1,294,846 ) $ - Total shareholders’ equity $ 13,734,420 $ (647,388 ) $ 13,087,032 Total liabilities and shareholders’ equity $ 16,070,008 $ (310,002 ) $ 15,760,006 (1) There was no impact to the Company’s consolidated statements of operations. (2) The Company does not own the VIE’s portion of this asset. Amounts relating to the VIE are accounts receivable, net of $113,599 and inventory, net of $768,633. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue Recognition [Abstract] | |
Schedule of disaggregated revenue | For the Three Months Ended 2020 2019 Types of Revenues: Medical retail (amounts related to VIE discontinued operations of $1,259,120 and $1,023,480) $ 1,259,120 $ 1,023,480 Medical wholesale (amounts related to VIE discontinued operations of $455,521 and $200,250) 455,521 200,250 Recreational wholesale (amounts related to VIE discontinued operations of $143,561 and $381,746) 143,561 381,746 Other revenues (amounts related to VIE discontinued operations of $0 and $0) - - Total revenues $ 1,858,202 $ 1,605,476 For the Nine Months Ended 2020 2019 Types of Revenues: Medical retail (amounts related to VIE discontinued operations of $3,531,304 and $1,023,480) $ 3,542,504 $ 1,023,480 Medical wholesale (amounts related to VIE discontinued operations of $1,054,748 and $200,250) 1,055,448 200,250 Recreational wholesale (amounts related to VIE discontinued operations of $598,276 and $381,746) 1,367,831 381,746 Other revenues (amounts related to VIE discontinued operations of $2,741 and $0) 2,741 - Total revenues $ 5,968,524 $ 1,605,476 |
Business Combination (Tables)
Business Combination (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of business acquisitions | Cash $ 1,999,770 Common stock 6,776,617 Total purchase price $ 8,776,387 Description Fair Value Weighted average useful life (in years) Assets acquired: Cash $ 136,654 Other current assets 74 Property and equipment, net 1,985,738 Intangible assets: Customer relationships 215,900 6 Trademark/trade name 1,340,000 Indefinite Developed manufacturing process 1,330,000 Indefinite Goodwill 4,663,514 Right of use asset 1,411,461 Deposits 12,348 Total assets acquired $ 11,095,689 Liabilities assumed: Notes payable $ 147,268 Notes payable, related parties 760,573 Right of use liability 1,411,461 Total liabilities assumed 2,319,302 Estimated fair value of net assets acquired $ 8,776,387 |
Schedule of pro forma financial information | For the Three Months Ended For the Nine Months Ended 2020 2019 2020 2019 Net Sales $ 1,858,202 $ 1,907,323 $ 5,968,524 $ 4,964,507 Net loss $ (5,939,989 ) $ (782,412 ) $ (10,310,306 ) $ (1,464,115 ) Net loss per common share $ (0.06 ) $ (0.01 ) $ (0.10 ) $ (0.02 ) |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Cash, Including Discontinued Operations [Abstract] | |
Schedule of discontinued operations carrying amounts of assets and liabilities | September 30, July 1, Assets Cash $ - $ 18,472 Inventory, net - - Prepaid expenses and advances - 29,980 Current assets held for sale - 48,452 Property and equipment, net - 456,762 Total assets held for sale - 505,214 Liabilities Accounts payable and accrued liabilities - 23,123 Total liabilities held for sale - 23,123 Net assets $ - $ 482,091 * - Date of Devco disposition September 30, December 31, Assets Accounts receivable, net $ 60,312 $ 113,599 Prepaid expenses 2,639 11,588 Inventory, net 597,935 768,633 Property and equipment, net 2,483,690 2,152,626 Goodwill - 4,663,514 Intangible assets, net 2,842,346 2,869,247 Security deposits 15,608 15,608 Right of use asset, net 913,850 1,243,732 Total current assets held for sale 6,916,380 11,838,547 Total assets held for sale $ 6,916,380 $ 11,838,547 Liabilities Accounts payable and accrued expenses 171,991 337,386 Taxes payable 22,233 24,865 Notes payable, related parties 431,090 307,450 Right of use liability 898,970 1,243,732 Total liabilities held for sale 1,524,284 1,913,433 Net assets $ 5,392,096 $ 9,925,114 |
