Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 09, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | CRYOMASS TECHNOLOGIES INC. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 159,121,467 | |
Amendment Flag | false | |
Entity Central Index Key | 0001533030 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-56155 | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 82-5051728 | |
Entity Address, Address Line One | 1001 Bannock Street | |
Entity Address, Address Line Two | Suite 612 | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80204 | |
Entity Interactive Data Current | Yes | |
City Area Code | 303 | |
Local Phone Number | 222-8092 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 237,552 | $ 329,839 |
Accounts receivable, net | 540,000 | 540,000 |
Prepaid expenses | 117,604 | 60,475 |
Related party note receivable | 281,771 | |
Assets held for sale, current | 7,313,798 | 6,867,840 |
Total current assets | 8,490,725 | 7,798,154 |
Property and equipment, net | 135,000 | |
Intangible assets, net | 4,060,431 | |
Goodwill | 1,190,000 | |
Total assets | 13,876,156 | 7,798,154 |
Current liabilities: | ||
Accounts payable and accrued expenses | 3,124,652 | 2,248,235 |
Loans payable | 286,441 | 412,560 |
Taxes payable | 771 | 771 |
Note payable, related party | 1,457,669 | |
Liabilities held for sale, current | 677,084 | 1,464,285 |
Total current liabilities | 5,546,617 | 4,125,851 |
Notes payable | 4,982,944 | 52,083 |
Deferred tax liability | 14,926 | 14,926 |
Total liabilities | 10,544,487 | 4,192,860 |
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, 120,058,181 and 97,005,817 shares issued and outstanding on September 30, 2021 and December 31, 2020, respectively | 120,058 | 97,006 |
Additional paid-in capital | 24,622,355 | 19,138,947 |
Common stock to be issued | 98,535 | |
Accumulated deficit | (21,410,744) | (15,729,194) |
Total shareholders’ equity | 3,331,669 | 3,605,294 |
Total liabilities and shareholders’ equity | $ 13,876,156 | $ 7,798,154 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 120,058,181 | 97,005,817 |
Common stock, shares outstanding | 120,058,181 | 97,005,817 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
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 | 1,204,621 | 509,031 | 2,004,417 | 1,925,716 |
Sales and marketing | 44,049 | 44,063 | 14,854 | |
General and administrative | 445,748 | 382,869 | 2,821,541 | 2,182,631 |
Amortization expense | 21,832 | 21,832 | ||
Legal and professional fees | 340,226 | 289,484 | 797,772 | 1,216,799 |
Total operating expenses | 2,056,476 | 1,181,384 | 5,689,625 | 5,340,000 |
Loss from operations | (2,056,476) | (1,181,384) | (5,689,625) | (5,302,824) |
Other income (expenses): | ||||
Interest expense | (270,552) | (85,040) | (644,027) | (85,040) |
Gain / (loss) on foreign exchange | 23,170 | (36,500) | 46,708 | (52,511) |
Total other expenses | (247,382) | (121,540) | (597,319) | (137,551) |
Net loss from continuing operations, before taxes | (2,303,858) | (1,302,924) | (6,286,944) | (5,440,375) |
Income taxes | 2,559 | 7,676 | ||
Net loss from continuing operations | (2,303,858) | (1,305,483) | (6,286,944) | (5,448,051) |
Net gain / (loss) from discontinued operations, net of tax | 250,092 | (4,634,506) | 605,394 | (4,862,255) |
Net loss | (2,053,766) | (5,939,989) | (5,681,550) | (10,310,306) |
Comprehensive loss from discontinued operations | ||||
Comprehensive loss | $ (2,053,766) | $ (5,939,989) | $ (5,681,550) | $ (10,310,306) |
Net loss per common share: | ||||
Loss from continuing operations - basic and diluted (in Dollars per share) | $ (0.02) | $ (0.01) | $ (0.06) | $ (0.05) |
Gain / (loss) from discontinued operations - basic and diluted (in Dollars per share) | 0 | (0.05) | 0.01 | (0.05) |
Loss per common share - basic and diluted (in Dollars per share) | $ (0.02) | $ (0.06) | $ (0.05) | $ (0.1) |
Weighted average common shares outstanding—basic and diluted (in Shares) | 118,939,488 | 93,060,753 | 107,846,167 | 101,611,540 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Unaudited) (Parentheticals) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||
Provision for inventory loss | $ 0 | $ 400,787 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Common Stock to Be Issued | Accumulated Deficit | Total |
Balance at Dec. 31, 2019 | $ 106,216 | $ 16,894,103 | $ (3,913,287) | $ 13,087,032 | |
Balance (in 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 (in 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 (in 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 (in Shares) at Mar. 31, 2020 | 107,992,257 | ||||
Share cancellations | |||||
Share cancellations (in 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 (in Shares) at Jun. 30, 2020 | 92,942,257 | ||||
Share cancellations | $ (15,350) | 15,350 | |||
Share cancellations (in Shares) | (300,000) | ||||
Share issuance | $ 70 | 14,930 | 15,000 | ||
Share issuance (in Shares) | 70,000 | ||||
Stock-based compensation | $ 758 | 219,641 | 220,399 | ||
Stock-based compensation (in Shares) | 757,895 | ||||
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 (in Shares) at Sep. 30, 2020 | 93,470,152 | ||||
Beneficial Conversion Feature of Note Payable | 250,000 | 250,000 | |||
Balance at Dec. 31, 2020 | $ 97,006 | 19,138,947 | 98,535 | (15,729,194) | 3,605,294 |
Balance (in Shares) at Dec. 31, 2020 | 97,005,817 | ||||
Share issuance | $ 1,492 | 207,043 | (98,535) | 110,000 | |
Share issuance (in Shares) | 1,491,819 | ||||
Stock-based compensation | 250,817 | 250,817 | |||
Net loss | (1,046,927) | (1,046,927) | |||
Balance at Mar. 31, 2021 | $ 98,498 | 19,596,807 | (16,776,121) | 2,919,184 | |
Balance (in Shares) at Mar. 31, 2021 | 98,497,636 | ||||
Share issuance | $ 202 | 202 | |||
Share issuance (in Shares) | 201,586 | ||||
Share issuance related to Cryocann asset purchase | $ 10,000 | 1,794,500 | 1,804,500 | ||
Share issuance related to Cryocann asset purchase (in Shares) | 10,000,000 | ||||
Share issuance pursuant to employment agreements | $ 6,701 | 894,000 | 900,701 | ||
Share issuance pursuant to employment agreements (in Shares) | 6,701,586 | ||||
Share issuance in exchange for extinguishment of debt | $ 2,500 | 505,902 | 508,402 | ||
Share issuance in exchange for extinguishment of debt (in Shares) | 2,500,000 | ||||
Share issuance in exchange for services | $ 633 | 56,867 | 57,500 | ||
Share issuance in exchange for services (in Shares) | 633,125 | ||||
Stock options issued and outstanding | 710,202 | 710,202 | |||
Stock-based compensation | 190,026 | 190,026 | |||
Net loss | (2,580,857) | (2,580,857) | |||
Balance at Jun. 30, 2021 | $ 118,534 | 23,748,304 | (19,356,978) | 4,509,860 | |
Balance (in Shares) at Jun. 30, 2021 | 118,533,933 | ||||
Share issuance | $ 798 | 199,000 | 199,798 | ||
Share issuance (in Shares) | 798,414 | ||||
Share issuance in exchange for services | $ 634 | 239,853 | 240,487 | ||
Share issuance in exchange for services (in Shares) | 633,707 | ||||
Share issuance for interest payment on note payable | $ 92 | 23,317 | 23,409 | ||
Share issuance for interest payment on note payable (in Shares) | 92,127 | ||||
Stock options issued and outstanding | 258,003 | 258,003 | |||
Beneficial Conversion Feature of Note Payable | 85,250 | 85,250 | |||
Stock-based compensation | 68,628 | 68,628 | |||
Net loss | (2,053,766) | (2,053,766) | |||
Balance at Sep. 30, 2021 | $ 120,058 | $ 24,622,355 | $ (21,410,744) | $ 3,331,669 | |
Balance (in Shares) at Sep. 30, 2021 | 120,058,181 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (6,286,944) | $ (5,448,051) |
Adjustments to reconcile net loss to net cash used in operating activities from continuing operations: | ||
Depreciation and amortization expense | 21,832 | |
Amortization of debt discount | 30,861 | 20,833 |
Provision for inventory loss | 400,787 | |
Stock-based compensation expense | 2,400,976 | 1,593,055 |
Deferred income tax expense | 2,985 | |
Fair value of common stock issued pursuant to service and advisory agreements | 291,096 | 15,000 |
Change in operating assets and liabilities: | ||
Accounts receivable | (684,000) | |
Prepaid expenses | (57,129) | (71,408) |
Inventory, net | (60,787) | |
Assets held for sale | 7,134 | |
Accounts payable and accrued expenses | 876,417 | 843,353 |
Taxes payable | 771 | |
Net cash used in operating activities from continuing operations | (2,722,891) | (3,380,328) |
Net cash provided by / (used in) operating activities from disc ops | (347,204) | 132,937 |
Net cash used in operating activities | (3,070,095) | (3,247,391) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash payment for Cryocann asset purchase | (1,000,000) | |
Issuance of other payable related to Cryocann asset purchase | (1,247,684) | |
Purchase of property and equipment | (135,000) | |
Net cash used in investing activities from continuing operations | (2,382,684) | |
Net cash used in investing activities from discontinued operations | (280,561) | (462,174) |
Net cash used in investing activities | (2,663,245) | (462,174) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from note payable, related parties | 237,590 | |
Proceeds from issuance of common stock | 320,000 | |
Repayment of loans payable, current | (40,668) | |
Proceeds from loans payable | 600,000 | |
Proceeds from notes payable | 4,900,000 | 250,000 |
Related party note disbursement | (281,771) | |
Net cash provided by financing activities from continuing operations | 5,135,151 | 850,000 |
Net cash provided by financing activities from discontinued operations | 505,902 | |
Net cash provided by financing activities | 5,641,053 | 850,000 |
Net increase / (decrease) in cash from continuing operations | 29,576 | (2,530,328) |
Net increase / (decrease) in cash from discontinued operations | (121,863) | (329,237) |
Cash at beginning of period | 329,839 | 3,473,770 |
Cash at end of period | 237,552 | 614,205 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 283,330 | 46,038 |
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 | $ 2,851,103 | $ 390,060 |
Nature of the Business
