Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 08, 2022 | |
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 | 202,526,205 | |
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, 2022 | |
Document Fiscal Year Focus | 2022 | |
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 | |
City Area Code | 303 | |
Local Phone Number | 416-7208 | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 3,129,736 | $ 5,772,839 |
Prepaid expenses | 136,637 | 757,383 |
Total current assets | 3,266,373 | 6,530,222 |
Loan receivable | 4,218,831 | 3,600,000 |
Property and equipment, net | 349,586 | 225,000 |
Intangible assets, net | 4,026,291 | 4,038,600 |
Goodwill | 1,190,000 | 1,190,000 |
Total assets | 13,051,081 | 15,583,822 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,235,004 | 1,882,419 |
Total current liabilities | 1,235,004 | 1,882,419 |
Notes payable | 2,000,000 | 177,083 |
Total liabilities | 3,235,004 | 2,059,502 |
Commitments and contingencies (Note 15) | ||
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, 202,526,205 and 196,949,801 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 202,528 | 196,950 |
Additional paid-in capital | 43,013,522 | 41,916,207 |
Common stock to be issued | ||
Accumulated deficit | (33,399,973) | (28,588,837) |
Total shareholders’ equity | 9,816,077 | 13,524,320 |
Total liabilities and shareholders’ equity | $ 13,051,081 | $ 15,583,822 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
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 | 202,526,205 | 196,949,801 |
Common stock, shares outstanding | 202,526,205 | 196,949,801 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Net sales | ||||
Cost of goods sold | ||||
Gross profit | ||||
Operating expenses: | ||||
Personnel costs | 733,233 | 1,204,621 | 1,534,885 | 2,004,417 |
General and administrative | 306,037 | 489,797 | 839,818 | 2,865,604 |
Legal and professional fees | 190,693 | 340,226 | 2,337,143 | 797,772 |
Amortization expense | 21,832 | 21,832 | 65,495 | 21,832 |
Research and development | 2,031 | 20,518 | ||
Total operating expenses | 1,253,826 | 2,056,476 | 4,797,859 | 5,689,625 |
Loss from operations | (1,253,826) | (2,056,476) | (4,797,859) | (5,689,625) |
Other income (expenses): | ||||
Interest expense – net | (19,636) | (590,601) | (90,894) | (1,152,858) |
Gain / (loss) on foreign exchange | 45,049 | 23,170 | 77,618 | 46,708 |
Total other expenses | 25,413 | (567,431) | (13,276) | (1,106,150) |
Net loss from continuing operations, before taxes | (1,228,413) | (2,623,907) | (4,811,135) | (6,795,775) |
Income taxes | ||||
Net loss from continuing operations | (1,228,413) | (2,623,907) | (4,811,135) | (6,795,775) |
Net gain / (loss) from discontinued operations, net of tax | 250,092 | 605,394 | ||
Net loss | (1,228,413) | (2,373,815) | (4,811,135) | (6,190,381) |
Comprehensive loss from discontinued operations | ||||
Comprehensive loss | $ (1,228,413) | $ (2,373,815) | $ (4,811,135) | $ (6,190,381) |
Net loss per common share: | ||||
Loss from continuing operations – basic and diluted (in Dollars per share) | $ (0.01) | $ (0.02) | $ (0.02) | $ (0.06) |
Gain / (loss) from discontinued operations – basic and diluted (in Dollars per share) | 0 | 0 | 0 | (0.01) |
Loss per common share – basic and diluted (in Dollars per share) | $ (0.01) | $ (0.02) | $ (0.02) | $ (0.05) |
Weighted average common shares outstanding—basic and diluted (in Shares) | 201,998,206 | 118,939,488 | 203,440,055 | 107,846,167 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Loss per common share – basic and diluted (in Dollars per share) | $ (0.01) | $ (0.02) | $ (0.02) | $ (0.05) |
Weighted average common shares outstanding— diluted | 201,998,206 | 118,939,488 | 203,440,055 | 107,846,167 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Common Stock to be Issued | Accumulated Deficit | Total |
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 | ||||
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 | ||||
Net loss | (6,190,381) | ||||
Balance at Sep. 30, 2021 | $ 120,058 | 25,981,647 | (21,919,575) | 4,182,130 | |
Balance (in Shares) at Sep. 30, 2021 | 120,058,181 | ||||
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-based compensation | 190,026 | 190,026 | |||
Stock options issued | 710,202 | 710,202 | |||
Beneficial Conversion Feature of Note Payable | 391,958 | 391,958 | |||
Warrants issued in conjunction with Convertible Notes Payable | 888,371 | 888,371 | |||
Net loss | (2,769,639) | (2,769,639) | |||
Balance at Jun. 30, 2021 | $ 118,534 | 25,028,633 | (19,545,760) | 5,601,407 | |
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 | |||
Stock-based compensation | 68,628 | 68,628 | |||
Beneficial Conversion Feature of Note Payable | 123,805 | 123,805 | |||
Warrants issued in conjunction with Convertible Notes Payable | 40,408 | 40,408 | |||
Net loss | (2,373,815) | (2,373,815) | |||
Balance at Sep. 30, 2021 | $ 120,058 | 25,981,647 | (21,919,575) | 4,182,130 | |
Balance (in Shares) at Sep. 30, 2021 | 120,058,181 | ||||
Balance at Dec. 31, 2021 | $ 196,950 | 41,916,207 | (28,588,837) | 13,524,320 | |
Balance (in Shares) at Dec. 31, 2021 | 196,949,801 | ||||
Share issuance in exchange for services | $ 458 | 159,959 | 80,208 | 240,625 | |
Share issuance in exchange for services (in Shares) | 458,334 | ||||
Stock-based compensation | $ 1,736 | 139,079 | 140,815 | ||
Stock-based compensation (in Shares) | 1,735,529 | ||||
Net loss | (2,152,305) | (2,152,305) | |||
Balance at Mar. 31, 2022 | $ 199,144 | 42,215,245 | 80,208 | (30,741,142) | 11,753,455 |
Balance (in Shares) at Mar. 31, 2022 | 199,143,664 | ||||
Balance at Dec. 31, 2021 | $ 196,950 | 41,916,207 | (28,588,837) | 13,524,320 | |
Balance (in Shares) at Dec. 31, 2021 | 196,949,801 | ||||
Net loss | (4,811,135) | ||||
Balance at Sep. 30, 2022 | $ 202,528 | 43,013,522 | (33,399,973) | 9,816,077 | |
Balance (in Shares) at Sep. 30, 2022 | 202,526,205 | ||||
Balance at Mar. 31, 2022 | $ 199,144 | 42,215,245 | 80,208 | (30,741,142) | 11,753,455 |
Balance (in Shares) at Mar. 31, 2022 | 199,143,664 | ||||
Share issuance in exchange for services | $ 688 | 239,938 | 240,626 | ||
Share issuance in exchange for services (in Shares) | 687,501 | ||||
Stock-based compensation | $ 1,000 | 68,095 | 69,095 | ||
Stock-based compensation (in Shares) | 1,000,000 | ||||
Net loss | (1,430,418) | (1,430,418) | |||
Balance at Jun. 30, 2022 | $ 201,053 | 42,589,208 | 80,208 | (32,171,560) | 10,698,909 |
Balance (in Shares) at Jun. 30, 2022 | 201,051,665 | ||||
Shares issued from warrants exercised | $ 221 | 65,930 | 66,151 | ||
Shares issued from warrants exercised (in Shares) | 220,500 | ||||
Share issuance in exchange for services | $ 417 | 145,417 | (80,208) | 65,626 | |
Share issuance in exchange for services (in Shares) | 416,667 | ||||
Share issuance from sale of common stock | $ 1,000 | 213,134 | 214,134 | ||
Share issuance from sale of common stock (in Shares) | 1,000,000 | ||||
Share cancellation related to interest on note payable | $ (92) | (23,317) | (23,409) | ||
Share cancellation related to interest on note payable (in Shares) | (92,127) | ||||
Stock-based compensation | $ 150 | 89,080 | 89,230 | ||
Stock-based compensation (in Shares) | 150,000 | ||||
Net loss | (1,228,413) | (1,228,413) | |||
Balance at Sep. 30, 2022 | $ 202,528 | $ 43,013,522 | $ (33,399,973) | $ 9,816,077 | |
Balance (in Shares) at Sep. 30, 2022 | 202,526,205 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss from continuing operations | $ (4,811,135) | $ (6,795,775) |
Adjustments to reconcile net loss to net cash used in operating activities from continuing operations: | ||
Amortization of debt discount | 72,917 | 539,692 |
Depreciation and amortization expense | 65,495 | 21,832 |
Stock-based compensation expense | 299,140 | 2,400,976 |
Share issuances in exchange for services | 546,876 | 291,096 |
Change in operating assets and liabilities: | ||
Prepaid expenses | 620,746 | (57,129) |
Accounts payable and accrued expenses | (647,415) | 876,417 |
Net cash used in operating activities from continuing operations | (3,853,376) | (2,722,891) |
Net cash used in operating activities from disc ops | (347,204) | |
Net cash used in operating activities | (3,853,376) | (3,070,095) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash payment for Cryocann asset purchase | (1,000,000) | |
Payoff of CryoCann loan agreement at closing | (1,247,684) | |
Issuance of loans receivable | (618,831) | |
Purchase of property and equipment | (124,586) | (135,000) |
Purchase of intangible assets | (53,186) | |
Net cash used in investing activities from continuing operations | (796,603) | (2,382,684) |
Net cash used in investing activities from discontinued operations | (280,561) | |
Net cash used in investing activities | (796,603) | (2,663,245) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from note payable, related parties | 237,590 | |
Proceeds from common stock subscribed and to be issued | 256,876 | 320,000 |
Repayment of loans payable, current | (40,668) | |
Proceeds from notes payable | 1,750,000 | 4,900,000 |
Related party note disbursement | (281,771) | |
Net cash provided by financing activities from continuing operations | 2,006,876 | 5,135,151 |
Net cash provided by financing activities from discontinued operations | 505,902 | |
Net cash provided by financing activities | 2,006,876 | 5,641,053 |
Net increase / (decrease) in cash from continuing operations | (2,643,103) | 29,576 |
Net increase / (decrease) in cash from discontinued operations | (121,863) | |
Cash at beginning of period | 5,772,839 | 329,839 |
Cash at end of period | 3,129,736 | 237,552 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 16,592 | 283,330 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Common stock issued pursuant to vesting of restricted stock units | $ 30,000 | $ 2,851,103 |
Nature of the Business
Nature of the Business | 9 Months Ended |
Sep. 30, 2022 | |
Nature of the Business [Abstract] | |
Nature of the Business | 1. Nature of the Business Cryomass Technologies Inc (“Cryomass Technologies” or the “Company”) designs, manufactures and is developing the strategy to commercialize patented cryo-mechanical systems for the harvesting and refinement of hemp, cannabis, and potentially other high value crops such as hops. The system exploits CryoMass’s U.S.-patented process for the controlled application of liquid nitrogen to stabilize and separate the structural elements of gross plant material. The device currently under development can be operated at a cultivation site or be installed at a processing facility and is being optimized for the collection of fully intact hemp and cannabis trichomes. The first functional “beta” machine has completed field testing. The Company is currently negotiating a license and lease arrangement with a third party to deploy multiple CryoMass trichome separation units at the prospective partner’s facility in California and other locations, with the intention of starting commercial operations shortly thereafter. |
Variable Interest Entity
Variable Interest Entity | 9 Months Ended |
Sep. 30, 2022 | |
Variable Interest Entity [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. Beginning July 15, 2019, the Company consolidated Critical Mass Industries LLC DBA Good Meds (“CMI” and/or “Good Meds”) 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 were included in the accompanying condensed consolidated financial statements. Effective December 31, 2021, we entered into a restated and amended administrative services agreement, terminated our license and marketing agreements, and restated the asset purchase agreement with CMI and affiliates. As a result of these agreements, we disposed of all CMI-related assets and extinguished any and all related obligations. For clarity, we have no management or operations decision-making right or responsibility, nor any access to future economic benefits from operation of the assets. Therefore, upon commencing these agreements, we determined that CMI no longer qualifies as a variable interest entity as of December 31, 2021. Three Months Ended Nine Months Ended 2022 2021 2022 2021 Income Statement Net sales $ - $ 1,399,505 $ - $ 4,713,077 Cost of goods sold, inclusive of depreciation - 857,281 - 2,982,974 Gross profit - 542,224 - 1,730,103 Operating expenses: Personnel costs - 71,085 - 335,182 General and administrative - 215,497 - 703,909 Legal and professional fees - 5,550 - 35,815 Amortization expense - - - - Total operating expenses - 292,132 - 1,074,906 Gain / (loss) from operations - 250,092 - 655,197 Other income (expenses): Interest expense - - - (49,803 ) Loss on foreign exchange - - - - Total other expenses - - - (49,803 ) Net gain from discontinued operations, before taxes - 250,092 - 605,394 Income taxes - - - - Net gain from discontinued operations $ - $ 250,092 $ - $ 605,394 As a result of new agreements entered with CMI on December 31, 2021, we disposed of all CMI-related assets and extinguished any and all related obligations in exchange for a $3,600,000 promissory note due to us no later than December 31, 2023. |