Schedule of discontinued operations statements of operations | Three Months Ended Nine Months Ended 2020 2019 2020 2019 Selling, marketing and administrative $ - $ - $ - $ 19,716 Impairment loss - - - 903 Interest expense - - - 310 Net loss from discontinued operations, before taxes - - - (20,929 ) Income taxes - - - 1,350 Net loss from discontinued operations, net of tax $ - $ - $ - $ (22,279 ) Foreign currency translation adjustments - - - (5,370 ) Comprehensive loss from discontinued operations, net of tax $ - $ - $ - $ (27,649 ) Three Months Ended Nine Months Ended 2020 2019 2020 2019 Net sales $ 1,858,202 $ 1,605,476 $ 5,187,069 $ 1,605,476 Cost of goods sold, inclusive of depreciation 1,354,626 981,890 3,982,677 981,890 Gross profit 503,576 623,586 1,204,392 623,586 Operating expenses: Personnel costs 104,021 112,028 286,788 112,028 Sales and marketing 224,382 164,629 699,080 164,629 General and administrative 54,904 76,175 186,614 76,175 Legal and professional fees 56,436 43,311 77,667 43,311 Amortization expense 8,967 10,593 26,901 10,593 Total operating expenses 448,710 406,736 1,277,050 406,736 Gain / (loss) from operations 54,866 216,850 (72,658 ) 216,850 Other income (expenses): Interest expense (25,858 ) (12,715 ) (126,083 ) (12,715 ) Goodwill impairment (4,663,514 ) - (4,663,514 ) - Total other expenses (4,689,372 ) (12,715 ) (4,789,597 ) (12,715 ) Net loss from discontinued operations, before taxes (4,634,506 ) 204,135 (4,862,255 ) 204,135 Income taxes - - - - Net loss from discontinued operations $ (4,634,506 ) $ 204,135 $ (4,862,255 ) $ 204,135 |
Inventory, Net (Tables)
Inventory, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | September 30, December 31, Finished goods (amounts related to VIE discontinued operations of $252,553 and $416,871) $ 252,553 $ 920,671 Work-in-process inventory grow (amounts related to VIE discontinued operations of $345,382 and $351,762) 345,382 351,762 Provision for inventory losses - (163,800 ) $ 597,935 $ 1,108,633 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | September 30, December 31, Leasehold improvements $ 2,236,054 $ 2,223,609 Machinery and equipment 954,081 888,786 Furniture and fixtures 43,331 43,331 Construction in progress 643,049 258,615 3,876,515 3,414,341 Less: Accumulated depreciation (1,392,825 ) (1,261,715 ) $ 2,483,690 $ 2,152,626 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of identifiable intangible assets | September 30, Estimated Useful Life (Years) Gross Amount Accumulated Amortization Carrying Value Amortized: Customer relationships 6 years $ 215,900 $ (43,554 ) $ 172,346 215,900 (43,554 ) 172,346 Indefinite-lived Trademark/trade name Indefinite 1,340,000 - 1,340,000 Developed manufacturing process Indefinite 1,330,000 - 1,330,000 $ 2,885,900 $ (43,554 ) $ 2,842,346 December 31, Estimated Useful Life (Years) Gross Amount Accumulated Amortization Carrying Value Amortized: Customer relationships 6 years $ 215,900 $ (16,653 ) $ 199,247 215,900 (16,653 ) 199,247 Indefinite-lived Trademark/trade name Indefinite 1,340,000 - 1,340,000 Developed manufacturing process Indefinite 1,330,000 - 1,330,000 $ 2,885,900 $ (16,653 ) $ 2,869,247 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of the company's RSU award activity | Restricted Stock Units Weighted Average Grant Date Fair Value Outstanding at December 31, 2019 - $ - Granted 4,000,000 0.63 Vested (600,000 ) 0.65 Forfeited (200,000 ) 0.65 Outstanding at March 31, 2020 3,200,000 0.62 Granted 1,442,895 0.29 Vested (10,000 ) 0.28 Forfeited (2,000,000 ) 0.60 Outstanding at June 30, 2020 2,632,895 0.46 Granted 757,895 0.19 Vested (757,895 ) 0.19 Forfeited (582,895 ) 0.44 Outstanding at September 30, 2020 2,050,000 $ 0.46 |
Nature of the Business (Details
Nature of the Business (Details) - USD ($) | Jul. 15, 2019 | Sep. 30, 2020 | Jul. 02, 2019 |
Nature of the Business (Textual) | |||