Nature of the Business | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Nature of the Business | 1. Nature of the Business Cryomass Technologies Inc (“Cryomass Technologies” 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 July 15, 2021, the Company entered into a plan of merger with a wholly-owned subsidiary, the effect of which was to change its name to Cryomass Technologies Inc. Our ticker symbol changed from AGOL to CRYM. 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. Effective August 27, 2021, General Extract became Cryomass LLC. 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. 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. (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. 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 budder. Good Meds also operates two medical marijuana dispensaries and related businesses in Colorado (see Note 2). The business has been in operation since 2009. Its mission is to deliver high-quality, safely manufactured, sustainable, innovative, and accessible cannabis products which support individual well-being. The Company is actively pursuing divestiture of its Colorado-based subsidiaries and assets. In August 2020, the Company merged with its wholly owned Nevada subsidiary, Andina Gold Corp., and changed its name into 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. In August 2020, the Company established a wholly owned Colombian subsidiary, Andina Gold Colombia SAS for the purpose of pursuing opportunities in the gold exploration business in Colombia. In December 2020, due to the death of the top geologist exploring opportunities on behalf of the Company, and the effects of the ongoing Coronavirus pandemic, the Company determined that pursuit of gold exploration in Colombia was no longer a practical alternative. On June 22, 2021, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Cryocann USA Corp, a California corporation (“Cryocann”), pursuant to which Company acquired substantially all the assets of Cryocann, (the “Cryocann Acquisition”). The Acquisition was consummated on June 23, 2021. The aggregate purchase price for substantially all the assets of Cryocann was $3,500,000 million in cash and 10,000,000 shares of Company common stock (the “Purchase Price”), of which $1,000,000 in cash and 10,000,000 shares of Company common stock were paid at closing and a promissory note was issued for $1,252,316 payable by Company to Cryocann on October 15, 2021, which represents the remaining Purchase Price of $2,500,000 minus the amount owed by Cryocann under a Loan Agreement dated April 23, 2021 by and between Cryocann and Company. As part of the Cryocann Acquisition, we retained both Cryocann employees, who have expert knowledge of the industry, related participants, customers and the acquired patented technology. Under these employment agreements, each employee may receive compensation if specific performance targets are met in association with our future operating performance once the Cryocann technology enters the market. Cryocann is a designer and seller of equipment developed on the basis of patented technology for cannabis varieties harvesting, refinement, and extraction. The technology reduces processing costs, increases the quality of the extracted compounds and has potential for other agricultural applications including hemp and hops. The Company is exploring the application of the underlying technology to a broad range of industries that handle high-value materials and that could benefit from our precision capture methods. We anticipate that cannabis and hemp will be the first in a series of such industries. Further, we expect to begin field-testing in the fourth quarter of this year and to start commercialization early in 2022. |
Variable Interest Entity
Variable Interest Entity | 9 Months Ended |
Sep. 30, 2021 | |
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 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 As of September 30, As of December 31, Current assets Cash and cash equivalents $ 117,113 $ 196,445 Accounts receivable, net 38,188 66,043 Inventory, net 1,311,197 791,868 Total current assets 1,466,498 1,054,356 Total assets $ 1,466,498 $ 1,054,356 Current liabilities Accounts payable and accrued expenses $ 252,882 $ 211,463 Total current liabilities 252,882 211,463 Total liabilities 252,882 211,463 Net assets $ 1,213,616 $ 842,893 Three Months Ended Nine Months Ended 2021 2020 2021 2020 Income Statement Net sales $ 1,399,505 $ 1,858,202 $ 4,713,077 $ 5,187,069 Cost of goods sold, inclusive of depreciation 857,281 1,354,626 2,982,974 3,982,677 Gross profit 542,224 503,576 1,730,103 1,204,392 Operating expenses: Personnel costs 71,085 104,021 335,182 286,788 Sales and marketing 186,190 224,382 621,765 699,080 General and administrative 29,307 54,904 82,144 186,614 Legal and professional fees 5,550 56,436 35,815 77,667 Amortization expense - 8,967 - 26,901 Total operating expenses 292,132 448,710 1,074,906 1,277,050 Gain / (loss) from operations 250,092 54,866 655,197 (72,658 ) Other income (expenses): Interest expense - (25,858 ) (49,803 ) (126,083 ) Goodwill impairment - (4,663,514 ) - (4,663,514 ) Total operating expenses 292,132 (4,689,372 ) (49,803 ) (4,789,597 ) Net income from discontinued operations $ 250,092 $ (4,634,506 ) $ 605,394 $ (4,862,255 ) |
Revision of Prior Period Financ
Revision of Prior Period Financial Statements | 9 Months Ended |
Sep. 30, 2021 | |
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 for the fiscal year ended December 31, 2019, 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, 2019 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, 2021 | |
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 it has sufficient cash available (most of which was received subsequent to the end of the quarter) to fund its anticipated level of operations for at least the next twelve months. During the quarter and subsequent to quarter end, the Company raised a total of $9,954,000 in private placements, and reduced debt by $4,900,000 in debt -to-equity conversions. Approximately $3,000,000 is required by management to operate the parent company for the next twelve months and the capital expenditures and startup costs associated with Cryomass LLC are anticipated to be approximately $3,000,000. Therefore, management believes that it has sufficient cash available to support this level of operations for the foreseeable future.. Our unaudited financial statements for the three and nine months ended September 30, 2021 have been prepared on a going concern basis. 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, 2021, our company used $3,070,095 of cash for operating activities, incurred a net loss of $5,645,288 and has an accumulated deficit of $21,374,482 since inception. While management believes the Company has sufficient cash available to support an anticipated level of operations for at least the next twelve months, there can be no assurance that it will continue to be able to obtain necessary equity or debt funding, or funding through the sale of assets, or attainment of sufficient levels of profitability to sustain operations beyond that time. On March 11, 2020, the 2019 novel coronavirus (“COVID-19) was characterized as a “pandemic.” The Company’s operations were impacted 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, 2021 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 Consolidated Financial Statements in future reporting periods. 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 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, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 5. Summary of Significant Accounting Policies Principles of Consolidation The accompanying unaudited interim 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 consolidated financial statements include the accounts of Cryomass Technologies Inc., Cryomass Inc. 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 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, 2021 and 2020 are not necessarily indicative of the results to be expected for any subsequent period or the entire year ending December 31, 2021. These unaudited interim 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, 2020, included in the Company’s Form 10-K filed on March 30, 2021 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 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 Purchase Accounting for Acquisitions We apply the acquisition method of accounting for a business combination. In general, this methodology requires us to record assets acquired and liabilities assumed at their respective fair values at the date of acquisition. Any amount of the purchase price paid that is in excess of the estimated fair value of the net assets acquired is recorded as goodwill. For certain acquisitions, we also record a liability for contingent consideration based on estimated future business performance. We monitor our assumptions surrounding these estimated future cash flows and, if there is a significant change, would record an adjustment to the contingent consideration liability and a corresponding adjustment to either income or expense. We determine fair value using widely accepted valuation techniques, primarily discounted cash flow and market multiple analyses. These types of analyses require us to make assumptions and estimates regarding industry and economic factors, the profitability of future business strategies, discount rates and cash flow. If actual results are not consistent with our assumptions and estimates, or our assumptions and estimates change due to new information, we may be exposed to an impairment charge in the future. If the contingent consideration paid for any of our acquisitions differs from the amount initially recorded, we would record either income or expense associated with the change in liability. 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 receiveable 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 $578,188 and $606,043 as of September 2021 and December 31, 2020, respectively. This includes $38,188 and $66,043, 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 $2,415 and $954 for the three and nine months ended September 30, 2021, respectively. This amount includes $2,415 and $954, respectively, related to the VIE, which is classified as discontinued operations. 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. 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 loss of $0 and $400,787 was charged against cost of goods sold during the nine months ended September 30, 2021 and 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, 2021 and 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. Cost of Goods Sold, Net of Depreciation and Amortization Cost of goods sold primarily consisted of allocated salaries and wages of employees directly related with the production process, allocated depreciation and amortization directly related to the production process, cultivation supplies, rent and utilities. Operating Expenses Operating expenses encompass personnel costs, sales and marketing expenses, general and administrative expenses, professional and legal fees and depreciation and amortization related to the property and equipment and intangibles acquired through the acquisition of CMI. Personnel costs consist primarily of consulting expense and administrative salaries and wages. Sales and marketing expenses consist primarily of advertising and marketing, and salaries related to sales and marketing employees. General and administrative expenses are comprised of travel expenses, accounting expenses, and board fees. Professional services are principally comprised of outside legal and professional fees. Other Expense, net Other expense, net consisted of interest expense and gain on foreign exchange. 