Restatement
Restatement | 9 Months Ended |
Sep. 30, 2022 | |
Restatement [Abstract] | |
Restatement | 3. Restatement During Q2 2021, the Company executed two tranches of convertible term note agreements in aggregate principal value of $3.0 million and $1.9 million, respectively that bear interest at a rate of 12% per annum. The notes had maturities of March 31, 2022 and September 30, 2022, respectively. In conjunction with the notes, the Company entered into certain warrant agreements to purchase common shares of the Company. The Company offered 24,500,000 of warrant shares in conjunction with the issuance of the notes with an exercise price of $0.40. The warrants from each tranche of convertible notes are exercisable from the issuance date through March 31, 2023 and April 30, 2023, respectively. As part of year-end audit procedures, the Company discovered these warrant contracts would require an independent fair value calculation, as well as beneficial conversion value to be attributed to the convertible notes. The Company engaged an independent valuation firm to perform a fair value calculation of the warrants and associated beneficial conversion feature. As a result of the fair value analysis, additional paid-in capital was allocated to beneficial conversion feature and to warrants, resulting in debt discount and associated amortization expense as of and for the period ended September 30, 2021. As of September 30, 2021 Previously Adjustments Revised LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 3,124,652 $ - $ 3,124,652 Loans payable 286,441 - 286,441 Taxes payable 771 - 771 Note payable, related party 1,457,669 - 1,457,669 Liabilities held for sale, current 677,084 - 677,084 Total current liabilities 5,546,617 - 5,546,617 Notes payable 4,982,944 (850,461 ) 4,132,483 Deferred tax liability 14,926 - 14,926 Total liabilities 10,544,487 (850,461 ) 9,694,026 Commitments and contingencies Shareholders' equity: Preferred stock, $0.001 par value, 100,000 shares authorized, no - - - Common stock, $0.001 par value, 500,000,000 shares authorized, 120,058,181 and 97,005,817 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively 120,058 - 120,058 Additional paid-in capital 24,622,355 1,359,292 25,981,647 Accumulated deficit (21,410,744 ) (508,831 ) (21,919,575 ) Total shareholders' equity 3,331,669 850,461 4,182,130 Total liabilities and shareholders' equity $ 13,876,156 $ - $ 13,876,156 For the Three Months Ended Previously Adjustments Revised Other income (expenses): Interest expense (270,552 ) (320,049 ) (590,601 ) Gain on foreign exchange 23,170 - 23,170 Total other expenses (247,382 ) (320,049 ) (567,431 ) Net loss from continuing operations, before taxes (2,303,858 ) (320,049 ) (2,623,907 ) Income taxes - - - Net loss from continuing operations (2,303,858 ) (320,049 ) (2,623,907 ) Net loss from discontinued operations, net of tax 250,092 - 250,092 Net loss $ (2,053,766 ) $ (320,049 ) $ (2,373,815 ) Comprehensive loss from discontinued operations - - - Comprehensive loss $ (2,053,766 ) $ (320,049 ) $ (2,373,815 ) For the Nine Months Ended Previously Adjustments Revised Other income (expenses): Interest expense (644,027 ) (508,831 ) (1,152,858 ) Gain on foreign exchange 46,708 - 46,708 Total other expenses (597,319 ) (508,831 ) (1,106,150 ) Net loss from continuing operations, before taxes (6,286,944 ) (508,831 ) (6,795,775 ) Income taxes - - - Net loss from continuing operations (6,286,944 ) (508,831 ) (6,795,775 ) Net loss from discontinued operations, net of tax 605,394 - 605,394 Net loss $ (5,681,550 ) $ (508,831 ) $ (6,190,381 ) Comprehensive loss from discontinued operations - - - Comprehensive loss $ (5,681,550 ) $ (508,831 ) $ (6,190,381 ) Common Stock Additional Common Accumulated Total Shares Amount Capital Be Issued Deficit Equity Balance at March 31, 2021 98,497,636 $ 98,498 $ 19,596,807 $ - $ (16,776,121 ) $ 2,919,184 Share issuance 201,586 202 - - - 202 Share issuance related to Cryocann asset purchase 10,000,000 10,000 1,794,500 - - 1,804,500 Share issuance pursuant to employment agreements 6,701,586 6,701 894,000 - - 900,701 Share issuance in exchange for extinguishment of debt 2,500,000 2,500 505,902 - - 508,402 Share issuance in exchange for services 633,125 633 56,867 - - 57,500 Stock-based compensation - - 190,026 - - 190,026 Stock options issued and outstanding - - 710,202 - - 710,202 Net loss - - - - (2,580,857 ) (2,580,857 ) Previously reported balance at June 30, 2021 118,533,933 $ 118,534 $ 23,748,304 $ - $ (19,356,978 ) $ 4,509,860 Adjustments: Interest expense from debt discount amortization related to Beneficial Conversion Feature - - - - (188,782 ) (188,782 ) Beneficial Conversion Feature of Note Payable - - 391,958 - - 391,958 Warrants issued in conjunction with Convertible Notes Payable - - 888,371 - - 888,371 Adjusted balance at June 30, 2021 118,533,933 $ 118,534 $ 25,208,633 $ - $ (19,545,760 ) $ 5,601,407 Share issuance 798,414 798 199,000 - - 199,798 Share issuance in exchange for services 633,707 634 239,853 - - 240,487 Share issuance for interest payment on note payable 92,127 92 23,317 - - 23,409 Stock-based compensation - - 68,628 - - 68,628 Stock options issued and outstanding - - 258,003 - - 258,003 Beneficial Conversion Feature of Note Payable - - 85,250 - - 85,250 Net loss - - - - (2,053,766 ) (2,053,766 ) Balance at September 30, 2021 120,058,181 $ 120,058 $ 25,902,684 $ - $ (21,599,526 ) $ 4,423,216 Adjustments: Interest expense from debt discount amortization related to Beneficial Conversion Feature - - - - (320,049 ) (320,049 ) Beneficial Conversion Feature of Note Payable - - 38,555 - - 38,555 Warrants issued in conjunction with Convertible Notes Payable - - 40,408 - - 40,408 Adjusted balance at September 30, 2021 120,058,181 $ 120,058 $ 25,981,647 $ - $ (21,919,575 ) $ 4,182,130 For the Nine Months Ended Previously Adjustments Revised CASH FLOWS FROM OPERATING ACTIVITIES: Net loss from continuing operations $ (6,286,944 ) $ (508,831 ) $ (6,795,775 ) Adjustments to reconcile net loss to net cash used in operating activities from continuing operations: Depreciation and amortization expense 21,832 - 21,832 Amortization of debt discount 30,861 508,831 539,692 Stock-based compensation expense 2,400,976 - 2,400,976 Fair value of common stock issued pursuant to service and advisory agreements 291,096 - 291,096 Change in operating assets and liabilities: Prepaid expenses (57,129 ) - (57,129 ) Accounts payable and accrued expenses 876,417 - 876,417 Net cash used in operating activities from continuing operations (2,722,891 ) - (2,722,891 ) Net cash provided by operating activities from discontinued operations (347,204 ) - (347,204 ) Net cash used in operating activities (3,070,095 ) - (3,070,095 ) |
Going Concern Uncertainty, Fina
Going Concern Uncertainty, Financial Conditions and Management’s Plans | 9 Months Ended |
Sep. 30, 2022 | |
Going Concern Uncertainty, Financial Conditions and Management’s Plans [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, in addition to cash expected to be available from lease payments and royalty payments in connection with future revenue generation, to fund its anticipated level of operations for at least the next twelve months. As of September 30, 2022, the Company had working capital of $2,031,369 and cash balance of $3,129,736. The Company estimates that it needs approximately $4,000,000 over the next twelve months. The Company has capital expenditure requirements ranging from zero to $6,600,000 depending on how many trichome separation units are ordered during the next twelve months, but upfront lease payments are expected to offset each unit ordered . While management believes the Company has sufficient cash available to support an anticipated level of operations for at least the next twelve months, the continuation of our company as a going concern is dependent upon the continued financial support from our shareholders, the ability of our company to obtain necessary equity or debt financing to continue operations, and ultimately the attainment of profitable operations. For the nine months ended September 30, 2022, our company used $3,853,376 of cash for operating activities, incurred a net loss of $4,811,135 and has an accumulated deficit of $33,399,973 since inception. On March 11, 2020, the 2019 novel coronavirus (“COVID-19) was characterized as a “pandemic.” The Company’s operations were impacted during the year 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, 2022 and through the date of this report. The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Condensed Consolidated Financial Statements in future reporting periods. 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, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 5. Summary of Significant Accounting Policies Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with GAAP. The condensed consolidated financial statements include the accounts of the Cryomass Technologies Inc, Cryomass LLC, and CMI, a VIE for which the Company was deemed to be the primary beneficiary. CMI was no longer included in the condensed consolidated financial statements as of or for the period subsequent to December 31, 2021. All significant intercompany balances and transactions have been eliminated in consolidation. The Company operates as one segment from its corporate headquarters in Colorado. Effective December 31, 2021, the Company entered into an asset purchase agreement involving its VIE with Critical Mass Industries, Inc. and John Knapp, the sole shareholder of Critical Mass Industries, Inc., to divest its discontinued operations, where the buyer assumes all assets and liabilities from the Company. Therefore, with regards to both criteria discussed above, the Company no longer has the power to direct activities, absorb losses, or receive benefits from the VIE and as such will no longer consolidate CMI’s financial results with its own. Use of Estimates The preparation of the Company’s condensed consolidated 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 condensed consolidated financial statements, and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to determining the fair value of the assets acquired and liabilities assumed in acquisition, determining the useful lives and potential impairment of long-lived assets and potential impairment of goodwill. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. Reclassifications Certain items in the interim condensed consolidated financial statements were reclassified from prior periods for presentation purposes. Cash and Cash Equivalents The Company considers all highly liquid instruments with maturities of three months or less at the time of issuance to be cash equivalents. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. Periodically, the Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company deposits its cash in financial institutions that it believes have high credit quality and has not experienced any losses on such accounts. Additionally, the company entered into a $3,600,000 loan receivable in conjunction with the disposal of discontinued operations at the end of 2021, which is backed by the assets of the discontinued operations, should the borrower default. Aside from these items, the Company does not believe it is exposed to any unusual credit risk. 