Denver, CO, operates square-foot, description | Good Meds, the operating unit of CMI, is based in Denver, CO, and operates in a 60,000-square-foot cultivation and processing facility. | ||
Critical Mass Industries [Member] | |||
Nature of the Business (Textual) | |||
Shares issued | 1,500,000 | ||
Cash paid | $ 1,999,770 | ||
General Extract, LLC [Member] | |||
Nature of the Business (Textual) | |||
Membership interests acquired | 100.00% | ||
First Colombia Devco S.A.S [Member] | Critical Mass Industries [Member] | |||
Nature of the Business (Textual) | |||
Shares issued | 13,553,233 |
Variable Interest Entity (Detai
Variable Interest Entity (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets | ||||
Cash and cash equivalents | $ 614,205 | $ 3,473,770 | $ 4,702,901 | $ 207,313 |
Inventory, net | 340,000 | |||
Total current assets | 8,386,548 | 15,760,006 | ||
Current liabilities | ||||
Total current liabilities | 3,723,258 | 2,668,283 | ||
VIE's [Member] | ||||
Current assets | ||||
Cash and cash equivalents | 399,011 | 467,460 | ||
Accounts receivable, net | 60,312 | 113,599 | ||
Inventory, net | 597,935 | 768,633 | ||
Total current assets | 1,057,258 | 1,349,692 | ||
Total assets | 1,057,258 | 1,349,692 | ||
Current liabilities | ||||
Accounts payable and accrued expenses | 171,991 | 337,386 | ||
Total current liabilities | 171,991 | 337,386 | ||
Total liabilities | 171,991 | 337,386 | ||
Net assets | $ 885,267 | $ 1,012,306 |
Variable Interest Entity (Det_2
Variable Interest Entity (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Variable Interest Entity [Line Items] | ||||||||
Net sales | $ 781,455 | |||||||
Cost of goods sold, inclusive of depreciation | 744,279 | |||||||
Gross profit | 37,176 | |||||||
Operating expenses | ||||||||
Personnel costs | 509,031 | 295,504 | 1,925,716 | 295,504 | ||||
Sales and marketing | 5,225 | 14,854 | 5,225 | |||||
Legal and professional fees | 289,484 | 708,364 | 1,216,799 | 708,363 | ||||
Total operating expenses | 1,181,384 | 1,413,347 | 5,340,000 | 1,683,207 | ||||
Gain / (loss) from operations | (1,181,384) | (1,413,347) | (5,302,824) | (1,683,207) | ||||
Total other expenses | (121,540) | (137,551) | (430) | |||||
Net income | (5,939,989) | $ (773,008) | $ (3,597,309) | $ (1,299,517) | $ (227,055) | $ (70,884) | (10,310,306) | $ (1,592,086) |
VIE's [Member] | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Net sales | 1,858,202 | 5,187,069 | ||||||
Cost of goods sold, inclusive of depreciation | 1,354,626 | 3,982,677 | ||||||
Gross profit | 503,576 | 1,204,392 | ||||||
Operating expenses | ||||||||
Personnel costs | 104,021 | 286,788 | ||||||
Sales and marketing | 224,382 | 699,080 | ||||||
General and administrative | 54,904 | 186,614 | ||||||
Legal and professional fees | 56,436 | 77,667 | ||||||
Amortization expense | 8,967 | 26,901 | ||||||
Total operating expenses | 448,710 | 1,277,050 | ||||||
Gain / (loss) from operations | 54,866 | (72,658) | ||||||
Interest expense | 25,858 | 126,083 | ||||||
Goodwill impairment | 4,663,514 | 4,663,514 | ||||||
Total other expenses | 4,689,372 | 4,789,597 | ||||||
Net income | $ (4,634,506) | $ (4,862,255) |
Revision of Prior Period Fina_3
Revision of Prior Period Financial Statements (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | |
Inventory, net | $ 340,000 | ||
Accounts receivable, net | 684,000 | ||
Total current assets | 8,386,548 | 15,760,006 | |
Goodwill | 0 | 4,663,514 | |
Total assets | 8,386,548 | 15,760,006 | |
Accounts payable and accrued expenses | 1,598,203 | 754,850 | |
Total current liabilities | 3,723,258 | 2,668,283 | |
Total liabilities | 3,751,767 | 2,672,974 | |
Additional paid-in capital | 18,764,904 | 16,894,103 | |
Total shareholders’ equity | 4,634,781 | 13,087,032 | |
Total liabilities and shareholders’ equity | $ 8,386,548 | 15,760,006 | |
Previously Reported [Member] | |||
Inventory, net | [1] | 340,000 | |
Accounts receivable, net | [1] | ||