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 consolidated statements of operations. Property and Equipment, net Purchase of property and equipment are recorded at cost. Improvements and replacements of property and equipment are capitalized. Maintenance and repairs that do not improve or extend the lives of property and equipment are charged to expense as incurred. When assets are sold or retired, their cost and related accumulated depreciation are removed from the accounts and any gain or loss is reported in the consolidated statements of operations. Depreciation and amortization expense is recognized using the straight-line method over the estimated useful life of each asset, as follows: Estimated Useful Life Computer equipment 3 – 5 years Furniture and fixtures 5 – 7 years Machinery and equipment 5 – 8 years Leasehold improvements Shorter of lease term or 15 years Goodwill and Intangible Assets Goodwill represents the excess of the purchase price of an acquired entity over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. Indefinite-lived intangible assets established in connection with business combinations consist of trademarks, trade names and developed manufacturing processes. Intangible assets with indefinite lives are recorded at their estimated fair value at the date of acquisition. Intangible assets with finite lives are recorded at their estimated fair value at the date of acquisition and are amortized over their estimated useful lives using the straight-line method. Amortization of assets ceases upon designation as held for sale. The estimated useful lives of intangible assets are detailed in the table below: Estimated Useful Life Customer relationships 6 years Trademark/trade name Indefinite Developed manufacturing process Indefinite In process research and development Indefinite Patent 10 years Intangible assets associated with in process research and development are indefinite lived until the research and development is finalized, at which point we will assess an estimated useful life. Impairment of Goodwill and Intangible Assets Goodwill Goodwill is not amortized, but instead is tested annually at December 31 for impairment and upon the occurrence of certain events or substantive changes in circumstances. We account for the impairment of goodwill under the provisions of Financial Accounting Standards Board (FASB) Accounting Standard Update 2017-04 (“ASU 2017-04”), “ Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment Intangibles – Goodwill and Other - Goodwill The Company performs impairment testing for goodwill by performing the following steps: 1) evaluate the relevant events or circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, 2) if yes to step 1, calculate the fair value of the reporting unit and compare it with its carrying amount, including goodwill, 3) recognize impairment, limited to the total amount of goodwill allocated to that reporting unit, equal to the excess of the carrying value of a reporting unit over its fair value. As of December 31, 2020, management concluded that the goodwill resulting from the CMI transaction (Note 7) was impaired. See Note 11. Indefinite-Lived Intangible Assets Indefinite-lived intangible assets are not amortized, but instead are tested annually at December 31 for impairment and upon the occurrence of certain events or substantive changes in circumstances. We account for the impairment of indefinite-lived intangible assets under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 350-30-35, Intangibles – Goodwill and Other – General Intangibles Other Than Goodwill As of December 31, 2020, management concluded that indefinite-lived intangible assets were impaired. See Note 11. Intangible Assets Subject to Amortization Intangible assets subject to amortization are tested annually at December 31 for impairment and upon the occurrence of certain events or substantive changes in circumstances. We account for the impairment of intangible assets subject to amortization under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 360-10-35, Property, Plant, and Equipment As of December 31, 2020, management concluded that intangible assets subject to amortization were impaired. See Note 11. Contingencies An initial right-of-use (“ROU”) asset and corresponding liability of $1,411,461 was recognized upon the CMI Transaction. The Company adopted ASU Topic 842 January 1, 2019, but had no reportable operating leases at that point in time. Income Taxes The Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes 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 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. Recent Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40). |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 6. Revenue Recognition Disaggregated Revenue For the Three Months Ended 2021 2020 Types of Revenues: Medical retail (amounts related to VIE discontinued operations of $943,012 and $1,259,120) $ 943,012 $ 1,259,120 Medical wholesale (amounts related to VIE discontinued operations of $456,540 and $455,521) 456,540 455,521 Recreational wholesale (amounts related to VIE discontinued operations of $(47) and $143,561) (47 ) 143,561 Other revenues (amounts related to VIE discontinued operations of $0 and $0) - - Total revenues $ 1,399,505 $ 1,858,202 For the Nine Months Ended 2021 2020 Types of Revenues: Medical retail (amounts related to VIE discontinued operations of $3,196,912 and $3,531,304) $ 3,196,912 $ 3,542,504 Medical wholesale (amounts related to VIE discontinued operations of $1,525,132 and $1,054,748) 1,525,132 1,055,448 Recreational wholesale (amounts related to VIE discontinued operations of $8,963 and $598,276) 8,963 1,367,831 Other revenues (amounts related to VIE discontinued operations of $(17,930) and $2,741) (17,930 ) 2,741 Total revenues $ 4,713,077 $ 5,968,524 |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination [Abstract] | |
Business Combination | 7. Business Combination Effective July 15, 2019, the Company acquired cannabis-related 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 Cryomass Technologies common stock, in addition to $1,999,770 in cash to the members of CMI, and to CMI, respectively. 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 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 Effective June 23, 2021, the Company acquired substantially all the assets of Cryocann for $3,500,000 million in cash and 10,000,000 shares of Company common stock, of which $1,000,000 in cash and 10,000,000 shares of Company common stock were paid at closing and a promissory note was issued for $1,252,316 payable by Company to Cryocann on October 15, 2021, which represents the remaining Purchase Price of $2,500,000 minus the amount owed by Cryocann under a Loan Agreement dated April 23, 2021 by and between Cryocann and the Company. The Company concluded that the Cryocann Acquisition qualified as a business combination under ASC 805. The Company’s allocation of the purchase price was calculated as follows: Cash $ 2,247,684 Common stock 1,804,500 Promissory Note 1,220,079 Total purchase price $ 5,272,263 Description Fair Value Weighted Assets acquired: Intangible assets: In process research and development 3,209,000 Indefinite Patent 873,263 10 Goodwill 1,190,000 Total assets acquired $ 5,272,263 The estimates of the fair value of the assets acquired assumed at the date of the Cryocann Acquisition are subject to adjustment during the measurement period (up to one year from each acquisition date). The primary areas of the accounting for the Cryocann Acquisition that are not yet finalized relate to the fair value of intangible assets acquired, residual goodwill and any related tax impact. The fair value of these net assets acquired is based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. While the Company believes that such preliminary estimates provide a reasonable basis for estimating the fair value of assets acquired, it evaluates any necessary information prior to finalization of the fair value. During the measurement period, the Company will adjust assets if new information is obtained about facts and circumstances that existed as of the date of the Cryocann Acquisition that, if known, would have resulted in the revised estimated values of those assets as of that date. The impact of all changes that do not qualify as measurement period adjustments are included in current period earnings. If the actual results differ from the estimates and judgments used in these fair values, the amounts recorded in the consolidated financial statements could be subject to a possible impairment of the intangible assets or goodwill or require acceleration of the amortization expense of intangible assets in subsequent periods. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 8. Discontinued Operations In June 2020, the Company’s board of directors adopted a plan to end its involvement through the various 2019 CMI contracts with 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, 2021 and December 31, 2020. The accompanying consolidated balance sheets include the following carrying amounts of assets and liabilities related to these CMI discontinued operations: September 30, December 31, 2020 Assets Accounts receivable, net $ 38,188 $ 66,043 Prepaid expenses 11,696 7,601 Inventory, net 1,311,197 791,868 Property and equipment, net 2,995,332 2,714,771 Intangible assets, net 2,481,128 2,481,128 Security deposits 11,522 11,522 Right of use asset, net 464,735 794,907 Total current assets held for sale 7,313,798 6,867,840 Total assets held for sale $ 7,313,798 $ 6,867,840 Liabilities Accounts payable and accrued expenses 252,882 211,463 Taxes payable 16,331 22,645 Notes payable, related parties - 458,599 Right of use liability 407,871 771,578 Total liabilities held for sale 677,084 1,464,285 Net assets $ 6,636,714 $ 5,403,555 The consolidated statements of operations include the following operating results related to these CMI discontinued operations: Three Months Ended Nine Months Ended 2021 2020 2021 2020 Net sales $ 1,399,505 $ 1,858,202 $ 4,713,077 $ 5,187,069 Cost of goods sold, inclusive of depreciation 857,281 1,354,626 2,982,974 3,982,677 Gross profit 542,224 503,576 1,730,103 1,204,392 Operating expenses: Personnel costs 71,085 104,021 335,182 286,788 Sales and marketing 186,190 224,382 621,765 699,080 General and administrative 29,307 54,904 82,144 186,614 Legal and professional fees 5,550 56,436 35,815 77,667 Amortization expense - 8,967 - 26,901 Total operating expenses 292,132 448,710 1,074,906 1,277,050 Gain / (loss) from operations 250,092 54,866 655,197 (72,658 ) Other income (expenses): Interest expense - (25,858 ) (49,803 ) (126,083 ) Goodwill impairment - (4,663,514 ) - (4,663,514 ) Total other expenses - (4,689,372 ) (49,803 ) (4,789,597 ) Net gain / (loss) from discontinued operations, before taxes 250,092 (4,634,506 ) 605,394 (4,862,255 ) Income taxes - - - - Net loss from discontinued operations $ 250,092 $ (4,634,506 ) $ 605,394 $ (4,862,255 ) |
Inventory, Net
Inventory, Net | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory, Net | 9. Inventory, Net Inventory, net consisted of the following: September 30, December 31, 2020 Finished goods (amounts related to VIE discontinued operations of $1,003,985 and $431,466) $ 1,003,985 $ 431,466 Work-in-process inventory grow (amounts related to VIE discontinued operations of $307,212 and $360,402) 307,212 360,402 $ 1,311,197 $ 791,868 The Company re-negotiated the selling price of the cannabidiol finished goods inventory from Cryomass LLC in 2019 and 2020. All remaining cannabidiol finished goods inventory was sold in 2020 Q2. |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2021 | |