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. Variable Interest Entities The Company accounts for variable interest entities in accordance with FASB ASC Topic 810, Consolidation Discontinued Operations The Company had no revenues from discontinued operations for the three and nine months ended September 30, 2022. For the three and nine months ended September 30, 2021, Company’s revenue consisted of sales of cannabis and ancillary products to both retail consumers and wholesale customers through its relationship with a VIE, CMI. Revenue for retail customers was 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 was 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 was recognized upon transfer of control of promised products to customers, generally as risk of loss passes, in an amount that reflected the consideration CMI expected to receive in exchange for those products. Taxes collected from customers, which was subsequently remitted to governmental authorities, were excluded from revenue. Retail customer loyalty liabilities were recognized in the period in which they were incurred and were often retired without being utilized. Shipping and handling costs were expensed as incurred and are included in cost of sales. CMI operated in a highly regulated environment in which state regulatory approval was 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. Expenses Operating Expenses Operating expenses encompass personnel costs, research and development 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 Cryocann. Personnel costs consist primarily of consulting expense and administrative salaries and wages. General and administrative expenses are comprised of travel expenses, accounting expenses, stock-based compensation, and board fees. Professional services are principally comprised of outside legal and professional fees. Other Expense, net Other expense, net consisted of interest expense, other income and (loss) 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. For stock options, the Company engages a valuation firm to calculate the grant date fair value of the options issued. 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 in process research and development and internal-use software. Intangible assets with indefinite lives are recorded at their estimated fair value at the date of acquisition. Once in process research and development is placed in service, it will be amortized over the estimated useful life. Internal-use software costs recognized as an intangible asset relates to capitalizable costs of computer software obtained for internal-use as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350-40-30-1. All other internal-use software costs are expensed as incurred by the Company. Amortization will be recorded straight-line over the estimated useful life of the software once the software is ready for its intended use. As of September 30, 2022, our internal-use software was not ready for its intended use. The estimated useful life for internal-use software will be determined and periodically reassessed based on considerations for obsolescence, technology, competition, and other economic factors. 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 Patent 10 years In process research and development Indefinite Internal-use software Indefinite 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. Management concluded that there were no events indicative of goodwill impairment during the nine months ended September 30, 2022. Indefinite-Lived Intangible Assets and Intangible Assets Subject to Amortization Indefinite-lived intangible assets and intangible assets subject to amortization 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 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 Management concluded that there were no events indicative of identifiable intangible asset impairment during the nine months ended September 30, 2022. 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, and notes 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. The fair value of beneficial conversion features associated with convertible notes and the fair value of warrants are calculated utilizing level 2 inputs. When multiple instruments are issued in a single transaction, the total proceeds from the transaction should be allocated among the individual freestanding instruments identified. The allocation occurs after identifying (1) all the freestanding instruments and (2) the subsequent measurement basis for those instruments. The subsequent measurement basis helps inform how the proceeds should be allocated. After the proceeds are allocated to the freestanding instruments, those instruments should be further evaluated for embedded features that may need to be bifurcated or separated. If debt or stock is issued with detachable warrants, the guidance in ASC 470-20-25-2 (applied by analogy to stock) requires that the proceeds be allocated to the two instruments based on their relative fair values. This method is generally appropriate if debt or stock is issued with any other freestanding instrument that is classified in equity (such as a detachable forward contract) or as a liability but not subject to subsequent fair value accounting. Given that our convertible notes and common stock that were issued with warrants are both not subject to subsequent fair value accounting treatment, Management determined the relative fair value method shall be used for allocating the proceeds of the transaction. Under the relative fair value method, the instrument being analyzed is allocated a portion of the proceeds based on its fair value to the sum of the fair value of all the instruments covered in the allocation. Management additionally evaluates the facts and circumstances to determine whether the principal balance of convertible notes approximate their fair value, which we have concluded for all convertible notes issued. As a result of our fair value calculations, we recognized $928,779 and $515,763 of additional paid in capital associated with the value of the warrants and beneficial conversion, respectively, resulting in a total notes payable discount of $1,444,542. As such, no debt discount amortization was recognized during the three and nine months ended September 30, 2022. $320,049 and $508,831 of debt discount amortization was recognized as interest expense during the three and nine months ended September 30, 2021. Net Loss per Share The Company follows ASC 260, Earnings Per Share 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). |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination [Abstract] | |
Business Combination | 6. Business Combination On June 22, 2021, the Company entered into an Asset 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 aggregate purchase price was $3,500,000 million in cash and 10,000,000 shares of Company common stock 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 As if the acquisition occurred on January 1, 2021, as reported in our pro forma basis, our net loss would have been $2,373,815 and $7,407,987 and our net loss per common share would have been $0.02 and $0.06 for the three and nine months ended September 30, 2021, respectively. Our net sales would have remained unchanged during the period. These pro forma results are not necessarily indicative of the results that actually would have occurred if the acquisition had occurred on the first day of the periods presented, nor does the pro forma financial information purport to represent the results of operations for future periods. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | 7. Discontinued Operations In June 2020, the Company’s board of directors adopted a plan to exit the cultivation, manufacturing of infused products and retail distribution businesses through the termination of its VIE relationship with CMI. The Company determined that this event represented a strategic shift having a major effect on the Company’s operations and financial results. The consolidated statements of operations include the following operating results related to these CMI discontinued operations: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Net sales $ - $ 1,399,505 $ - $ 4,713,077 Cost of goods sold, inclusive of depreciation - 857,281 - 2,982,974 Gross profit - 542,224 - 1,730,103 Operating expenses: Personnel costs - 71,085 - 335,182 General and administrative - 215,497 - 703,909 Legal and professional fees - 5,550 - 35,815 Total operating expenses - 292,132 - 1,074,906 Gain from operations - 250,092 - 655,197 Other income (expenses): Interest expense - - - (49,803 ) Loss on foreign exchange - - - - Total other expenses - - - (49,803 ) Net gain from discontinued operations, before taxes - 250,092 - 605,394 Income taxes - - - - Net gain from discontinued operations $ - $ 250,092 $ - $ 605,394 |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 8. Property and Equipment, Net Property and equipment, net, of $349,586 and $225,000 as of September 30, 2022 and December 31, 2021, respectively, consisted entirely of machinery and equipment. As of September 30, 2022, our machinery and equipment was not capable of producing a unit of product that is saleable. On October 24, 2022, our machinery and equipment was able to produce a commercially viable unit and we began depreciating the machine at that time. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | 9. Goodwill and Intangible Assets The carrying value of goodwill was $1,190,000 as of September 30, 2022 and December 31, 2021. The following tables summarize information relating to the Company’s identifiable intangible assets as of September 30, 2022 and December 31, 2021: September 30, 2022 Estimated Gross Accumulated Carrying Amortized Patent 10 years $ 873,263 $ (109,158 ) $ 764,105 Indefinite-lived In-process research and development Indefinite 3,209,000 - 3,209,000 Internal-use software Indefinite 53,186 - 53,186 Total identifiable intangible assets $ 4,135,449 $ (109,158 ) $ 4,026,291 December 31, 2021 Estimated Gross Accumulated Carrying Amortized Patent 10 years $ 873,263 $ (43,663 ) $ 829,600 Indefinite-lived In-process research and development Indefinite 3,209,000 - 3,209,000 Total identifiable intangible assets $ 4,082,263 $ (43,663 ) $ 4,038,600 Amortization expense was $21,832 and $65,495 for the three and nine months ended September 30, 2022, respectively, and was $21,832 for the three and nine months ended September 30, 2021. |
Loans Receivable
Loans Receivable | 9 Months Ended |
Sep. 30, 2022 | |
Loan Receivable [Abstract] | |
Loans Receivable | 10. Loans Receivable As a result of new agreements entered with CMI on December 31, 2021, as further detailed in Note 1 above, we received a $6,600,000 promissory note due to us no later than December 31, 2023, of which we determined the net realizable value of the gross amount of the note was $3,600,000. In consideration of the loan receivable, we conveyed to CMI, any and all manufacturing, grow equipment, and retail-related assets and other assets Seller owned in the state of Colorado and were used by CMI subsidiaries in the course of business, including client lists and appertaining intellectual property, as well as all liabilities related to these assets. During the first quarter of 2022, the Company issued an additional $620,000 in loans to CMI, which is included in the loan receivable balance on the condensed consolidated balance sheets. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt [Abstract] | |