Total current assets | 3,933,047 | ||
Goodwill | 5,855,748 | ||
Total assets | 16,070,008 | ||
Accounts payable and accrued expenses | 754,850 | ||
Total current liabilities | 1,558,821 | ||
Total liabilities | 2,335,588 | ||
Additional paid-in capital | 16,246,645 | ||
Non-controlling interests in consolidated variable interest entity | 1,294,846 | ||
Total shareholders’ equity | 13,734,420 | ||
Total liabilities and shareholders’ equity | 16,070,008 | ||
Non-controlling Interest Adjustment [Member] | |||
Inventory, net | [1] | 768,633 | |
Accounts receivable, net | [1] | 113,599 | |
Total current assets | 882,232 | ||
Goodwill | 1,192,234 | ||
Total assets | (310,002) | ||
Accounts payable and accrued expenses | 337,386 | ||
Total current liabilities | 337,386 | ||
Total liabilities | 337,386 | ||
Additional paid-in capital | 647,458 | ||
Non-controlling interests in consolidated variable interest entity | (1,294,846) | ||
Total shareholders’ equity | (647,388) | ||
Total liabilities and shareholders’ equity | (310,002) | ||
Revised [Member] | |||
Inventory, net | [1],[2] | 1,108,633 | |
Accounts receivable, net | [1],[2] | 113,599 | |
Total current assets | [2] | 4,815,279 | |
Goodwill | [2] | 4,663,514 | |
Total assets | [2] | 15,760,006 | |
Accounts payable and accrued expenses | [2] | 1,092,236 | |
Total current liabilities | [2] | 1,896,207 | |
Total liabilities | [2] | 2,672,974 | |
Additional paid-in capital | [2] | 16,894,103 | |
Non-controlling interests in consolidated variable interest entity | [2] | ||
Total shareholders’ equity | [2] | 13,087,032 | |
Total liabilities and shareholders’ equity | [2] | $ 15,760,006 | |
[1] | The Company does not own the VIE's portion of this asset. Amounts relating to the VIE are accounts receivable, net of $113,599 and inventory, net of $768,633. | ||
[2] | There was no impact to the Company's consolidated statements of operations. |
Revision of Prior Period Fina_4
Revision of Prior Period Financial Statements (Details Textual) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | |
Revision of Prior Period Financial Statements (Textual) | |||
Inventory, net | $ 340,000 | ||
Accounts receivable, net | 684,000 | ||
Decrease in goodwill | 0 | 4,663,514 | |
Increase in additional-paid-in capital | 18,764,904 | 16,894,103 | |
VIE's [Member] | |||
Revision of Prior Period Financial Statements (Textual) | |||
Inventory, net | 597,935 | 768,633 | |
Accounts receivable, net | 113,599 | ||
Accounts payable and accrued expenses | $ 171,991 | 337,386 | |
Non-controlling Interest Adjustment [Member] | |||
Revision of Prior Period Financial Statements (Textual) | |||
Inventory, net | [1] | 768,633 | |
Accounts receivable, net | [1] | 113,599 | |
Decrease in goodwill | 1,192,234 | ||
Increase in additional-paid-in capital | 647,458 | ||
Accounts payable and accrued expenses | $ 337,386 | ||
[1] | The Company does not own the VIE's portion of this asset. Amounts relating to the VIE are accounts receivable, net of $113,599 and inventory, net of $768,633. |
Going Concern Uncertainty, Fi_2
Going Concern Uncertainty, Financial Conditions and Management's Plans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Going Concern Uncertainty, Financial Condition and Management's Plans (Textual) | |||||||||
Cash for operating activities | $ (3,247,391) | $ (607,022) | |||||||
Accumulated deficit | $ (14,223,593) | (14,223,593) | $ (3,913,287) | ||||||
Net loss | $ (5,939,989) | $ (773,008) | $ (3,597,309) | $ (1,299,517) | $ (227,055) | $ (70,884) | $ (10,310,306) | $ (1,592,086) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies (Textual) | |||||
Accounts receivable, net | $ 684,000 | $ 684,000 | |||
Provision for inventory losses | 0 | $ 400,787 | |||
Income taxes, description | In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, our policy will be to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements. | ||||