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 classified as held for sale, except for $135,000 of machinery and equipment held by Cryomass Inc. September 30, December 31, Leasehold improvements $ 2,770,385 $ 2,770,385 Machinery and equipment 1,207,443 1,065,885 Furniture and fixtures 43,331 43,331 Construction in progress 501,998 227,995 4,523,157 4,107,596 Less: Accumulated depreciation (1,392,825 ) (1,392,825 ) $ 3,130,332 $ 2,714,771 Depreciation expense for the three and nine months ended September 30, 2021 was $0 and $0, respectively. Depreciation expense for the three and nine months ended September 30, 2020 was $0, and $131,110, respectively. Depreciation expense was recorded in cost of goods sold and general and administrative expense. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 11. Goodwill and Intangible Assets The Company tests goodwill and intangible assets for impairment annually as of December 31 st , Intangibles – Goodwill and Other - Goodwill. Intangibles – Goodwill and Other – General Intangibles Other Than Goodwill Property, Plant, and Equipment The carrying value of goodwill was $1,190,000 and $0, as of September 30, 2021 and December 31, 2020, respectively. The following tables summarize information relating to the Company’s identifiable intangible assets, which are classified as held for sale, as of September 30, 2021 and December 31, 2020: September 30, 2021 Estimated Gross Accumulated Amortization Impairment Carrying Amortized Customer relationships 6 years $ 215,900 $ (43,554 ) $ (27,023 ) $ 145,323 Patent 10 years 873,263 (21,832 ) - 851,431 Total amortized 1,089,163 (65,386 ) (27,023 ) 996,754 Indefinite-lived In-process research and development Indefinite 3,209,000 - - 3,209,000 Trademark/trade name Indefinite 1,340,000 - (167,723 ) 1,172,277 Developed manufacturing process Indefinite 1,330,000 - (166,472 ) 1,163,528 Total indefinite-lived 5,879,000 - (334,195 ) 5,544,805 Total identifiable intangible assets $ 6,968,163 $ (65,386 ) $ (361,218 ) $ 6,541,559 December 31, 2020 Estimated Gross Accumulated Amortization Impairment Carrying Amortized Customer relationships 6 years $ 215,900 $ (43,554 ) $ (27,023 ) $ 145,323 Total amortized 215,900 (43,554 ) (27,023 ) 145,323 Indefinite-lived Trademark/trade name Indefinite 1,340,000 - (167,723 ) 1,172,277 Developed manufacturing process Indefinite 1,330,000 - (166,472 ) 1,163,528 Total indefinite-lived 2,670,000 - (334,195 ) 2,335,805 Total identifiable intangible assets $ 2,885,900 $ (43,554 ) $ (361,218 ) $ 2,481,128 Amortization expense, which is included in continuing operations, was $21,832 and $21,832 for the three and nine months ended September 30, 2021, respectively, and was $8,967 and $26,901 for the three and nine months ended September 30, 2020, respectively. Amortization expense included in discontinued operations was $8,967 and $26,901 for the three and nine months ended September 30, 2020, respectively. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
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. On January 25, 2021, the Company refinanced this loan at 93.6%, to obtain additional funding. The loan was fully repaid on April 27, 2021, with a $412,560 loan balance as of December 31, 2020. On March 18, 2021, the Company entered into a $225,000 note payable, which accrued interest at 15% per annum. The note was fully repaid on May 7, 2021. Between March 29, 2021 and July 6, 2021, the Company entered into a series of similar subscription agreements with either domestic or non-US accredited investors, respectively (each, a “Initial Tranche Subscription Agreement (US)” and, respectively, “Initial Tranche Subscription Agreement (non-US)”) pursuant to which the Company issued and sold to certain accredited investors, in the initial tranche of a non-brokered private placement (the “Private Placement”), an aggregate 3,000 units (“Units”), each Unit representing (i) one $1,000 principal amount term note providing for an optional conversion into shares of Company common stock at a price of $0.20 per share (each the “Initial Convertible Term Note”) and (ii) a common share warrant for the purchase of 5,000 shares of Company common stock at an exercise price of $0.40 per share (each an “Initial Warrant”), for aggregate net proceeds of $3,000,000. Between May and July 6, 2021, the Company entered into a series of substantially similar subscription agreements with either domestic or non-US investors (each, a “Subscription Agreement (US)”, and, respectively, “Subscription Agreement (non-US)”) pursuant to which the Company issued and sold to certain accredited investors, in the second tranche of the Private Placement, an aggregate 1,900 units (“Units”), each Unit representing (i) one $1,000 principal amount term note (each a “Convertible Term Note”) providing for an optional conversion into shares of Company common stock at a price of $0.20 per share and (ii) a common share warrant for the purchase of 5,000 shares of Company common stock at an exercise price of $0.40 per share (each a “Warrant”), for additional aggregate net proceeds of $1,900,000. During the nine months ended September 30, 2021, the Company received $4,900,000 of proceeds from the Private Placement. On August 20, 2021, the Company entered into a $300,000 loan agreement, which accrues interest at 91.23% per annum. Payment is due on a weekly basis up to the maturity date of May 27, 2021. The loan had an outstanding balance of $286,441 as of September 30, 2021. The loan was fully repaid on October 19, 2021. See Note 17 for further detail regarding the loan repayment. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
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. In the second quarter of 2021, the Company issued 2,500,000 shares to pay off the balance of the note. Effective February 25, 2020, Knapp resigned as a director of Cryomass Technologies, 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. The outstanding balance of the notes payable, related party was $0 and $458,599 as of September 30, 2021 and December 31, 2020, respectively. In conjunction with the Cryocann Acquisition, the Company received a promissory note from Matt Armstrong, an employee of the Company, for $281,771. This note receivable was issued as part of an employment agreement with Matt Armstrong, effective June 22, 2021, and was offset against his signing bonus on October 15, 2021. There was no interest associated with the note. On August 19, 2021, the Company entered into a loan agreement of $237,590 with its Chief Executive Officer, Christian Noel. The note accrues interest at 14% per annum and was repaid on October 22, 2021. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | 14. Shareholders’ Equity From June to August 2019, the Company completed a private placement for the sale of its common stock. The Company issued 14,325,005 shares of common stock for gross proceeds of $7,162,503, or $0.50 per share, minus equity issuance costs of $72,096. In July 2019, the Company issued 13,553,233 shares of common stock in connection with the CMI Transaction (refer to Note 7). During the year ended December 31, 2019, the Company issued 790,000 shares of common stock pursuant to advisory agreements. The fair value of $395,000 was included in legal and professional fees in the consolidated statements of operations. 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. From October to December 2020, the Company issued 3,535,665 shares of common stock in order to raise capital. From January to March 2021, the Company issued 1,491,819 shares of common stock in order to raise capital. From April to June 2021, the Company issued 10,000,000 shares of common stock related to the CryoCann transaction, 6,903,172 shares of common stock pursuant to employment agreements, 2,500,000 shares of common stock in exchange for the extinguishment of debt, and 633,125 shares of common stock in exchange for services. From July to September 2021, the Company issued 798,414 shares of common stock in order to raise capital, 633,707 shares of common stock in exchange for services, and 92,127 shares of common stock for interest payment on a note payable. 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. In April 2021 Board of Directors cancelled the 2019 Plan. A summary of the Company’s RSU award activity for the nine months ended September 30, 2021 is as follows: Restricted Stock Weighted Outstanding at December 31, 2020 2,453,175 $ 0.42 Granted 500,000 0.14 Vested (903,172 ) 0.16 Forfeited - - Outstanding at March 31, 2021 2,050,003 $ 0.46 Granted 6,135,000 0.15 Vested (6,000,000 ) 0.15 Forfeited - - Outstanding at June 30, 2021 2,185,003 0.45 Granted - - Vested - - Forfeited - - Outstanding at September 30, 2021 2,185,003 0.45 The total fair value of RSUs vested during the three and nine months ending September 30, 2021 was $0 and $2,851,102, respectively. The total fair value of RSUs vested during the three and nine months ending September 30, 2020 was $144,000 and $536,810, respectively. As of September 30, 2021, there was $202,069 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 $68,328 and $1,410,173 for the three and nine months ending September 30, 2021, respectively. 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. Stock-based compensation for the three months ending September 30, 2021 consisted of equity awards forfeited, granted and vested to employees, directors and consultants of the Company in the amount of $(19,184), $71,259, and $16,253, respectively. Stock-based compensation for the nine months ending September 30, 2021 consisted of equity awards forfeited, granted and vested to employees, directors and consultants of the Company in the amount of $1,085,398, $276,016, and $48,759, 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, 2021 | |
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 rate for the nine months ended September 30, 2021 was 0.0%, As of September 30, 2021, the Company has recorded a total income tax liability in the amount of $14,926. The total income tax liability recorded is in relation to the discontinued operations of the company and available for sale assets. |
Commitments & Contingencies
Commitments & Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
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 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 $16,190 and $46,706 for the three and nine months ended September 30, 2021, respectively. 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 $150,259 and 363,707 for the three and nine months ended September 30, 2021, respectively. 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, 2021 and 2020. Operating lease cost was approximately $169,326 and $495,360 for the three and nine months ended September 30, 2021, respectively. 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, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events On October 10, 2021, the Company issued 62,500 shares of common stock at $0.35 per share. On October 25, 2021 the Company issued 543,000 and 270,000 shares of common stock at $0.50 and $0.52 per share, respectively. These issuances were in exchange for services. From October 10, 2021 to October 26, 2021, convertible note holders converted their notes into 24,614,500 shares of common stock at $0.20 per share. These conversions were associated with the Initial Convertible Term Note and Convertible Term Note defined in Note 12. Between October 14, 2021 and November 3, 2021, the Company issued 13,590,000 shares of common stock at $0.20 per share in order to raise capital. On October 15, 2021, the Company fully repaid the promissory note that was issued for $1,252,316 payable by the Company to Cryocann as part of the Cryocann Acquisition. On October 15, 2021, our related party note receivable of $281,771 was relieved through the signing bonus due to Matt Armstrong as part of his employment agreement. On October 19, 2021, the Company fully repaid the remaining principal balance for the $286,441 note entered into on August 20, 2021. On October 22, 2021, the Company fully repaid the related party note due to its Chief Executive Officer, Christian Noel. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited interim 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 consolidated financial statements include the accounts of Cryomass Technologies Inc., Cryomass Inc. 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 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, 2021 and 2020 are not necessarily indicative of the results to be expected for any subsequent period or the entire year ending December 31, 2021. These unaudited interim 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, 2020, included in the Company’s Form 10-K filed on March 30, 2021 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 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 |