Debt | 11. 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 had a face value of $250,000, matured August 1, 2022, and accrues interest at 8% per annum. The note was 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 was 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 accrued 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. 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. The Initial Convertible Term Notes would have matured on March 31, 2022 had they not all been converted and the Initial Warrants expire unless exercised by on March 31, 2023. Interest accrued on these notes at a rate of 12% per annum payable on a quarterly basis. Between May 11, 2021 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. The Convertible Term Notes and Warrants had a maturity of September 30, 2022 and the Warrants expire unless exercised by April 30, 2023. Interest accrued at a rate of 12% per annum payable on a quarterly basis. All notes were converted during the fourth quarter of 2021. On August 20, 2021, the Company entered into a $300,000 loan agreement, which accrued interest at 91.23% per annum. Payment was due on a weekly basis up to the maturity date of May 27, 2021. The loan was fully repaid on October 19, 2021. On September 15, 2022, the Company entered into a $2,000,000 loan agreement which accrues interest at 12% per annum, payable quarterly. The full principal amount is due on October 1, 2024. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 12. Related Party Transactions 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 accrued interest at 14% per annum and was repaid on October 22, 2021. On November 15, 2021, the Company issued 250,000 common shares and warrants, respectively, to Christian Noel in exchange for $50,000. In addition, the Company issued 760,000 common shares and warrants, respectively, to Trichome Capital Inc. in exchange for $152,000. Christian Noel has voting and investment control of Trichome Capital Inc. On November 15, 2021, the Company issued 760,000 common shares and warrants, respectively, to Health Diplomats Pte Ltd in exchange for $152,000. Delon Human, one of our independent directors, owns 100% of Health Diplomats Pte Ltd. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Shareholders’ Equity [Abstract] | |
Shareholders' Equity | 13. Shareholders’ Equity 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. From October to December 2021, the Company issued 50,700,000 shares of common stock in order to raise capital, 1,570,501 shares of common stock in exchange for services, and 24,621,119 shares of common stock in exchange for extinguishment of debt. From January to March 2022, the Company issued 458,334 shares of common stock in exchange for services, 550,000 shares of common stock for 2021 management performance bonuses, 185,529 shares of common stock for director compensation, and 1,000,000 shares of common stock for 2020 RSU grants vesting in January 2022. From April to June 2022, the Company issued 687,501 shares of common stock in exchange for services, 1,000,000 shares of common stock related to director and management compensation, and 220,500 shares of common stock for exercise of warrants. From July to September 2022, the Company issued 416,667 shares of common stock in exchange for services, 1,000,000 shares from sale of common stock, and 150,000 shares related to vesting of employee RSU grants. Additionally, 92,127 shares were cancelled related to an interest payment that was paid in cash. 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. On January 10, 2022, the shareholders approved the 2022 Stock Incentive Plan which then replaced the 2019 Plan. A summary of the Company’s RSU award activity for the nine months ended September 30, 2022 is as follows: Restricted Weighted Outstanding at December 31, 2021 2,200,003 $ 0.45 Granted 1,469,511 0.27 Vested (1,735,529 ) 0.49 Forfeited - - Outstanding at March 31, 2022 1,933,985 $ 0.27 Granted 510,000 0.35 Vested (1,135,000 ) 0.28 Forfeited (50,000 ) 0.17 Outstanding at June 30, 2022 1,258,985 0.20 Granted 69,875 0.26 Vested (15,000 ) 0.20 Forfeited - - Outstanding at September 30, 2022 1,313,860 0.30 The total fair value of RSUs vested during the three and nine months ending September 30, 2022 was $3,000 and $1,168,600, respectively. The total fair value of RSUs vested during the three and nine months ending September 30, 2021 was $0 and $2,851,102, respectively. As of September 30, 2022, there was $203,224 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 $89,230 and $299,140 for the three and nine months ending September 30, 2022, respectively. 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 for the three months ending September 30, 2022 consisted of equity awards forfeited, granted and vested to employees, directors and consultants of the Company in the amount of $5,313, $83,917, and $0, respectively. Stock-based compensation for the nine months ending September 30, 2022 consisted of equity awards forfeited, granted and vested to employees, directors and consultants of the Company in the amount of $29,101, $265,193, and $4,846, respectively. Expenses for stock-based compensation is included on the accompanying consolidated statements of operations in general and administrative expense. Stock Option Awards A summary of the Company’s stock option activity for the nine months ended September 30, 2022 is as follows: Stock Weighted Weighted Aggregate Outstanding at December 31, 2021 8,500,000 $ 0.18 9.2 $ 1,579,108 Granted and vested - - - - Forfeited - - - - Outstanding at March 31, 2022 8,500,000 $ 0.18 9.0 $ 1,579,108 Granted and vested - - - - Forfeited - - - - Outstanding at June 30, 2022 8,500,000 $ 0.18 8.7 $ 1,579,108 Granted and vested - - - - Forfeited - - - - Outstanding at September 30, 2022 8,500,000 $ 0.18 8.5 $ 1,579,108 During the three and nine months ended September 30, 2022, the Company did not issue any stock options. During the three and nine months ended September 30, 2021, the Company issued 1,000,000 and 5,000,000 stock options, respectively. During the year ended December 31, 2021, the Company issued warrants with the option to purchase 73,950,000 common shares at an exercise price of $0.40 per share. Of these warrants, 15,000,000 shares expire on March 31, 2023, 9,500,000 expire on April 30, 2023, 1,000,000 expire on September 17, 2023, 9,000,000 expire on October 15, 2023, 9,510,000 expire on October 26, 2023, 190,000 expire on November 2, 2023, 4,560,000 expire on November 10, 2023, 1,940,000 expire on November 15, 2023, 750,000 expire on November 17, 2023, and 22,500,000 expire on November 10, 2024. During the three and nine months ended September 30, 2022, 220,500 warrants were exercised at $0.30 per share. The fair value of these warrants is $1,867,960, which is reflected in additional paid in capital. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. 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, 2022 was 0.0%, As of September 30, 2022, the Company has recorded no income tax liability. |
Commitments & Contingencies
Commitments & Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies [Abstract] | |
Commitments & Contingencies | 15. Commitments & Contingencies Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s condensed consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. Lease Commitments The Company accounts for lease transactions in accordance with Topic 842, Leases There are no other leases that meet the reporting standards of ASU Topic 842 as the Company does not have any leases with a term exceeding twelve months. There were no lease payments not accounted for under ASU Topic 842 for the three and nine months ended September 30, 2022, respectively. 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. An ROU asset of $1,411,461 was recognized upon the CMI Transaction. The right of use assets and lease liabilities assumed from the CMI transaction were disposed of as part of the disposal of our discontinued operations, which is described in further detail above. The present value of the liabilities decreased by $0 and $150,259 for the three months ended September 30, 2022 and 2021, respectively, and by $0 and $363,707 for the nine months ended September 30, 2022 and 2021, respectively. This balance is included in the operating section of the statement of cash flows for the nine months ended September 30, 2022 and 2021. Operating lease cost was approximately $0 and $169,326 for the three months ended September, 2022 and 2021, respectively, and was approximately $0 and $495,360 for the nine months ended September 30, 2022 and 2021, respectively. The Company does not have any leases that have not yet commenced which are significant. Legal Proceedings Legal proceedings covering a dispute arising from a past employment agreements is pending against the Company’s former business partner, CMI. In Gaudio v. Critical Mass Industries, LLC et al, CMI’s motion to set aside a default judgment was granted April 26, 2021. It is possible that there could be adverse developments in the Gaudio case. An unfavorable outcome or settlement of pending litigation would have a significant impact on our ability to collect receivables from CMI, to complete any of the pending transactions involving our Colorado assets and agreements and could encourage the commencement of additional litigation against CMI or the Company. We and our subsidiaries will record provisions in the consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. At the present time, while it is reasonably possible that an unfavorable outcome in the Gaudio case may occur, (i) management is unable to estimate the possible loss or range of loss that our Company would undergo that could result from an unfavorable outcome or settlement in Gaudio; and (iii) accordingly, management has not provided any amounts in the consolidated financial statements for an unfavorable outcome in this case, if applicable. Any applicable legal advice costs are expensed as incurred. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events On November 6, 2022, the Company entered into a non-binding term sheet outlining the principal terms of a license agreement with a California-based company for the deployment of twelve (12) Trichome Separator Units (the “Units”) over exclusive territories covering the states of California, Pennsylvania, New Jersey, New York and Florida. The rental/royalty deal provides for licensing of the Company’s patented Cryogenic Separation of Plant Material technology for use in cannabis biomass processing as well as leasing of the Units. The agreement, when completed, provides for upfront license fees totaling $10,200,000 payable between closing of the agreement and June 30, 2023, plus lease payments equaling 50% of net revenue (gross revenue minus certain agreed operating and administrative costs) from the processing of the cannabis biomass. The term of the agreement is five years. The agreement is subject to completion of documentation. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with GAAP. The condensed consolidated financial statements include the accounts of the Cryomass Technologies Inc, Cryomass LLC, and CMI, a VIE for which the Company was deemed to be the primary beneficiary. CMI was no longer included in the condensed consolidated financial statements as of or for the period subsequent to December 31, 2021. All significant intercompany balances and transactions have been eliminated in consolidation. The Company operates as one segment from its corporate headquarters in Colorado. Effective December 31, 2021, the Company entered into an asset purchase agreement involving its VIE with Critical Mass Industries, Inc. and John Knapp, the sole shareholder of Critical Mass Industries, Inc., to divest its discontinued operations, where the buyer assumes all assets and liabilities from the Company. Therefore, with regards to both criteria discussed above, the Company no longer has the power to direct activities, absorb losses, or receive benefits from the VIE and as such will no longer consolidate CMI’s financial results with its own. |
Use of Estimates | Use of Estimates The preparation of the Company’s condensed consolidated 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 condensed consolidated financial statements, and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to determining the fair value of the assets acquired and liabilities assumed in acquisition, determining the useful lives and potential impairment of long-lived assets and potential impairment of goodwill. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. |
Reclassifications | Reclassifications Certain items in the interim condensed consolidated financial statements were reclassified from prior periods for presentation purposes. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid instruments with maturities of three months or less at the time of issuance to be cash equivalents. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. Periodically, the Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company deposits its cash in financial institutions that it believes have high credit quality and has not experienced any losses on such accounts. Additionally, the company entered into a $3,600,000 loan receivable in conjunction with the disposal of discontinued operations at the end of 2021, which is backed by the assets of the discontinued operations, should the borrower default. Aside from these items, the Company does not believe it is exposed to any unusual credit risk. |