Unvested RSU's considered potentially dilutive securities outstanding | 2,050,000 | ||||
Bad debt expense | 34,765 | $ (1,200) | $ 42,118 | $ (1,200) | |
VIE's, Primary Beneficiary [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Accounts receivable, net | 744,312 | 744,312 | 113,599 | ||
Bad debt expense | (1,235) | 2,118 | |||
Includes related sale | $ 60,312 | $ 60,312 | $ 113,599 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Total revenues | $ 781,455 | |||
Medical retail [Member] | ||||
Total revenues | 1,259,120 | 1,023,480 | 3,542,504 | 1,023,480 |
Medical wholesale [Member] | ||||
Total revenues | 455,521 | 200,250 | 1,055,448 | 200,250 |
Recreational wholesale [Member] | ||||
Total revenues | 143,561 | 381,746 | 1,367,831 | 381,746 |
Other revenues [Member] | ||||
Total revenues | $ 2,741 |
Revenue Recognition (Details Te
Revenue Recognition (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Other Revenues [Member] | ||||
Revenue Recognition (Textual) | ||||
Amounts related to VIE | $ 0 | $ 0 | $ 2,741 | $ 0 |
Recreational Wholesale [Member] | ||||
Revenue Recognition (Textual) | ||||
Amounts related to VIE | 143,561 | 381,746 | 598,276 | 381,746 |
Medical Wholesale [Member] | ||||
Revenue Recognition (Textual) | ||||
Amounts related to VIE | 455,521 | 200,250 | 1,054,748 | 200,250 |
Medical Retail [Member] | ||||
Revenue Recognition (Textual) | ||||
Amounts related to VIE | $ 1,259,120 | $ 1,023,480 | $ 3,531,304 | $ 1,023,480 |
Business Combination (Details)
Business Combination (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Common stock | $ 6,776,617 | |
CMI Transaction [Member] | ||
Cash | 1,999,770 | |
Common stock | 6,776,617 | |
Total purchase price | $ 8,776,387 |
Business Combination (Details 1
Business Combination (Details 1) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Intangible assets: | ||
Goodwill | $ 0 | $ 4,663,514 |
Trademark/trade name [Member] | ||
Liabilities assumed: | ||
Weighted average useful life | Indefinite | |
Developed manufacturing process [Member] | ||
Liabilities assumed: | ||
Weighted average useful life | Indefinite | |
Customer relationships [Member] | ||
Liabilities assumed: | ||
Weighted average useful life (in years) | 6 years | 6 years |
CMI Transaction [Member] | ||
Assets acquired: | ||
Cash | $ 136,654 | |
Other current assets | 74 | |
Property and equipment, net | 1,985,738 | |
Intangible assets: | ||
Customer relationships | 215,900 | |
Trademark/trade name | 1,340,000 | |
Developed manufacturing process | 1,330,000 | |
Goodwill | 4,663,514 | |
Right of use asset | 1,411,461 | |
Deposits | 12,348 | |
Total assets acquired | 11,095,689 | |
Liabilities assumed: | ||
Notes payable | 147,268 | |
Notes payable, related parties | 760,573 | |
Right of use liability | 1,411,461 | |
Total liabilities assumed | 2,319,302 | |
Estimated fair value of net assets acquired | $ 8,776,387 |
Business Combination (Details 2
Business Combination (Details 2) - CMI Transaction [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Net Sales | $ 1,858,202 | $ 1,907,323 | $ 5,968,524 | $ 4,964,507 |
Net loss | $ (5,939,989) | $ (782,412) | $ (10,310,306) | $ (1,464,115) |
Net loss per common share | $ (0.06) | $ (0.01) | $ (0.10) | $ (0.02) |
Business Combination (Details T
Business Combination (Details Textual) - USD ($) | Jul. 15, 2019 | Sep. 30, 2020 | Sep. 30, 2020 |
CMI Transaction [Member] | |||
Business Combination (Textual) | |||
Number of common stock issued | 13,553,233 | ||
Cash | $ 1,999,770 | ||
Net income | $ 4,634,506 | $ 4,862,255 | |
Critical Mass Industries [Member] | |||
Business Combination (Textual) | |||
Number of common stock issued | 1,500,000 | ||
Cash | $ 1,999,770 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Jul. 02, 2019 | [1] |
CMI Transaction [Member] | ||||
Assets | ||||
Accounts receivable, net | $ 60,312 | $ 113,599 | ||
Prepaid expenses and advances | 2,639 | 11,588 | ||
Inventory, net | 597,935 | 768,633 | ||