Purchase Accounting for Acquisitions | Purchase Accounting for Acquisitions We apply the acquisition method of accounting for a business combination. In general, this methodology requires us to record assets acquired and liabilities assumed at their respective fair values at the date of acquisition. Any amount of the purchase price paid that is in excess of the estimated fair value of the net assets acquired is recorded as goodwill. For certain acquisitions, we also record a liability for contingent consideration based on estimated future business performance. We monitor our assumptions surrounding these estimated future cash flows and, if there is a significant change, would record an adjustment to the contingent consideration liability and a corresponding adjustment to either income or expense. We determine fair value using widely accepted valuation techniques, primarily discounted cash flow and market multiple analyses. These types of analyses require us to make assumptions and estimates regarding industry and economic factors, the profitability of future business strategies, discount rates and cash flow. If actual results are not consistent with our assumptions and estimates, or our assumptions and estimates change due to new information, we may be exposed to an impairment charge in the future. If the contingent consideration paid for any of our acquisitions differs from the amount initially recorded, we would record either income or expense associated with the change in liability. |
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 receiveable 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 $578,188 and $606,043 as of September 2021 and December 31, 2020, respectively. This includes $38,188 and $66,043, 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 $2,415 and $954 for the three and nine months ended September 30, 2021, respectively. This amount includes $2,415 and $954, respectively, related to the VIE, which is classified as discontinued operations. 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. |
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 loss of $0 and $400,787 was charged against cost of goods sold during the nine months ended September 30, 2021 and 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, 2021 and 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. |
Cost of Goods Sold, Net of Depreciation and Amortization | Cost of Goods Sold, Net of Depreciation and Amortization Cost of goods sold primarily consisted of allocated salaries and wages of employees directly related with the production process, allocated depreciation and amortization directly related to the production process, cultivation supplies, rent and utilities. |
Operating Expenses | Operating Expenses Operating expenses encompass personnel costs, sales and marketing expenses, general and administrative expenses, professional and legal fees and depreciation and amortization related to the property and equipment and intangibles acquired through the acquisition of CMI. Personnel costs consist primarily of consulting expense and administrative salaries and wages. Sales and marketing expenses consist primarily of advertising and marketing, and salaries related to sales and marketing employees. General and administrative expenses are comprised of travel expenses, accounting expenses, and board fees. Professional services are principally comprised of outside legal and professional fees. |
Other Expense, net | Other Expense, net Other expense, net consisted of interest expense and gain on foreign exchange. |
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 consolidated statements of operations. |
Property and Equipment, net | Property and Equipment, net Purchase of property and equipment are recorded at cost. Improvements and replacements of property and equipment are capitalized. Maintenance and repairs that do not improve or extend the lives of property and equipment are charged to expense as incurred. When assets are sold or retired, their cost and related accumulated depreciation are removed from the accounts and any gain or loss is reported in the consolidated statements of operations. Depreciation and amortization expense is recognized using the straight-line method over the estimated useful life of each asset, as follows: Estimated Useful Life Computer equipment 3 – 5 years Furniture and fixtures 5 – 7 years Machinery and equipment 5 – 8 years Leasehold improvements Shorter of lease term or 15 years |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of the purchase price of an acquired entity over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. Indefinite-lived intangible assets established in connection with business combinations consist of trademarks, trade names and developed manufacturing processes. Intangible assets with indefinite lives are recorded at their estimated fair value at the date of acquisition. Intangible assets with finite lives are recorded at their estimated fair value at the date of acquisition and are amortized over their estimated useful lives using the straight-line method. Amortization of assets ceases upon designation as held for sale. The estimated useful lives of intangible assets are detailed in the table below: Estimated Useful Life Customer relationships 6 years Trademark/trade name Indefinite Developed manufacturing process Indefinite In process research and development Indefinite Patent 10 years Intangible assets associated with in process research and development are indefinite lived until the research and development is finalized, at which point we will assess an estimated useful life. |
Impairment of Goodwill and Intangible Assets | Impairment of Goodwill and Intangible Assets Goodwill Goodwill is not amortized, but instead is tested annually at December 31 for impairment and upon the occurrence of certain events or substantive changes in circumstances. We account for the impairment of goodwill under the provisions of Financial Accounting Standards Board (FASB) Accounting Standard Update 2017-04 (“ASU 2017-04”), “ Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment Intangibles – Goodwill and Other - Goodwill The Company performs impairment testing for goodwill by performing the following steps: 1) evaluate the relevant events or circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, 2) if yes to step 1, calculate the fair value of the reporting unit and compare it with its carrying amount, including goodwill, 3) recognize impairment, limited to the total amount of goodwill allocated to that reporting unit, equal to the excess of the carrying value of a reporting unit over its fair value. As of December 31, 2020, management concluded that the goodwill resulting from the CMI transaction (Note 7) was impaired. See Note 11. |
Indefinite-Lived Intangible Assets | Indefinite-Lived Intangible Assets Indefinite-lived intangible assets are not amortized, but instead are tested annually at December 31 for impairment and upon the occurrence of certain events or substantive changes in circumstances. We account for the impairment of indefinite-lived intangible assets under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 350-30-35, Intangibles – Goodwill and Other – General Intangibles Other Than Goodwill As of December 31, 2020, management concluded that indefinite-lived intangible assets were impaired. See Note 11. |
Intangible Assets Subject to Amortization | Intangible Assets Subject to Amortization Intangible assets subject to amortization are tested annually at December 31 for impairment and upon the occurrence of certain events or substantive changes in circumstances. We account for the impairment of intangible assets subject to amortization under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 360-10-35, Property, Plant, and Equipment As of December 31, 2020, management concluded that intangible assets subject to amortization were impaired. See Note 11. |
Contingencies | Contingencies An initial right-of-use (“ROU”) asset and corresponding liability of $1,411,461 was recognized upon the CMI Transaction. The Company adopted ASU Topic 842 January 1, 2019, but had no reportable operating leases at that point in time. |
Income Taxes | Income Taxes The Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes |
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 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40). |
Variable Interest Entity (Table
Variable Interest Entity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |
Schedule of Variable Interest Entity | Balance Sheet As of September 30, As of December 31, Current assets Cash and cash equivalents $ 117,113 $ 196,445 Accounts receivable, net 38,188 66,043 Inventory, net 1,311,197 791,868 Total current assets 1,466,498 1,054,356 Total assets $ 1,466,498 $ 1,054,356 Current liabilities Accounts payable and accrued expenses $ 252,882 $ 211,463 Total current liabilities 252,882 211,463 Total liabilities 252,882 211,463 Net assets $ 1,213,616 $ 842,893 |
Schedule of description of operating results of Variable Interest Entities | Three Months Ended Nine Months Ended 2021 2020 2021 2020 Income Statement Net sales $ 1,399,505 $ 1,858,202 $ 4,713,077 $ 5,187,069 Cost of goods sold, inclusive of depreciation 857,281 1,354,626 2,982,974 3,982,677 Gross profit 542,224 503,576 1,730,103 1,204,392 Operating expenses: Personnel costs 71,085 104,021 335,182 286,788 Sales and marketing 186,190 224,382 621,765 699,080 General and administrative 29,307 54,904 82,144 186,614 Legal and professional fees 5,550 56,436 35,815 77,667 Amortization expense - 8,967 - 26,901 Total operating expenses 292,132 448,710 1,074,906 1,277,050 Gain / (loss) from operations 250,092 54,866 655,197 (72,658 ) Other income (expenses): Interest expense - (25,858 ) (49,803 ) (126,083 ) Goodwill impairment - (4,663,514 ) - (4,663,514 ) Total operating expenses 292,132 (4,689,372 ) (49,803 ) (4,789,597 ) Net income from discontinued operations $ 250,092 $ (4,634,506 ) $ 605,394 $ (4,862,255 ) |
Revision of Prior Period Fina_2
Revision of Prior Period Financial Statements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revision Of Prior Period Financial Statements [Abstract] | |
Schedule of impact of these adjustments on consolidated financial statements | December 31, 2019 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful life of property and equipment | Estimated Useful Life Computer equipment 3 – 5 years Furniture and fixtures 5 – 7 years Machinery and equipment 5 – 8 years Leasehold improvements Shorter of lease term or 15 years |
Schedule of estimated useful lives of intangible assets | Estimated Useful Life Customer relationships 6 years Trademark/trade name Indefinite Developed manufacturing process Indefinite In process research and development Indefinite Patent 10 years |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregated revenue | For the Three Months Ended 2021 2020 Types of Revenues: Medical retail (amounts related to VIE discontinued operations of $943,012 and $1,259,120) $ 943,012 $ 1,259,120 Medical wholesale (amounts related to VIE discontinued operations of $456,540 and $455,521) 456,540 455,521 Recreational wholesale (amounts related to VIE discontinued operations of $(47) and $143,561) (47 ) 143,561 Other revenues (amounts related to VIE discontinued operations of $0 and $0) - - Total revenues $ 1,399,505 $ 1,858,202 For the Nine Months Ended 2021 2020 Types of Revenues: Medical retail (amounts related to VIE discontinued operations of $3,196,912 and $3,531,304) $ 3,196,912 $ 3,542,504 Medical wholesale (amounts related to VIE discontinued operations of $1,525,132 and $1,054,748) 1,525,132 1,055,448 Recreational wholesale (amounts related to VIE discontinued operations of $8,963 and $598,276) 8,963 1,367,831 Other revenues (amounts related to VIE discontinued operations of $(17,930) and $2,741) (17,930 ) 2,741 Total revenues $ 4,713,077 $ 5,968,524 |