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. |
Variable Interest Entities | Variable Interest Entities The Company accounts for variable interest entities in accordance with FASB ASC Topic 810, Consolidation |
Discontinued Operations | Discontinued Operations The Company had no revenues from discontinued operations for the three and nine months ended September 30, 2022. For the three and nine months ended September 30, 2021, Company’s revenue consisted of sales of cannabis and ancillary products to both retail consumers and wholesale customers through its relationship with a VIE, CMI. Revenue for retail customers was 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 was 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 was recognized upon transfer of control of promised products to customers, generally as risk of loss passes, in an amount that reflected the consideration CMI expected to receive in exchange for those products. Taxes collected from customers, which was subsequently remitted to governmental authorities, were excluded from revenue. Retail customer loyalty liabilities were recognized in the period in which they were incurred and were often retired without being utilized. Shipping and handling costs were expensed as incurred and are included in cost of sales. CMI operated in a highly regulated environment in which state regulatory approval was 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. |
Expenses | Expenses Operating Expenses Operating expenses encompass personnel costs, research and development 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 Cryocann. Personnel costs consist primarily of consulting expense and administrative salaries and wages. General and administrative expenses are comprised of travel expenses, accounting expenses, stock-based compensation, and board fees. Professional services are principally comprised of outside legal and professional fees. Other Expense, net Other expense, net consisted of interest expense, other income and (loss) 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. For stock options, the Company engages a valuation firm to calculate the grant date fair value of the options issued. 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 |
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 in process research and development and internal-use software. Intangible assets with indefinite lives are recorded at their estimated fair value at the date of acquisition. Once in process research and development is placed in service, it will be amortized over the estimated useful life. Internal-use software costs recognized as an intangible asset relates to capitalizable costs of computer software obtained for internal-use as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350-40-30-1. All other internal-use software costs are expensed as incurred by the Company. Amortization will be recorded straight-line over the estimated useful life of the software once the software is ready for its intended use. As of September 30, 2022, our internal-use software was not ready for its intended use. The estimated useful life for internal-use software will be determined and periodically reassessed based on considerations for obsolescence, technology, competition, and other economic factors. 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 Patent 10 years In process research and development Indefinite Internal-use software Indefinite |
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. Management concluded that there were no events indicative of goodwill impairment during the nine months ended September 30, 2022. |
Indefinite-Lived Intangible Assets and Intangible Assets Subject to Amortization | Indefinite-Lived Intangible Assets and Intangible Assets Subject to Amortization Indefinite-lived intangible assets and intangible assets subject to amortization 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 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 Management concluded that there were no events indicative of identifiable intangible asset impairment during the nine months ended September 30, 2022. |
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, and notes 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. The fair value of beneficial conversion features associated with convertible notes and the fair value of warrants are calculated utilizing level 2 inputs. When multiple instruments are issued in a single transaction, the total proceeds from the transaction should be allocated among the individual freestanding instruments identified. The allocation occurs after identifying (1) all the freestanding instruments and (2) the subsequent measurement basis for those instruments. The subsequent measurement basis helps inform how the proceeds should be allocated. After the proceeds are allocated to the freestanding instruments, those instruments should be further evaluated for embedded features that may need to be bifurcated or separated. If debt or stock is issued with detachable warrants, the guidance in ASC 470-20-25-2 (applied by analogy to stock) requires that the proceeds be allocated to the two instruments based on their relative fair values. This method is generally appropriate if debt or stock is issued with any other freestanding instrument that is classified in equity (such as a detachable forward contract) or as a liability but not subject to subsequent fair value accounting. Given that our convertible notes and common stock that were issued with warrants are both not subject to subsequent fair value accounting treatment, Management determined the relative fair value method shall be used for allocating the proceeds of the transaction. Under the relative fair value method, the instrument being analyzed is allocated a portion of the proceeds based on its fair value to the sum of the fair value of all the instruments covered in the allocation. Management additionally evaluates the facts and circumstances to determine whether the principal balance of convertible notes approximate their fair value, which we have concluded for all convertible notes issued. As a result of our fair value calculations, we recognized $928,779 and $515,763 of additional paid in capital associated with the value of the warrants and beneficial conversion, respectively, resulting in a total notes payable discount of $1,444,542. As such, no debt discount amortization was recognized during the three and nine months ended September 30, 2022. $320,049 and $508,831 of debt discount amortization was recognized as interest expense during the three and nine months ended September 30, 2021. |
Net Loss per Share | Net Loss per Share The Company follows ASC 260, Earnings Per Share |
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, 2022 | |
Variable Interest Entity [Abstract] | |
Schedule of determined that CMI no longer qualifies as a variable interest entity | Three Months Ended Nine Months Ended 2022 2021 2022 2021 Income Statement Net sales $ - $ 1,399,505 $ - $ 4,713,077 Cost of goods sold, inclusive of depreciation - 857,281 - 2,982,974 Gross profit - 542,224 - 1,730,103 Operating expenses: Personnel costs - 71,085 - 335,182 General and administrative - 215,497 - 703,909 Legal and professional fees - 5,550 - 35,815 Amortization expense - - - - Total operating expenses - 292,132 - 1,074,906 Gain / (loss) from operations - 250,092 - 655,197 Other income (expenses): Interest expense - - - (49,803 ) Loss on foreign exchange - - - - Total other expenses - - - (49,803 ) Net gain from discontinued operations, before taxes - 250,092 - 605,394 Income taxes - - - - Net gain from discontinued operations $ - $ 250,092 $ - $ 605,394 |
Restatement (Tables)
Restatement (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Restatement [Abstract] | |
Schedule of condensed balance sheet | As of September 30, 2021 Previously Adjustments Revised LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 3,124,652 $ - $ 3,124,652 Loans payable 286,441 - 286,441 Taxes payable 771 - 771 Note payable, related party 1,457,669 - 1,457,669 Liabilities held for sale, current 677,084 - 677,084 Total current liabilities 5,546,617 - 5,546,617 Notes payable 4,982,944 (850,461 ) 4,132,483 Deferred tax liability 14,926 - 14,926 Total liabilities 10,544,487 (850,461 ) 9,694,026 Commitments and contingencies Shareholders' equity: Preferred stock, $0.001 par value, 100,000 shares authorized, no - - - Common stock, $0.001 par value, 500,000,000 shares authorized, 120,058,181 and 97,005,817 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively 120,058 - 120,058 Additional paid-in capital 24,622,355 1,359,292 25,981,647 Accumulated deficit (21,410,744 ) (508,831 ) (21,919,575 ) Total shareholders' equity 3,331,669 850,461 4,182,130 Total liabilities and shareholders' equity $ 13,876,156 $ - $ 13,876,156 |
Schedule of consolidated statements of operations | For the Three Months Ended Previously Adjustments Revised Other income (expenses): Interest expense (270,552 ) (320,049 ) (590,601 ) Gain on foreign exchange 23,170 - 23,170 Total other expenses (247,382 ) (320,049 ) (567,431 ) Net loss from continuing operations, before taxes (2,303,858 ) (320,049 ) (2,623,907 ) Income taxes - - - Net loss from continuing operations (2,303,858 ) (320,049 ) (2,623,907 ) Net loss from discontinued operations, net of tax 250,092 - 250,092 Net loss $ (2,053,766 ) $ (320,049 ) $ (2,373,815 ) Comprehensive loss from discontinued operations - - - Comprehensive loss $ (2,053,766 ) $ (320,049 ) $ (2,373,815 ) For the Nine Months Ended Previously Adjustments Revised Other income (expenses): Interest expense (644,027 ) (508,831 ) (1,152,858 ) Gain on foreign exchange 46,708 - 46,708 Total other expenses (597,319 ) (508,831 ) (1,106,150 ) Net loss from continuing operations, before taxes (6,286,944 ) (508,831 ) (6,795,775 ) Income taxes - - - Net loss from continuing operations (6,286,944 ) (508,831 ) (6,795,775 ) Net loss from discontinued operations, net of tax 605,394 - 605,394 Net loss $ (5,681,550 ) $ (508,831 ) $ (6,190,381 ) Comprehensive loss from discontinued operations - - - Comprehensive loss $ (5,681,550 ) $ (508,831 ) $ (6,190,381 ) |
Schedule of consolidated statements of shareholders’ equity | Common Stock Additional Common Accumulated Total Shares Amount Capital Be Issued Deficit Equity Balance at March 31, 2021 98,497,636 $ 98,498 $ 19,596,807 $ - $ (16,776,121 ) $ 2,919,184 Share issuance 201,586 202 - - - 202 Share issuance related to Cryocann asset purchase 10,000,000 10,000 1,794,500 - - 1,804,500 Share issuance pursuant to employment agreements 6,701,586 6,701 894,000 - - 900,701 Share issuance in exchange for extinguishment of debt 2,500,000 2,500 505,902 - - 508,402 Share issuance in exchange for services 633,125 633 56,867 - - 57,500 Stock-based compensation - - 190,026 - - 190,026 Stock options issued and outstanding - - 710,202 - - 710,202 Net loss - - - - (2,580,857 ) (2,580,857 ) Previously reported balance at June 30, 2021 118,533,933 $ 118,534 $ 23,748,304 $ - $ (19,356,978 ) $ 4,509,860 Adjustments: Interest expense from debt discount amortization related to Beneficial Conversion Feature - - - - (188,782 ) (188,782 ) Beneficial Conversion Feature of Note Payable - - 391,958 - - 391,958 Warrants issued in conjunction with Convertible Notes Payable - - 888,371 - - 888,371 Adjusted balance at June 30, 2021 118,533,933 $ 118,534 $ 25,208,633 $ - $ (19,545,760 ) $ 5,601,407 Share issuance 798,414 798 199,000 - - 199,798 Share issuance in exchange for services 633,707 634 239,853 - - 240,487 Share issuance for interest payment on note payable 92,127 92 23,317 - - 23,409 Stock-based compensation - - 68,628 - - 68,628 Stock options issued and outstanding - - 258,003 - - 258,003 Beneficial Conversion Feature of Note Payable - - 85,250 - - 85,250 Net loss - - - - (2,053,766 ) (2,053,766 ) Balance at September 30, 2021 120,058,181 $ 120,058 $ 25,902,684 $ - $ (21,599,526 ) $ 4,423,216 Adjustments: Interest expense from debt discount amortization related to Beneficial Conversion Feature - - - - (320,049 ) (320,049 ) Beneficial Conversion Feature of Note Payable - - 38,555 - - 38,555 Warrants issued in conjunction with Convertible Notes Payable - - 40,408 - - 40,408 Adjusted balance at September 30, 2021 120,058,181 $ 120,058 $ 25,981,647 $ - $ (21,919,575 ) $ 4,182,130 |