Property and equipment, net | 2,483,690 | 2,152,626 | ||
Goodwill | 4,663,514 | |||
Intangible assets, net | 2,842,346 | 2,869,247 | ||
Security deposits | 15,608 | 15,608 | ||
Right of use asset, net | 913,850 | 1,243,732 | ||
Current assets held for sale | 6,916,380 | 11,838,547 | ||
Total assets held for sale | 6,916,380 | 11,838,547 | ||
Liabilities | ||||
Accounts payable and accrued liabilities | 171,991 | 337,386 | ||
Taxes payable | 22,233 | 24,865 | ||
Notes payable, related parties | 431,090 | 307,450 | ||
Right of use liability | 898,970 | 1,243,732 | ||
Total liabilities held for sale | 1,524,284 | 1,913,433 | ||
Net assets | 5,392,096 | $ 9,925,114 | ||
First Colombia Devco S.A.S [Member] | ||||
Assets | ||||
Cash | $ 18,472 | |||
Prepaid expenses and advances | 29,980 | |||
Inventory, net | ||||
Property and equipment, net | 48,452 | |||
Total assets held for sale | 505,214 | |||
Liabilities | ||||
Accounts payable and accrued liabilities | 23,123 | |||
Total liabilities held for sale | 23,123 | |||
Net assets | $ 482,091 | |||
[1] | Date of Devco disposition |
Discontinued Operations (Deta_2
Discontinued Operations (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
CMI Transaction [Member] | ||||
Net sales | $ 1,858,202 | $ 1,605,476 | $ 5,187,069 | $ 1,605,476 |
Cost of goods sold, inclusive of depreciation | 1,354,626 | 981,890 | 3,982,677 | 981,890 |
Gross profit | 503,576 | 623,586 | 1,204,392 | 623,586 |
Operating expenses: | ||||
Personnel costs | 104,021 | 112,028 | 286,788 | 112,028 |
Selling, marketing and administrative | 224,382 | 164,629 | 699,080 | 164,629 |
General and administrative | 54,904 | 76,175 | 186,614 | 76,175 |
Legal and professional fees | 56,436 | 43,311 | 77,667 | 43,311 |
Amortization expense | 8,967 | 10,593 | 26,901 | 10,593 |
Total operating expenses | 448,710 | 406,736 | 1,277,050 | 406,736 |
Gain / (loss) from operations | 54,866 | 216,850 | (72,658) | 216,850 |
Other income (expenses): | ||||
Interest expense | (25,858) | (12,715) | (126,083) | (12,715) |
Goodwill impairment | (4,663,514) | (4,663,514) | ||
Total other expenses | (4,689,372) | (12,715) | (4,789,597) | (12,715) |
Net loss from discontinued operations, before taxes | (4,634,506) | 204,135 | (4,862,255) | 204,135 |
Income taxes | ||||
Net loss from discontinued operations | (4,634,506) | 204,135 | (4,862,255) | 204,135 |
First Colombia Devco S.A.S [Member] | ||||
Operating expenses: | ||||
Selling, marketing and administrative | 19,716 | |||
Impairment loss | 903 | |||
Other income (expenses): | ||||
Interest expense | 310 | |||
Net loss from discontinued operations, before taxes | (20,929) | |||
Income taxes | 1,350 | |||
Net loss from discontinued operations | (22,279) | |||
Foreign currency translation adjustments | (5,370) | |||
Comprehensive loss from discontinued operations, net of tax | $ (27,649) |
Discontinued Operations (Deta_3
Discontinued Operations (Details Textual) | 9 Months Ended | |
Sep. 30, 2019USD ($) | Jul. 02, 2019ha | |
General Extract [Member] | ||
Discontinued Operations (Textual) | ||
Membership interests acquired | 100.00% | |
First Colombia Devco S.A.S [Member] | ||
Discontinued Operations (Textual) | ||
Area of Land | ha | 13 | |
Discontinued operations non-cash impairment charges | $ 903 | |
Discontinued operations depreciation expense | $ 368 |
Inventory, Net (Details)
Inventory, Net (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 252,553 | $ 920,671 |
Work-in-process inventory grow | 345,382 | 351,762 |
Provision for inventory losses | (163,800) | |
Total inventory | $ 597,935 | $ 1,108,633 |
Inventory, Net (Details Textual
Inventory, Net (Details Textual) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Inventory, Net (Textual) | |||
Finished goods amounts | $ 252,553 | $ 920,671 | |
Work-in-process inventory grow amounts | 345,382 | 351,762 | |
VIE's [Member] | |||
Inventory, Net (Textual) | |||