Business Combination (Tables)
Business Combination (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination [Abstract] | |
Schedule of purchase price | Cash $ 1,999,770 Common stock 6,776,617 Total purchase price $ 8,776,387 Cash $ 2,247,684 Common stock 1,804,500 Promissory Note 1,220,079 Total purchase price $ 5,272,263 |
Schedule of business combination description | Description Fair Value Weighted 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 Description Fair Value Weighted Assets acquired: Intangible assets: In process research and development 3,209,000 Indefinite Patent 873,263 10 Goodwill 1,190,000 Total assets acquired $ 5,272,263 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of assets and liabilities related to these CMI discontinued operations | September 30, December 31, 2020 Assets Accounts receivable, net $ 38,188 $ 66,043 Prepaid expenses 11,696 7,601 Inventory, net 1,311,197 791,868 Property and equipment, net 2,995,332 2,714,771 Intangible assets, net 2,481,128 2,481,128 Security deposits 11,522 11,522 Right of use asset, net 464,735 794,907 Total current assets held for sale 7,313,798 6,867,840 Total assets held for sale $ 7,313,798 $ 6,867,840 Liabilities Accounts payable and accrued expenses 252,882 211,463 Taxes payable 16,331 22,645 Notes payable, related parties - 458,599 Right of use liability 407,871 771,578 Total liabilities held for sale 677,084 1,464,285 Net assets $ 6,636,714 $ 5,403,555 |
Schedule of discontinued operations statements of operations | Three Months Ended Nine Months Ended 2021 2020 2021 2020 Net sales $ 1,399,505 $ 1,858,202 $ 4,713,077 $ 5,187,069 Cost of goods sold, inclusive of depreciation 857,281 1,354,626 2,982,974 3,982,677 Gross profit 542,224 503,576 1,730,103 1,204,392 Operating expenses: Personnel costs 71,085 104,021 335,182 286,788 Sales and marketing 186,190 224,382 621,765 699,080 General and administrative 29,307 54,904 82,144 186,614 Legal and professional fees 5,550 56,436 35,815 77,667 Amortization expense - 8,967 - 26,901 Total operating expenses 292,132 448,710 1,074,906 1,277,050 Gain / (loss) from operations 250,092 54,866 655,197 (72,658 ) Other income (expenses): Interest expense - (25,858 ) (49,803 ) (126,083 ) Goodwill impairment - (4,663,514 ) - (4,663,514 ) Total other expenses - (4,689,372 ) (49,803 ) (4,789,597 ) Net gain / (loss) from discontinued operations, before taxes 250,092 (4,634,506 ) 605,394 (4,862,255 ) Income taxes - - - - Net loss from discontinued operations $ 250,092 $ (4,634,506 ) $ 605,394 $ (4,862,255 ) |
Inventory, Net (Tables)
Inventory, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | September 30, December 31, 2020 Finished goods (amounts related to VIE discontinued operations of $1,003,985 and $431,466) $ 1,003,985 $ 431,466 Work-in-process inventory grow (amounts related to VIE discontinued operations of $307,212 and $360,402) 307,212 360,402 $ 1,311,197 $ 791,868 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | September 30, December 31, Leasehold improvements $ 2,770,385 $ 2,770,385 Machinery and equipment 1,207,443 1,065,885 Furniture and fixtures 43,331 43,331 Construction in progress 501,998 227,995 4,523,157 4,107,596 Less: Accumulated depreciation (1,392,825 ) (1,392,825 ) $ 3,130,332 $ 2,714,771 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of identifiable intangible assets | September 30, 2021 Estimated Gross Accumulated Amortization Impairment Carrying Amortized Customer relationships 6 years $ 215,900 $ (43,554 ) $ (27,023 ) $ 145,323 Patent 10 years 873,263 (21,832 ) - 851,431 Total amortized 1,089,163 (65,386 ) (27,023 ) 996,754 Indefinite-lived In-process research and development Indefinite 3,209,000 - - 3,209,000 Trademark/trade name Indefinite 1,340,000 - (167,723 ) 1,172,277 Developed manufacturing process Indefinite 1,330,000 - (166,472 ) 1,163,528 Total indefinite-lived 5,879,000 - (334,195 ) 5,544,805 Total identifiable intangible assets $ 6,968,163 $ (65,386 ) $ (361,218 ) $ 6,541,559 December 31, 2020 Estimated Gross Accumulated Amortization Impairment Carrying Amortized Customer relationships 6 years $ 215,900 $ (43,554 ) $ (27,023 ) $ 145,323 Total amortized 215,900 (43,554 ) (27,023 ) 145,323 Indefinite-lived Trademark/trade name Indefinite 1,340,000 - (167,723 ) 1,172,277 Developed manufacturing process Indefinite 1,330,000 - (166,472 ) 1,163,528 Total indefinite-lived 2,670,000 - (334,195 ) 2,335,805 Total identifiable intangible assets $ 2,885,900 $ (43,554 ) $ (361,218 ) $ 2,481,128 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of the company's RSU award activity | Restricted Stock Weighted Outstanding at December 31, 2020 2,453,175 $ 0.42 Granted 500,000 0.14 Vested (903,172 ) 0.16 Forfeited - - Outstanding at March 31, 2021 2,050,003 $ 0.46 Granted 6,135,000 0.15 Vested (6,000,000 ) 0.15 Forfeited - - Outstanding at June 30, 2021 2,185,003 0.45 Granted - - Vested - - Forfeited - - Outstanding at September 30, 2021 2,185,003 0.45 |
Nature of the Business (Details
Nature of the Business (Details) - USD ($) | Oct. 15, 2021 | Jul. 15, 2019 | Apr. 23, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Jul. 01, 2019 |
Nature of the Business (Details) [Line Items] | ||||||
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. | |||||
Aggregate purchase | $ 3,500,000,000,000 | |||||
Common stock shares (in Shares) | 10,000,000 | |||||
Cash | $ 1,000,000 | |||||
Purchase price amount | $ 2,500,000 | |||||
Subsequent Event [Member] | ||||||
Nature of the Business (Details) [Line Items] | ||||||
Promissory note | $ 1,252,316 | |||||
Promissory Note [Member] | ||||||
Nature of the Business (Details) [Line Items] | ||||||
Common stock shares (in Shares) | 10,000,000 | |||||
General Extract, LLC [Member] | ||||||
Nature of the Business (Details) [Line Items] | ||||||
Membership interests acquired | 100.00% | |||||
Critical Mass Industries [Member] | ||||||
Nature of the Business (Details) [Line Items] | ||||||
Cash paid | $ 1,999,770 | |||||
Critical Mass Industries [Member] | First Colombia Devco S.A.S [Member] | ||||||
Nature of the Business (Details) [Line Items] | ||||||
Shares issued (in Shares) | 13,553,233 |
Variable Interest Entity (Detai
Variable Interest Entity (Details) - Schedule of Variable Interest Entity - VIE's [Member] - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 117,113 | $ 196,445 |
Accounts receivable, net | 38,188 | 66,043 |
Inventory, net | 1,311,197 | 791,868 |
Total current assets | 1,466,498 | 1,054,356 |
Total assets | 1,466,498 | 1,054,356 |
Current liabilities | ||
Accounts payable and accrued expenses | 252,882 | 211,463 |
Total current liabilities | 252,882 | 211,463 |
Total liabilities | 252,882 | 211,463 |
Net assets | $ 1,213,616 | $ 842,893 |
Variable Interest Entity (Det_2
Variable Interest Entity (Details) - Schedule of description of operating results of Variable Interest Entities - VIE's [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement | ||||
Net sales | $ 1,399,505 | $ 1,858,202 | $ 4,713,077 | $ 5,187,069 |
Cost of goods sold, inclusive of depreciation | 857,281 | 1,354,626 | 2,982,974 | 3,982,677 |
Gross profit | 542,224 | 503,576 | 1,730,103 | 1,204,392 |
Operating expenses: | ||||
Personnel costs | 71,085 | 104,021 | 335,182 | 286,788 |
Sales and marketing | 186,190 | 224,382 | 621,765 | 699,080 |
General and administrative | 29,307 | 54,904 | 82,144 | 186,614 |
Legal and professional fees | 5,550 | 56,436 | 35,815 | 77,667 |
Amortization expense | 8,967 | 26,901 | ||
Total operating expenses | 292,132 | 448,710 | 1,074,906 | 1,277,050 |
Gain / (loss) from operations | 250,092 | 54,866 | 655,197 | (72,658) |
Other income (expenses): | ||||
Interest expense | (25,858) | (49,803) | (126,083) | |
Goodwill impairment | (4,663,514) | (4,663,514) | ||
Total operating expenses | 292,132 | (4,689,372) | (49,803) | (4,789,597) |
Net income from discontinued operations | $ 250,092 | $ (4,634,506) | $ 605,394 | $ (4,862,255) |
Revision of Prior Period Fina_3
Revision of Prior Period Financial Statements (Details) - USD ($) | 1 Months Ended | ||
Dec. 31, 2019 | Sep. 30, 2021 | ||
Non-controlling Interest Adjustment [Member] | |||
Revision of Prior Period Financial Statements (Details) [Line Items] | |||
Accounts receivable, net | [1] | $ 113,599 | |
Inventory, net | [1] | 768,633 | |
Accounts payable and accrued expenses | 337,386 | ||
Decrease in goodwill | 1,192,234 | ||
Increase in additional-paid-in capital | $ 647,458 | ||
VIE's [Member] | |||
Revision of Prior Period Financial Statements (Details) [Line Items] | |||
Accounts receivable, net | $ 113,599 | ||
Inventory, net | $ 768,633 | ||
[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 $768,633. |
Revision of Prior Period Fina_4
Revision of Prior Period Financial Statements (Details) - Schedule of impact of these adjustments on consolidated financial statements | Dec. 31, 2019USD ($) | |
Previously Reported [Member] | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Inventory, net (2) | $ 340,000 | [1] |
Accounts receivable, net (2) | [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] | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Inventory, net (2) | 768,633 | [1] |
Accounts receivable, net (2) | 113,599 | [1] |
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] | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Inventory, net (2) | 1,108,633 | [1],[2] |
Accounts receivable, net (2) | 113,599 | [1],[2] |
Total current assets | 4,815,279 | [2] |
Goodwill | 4,663,514 | [2] |
Total assets | 15,760,006 | [2] |
Accounts payable and accrued expenses | 1,092,236 | [2] |
Total current liabilities | 1,896,207 | [2] |
Total liabilities | 2,672,974 | [2] |
Additional paid-in capital | 16,894,103 | [2] |
Non-controlling interests in consolidated variable interest entity | [2] | |
Total shareholders’ equity | 13,087,032 | [2] |
Total liabilities and shareholders’ equity | $ 15,760,006 | [2] |
[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 $768,633. | |
[2] | There was no impact to the Company’s consolidated statements of operations. |
Going Concern Uncertainty, Fi_2
Going Concern Uncertainty, Financial Conditions and Management’s Plans (Details) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Private placement amount | $ 9,954,000 |
Debt amount | 4,900,000 |
Management amount | $ 3,000,000 |
Approximate amount | $3,000,000 |
Cash for operating activities | $ 3,070,095 |
Net loss | 5,645,288 |
Accumulated deficit | $ 21,374,482 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Allowance for doubtful accounts | $ 578,188 | $ 606,043 | |||
Accounts receivable, net | $ 540,000 | 540,000 | $ 540,000 | ||
Bad debt expense | 2,415 | $ 34,765 | 954 | $ 42,118 | |
Provision for inventory loss | $ 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 (in Shares) | 2,185,000 | 2,453,172 | |||
CMI Transaction [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Right-of-use assets and corresponding liability | 1,411,461 | $ 1,411,461 | |||
Variable Interest Entity, Primary Beneficiary [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Accounts receivable, net | 38,188 | 38,188 | $ 66,043 | ||
Bad debt expense | $ 2,415 | $ (1,235) | $ 954 | $ 2,118 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful life of property and equipment | 9 Months Ended |