Schedule of consolidated statements of cash flows | For the Nine Months Ended Previously Adjustments Revised CASH FLOWS FROM OPERATING ACTIVITIES: Net loss from continuing operations $ (6,286,944 ) $ (508,831 ) $ (6,795,775 ) Adjustments to reconcile net loss to net cash used in operating activities from continuing operations: Depreciation and amortization expense 21,832 - 21,832 Amortization of debt discount 30,861 508,831 539,692 Stock-based compensation expense 2,400,976 - 2,400,976 Fair value of common stock issued pursuant to service and advisory agreements 291,096 - 291,096 Change in operating assets and liabilities: Prepaid expenses (57,129 ) - (57,129 ) Accounts payable and accrued expenses 876,417 - 876,417 Net cash used in operating activities from continuing operations (2,722,891 ) - (2,722,891 ) Net cash provided by operating activities from discontinued operations (347,204 ) - (347,204 ) Net cash used in operating activities (3,070,095 ) - (3,070,095 ) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant 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 Patent 10 years In process research and development Indefinite Internal-use software Indefinite |
Business Combination (Tables)
Business Combination (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination [Abstract] | |
Schedule of purchase price | 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 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, 2022 | |
Discontinued Operations [Abstract] | |
Schedule of CMI discontinued operations | Three Months Ended Nine Months Ended 2022 2021 2022 2021 Net sales $ - $ 1,399,505 $ - $ 4,713,077 Cost of goods sold, inclusive of depreciation - 857,281 - 2,982,974 Gross profit - 542,224 - 1,730,103 Operating expenses: Personnel costs - 71,085 - 335,182 General and administrative - 215,497 - 703,909 Legal and professional fees - 5,550 - 35,815 Total operating expenses - 292,132 - 1,074,906 Gain from operations - 250,092 - 655,197 Other income (expenses): Interest expense - - - (49,803 ) Loss on foreign exchange - - - - Total other expenses - - - (49,803 ) Net gain from discontinued operations, before taxes - 250,092 - 605,394 Income taxes - - - - Net gain from discontinued operations $ - $ 250,092 $ - $ 605,394 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets [Abstract] | |
Schedule of identifiable intangible assets | September 30, 2022 Estimated Gross Accumulated Carrying Amortized Patent 10 years $ 873,263 $ (109,158 ) $ 764,105 Indefinite-lived In-process research and development Indefinite 3,209,000 - 3,209,000 Internal-use software Indefinite 53,186 - 53,186 Total identifiable intangible assets $ 4,135,449 $ (109,158 ) $ 4,026,291 December 31, 2021 Estimated Gross Accumulated Carrying Amortized Patent 10 years $ 873,263 $ (43,663 ) $ 829,600 Indefinite-lived In-process research and development Indefinite 3,209,000 - 3,209,000 Total identifiable intangible assets $ 4,082,263 $ (43,663 ) $ 4,038,600 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Shareholders' Equity [Abstract] | |
Schedule of the company's RSU award activity | Restricted Weighted Outstanding at December 31, 2021 2,200,003 $ 0.45 Granted 1,469,511 0.27 Vested (1,735,529 ) 0.49 Forfeited - - Outstanding at March 31, 2022 1,933,985 $ 0.27 Granted 510,000 0.35 Vested (1,135,000 ) 0.28 Forfeited (50,000 ) 0.17 Outstanding at June 30, 2022 1,258,985 0.20 Granted 69,875 0.26 Vested (15,000 ) 0.20 Forfeited - - Outstanding at September 30, 2022 1,313,860 0.30 |
Schedule of stock options activity | Stock Weighted Weighted Aggregate Outstanding at December 31, 2021 8,500,000 $ 0.18 9.2 $ 1,579,108 Granted and vested - - - - Forfeited - - - - Outstanding at March 31, 2022 8,500,000 $ 0.18 9.0 $ 1,579,108 Granted and vested - - - - Forfeited - - - - Outstanding at June 30, 2022 8,500,000 $ 0.18 8.7 $ 1,579,108 Granted and vested - - - - Forfeited - - - - Outstanding at September 30, 2022 8,500,000 $ 0.18 8.5 $ 1,579,108 |
Variable Interest Entity (Detai
Variable Interest Entity (Details) | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Variable Interest Entity [Abstract] | |
Promissory note due | $ 3,600,000 |
Due date | Dec. 31, 2023 |
Variable Interest Entity (Det_2
Variable Interest Entity (Details) - Schedule of determined that CMI no longer qualifies as a variable interest entity - VIE's [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement | ||||
Net sales | $ 1,399,505 | $ 4,713,077 | ||
Cost of goods sold, inclusive of depreciation | 857,281 | 2,982,974 | ||
Gross profit | 542,224 | 1,730,103 | ||
Operating expenses: | ||||
Personnel costs | 71,085 | 335,182 | ||
General and administrative | 215,497 | 703,909 | ||
Legal and professional fees | 5,550 | 35,815 | ||
Amortization expense | ||||
Total operating expenses | 292,132 | 1,074,906 | ||
Gain / (loss) from operations | 250,092 | 655,197 | ||
Other income (expenses): | ||||
Interest expense | (49,803) | |||
Loss on foreign exchange | ||||
Total other expenses | (49,803) | |||
Net gain from discontinued operations, before taxes | 250,092 | 605,394 | ||
Income taxes | ||||
Net gain from discontinued operations | $ 250,092 | $ 605,394 |
Restatement (Details)
Restatement (Details) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2021 | Sep. 30, 2022 | Mar. 18, 2021 | |
Restatement (Details) [Line Items] | |||
Interest rate | 12% | 15% | |
Warrant shares (in Shares) | 24,500,000 | ||
Exercise price (in Dollars per share) | $ 0.4 | ||
Maximum [Member] | |||
Restatement (Details) [Line Items] | |||
Aggregate principal value | $ 3 | ||
Minimum [Member] | |||
Restatement (Details) [Line Items] | |||
Aggregate principal value | $ 1.9 |
Restatement (Details) - Schedul
Restatement (Details) - Schedule of condensed balance sheet | Sep. 30, 2021 USD ($) |
Previously Reported [Member] | |
Current liabilities: | |
Accounts payable and accrued expenses | $ 3,124,652 |
Loans payable | 286,441 |
Taxes payable | 771 |
Note payable, related party | 1,457,669 |
Liabilities held for sale, current | 677,084 |
Total current liabilities | 5,546,617 |
Notes payable | 4,982,944 |
Deferred tax liability | 14,926 |
Total liabilities | 10,544,487 |
Commitments and contingencies | |
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 at September 30, 2021 and December 31, 2020, respectively | 120,058 |
Additional paid-in capital | 24,622,355 |
Accumulated deficit | (21,410,744) |
Total shareholders' equity | 3,331,669 |
Total liabilities and shareholders' equity | 13,876,156 |
Adjustments [Member] | |
Current liabilities: | |
Accounts payable and accrued expenses | |
Loans payable | |
Taxes payable | |
Note payable, related party | |
Liabilities held for sale, current | |
Total current liabilities | |
Notes payable | (850,461) |
Deferred tax liability | |
Total liabilities | (850,461) |
Commitments and contingencies | |
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 at September 30, 2021 and December 31, 2020, respectively | |
Additional paid-in capital | 1,359,292 |
Accumulated deficit | (508,831) |
Total shareholders' equity | 850,461 |
Total liabilities and shareholders' equity | |
Revised [Member] | |
Current liabilities: | |
Accounts payable and accrued expenses | 3,124,652 |
Loans payable | 286,441 |
Taxes payable | 771 |
Note payable, related party | 1,457,669 |
Liabilities held for sale, current | 677,084 |
Total current liabilities | 5,546,617 |
Notes payable | 4,132,483 |
Deferred tax liability | 14,926 |
Total liabilities | 9,694,026 |
Commitments and contingencies | |
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 at September 30, 2021 and December 31, 2020, respectively | 120,058 |
Additional paid-in capital | 25,981,647 |
Accumulated deficit | (21,919,575) |
Total shareholders' equity | 4,182,130 |
Total liabilities and shareholders' equity | $ 13,876,156 |
Restatement (Details) - Sched_2
Restatement (Details) - Schedule of condensed balance sheet (Parentheticals) | Sep. 30, 2021 $ / shares shares |
Previously Reported [Member] | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
Preferred stock, par value (in Dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares authorized | 100,000 |
Preferred stock, shares issued | |
Preferred stock, shares outstanding | |
Common stock, par value (in Dollars per share) | $ / shares | $ 0.001 |
Common stock, shares authorized | 500,000,000 |
Common stock, shares issued | 118,533,933 |
Common stock, shares outstanding | 97,005,817 |
Adjustments [Member] | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
Preferred stock, par value (in Dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares authorized | 100,000 |
Preferred stock, shares issued | |
Preferred stock, shares outstanding | |
Common stock, par value (in Dollars per share) | $ / shares | $ 0.001 |
Common stock, shares authorized | 500,000,000 |
Common stock, shares issued | 118,533,933 |
Common stock, shares outstanding | 97,005,817 |
Revised [Member] | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
Preferred stock, par value (in Dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares authorized | 100,000 |
Preferred stock, shares issued | |
Preferred stock, shares outstanding | |
Common stock, par value (in Dollars per share) | $ / shares | $ 0.001 |
Common stock, shares authorized | 500,000,000 |
Common stock, shares issued | 118,533,933 |
Common stock, shares outstanding | 97,005,817 |
Restatement (Details) - Sched_3
Restatement (Details) - Schedule of consolidated statements of operations - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | |
Previously Reported [Member] | |||
Other income (expenses): | |||
Interest expense | $ (270,552) | $ (644,027) | |
Gain on foreign exchange | 23,170 | 46,708 | |
Total other expenses | (247,382) | (597,319) | |
Net loss from continuing operations, before taxes | (2,303,858) | (6,286,944) | |
Income taxes | |||
Net loss from continuing operations | (2,303,858) | (6,286,944) | |
Net loss from discontinued operations, net of tax | 250,092 | 605,394 | |
Net loss | (2,053,766) | $ (2,580,857) | (5,681,550) |
Comprehensive loss from discontinued operations | |||
Comprehensive loss | (2,053,766) | (5,681,550) | |
Adjustments [Member] | |||
Other income (expenses): | |||
Interest expense | (320,049) | (508,831) | |
Gain on foreign exchange | |||
Total other expenses | (320,049) | (508,831) | |
Net loss from continuing operations, before taxes | (320,049) | (508,831) | |
Income taxes | |||
Net loss from continuing operations | (320,049) | (508,831) | |
Net loss from discontinued operations, net of tax | |||
Net loss | (320,049) | (508,831) | |
Comprehensive loss from discontinued operations | |||
Comprehensive loss | (320,049) | (508,831) | |
Revised [Member] | |||
Other income (expenses): | |||
Interest expense | (590,601) | (1,152,858) | |
Gain on foreign exchange | 23,170 | 46,708 | |
Total other expenses | (567,431) | (1,106,150) | |
Net loss from continuing operations, before taxes | (2,623,907) | (6,795,775) | |
Income taxes | |||
Net loss from continuing operations | (2,623,907) | (6,795,775) | |
Net loss from discontinued operations, net of tax | 250,092 | 605,394 | |
Net loss | (2,373,815) | (6,190,381) | |
Comprehensive loss from discontinued operations | |||
Comprehensive loss | $ (2,373,815) | $ (6,190,381) |
Restatement (Details) - Sched_4
Restatement (Details) - Schedule of consolidated statements of shareholders’ equity - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | |
Previously Reported [Member] | |||
Restatement (Details) - Schedule of consolidated statements of shareholders’ equity [Line Items] | |||
Balance | $ 4,509,860 | $ 2,919,184 | |
Balance | 4,423,216 | 4,509,860 | $ 4,423,216 |
Adjustments: | |||
Beneficial Conversion Feature of Note Payable | 85,250 | ||
Share issuance | 199,798 | 202 | |
Share issuance related to Cryocann asset purchase | 1,804,500 | ||
Share issuance pursuant to employment agreements | 900,701 | ||
Share issuance in exchange for extinguishment of debt | 508,402 | ||