Finished goods amounts | 252,553 | 416,871 | |
Work-in-process inventory grow amounts | 345,382 | $ 351,762 | |
Cannabis [Member] | |||
Inventory, Net (Textual) | |||
Finished goods amounts | $ 252,553 | ||
Cannabidiol [Member] | |||
Inventory, Net (Textual) | |||
Finished goods amounts | $ 0 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,876,515 | $ 3,414,341 |
Less: Accumulated depreciation | (1,392,825) | (1,261,715) |
Property and equipment, net | 2,483,690 | 2,152,626 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 43,331 | 43,331 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,236,054 | 2,223,609 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 954,081 | 888,786 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 643,049 | $ 258,615 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Property and Equipment, Net (Textual) | ||||
Depreciation expense | $ 0 | $ 54,471 | $ 131,110 | $ 54,471 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Gross Amount | $ 215,900 | $ 215,900 |
Amortized intangible assets, Accumulated Amortization | (43,554) | (16,653) |
Amortized intangible assets, Carrying Value | 172,346 | 199,247 |
Indefinite-lived Intangible assets, Gross Amount | 2,885,900 | 2,885,900 |
Indefinite-lived Intangible assets, Accumulated Amortization | (43,554) | (16,653) |
Indefinite-lived intangible assets, Carrying Value | 2,842,346 | 2,869,247 |
Trademark/trade name [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived Intangible assets, Gross Amount | 1,340,000 | 1,340,000 |
Indefinite-lived Intangible assets, Accumulated Amortization | ||
Indefinite-lived intangible assets, Carrying Value | $ 1,340,000 | $ 1,340,000 |
Indefinite-lived intangible assets, Estimated Useful Life (Years) | Indefinite | Indefinite |
Developed manufacturing process [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived Intangible assets, Gross Amount | $ 1,330,000 | $ 1,330,000 |
Indefinite-lived Intangible assets, Accumulated Amortization | ||
Indefinite-lived intangible assets, Carrying Value | $ 1,330,000 | $ 1,330,000 |
Indefinite-lived intangible assets, Estimated Useful Life (Years) | Indefinite | Indefinite |
Customer relationships [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Gross Amount | $ 215,900 | $ 215,900 |
Amortized intangible assets, Accumulated Amortization | (43,554) | (16,653) |
Amortized intangible assets, Carrying Value | $ 172,346 | $ 199,247 |
Amortized intangible assets, Estimated Useful Life (Years) | 6 years | 6 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Goodwill and Intangible Assets (Textual) | |||||
Amortization expense including discontinued operations | $ 8,967 | $ 9,309 | $ 26,901 | $ 9,309 | |
Goodwill | 0 | 0 | $ 4,663,514 | ||
CMI Transaction [Member] | |||||
Goodwill and Intangible Assets (Textual) | |||||
Goodwill | $ 4,663,514 | $ 4,663,514 |
Debt (Details)
Debt (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Aug. 26, 2020 | Jul. 27, 2020 | Sep. 30, 2020 | |
Debt (Textual) | |||
Subscription agreement, description | The Company entered into a subscription agreement consisting of 1) a convertible note and 2) warrants. The 1) convertible note has a face value of $250,000, matures August 1, 2022, and accrues interest at 8% per annum. | ||
Convertible note | 2,500,000 | ||
Common stock conversion price | $ 0.10 | ||
Net carrying amount | $ 20,833 | ||
Unamortized debt discount | $ 229,167 | ||
Purchase exercisable | 2,500,000 | ||
Common stock per share | $ 0.25 | ||
Accrues interest | 84.00% | ||
Amount of loan agreement | $ 600,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Related Party Transactions (Textual) | ||
Amount due to related party | $ 431,090 | |
Maturity date | Jan. 31, 2021 | |
Original cost | $ 460,800 | $ 460,800 |
Converted into common shares | 200,000 | |
Note Interest | 25.00% | |
Common stock per share | $ 0.25 | |
Restricted Stock Units (RSUs) [Member] | ||