Sep. 30, 2021 | |
Leasehold improvements [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful life of property and equipment [Line Items] | |
Property, plant and equipment, useful life | 15 years |
Minimum [Member] | Computer equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful life of property and equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Minimum [Member] | Furniture and fixtures [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful life of property and equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Minimum [Member] | Machinery and equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful life of property and equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Maximum [Member] | Computer equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful life of property and equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Maximum [Member] | Furniture and fixtures [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful life of property and equipment [Line Items] | |
Property, plant and equipment, useful life | 7 years |
Maximum [Member] | Machinery and equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful life of property and equipment [Line Items] | |
Property, plant and equipment, useful life | 8 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of intangible assets | 9 Months Ended |
Sep. 30, 2021 | |
Customer relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 6 years |
Trademark/trade name [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets, description | Indefinite |
Developed manufacturing process [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets, description | Indefinite |
In process research and development [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets, description | Indefinite |
Patent [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 10 years |
Revenue Recognition (Details) -
Revenue Recognition (Details) - Schedule of disaggregated revenue - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 1,399,505 | $ 1,858,202 | $ 4,713,077 | $ 5,968,524 |
Medical retail [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 943,012 | 1,259,120 | 3,196,912 | 3,542,504 |
Medical wholesale [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 456,540 | 455,521 | 1,525,132 | 1,055,448 |
Recreational wholesale [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | (47) | 143,561 | 8,963 | 1,367,831 |
Other revenues [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ (17,930) | $ 2,741 |
Revenue Recognition (Details)_2
Revenue Recognition (Details) - Schedule of disaggregated revenue (Parentheticals) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Medical retail [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Amounts related to VIE discontinued operations | $ 1,123,396 | $ 1,205,330 | $ 2,253,900 | $ 2,283,384 |
Medical Wholesale [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Amounts related to VIE discontinued operations | 512,282 | 336,776 | 1,068,592 | 599,927 |
Recreational wholesale [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Amounts related to VIE discontinued operations | 974,426 | 9,010 | 1,224,270 | |
Other revenues [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Amounts related to VIE discontinued operations | $ 18,031 | $ 0 | $ 17,930 | $ 2,741 |
Business Combination (Details)
Business Combination (Details) - USD ($) | Oct. 15, 2021 | Jul. 15, 2019 | Jun. 23, 2021 | Apr. 23, 2021 |
Business Combination (Details) [Line Items] | ||||
Cash paid | $ 1,999,770 | |||
Acquired assets | $ 1,000,000 | |||
Shares of common stock (in Shares) | 10,000,000 | |||
Cryocann [Member] | ||||
Business Combination (Details) [Line Items] | ||||
Acquired assets | $ 3,500,000,000,000 | |||
Shares of common stock (in Shares) | 10,000,000 | |||
Promissory note issued | $ 1,252,316 | |||
Purchase amount | $ 2,500,000 | |||
CMI Transaction [Member] | ||||
Business Combination (Details) [Line Items] | ||||
Number of common stock issued (in Shares) | 13,553,233 |
Business Combination (Details)
Business Combination (Details) - Schedule of purchase price | 9 Months Ended |
Sep. 30, 2021USD ($) | |
CMI Transaction [Member] | |
Business Combination (Details) - Schedule of purchase price [Line Items] | |
Cash | $ 1,999,770 |
Common stock | 6,776,617 |
Total purchase price | 8,776,387 |
Cryocann Acquisition [Member] | |
Business Combination (Details) - Schedule of purchase price [Line Items] | |
Cash | 2,247,684 |
Common stock | 1,804,500 |
Promissory Note | 1,220,079 |
Total purchase price | $ 5,272,263 |
Business Combination (Details_2
Business Combination (Details) - Schedule of business combination description | 9 Months Ended |
Sep. 30, 2021USD ($) | |
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 |
Customer relationships weighted average useful life | 6 years |
Trademark/trade name | $ 1,340,000 |
Trademark/trade name weighted average useful life, description | Indefinite |
Developed manufacturing process | $ 1,330,000 |
Developed manufacturing process weighted average useful life, description | 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 |
Cryocann Acquisition [Member] | |
Intangible assets: | |
Goodwill | 1,190,000 |
Total assets acquired | 5,272,263 |
Liabilities assumed: | |
In process research and development | $ 3,209,000 |
In process research and development weighted average useful life, description | Indefinite |
Patent | $ 873,263 |
Patent weighted average useful life, description | 10 |
Discontinued Operations (Detail
Discontinued Operations (Details) - Schedule of assets and liabilities related to these CMI discontinued operations - CMI Transaction [Member] - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Accounts receivable, net | $ 38,188 | $ 66,043 |
Prepaid expenses | 11,696 | 7,601 |
Inventory, net | 1,311,197 | 791,868 |
Property and equipment, net | 2,995,332 | 2,714,771 |
Intangible assets, net | 2,481,128 | 2,481,128 |
Security deposits | 11,522 | 11,522 |
Right of use asset, net | 464,735 | 794,907 |
Total current assets held for sale | 7,313,798 | 6,867,840 |
Total assets held for sale | 7,313,798 | 6,867,840 |
Liabilities | ||
Accounts payable and accrued expenses | 252,882 | 211,463 |
Taxes payable | 16,331 | 22,645 |
Notes payable, related parties | 458,599 | |
Right of use liability | 407,871 | 771,578 |
Total liabilities held for sale | 677,084 | 1,464,285 |
Net assets | $ 6,636,714 | $ 5,403,555 |
Discontinued Operations (Deta_2
Discontinued Operations (Details) - Schedule of discontinued operations statements of operations - CMI Transaction [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Discontinued Operations (Details) - Schedule of discontinued operations statements of operations [Line Items] | ||||
Net sales | $ 1,399,505 | $ 1,858,202 | $ 4,713,077 | $ 5,187,069 |
Cost of goods sold, inclusive of depreciation | 857,281 | 1,354,626 | 2,982,974 | 3,982,677 |
Gross profit | 542,224 | 503,576 | 1,730,103 | 1,204,392 |
Operating expenses: | ||||
Personnel costs | 71,085 | 104,021 | 335,182 | 286,788 |
Sales and marketing | 186,190 | 224,382 | 621,765 | 699,080 |
General and administrative | 29,307 | 54,904 | 82,144 | 186,614 |
Legal and professional fees | 5,550 | 56,436 | 35,815 | 77,667 |
Amortization expense | 8,967 | 26,901 | ||
Total operating expenses | 292,132 | 448,710 | 1,074,906 | 1,277,050 |
Gain / (loss) from operations | 250,092 | 54,866 | 655,197 | (72,658) |
Other income (expenses): | ||||
Interest expense | (25,858) | (49,803) | (126,083) | |
Goodwill impairment | (4,663,514) | (4,663,514) | ||
Total other expenses | (4,689,372) | (49,803) | (4,789,597) | |
Net gain / (loss) from discontinued operations, before taxes | 250,092 | (4,634,506) | 605,394 | (4,862,255) |
Income taxes | ||||
Net loss from discontinued operations | $ 250,092 | $ (4,634,506) | $ 605,394 | $ (4,862,255) |
Inventory, Net (Details) - Sche
Inventory, Net (Details) - Schedule of inventory - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of inventory [Abstract] | ||
Finished goods (amounts related to VIE discontinued operations of $1,003,985 and $431,466) | $ 1,003,985 | $ 431,466 |
Work-in-process inventory grow (amounts related to VIE discontinued operations of $307,212 and $360,402) | 307,212 | 360,402 |
Total inventory | $ 1,311,197 | $ 791,868 |
Inventory, Net (Details) - Sc_2
Inventory, Net (Details) - Schedule of inventory (Parentheticals) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of inventory [Abstract] | ||
Finished goods discontinued operations | $ 1,003,985 | $ 431,466 |
Work-in-process discontinued operations | $ 307,212 | $ 360,402 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||||
Property and equipment | $ 135,000 | |||
Depreciation expense | $ 0 | $ 0 | $ 0 | $ 131,110 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details) - Schedule of property and equipment, net - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 4,523,157 | $ 4,107,596 |
Less: Accumulated depreciation | (1,392,825) | (1,392,825) |
Property and equipment, net | 3,130,332 | 2,714,771 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,770,385 | 2,770,385 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,207,443 | 1,065,885 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 43,331 | 43,331 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 501,998 | $ 227,995 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Impairment loss, description | the Company recorded an impairment loss of $4,663,514 related to goodwill in accordance with ASC 350-20-35, Intangibles – Goodwill and Other - Goodwill. Additionally, in 2020, the Company recorded an impairment loss of $334,195 related to indefinite-lived intangible assets in accordance with ASC 350-30-35 Intangibles – Goodwill and Other – General Intangibles Other Than Goodwill and an impairment loss of $27,023 related to intangible assets subject to amortization in accordance with ASC 360-10-35, Property, Plant, and Equipment. The fair value of CMI was the expected sales price, which management determined based on offers received and sales negotiations. | ||||
Carrying value of goodwill | $ 1,190,000 | $ 0 | |||
Amortization expense including discontinued operations | $ 21,832 | $ 8,967 | 21,832 | $ 26,901 | |
Amortization expense | $ 8,967 | $ 26,901 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details) - Schedule of identifiable intangible assets - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Amortized | ||
Amortized intangible assets, Carrying Value | $ 4,060,431 | |
Indefinite-lived | ||
Indefinite-lived Intangible assets, Gross Amount | 2,885,900 | |
Indefinite-lived Intangible assets, Accumulated Amortization | (43,554) | |
Indefinite-lived intangible assets, Impairment | (361,218) | |
Indefinite-lived intangible assets, Carrying Value | $ 2,481,128 | |
Customer relationships [Member] | ||
Amortized | ||
Amortized intangible assets, Estimated Useful Life (Years) | 6 years | 6 years |
Amortized intangible assets, Gross Amount | $ 215,900 | $ 215,900 |
Amortized intangible assets, Accumulated Amortization | (43,554) | (43,554) |
Amortized intangible assets, Impairment | (27,023) | (27,023) |
Amortized intangible assets, Carrying Value | $ 145,323 | 145,323 |
Patent [Member] | ||
Amortized | ||
Amortized intangible assets, Estimated Useful Life (Years) | 10 years | |
Amortized intangible assets, Gross Amount | $ 873,263 | |
Amortized intangible assets, Accumulated Amortization | (21,832) | |
Amortized intangible assets, Impairment | ||
Amortized intangible assets, Carrying Value | 851,431 | |