Share issuance in exchange for services | 240,487 | 57,500 | |
Share issuance for interest payment on note payable | 23,409 | ||
Stock-based compensation | 68,628 | 190,026 | |
Stock options issued and outstanding | 258,003 | 710,202 | |
Net loss | $ (2,053,766) | $ (2,580,857) | $ (5,681,550) |
Previously Reported [Member] | Common Stock [Member] | |||
Restatement (Details) - Schedule of consolidated statements of shareholders’ equity [Line Items] | |||
Balance (in Shares) | 118,533,933 | 98,497,636 | |
Balance | $ 118,534 | $ 98,498 | |
Balance (in Shares) | 120,058,181 | 118,533,933 | 120,058,181 |
Balance | $ 120,058 | $ 118,534 | $ 120,058 |
Adjustments: | |||
Share issuance (in Shares) | 798,414 | 201,586 | |
Share issuance | $ 798 | $ 202 | |
Share issuance related to Cryocann asset purchase (in Shares) | 10,000,000 | ||
Share issuance related to Cryocann asset purchase | $ 10,000 | ||
Share issuance pursuant to employment agreements (in Shares) | 6,701,586 | ||
Share issuance pursuant to employment agreements | $ 6,701 | ||
Share issuance in exchange for extinguishment of debt (in Shares) | 2,500,000 | ||
Share issuance in exchange for extinguishment of debt | $ 2,500 | ||
Share issuance in exchange for services (in Shares) | 633,707 | 633,125 | |
Share issuance in exchange for services | $ 634 | $ 633 | |
Share issuance for interest payment on note payable (in Shares) | 92,127 | ||
Share issuance for interest payment on note payable | $ 92 | ||
Previously Reported [Member] | Additional Paid-in Capital [Member] | |||
Restatement (Details) - Schedule of consolidated statements of shareholders’ equity [Line Items] | |||
Balance | 23,748,304 | 19,596,807 | |
Balance | 25,902,684 | 23,748,304 | 25,902,684 |
Adjustments: | |||
Beneficial Conversion Feature of Note Payable | 85,250 | ||
Share issuance | 199,000 | ||
Share issuance related to Cryocann asset purchase | 1,794,500 | ||
Share issuance pursuant to employment agreements | 894,000 | ||
Share issuance in exchange for extinguishment of debt | 505,902 | ||
Share issuance in exchange for services | 239,853 | 56,867 | |
Share issuance for interest payment on note payable | 23,317 | ||
Stock-based compensation | 68,628 | 190,026 | |
Stock options issued and outstanding | 258,003 | 710,202 | |
Previously Reported [Member] | Retained Earnings [Member] | |||
Restatement (Details) - Schedule of consolidated statements of shareholders’ equity [Line Items] | |||
Balance | (19,356,978) | (16,776,121) | |
Balance | (21,599,526) | (19,356,978) | (21,599,526) |
Adjustments: | |||
Net loss | (2,053,766) | (2,580,857) | |
Adjustments [Member] | |||
Restatement (Details) - Schedule of consolidated statements of shareholders’ equity [Line Items] | |||
Balance | 5,601,407 | ||
Balance | 4,182,130 | 5,601,407 | $ 4,182,130 |
Adjustments: | |||
Interest expense from debt discount amortization related to Beneficial Conversion Feature | (320,049) | (188,782) | |
Beneficial Conversion Feature of Note Payable | 38,555 | 391,958 | |
Warrants issued in conjunction with Convertible Notes Payable | $ 40,408 | $ 888,371 | |
Adjustments [Member] | Common Stock [Member] | |||
Restatement (Details) - Schedule of consolidated statements of shareholders’ equity [Line Items] | |||
Balance (in Shares) | 118,533,933 | ||
Balance | $ 118,534 | ||
Balance (in Shares) | 120,058,181 | 118,533,933 | 120,058,181 |
Balance | $ 120,058 | $ 118,534 | $ 120,058 |
Adjustments [Member] | Additional Paid-in Capital [Member] | |||
Restatement (Details) - Schedule of consolidated statements of shareholders’ equity [Line Items] | |||
Balance | 25,208,633 | ||
Balance | 25,981,647 | 25,208,633 | 25,981,647 |
Adjustments: | |||
Beneficial Conversion Feature of Note Payable | 38,555 | 391,958 | |
Warrants issued in conjunction with Convertible Notes Payable | 40,408 | 888,371 | |
Adjustments [Member] | Retained Earnings [Member] | |||
Restatement (Details) - Schedule of consolidated statements of shareholders’ equity [Line Items] | |||
Balance | (19,545,760) | ||
Balance | (21,919,575) | (19,545,760) | $ (21,919,575) |
Adjustments: | |||
Interest expense from debt discount amortization related to Beneficial Conversion Feature | $ (320,049) | $ (188,782) |
Restatement (Details) - Sched_5
Restatement (Details) - Schedule of consolidated statements of cash flows | 9 Months Ended |
Sep. 30, 2021 USD ($) | |
Previously Reported [Member] | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |
Net loss from continuing operations | $ (6,286,944) |
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 |
Stock-based compensation expense | 2,400,976 |
Fair value of common stock issued pursuant to service and advisory agreements | 291,096 |
Change in operating assets and liabilities: | |
Prepaid expenses | (57,129) |
Accounts payable and accrued expenses | 876,417 |
Net cash used in operating activities from continuing operations | (2,722,891) |
Net cash provided by operating activities from discontinued operations | (347,204) |
Net cash used in operating activities | (3,070,095) |
Adjustments [Member] | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |
Net loss from continuing operations | (508,831) |
Adjustments to reconcile net loss to net cash used in operating activities from continuing operations: | |
Depreciation and amortization expense | |
Amortization of debt discount | 508,831 |
Stock-based compensation expense | |
Fair value of common stock issued pursuant to service and advisory agreements | |
Change in operating assets and liabilities: | |
Prepaid expenses | |
Accounts payable and accrued expenses | |
Net cash used in operating activities from continuing operations | |
Net cash provided by operating activities from discontinued operations | |
Net cash used in operating activities | |
Revised [Member] | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |
Net loss from continuing operations | (6,795,775) |
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 | 539,692 |
Stock-based compensation expense | 2,400,976 |
Fair value of common stock issued pursuant to service and advisory agreements | 291,096 |
Change in operating assets and liabilities: | |
Prepaid expenses | (57,129) |
Accounts payable and accrued expenses | 876,417 |
Net cash used in operating activities from continuing operations | (2,722,891) |
Net cash provided by operating activities from discontinued operations | (347,204) |
Net cash used in operating activities | $ (3,070,095) |
Going Concern Uncertainty, Fi_2
Going Concern Uncertainty, Financial Conditions and Management’s Plans (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Working capital | $ 2,031,369 |
Cash balance | 3,129,736 |
Estimated cost | 4,000,000 |
Capital expenditures | 6,600,000 |
Investment amount | 100,000 |
Facility limit | 10,000,000 |
Cash for operating activities | 3,853,376 |
Incurred net loss | 4,811,135 |
Accumulated deficit | $ 33,399,973 |
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, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | ||||
Loan receivable | $ 3,600,000 | |||
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 condensed consolidated financial statements. | |||
Fair value of warrants | $ 928,779 | |||
Conversion of warrants | 515,763 | |||
Notes payable | $ 1,444,542 | |||
Debt discount amortization | $ 320,049 | $ 508,831 | ||
Unvested RSU’s considered potentially dilutive securities outstanding (in Shares) | 1,313,860 | 2,185,003 |
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, 2022 | |
Computer equipment [Member] | Minimum [Member] | |
Schedule of estimated useful life of property and equipment [Abstract] | |
Property, plant and equipment, useful life | 3 years |
Computer equipment [Member] | Maximum [Member] | |
Schedule of estimated useful life of property and equipment [Abstract] | |
Property, plant and equipment, useful life | 5 years |
Furniture and fixtures [Member] | Minimum [Member] | |
Schedule of estimated useful life of property and equipment [Abstract] | |
Property, plant and equipment, useful life | 5 years |
Furniture and fixtures [Member] | Maximum [Member] | |
Schedule of estimated useful life of property and equipment [Abstract] | |
Property, plant and equipment, useful life | 7 years |
Machinery and equipment [Member] | Minimum [Member] | |
Schedule of estimated useful life of property and equipment [Abstract] | |
Property, plant and equipment, useful life | 5 years |
Machinery and equipment [Member] | Maximum [Member] | |
Schedule of estimated useful life of property and equipment [Abstract] | |
Property, plant and equipment, useful life | 8 years |
Leasehold improvements [Member] | |
Schedule of estimated useful life of property and equipment [Abstract] | |
Property, plant and equipment, useful life | 15 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, 2022 | |
Patents [Member] | |
Schedule of estimated useful lives of intangible assets [Abstract] | |
Estimated useful lives of intangible assets | 10 years |
In process research and development [Member] | |
Schedule of estimated useful lives of intangible assets [Abstract] | |
Estimated useful lives of intangible assets | Indefinite |
Internal-use software [Member] | |
Schedule of estimated useful lives of intangible assets [Abstract] | |
Estimated useful lives of intangible assets | Indefinite |
Business Combination (Details)
Business Combination (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Oct. 15, 2021 | Jun. 22, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Apr. 23, 2021 | |
Business Combination [Abstract] | |||||
Aggregate purchase price | $ 3,500,000 | ||||
Shares of common stock (in Shares) | 10,000,000 | ||||
Promissory note issued | $ 1,252,316 | ||||
Purchase price | $ 2,500,000 | ||||
Net loss | $ 2,373,815 | $ 7,407,987 | |||
Net loss per share (in Dollars per share) | $ 0.02 | $ 0.06 |
Business Combination (Details)
Business Combination (Details) - Schedule of purchase price - Cryocann Acquisition [Member] | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
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 - Cryocann Acquisition [Member] | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Intangible assets: | |
In process research and development, Fair Value | $ 3,209,000 |
In process research and development, Weighted average useful life (in years) | Indefinite |
Patent, Fair Value | $ 873,263 |
Patent, Weighted average useful life (in years) | 10 years |
Goodwill, Fair Value | $ 1,190,000 |
Total assets acquired, Fair Value | $ 5,272,263 |
Discontinued Operations (Detail
Discontinued Operations (Details) - Schedule of CMI discontinued operations - CMI Transaction [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Discontinued Operations (Details) - Schedule of CMI discontinued operations [Line Items] | ||||
Net sales | $ 1,399,505 | $ 4,713,077 | ||
Cost of goods sold, inclusive of depreciation | 857,281 | 2,982,974 | ||
Gross profit | 542,224 | 1,730,103 | ||
Operating expenses: | ||||
Personnel costs | 71,085 | 335,182 | ||
General and administrative | 215,497 | 703,909 | ||
Legal and professional fees | 5,550 | 35,815 | ||
Total operating expenses | 292,132 | 1,074,906 | ||
Gain from operations | 250,092 | 655,197 | ||
Other income (expenses): | ||||
Interest expense | (49,803) | |||
Loss on foreign exchange | ||||
Total other expenses | (49,803) | |||
Net gain from discontinued operations, before taxes | 250,092 | 605,394 | ||
Income taxes | ||||
Net gain from discontinued operations | $ 250,092 | $ 605,394 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Abstract] | ||
Property and equipment, net | $ 349,586 | $ 225,000 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Goodwill and Intangible Assets [Abstract] | |||||
Carrying value of goodwill | $ 1,190,000 | $ 1,190,000 | |||
Amortization expense | $ 21,832 | $ 21,832 | $ 65,495 | $ 21,832 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details) - Schedule of identifiable intangible assets - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Indefinite-lived | ||
Indefinite-lived Intangible assets, Gross Amount | $ 4,135,449 | $ 4,082,263 |
Indefinite-lived Intangible assets, Accumulated Amortization | (109,158) | (43,663) |
Indefinite-lived intangible assets, Carrying Value | $ 4,026,291 | $ 4,038,600 |
Patent [Member] | ||