Related Party Transactions (Textual) | ||
Vested shares | 200,000 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares | 3 Months Ended | ||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | |
Outstanding beginning balance | 2,632,895 | 3,200,000 | |
Granted | 757,895 | 1,442,895 | 4,000,000 |
Vested | (757,895) | (10,000) | (600,000) |
Forfeited | (582,895) | (2,000,000) | (200,000) |
Outstanding ending balance | 2,050,000 | 2,632,895 | 3,200,000 |
Weighted average grant date fair value, beginning balance | $ 0.46 | $ 0.62 | |
Weighted average grant date fair value, Granted | 0.19 | 0.29 | 0.63 |
Weighted average grant date fair value, vested | 0.19 | 0.28 | 0.65 |
Weighted average grant date fair value, Forfeited | 0.44 | 0.60 | 0.65 |
Weighted average grant date fair value, ending balance | $ 0.46 | $ 0.46 | $ 0.62 |
Shareholders' Equity (Details T
Shareholders' Equity (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Aug. 31, 2020 | Aug. 31, 2020 | Jul. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Feb. 29, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Shareholders' Equity (Textual) | ||||||||||
Fair value of RSUs vested | $ 144,000 | $ 0 | $ 536,810 | $ 0 | ||||||
Unrecognized stock based compensation costs | 656,581 | 656,581 | ||||||||
Stock-based compensation expense | $ 220,399 | $ 0 | 828,830 | $ 0 | ||||||
Executive [Member] | ||||||||||
Shareholders' Equity (Textual) | ||||||||||
Issuance of common stock shares | 400,000 | |||||||||
Board [Member] | ||||||||||
Shareholders' Equity (Textual) | ||||||||||
Issuance of common stock shares | 757,895 | 200,000 | ||||||||
Directors [Member] | ||||||||||
Shareholders' Equity (Textual) | ||||||||||
Stock-based compensation consisted of equity awards granted and vested | 450,440 | |||||||||
Employees [Member] | ||||||||||
Shareholders' Equity (Textual) | ||||||||||
Stock-based compensation consisted of equity awards granted and vested | 323,117 | |||||||||
Issuance of common stock shares | 10,000 | 1,175,549 | ||||||||
Consultants [Member] | ||||||||||
Shareholders' Equity (Textual) | ||||||||||
Stock-based compensation consisted of equity awards granted and vested | $ 55,273 | |||||||||
Shareholders [Member] | ||||||||||
Shareholders' Equity (Textual) | ||||||||||
Issuance of common stock shares | 60,000 | 300,000 | 15,050,000 | |||||||
Shares of common stock cancelled | 300,000 | 15,050,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Taxes (Textual) | ||
Annual effective tax rates | 0.07% | |
Federal statutory tax rate | 21.00% | |
Income tax liability | $ 7,676 | |
Net operating loss carry forward | $ 1,046,749 | $ 583,001 |
Valuation reserve, percentage | 100.00% |
Commitments & Contingencies (De
Commitments & Contingencies (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | |
Commitments & Contingencies (Textual) | ||
Other lease payments | $ 19,584 | $ 55,471 |
Operating lease cost | 159,525 | 467,607 |
Present value of the liabilities decreased by acquisition of CMI | 123,530 | 344,762 |
CMI Transaction [Member] | ||
Commitments & Contingencies (Textual) | ||
Right of use asset, net | $ 1,411,461 | $ 1,411,461 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) | Oct. 15, 2020 | Oct. 29, 2020 |
Subsequent Evens (Textual) | ||
Gross proceeds | $ 75,000 | |
Warrant exercisable price per share | $ 0.30 | |
Convertible note maturity date | Nov. 1, 2022 | |
Commenced offering | $ 2,000,000 | |
Stock options, description | On October 29, 2020, the Board of Directors of the Company granted two officers stock options to purchase shares of common stock of the Company at an exercise price of $0.16. The stock options expire on October 29, 2030 if not exercised prior to that date. | |
Additional Share Price | $ 0.15 | |
Board [Member] | ||
Subsequent Evens (Textual) | ||
Stock options | 1,500,000 | |
Chief Financial [Member] | ||
Subsequent Evens (Textual) | ||
Stock options | 2,000,000 |