Total amortized [Member] | ||
Amortized | ||
Amortized intangible assets, Gross Amount | 1,089,163 | 215,900 |
Amortized intangible assets, Accumulated Amortization | (65,386) | (43,554) |
Amortized intangible assets, Impairment | (27,023) | (27,023) |
Amortized intangible assets, Carrying Value | $ 996,754 | $ 145,323 |
In-process research and development [Member] | ||
Indefinite-lived | ||
Indefinite-lived intangible assets, Estimated Useful Life (Years) | Indefinite | |
Indefinite-lived Intangible assets, Gross Amount | $ 3,209,000 | |
Indefinite-lived Intangible assets, Accumulated Amortization | ||
Indefinite-lived intangible assets, Impairment | ||
Indefinite-lived intangible assets, Carrying Value | $ 3,209,000 | |
Trademark/trade name [Member] | ||
Indefinite-lived | ||
Indefinite-lived intangible assets, Estimated Useful Life (Years) | Indefinite | Indefinite |
Indefinite-lived Intangible assets, Gross Amount | $ 1,340,000 | $ 1,340,000 |
Indefinite-lived Intangible assets, Accumulated Amortization | ||
Indefinite-lived intangible assets, Impairment | (167,723) | (167,723) |
Indefinite-lived intangible assets, Carrying Value | $ 1,172,277 | $ 1,172,277 |
Developed manufacturing process [Member] | ||
Indefinite-lived | ||
Indefinite-lived intangible assets, Estimated Useful Life (Years) | Indefinite | Indefinite |
Indefinite-lived Intangible assets, Gross Amount | $ 1,330,000 | $ 1,330,000 |
Indefinite-lived Intangible assets, Accumulated Amortization | ||
Indefinite-lived intangible assets, Impairment | (166,472) | (166,472) |
Indefinite-lived intangible assets, Carrying Value | 1,163,528 | 1,163,528 |
Total indefinite-lived [Member] | ||
Indefinite-lived | ||
Indefinite-lived Intangible assets, Gross Amount | 5,879,000 | 2,670,000 |
Indefinite-lived Intangible assets, Accumulated Amortization | ||
Indefinite-lived intangible assets, Impairment | (334,195) | (334,195) |
Indefinite-lived intangible assets, Carrying Value | 5,544,805 | $ 2,335,805 |
Total identifiable intangible assets [Member] | ||
Indefinite-lived | ||
Indefinite-lived Intangible assets, Gross Amount | 6,968,163 | |
Indefinite-lived Intangible assets, Accumulated Amortization | (65,386) | |
Indefinite-lived intangible assets, Impairment | (361,218) | |
Indefinite-lived intangible assets, Carrying Value | $ 6,541,559 |
Debt (Details)
Debt (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Aug. 20, 2021 | Aug. 19, 2021 | Mar. 18, 2021 | Jan. 25, 2021 | Jul. 27, 2020 | Jul. 06, 2021 | Jul. 06, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Aug. 01, 2022 | Sep. 30, 2020 | Aug. 26, 2020 | |
Debt (Details) [Line Items] | |||||||||||||
Net carrying amount | $ 145,833 | $ 52,083 | |||||||||||
Convertible note | 250,000 | 250,000 | |||||||||||
Unamortized debt discount | $ 104,167 | 197,917 | |||||||||||
Warrants exercisable (in Shares) | 2,500,000 | ||||||||||||
Common stock exercise price per share (in Dollars per share) | $ 0.4 | $ 0.4 | $ 0.25 | ||||||||||
Accrued interest per annum | 15.00% | ||||||||||||
Refinanced loan percentage | 93.60% | ||||||||||||
Maturity date | May 7, 2021 | ||||||||||||
Loan balance | $ 412,560 | ||||||||||||
Note payable | $ 225,000 | $ 250,000 | |||||||||||
Aggregate units (in Shares) | 6,903,172 | ||||||||||||
Principal amount | $ 1,000 | $ 1,000 | |||||||||||
Common stock price per share (in Dollars per share) | $ 0.2 | $ 0.2 | |||||||||||
Warrant for purchase shares (in Shares) | 5,000 | 5,000 | |||||||||||
Net proceeds | $ 3,000,000 | ||||||||||||
Proceeds from private placement | $ 4,900,000 | ||||||||||||
Loan agreement | $ 300,000 | $ 237,590 | |||||||||||
Interest | $ 0.9123 | ||||||||||||
Repayment loan | $ 286,441 | ||||||||||||
Convertible Debt [Member] | |||||||||||||
Debt (Details) [Line Items] | |||||||||||||
Conversion price (in Dollars per share) | $ 0.2 | $ 0.2 | |||||||||||
Common stock exercise price per share (in Dollars per share) | $ 0.4 | $ 0.4 | |||||||||||
Aggregate units (in Shares) | 1,900,000 | ||||||||||||
Principal amount | $ 1,000 | $ 1,000 | |||||||||||
Warrant for purchase shares (in Shares) | 5,000 | 5,000 | |||||||||||
Private Placement [Member] | |||||||||||||
Debt (Details) [Line Items] | |||||||||||||
Aggregate units (in Shares) | 1,900 | 3,000 | |||||||||||
Subscription Agreement [Member] | |||||||||||||
Debt (Details) [Line Items] | |||||||||||||
Convertible note face value | $ 250,000 | ||||||||||||
Interest per annum | 8.00% | ||||||||||||
Convertible into shares (in Shares) | 2,500,000 | ||||||||||||
Conversion price (in Dollars per share) | $ 0.1 | ||||||||||||
Loan Agreement [Member] | |||||||||||||
Debt (Details) [Line Items] | |||||||||||||
Convertible note face value | $ 600,000 | ||||||||||||
Accrued interest per annum | 84.00% | ||||||||||||
Maturity date | Apr. 27, 2021 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Oct. 22, 2021 | Aug. 20, 2021 | Aug. 19, 2021 | Feb. 25, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | |
Related Party Transactions (Details) [Line Items] | |||||||
Shares issued (in Shares) | 2,500,000 | ||||||
Notes payable, related party | $ 0 | $ 458,599 | |||||
Note receivable issued | $ 281,771 | ||||||
loan agreement | $ 300,000 | $ 237,590 | |||||
Note interest | 14.00% | ||||||
Restricted Stock Units [Member] | |||||||
Related Party Transactions (Details) [Line Items] | |||||||
Vested shares (in Shares) | 200,000 | ||||||
Converted into common shares (in Shares) | 200,000 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Aug. 31, 2020 | Jul. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Feb. 29, 2020 | Aug. 31, 2019 | Jul. 31, 2019 | Sep. 30, 2021 | Jul. 06, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2019 | |
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||
Issuance of common stock shares | 790,000 | |||||||||||||||
Gross proceeds (in Dollars) | $ 3,000,000 | |||||||||||||||
Price per share (in Dollars per share) | $ 0.2 | |||||||||||||||
issuance costs (in Dollars) | $ 72,096 | |||||||||||||||
Professional fees (in Dollars) | $ 395,000 | |||||||||||||||
Issuance of common stock shares | 10,000,000 | |||||||||||||||
Transaction shares | 6,903,172 | |||||||||||||||
Agreements shares | 2,500,000 | |||||||||||||||
Share exchange for services | 633,125 | |||||||||||||||
Common stock shares | 798,414 | |||||||||||||||
Raising capital | 633,707 | |||||||||||||||
Interest rate | 92,127 | |||||||||||||||
Fair value of RSU’s vested (in Dollars) | $ 0 | $ 144,000 | $ 2,851,102 | $ 536,810 | ||||||||||||
Unrecognized stock based compensation costs (in Dollars) | 202,069 | 202,069 | ||||||||||||||
Stock-based compensation expense (in Dollars) | 68,328 | $ 220,399 | 1,410,173 | $ 828,830 | ||||||||||||
Common Stock [Member] | ||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||
Issuance of common stock shares | 14,325,005 | 13,553,233 | 10,000,000 | |||||||||||||
Gross proceeds (in Dollars) | $ 7,162,503 | |||||||||||||||
Price per share (in Dollars per share) | $ 0.5 | |||||||||||||||
Executive [Member] | ||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||
Issuance of common stock shares | 1,175,549 | 400,000 | ||||||||||||||
Board [Member] | ||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||
Issuance of common stock shares | 757,895 | 200,000 | ||||||||||||||
Shareholders [Member] | ||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||
Issuance of common stock shares | 15,050,000 | |||||||||||||||
Shares of common stock cancelled | 15,050,000 | |||||||||||||||
Employees [Member] | ||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||
Issuance of common stock shares | 10,000 | |||||||||||||||
Stock-based compensation consisted of equity awards granted and vested (in Dollars) | (19,184) | 1,085,398 | ||||||||||||||
Shareholder [Member] | ||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||
Issuance of common stock shares | 300,000 | |||||||||||||||
Shares of common stock cancelled | 300,000 | |||||||||||||||
Raise capital [Member] | ||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||
Issuance of common stock shares | 60,000 | 1,491,819 | 3,535,665 | |||||||||||||
Directors [Member] | ||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||
Stock-based compensation consisted of equity awards granted and vested (in Dollars) | 71,259 | 276,016 | ||||||||||||||
Consultants [Member] | ||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||
Stock-based compensation consisted of equity awards granted and vested (in Dollars) | $ 16,253 | $ 48,759 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - Schedule of the company's RSU award activity - $ / shares | 1 Months Ended | 3 Months Ended | ||
Jul. 25, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 30, 2021 | |
Schedule of the company's RSU award activity [Abstract] | ||||
Restricted Stock Units, Outstanding beginning balance | 2,185,003 | 2,185,003 | 2,050,003 | 2,453,175 |
Weighted Average Grant Date Fair Value, Outstanding beginning balance | $ 0.45 | $ 0.45 | $ 0.46 | $ 0.42 |
Restricted Stock Units, Granted | 6,135,000 | 500,000 | ||
Weighted Average Grant Date Fair Value, Granted | $ 0.15 | $ 0.14 | ||
Restricted Stock Units, Vested | (543,000) | (6,000,000) | (903,172) | |
Weighted Average Grant Date Fair Value, Vested | $ 0.15 | $ 0.16 | ||
Restricted Stock Units, Forfeited | ||||
Weighted Average Grant Date Fair Value, Forfeited | ||||
Restricted Stock Units, Outstanding ending balance | 2,185,003 | 2,185,003 | ||
Weighted Average Grant Date Fair Value, Outstanding ending balance | $ 0.45 | $ 0.45 |
Income Taxes (Details)
Income Taxes (Details) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Income Tax Disclosure [Abstract] | |
Annual effective tax rates | 0.00% |
Income tax liability | $ 14,926 |
Commitments & Contingencies (De
Commitments & Contingencies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Commitments & Contingencies (Details) [Line Items] | ||||
Other lease term | 12 months | |||
Lease payments | $ 16,190 | $ 19,584 | $ 46,706 | $ 55,471 |
Present value of liabilities | 150,259 | 123,530 | 363,707 | 344,762 |
Operating lease cost | 169,326 | $ 159,525 | 495,360 | $ 467,607 |
CMI Transaction [Member] | ||||
Commitments & Contingencies (Details) [Line Items] | ||||
Right of use asset, net | $ 1,411,461 | $ 1,411,461 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Oct. 15, 2021 | Oct. 10, 2021 | Nov. 03, 2021 | Oct. 26, 2021 | Oct. 25, 2021 | Aug. 20, 2021 | Jul. 25, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2019 |
Subsequent Events (Details) [Line Items] | ||||||||||||
Private placement of convertible term notes | $ 4,900,000 | |||||||||||
Shares purchased | 543,000 | 6,000,000 | 903,172 | |||||||||
Exercise price | $ 270,000 | |||||||||||
Common stock issued | 790,000 | |||||||||||
Repaid principal balance | $ 286,441 | |||||||||||
Subsequent Event [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Gross proceeds | $ 62,500 | |||||||||||
Private placement of convertible term notes | $ 0.35 | |||||||||||
Common stock per value | $ 0.2 | |||||||||||
Converted notes | 24,614,500 | |||||||||||
Common stock issued | 13,590,000 | |||||||||||
Per share | $ 0.2 | |||||||||||
Related-party note receivable | $ 281,771 | |||||||||||
Cryocann Acquisition [Member] | Subsequent Event [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Repaid promissory note | $ 1,252,316 | |||||||||||
Minimum [Member] | Subsequent Event [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Common stock per value | $ 0.5 | |||||||||||
Maximum [Member] | Subsequent Event [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Common stock per value | $ 0.52 |