Amortized | ||
Amortized intangible assets, Estimated Useful Life (Years) | 10 years | 10 years |
Amortized intangible assets, Gross Amount | $ 873,263 | $ 873,263 |
Amortized intangible assets, Accumulated Amortization | (109,158) | (43,663) |
Amortized intangible assets, Carrying Value | $ 764,105 | $ 829,600 |
In-Process Research and Development [Member] | ||
Indefinite-lived | ||
Indefinite-lived intangible assets, Estimated Useful Life (Years) | Indefinite | Indefinite |
Indefinite-lived Intangible assets, Gross Amount | $ 3,209,000 | $ 3,209,000 |
Indefinite-lived Intangible assets, Accumulated Amortization | ||
Indefinite-lived intangible assets, Carrying Value | $ 3,209,000 | $ 3,209,000 |
Internal-Use Software [Member] | ||
Indefinite-lived | ||
Indefinite-lived intangible assets, Estimated Useful Life (Years) | Indefinite | |
Indefinite-lived Intangible assets, Gross Amount | $ 53,186 | |
Indefinite-lived Intangible assets, Accumulated Amortization | ||
Indefinite-lived intangible assets, Carrying Value | $ 53,186 |
Loans Receivable (Details)
Loans Receivable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Mar. 31, 2022 | |
Loan Receivable [Abstract] | ||
Promissory note due | $ 6,600,000 | |
Gross amount of promissory note | $ 3,600,000 | |
Additional loans | $ 620,000 |
Debt (Details)
Debt (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | |||||||
Aug. 20, 2021 | Mar. 18, 2021 | Jan. 25, 2021 | Jul. 27, 2020 | Sep. 15, 2022 | Jul. 06, 2021 | Jul. 06, 2021 | Dec. 31, 2021 | Jun. 30, 2021 | Aug. 26, 2020 | |
Debt (Details) [Line Items] | ||||||||||
Debt instrument description | The 1) convertible note had a face value of $250,000, matured August 1, 2022, and accrues interest at 8% per annum. | |||||||||
Net carrying amount | $ 177,083 | |||||||||
Convertible notes | 250,000 | |||||||||
Unamortized debt discount | $ 72,917 | |||||||||
Maturity date | Aug. 01, 2022 | |||||||||
Interest per annum | 15% | 12% | ||||||||
Refinanced loan percentage | 93.60% | |||||||||
Loan repaid date | Oct. 19, 2021 | May 07, 2021 | Apr. 27, 2021 | |||||||
Note payable | $ 225,000 | |||||||||
Interest accrued rate | 12% | 12% | ||||||||
Loan agreement | $ 300,000 | |||||||||
Accrued interest | 91.23% | |||||||||
Maturity date | May 27, 2021 | |||||||||
Loan agreement amount | $ 2,000,000 | |||||||||
Interest rate percenatge | 12% | |||||||||
Due date | Oct. 01, 2024 | |||||||||
Subscription Agreement [Member] | ||||||||||
Debt (Details) [Line Items] | ||||||||||
Convertible into shares (in Shares) | 2,500,000 | |||||||||
Conversion price (in Dollars per share) | $ 0.1 | |||||||||
Warrants exercisable (in Shares) | 2,500,000 | |||||||||
Common stock price per share (in Dollars per share) | $ 0.2 | $ 0.2 | $ 0.25 | |||||||
Aggregate units (in Shares) | 3,000 | |||||||||
Principal amount | $ 1,000 | $ 1,000 | ||||||||
Warrant for purchase shares (in Shares) | 5,000 | 5,000 | ||||||||
Common stock exercise price per share (in Dollars per share) | $ 0.4 | $ 0.4 | ||||||||
Aggregate net proceeds | $ 3,000,000 | $ 3,000,000 | ||||||||
Convertible term description | The Initial Convertible Term Notes would have matured on March 31, 2022 had they not all been converted and the Initial Warrants expire unless exercised by on March 31, 2023. | |||||||||
Loan Agreement [Member] | ||||||||||
Debt (Details) [Line Items] | ||||||||||
Loan agreement | $ 600,000 | |||||||||
Interest per annum | 84% | |||||||||
Convertible Debt [Member] | ||||||||||
Debt (Details) [Line Items] | ||||||||||
Aggregate units (in Shares) | 1,900 | |||||||||
Principal amount | $ 1,000 | $ 1,000 | ||||||||
Warrant for purchase shares (in Shares) | 5,000 | 5,000 | ||||||||
Common stock exercise price per share (in Dollars per share) | $ 0.4 | $ 0.4 | ||||||||
Aggregate net proceeds | $ 1,900,000 | $ 1,900,000 | ||||||||
Convertible term description | The Convertible Term Notes and Warrants had a maturity of September 30, 2022 and the Warrants expire unless exercised by April 30, 2023. | |||||||||
Conversion price per share (in Dollars per share) | $ 0.2 | $ 0.2 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |||
Aug. 19, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | Nov. 15, 2021 | Oct. 22, 2021 | |
Related Party Transactions (Details) [Line Items] | |||||
Promissory note received | $ 281,771 | ||||
Loan agreement | $ 237,590 | ||||
Interest rate | 14% | ||||
Common shares and warrants (in Shares) | 250,000 | ||||
Exchange amount | $ 50,000 | ||||
Common shares and warrants (in Shares) | 73,950,000 | ||||
Trichome Capital Inc [Member] | |||||
Related Party Transactions (Details) [Line Items] | |||||
Common shares and warrants (in Shares) | 760,000 | ||||
Exchange amount | $ 152,000 | ||||
Health Diplomats Pte Ltd [Member] | |||||
Related Party Transactions (Details) [Line Items] | |||||
Exchange amount | $ 152,000 | ||||
Common shares and warrants (in Shares) | 760,000 | ||||
Health Diplomats Pte Ltd [Member] | Owns [Member] | |||||
Related Party Transactions (Details) [Line Items] | |||||
Owns percentage | 100% |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Jan. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2021 | |
Shareholders' Equity (Details) [Line Items] | |||||||||||
Issuance of common stock shares | 10,000,000 | ||||||||||
Transaction shares | 6,903,172 | ||||||||||
Agreements shares | 2,500,000 | ||||||||||
Share exchange for services | 416,667 | 687,501 | 633,125 | ||||||||
Common stock shares | 1,000,000 | 1,000,000 | 1,000,000 | 458,334 | 50,700,000 | 798,414 | |||||
Raising capital | 633,707 | ||||||||||
Interest rate | 92,127 | ||||||||||
Common stock in exchange for services | 550,000 | 1,570,501 | |||||||||
Common stock in exchange for extinguishment of debt. | 185,529 | 24,621,119 | |||||||||
Exercise of warrants | 220,500 | ||||||||||
Vesting of employee RSU grants | 150,000 | 150,000 | |||||||||
Interest payment paid in cash | 92,127 | ||||||||||
RSUs vested (in Dollars) | $ 3,000 | $ 1,168,600 | |||||||||
Fair value of RSU’s vested (in Dollars) | $ 0 | $ 2,851,102 | |||||||||
Unrecognized stock-based compensation (in Dollars) | $ 203,224 | ||||||||||
Stock option shares issued | 1,000,000 | 5,000,000 | |||||||||
Warrants shares | 73,950,000 | 73,950,000 | |||||||||
Exercise price (in Dollars per share) | $ 0.4 | ||||||||||
Warrant share issued | 220,500 | 220,500 | |||||||||
Warrants exercised per share (in Dollars per share) | $ 0.3 | $ 0.3 | |||||||||
Fair value of additional paid in capital (in Dollars) | $ 1,867,960 | $ 1,867,960 | |||||||||
March 31, 2023 [Member] | |||||||||||
Shareholders' Equity (Details) [Line Items] | |||||||||||
Warrants expire | 15,000,000 | ||||||||||
April 30, 2023 [Member] | |||||||||||
Shareholders' Equity (Details) [Line Items] | |||||||||||
Warrants expire | 9,500,000 | ||||||||||
September 17, 2023 [Member] | |||||||||||
Shareholders' Equity (Details) [Line Items] | |||||||||||
Warrants expire | 1,000,000 | ||||||||||
October 15, 2023 [Member] | |||||||||||
Shareholders' Equity (Details) [Line Items] | |||||||||||
Warrants expire | 9,000,000 | ||||||||||
October 26, 2023 [Member] | |||||||||||
Shareholders' Equity (Details) [Line Items] | |||||||||||
Warrants expire | 9,510,000 | ||||||||||
November 2, 2023 [Member] | |||||||||||
Shareholders' Equity (Details) [Line Items] | |||||||||||
Warrants expire | 190,000 | ||||||||||
November 10, 2023 [Member] | |||||||||||
Shareholders' Equity (Details) [Line Items] | |||||||||||
Warrants expire | 4,560,000 | ||||||||||
November 15, 2023 [Member] | |||||||||||
Shareholders' Equity (Details) [Line Items] | |||||||||||
Warrants expire | 1,940,000 | ||||||||||
November 17, 2023 [Member] | |||||||||||
Shareholders' Equity (Details) [Line Items] | |||||||||||
Warrants expire | 750,000 | ||||||||||
November 10, 2024 [Member] | |||||||||||
Shareholders' Equity (Details) [Line Items] | |||||||||||
Warrants expire | 22,500,000 | ||||||||||
Employees [Member] | |||||||||||
Shareholders' Equity (Details) [Line Items] | |||||||||||
Stock-based compensation consisted of equity awards granted and vested (in Dollars) | 5,313 | ||||||||||
Raise capital [Member] | |||||||||||
Shareholders' Equity (Details) [Line Items] | |||||||||||
Share issued | 1,491,819 | ||||||||||
RSU’s [Member] | |||||||||||
Shareholders' Equity (Details) [Line Items] | |||||||||||
Stock-based compensation expense (in Dollars) | 89,230 | $ 68,328 | 299,140 | $ 1,410,173 | |||||||
Directors [Member] | |||||||||||
Shareholders' Equity (Details) [Line Items] | |||||||||||
Stock-based compensation consisted of equity awards granted and vested (in Dollars) | 83,917 | 265,193 | |||||||||
Consultants [Member] | |||||||||||
Shareholders' Equity (Details) [Line Items] | |||||||||||
Stock-based compensation consisted of equity awards granted and vested (in Dollars) | $ 0 | 4,846 | |||||||||
Employees [Member] | |||||||||||
Shareholders' Equity (Details) [Line Items] | |||||||||||
Stock-based compensation consisted of equity awards granted and vested (in Dollars) | $ 29,101 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - Schedule of the company's RSU award activity - $ / shares | 3 Months Ended | ||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Schedule Of The Companys Rsu Award Activity Abstract | |||
Restricted Stock Units, Outstanding beginning balance | 1,258,985 | 1,933,985 | 2,200,003 |
Weighted Average Grant Date Fair Value, Outstanding beginning balance | $ 0.2 | $ 0.27 | $ 0.45 |
Restricted Stock Units, Granted | 69,875 | 510,000 | 1,469,511 |
Weighted Average Grant Date Fair Value, Granted | $ 0.26 | $ 0.35 | $ 0.27 |
Restricted Stock Units, Vested | (15,000) | (1,135,000) | (1,735,529) |
Weighted Average Grant Date Fair Value, Vested | $ 0.2 | $ 0.28 | $ 0.49 |
Restricted Stock Units, Forfeited | (50,000) | ||
Weighted Average Grant Date Fair Value, Forfeited | $ 0.17 | ||
Restricted Stock Units, Outstanding ending balance | 1,313,860 | 1,258,985 | 1,933,985 |
Weighted Average Grant Date Fair Value, Outstanding ending balance | $ 0.3 | $ 0.2 | $ 0.27 |
Shareholders' Equity (Details_2
Shareholders' Equity (Details) - Schedule of stock options activity - Stock Option [Member] - USD ($) | 3 Months Ended | ||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Schedule of stock options activity [Abstract] | |||
Stock Option Shares, Outstanding, beginning | 8,500,000 | 8,500,000 | 8,500,000 |
Weighted Average Exercise Price, Outstanding, beginning | $ 0.18 | $ 0.18 | $ 0.18 |
Weighted Average Remaining Contractual Term, Outstanding, beginning | 8 years 8 months 12 days | 9 years | 9 years 2 months 12 days |
Aggregate Intrinsic Value, Outstanding, beginning | $ 1,579,108 | $ 1,579,108 | $ 1,579,108 |
Stock Option Shares, Granted and vested | |||
Weighted Average Exercise Price, Granted and vested | |||
Weighted Average Remaining Contractual Term, Granted and vested | |||
Aggregate Intrinsic Value, Granted and vested | |||
Stock Option Shares, Forfeited | |||
Weighted Average Exercise Price, Forfeited | |||
Weighted Average Remaining Contractual Term, Forfeited | |||
Aggregate Intrinsic Value, Forfeited | |||
Stock Option Shares, Outstanding, ending | 8,500,000 | 8,500,000 | 8,500,000 |
Weighted Average Exercise Price, Outstanding, ending | $ 0.18 | $ 0.18 | $ 0.18 |
Weighted Average Remaining Contractual Term, Outstanding, ending | 8 years 6 months | 8 years 8 months 12 days | 9 years |
Aggregate Intrinsic Value, Outstanding, ending | $ 1,579,108 | $ 1,579,108 | $ 1,579,108 |
Income Taxes (Details)
Income Taxes (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Annual effective tax rate | 0% |
Commitments & Contingencies (De
Commitments & Contingencies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Commitments & Contingencies (Details) [Line Items] | ||||
Other lease term | 12 months | |||
Other lease payments | $ 16,190 | $ 46,706 | ||
Present value of liabilities | $ 0 | 150,259 | $ 0 | 363,707 |
Operating lease cost | 0 | $ 169,326 | 0 | $ 495,360 |
CMI Transaction [Member] | ||||
Commitments & Contingencies (Details) [Line Items] | ||||
Assets recognized | $ 1,411,461 | $ 1,411,461 |
Subsequent Events (Details)
Subsequent Events (Details) | Nov. 06, 2022 USD ($) |
Subsequent Events [Abstract] | |
license fees | $ 10,200,000 |
Net revenue percentage | 50% |
Agreement term | 5 years |