Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | Jun. 26, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2024 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Information [Line Items] | ||
Entity Registrant Name | CRYOMASS TECHNOLOGIES INC. | |
Entity Central Index Key | 0001533030 | |
Entity File Number | 000-56155 | |
Entity Tax Identification Number | 82-5051728 | |
Entity Incorporation, State or Country Code | NV | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Contact Personnel [Line Items] | ||
Entity Address, Address Line One | 1001 Bannock Street | |
Entity Address, Address Line Two | Suite 612 | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80204 | |
Entity Phone Fax Numbers [Line Items] | ||
City Area Code | 303 | |
Local Phone Number | 416-7208 | |
Entity Listings [Line Items] | ||
Title of 12(b) Security | None | |
No Trading Symbol Flag | true | |
Security Exchange Name | NONE | |
Entity Common Stock, Shares Outstanding | 234,634,877 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 23,922 | $ 49,224 |
Accounts receivable, net | 8,852 | 8,552 |
Prepaid expenses | 75,304 | 94,746 |
Total current assets | 108,078 | 152,522 |
Property and equipment, net | 709,996 | 723,072 |
Intangible assets, net | 79,810 | 96,912 |
Total assets | 897,884 | 972,506 |
Current liabilities: | ||
Accounts payable and accrued expenses | 2,871,563 | 2,236,462 |
Deferred revenue, current | 321,250 | 20,000 |
Notes payable, current, net of discount | 245,600 | 237,500 |
Total current liabilities | 3,438,413 | 2,493,962 |
Deferred revenue, long term | 70,000 | 75,000 |
Notes payable, net of discount | 608,315 | 597,381 |
Contingent royalty liability | 2,546,000 | 1,185,000 |
Total liabilities | 9,215,812 | 6,821,748 |
Commitments and contingencies (Note 12) | ||
Shareholders’ equity (deficit): | ||
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, 211,037,383 and 202,651,205 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively | 211,038 | 210,033 |
Additional paid-in capital | 45,992,759 | 45,907,981 |
Accumulated deficit | (54,521,725) | (51,967,256) |
Total shareholders’ equity (deficit) | (8,317,928) | (5,849,242) |
Total liabilities and shareholders’ equity (deficit) | 897,884 | 972,506 |
Related Party | ||
Current liabilities: | ||
Notes payable, net of discount – related party | $ 2,553,084 | $ 2,470,405 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
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 | 211,037,383 | 202,651,205 |
Common stock, shares outstanding | 211,037,383 | 202,651,205 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Revenues | $ 5,300 | |
Cost of goods sold | ||
Gross profit | 5,300 | |
Operating expenses: | ||
Personnel costs | 644,003 | 768,266 |
General and administrative | 265,588 | 339,895 |
Legal and professional fees | 117,003 | 298,742 |
Depreciation and amortization expense | 30,179 | 124,529 |
Research and development | 123 | |
Total operating expenses | 1,056,773 | 1,531,555 |
Loss from operations | (1,051,473) | (1,531,555) |
Other income (expenses): | ||
Interest expense, net | (158,634) | (53,661) |
Gain / (loss) on foreign exchange | 16,638 | (13,310) |
Loss on contingent royalty liability | (1,361,000) | |
Total other expenses | (1,502,996) | (66,971) |
Net loss before taxes | (2,554,469) | (1,598,526) |
Income taxes | ||
Net loss | $ (2,554,469) | $ (1,598,526) |
Loss per common share – basic (in Dollars per share) | $ (0.01) | $ (0.01) |
Weighted average common shares outstanding—basic (in Shares) | 203,523,079 | 204,021,504 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Loss per common share – diluted | $ 0 | $ (0.01) |
Weighted average common shares outstanding— diluted | 203,523,079 | 204,021,504 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders’ Equity (Deficit) (Unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Common Stock to Be Issued | Accumulated Deficit | Total |
Balance at Dec. 31, 2022 | $ 202,652 | $ 43,163,579 | $ 219,765 | $ (39,011,528) | $ 4,574,468 |
Balance (in Shares) at Dec. 31, 2022 | 202,651,205 | ||||
Common stock issued for prior period services | $ 62 | 21,813 | (21,875) | $ 21,875 | |
Common stock issued for prior period services (in Shares) | 62,500 | 62,500 | |||
Common stock issued for current period services | $ 188 | 65,438 | $ 65,626 | ||
Common stock issued for current period services (in Shares) | 187,500 | 187,500 | |||
Common stock issued for vested RSUs for prior period services | $ 1,100 | 196,790 | (197,890) | ||
Common stock issued for vested RSUs for prior period services (in Shares) | 1,100,000 | ||||
Common stock issued for vested RSUs for current period services | $ 778 | 49,222 | 50,000 | ||
Common stock issued for vested RSUs for current period services (in Shares) | 777,932 | ||||
Stock-based compensation for vested RSUs for current period services | 62,972 | 62,972 | |||
Net loss | (1,598,526) | (1,598,526) | |||
Balance at Mar. 31, 2023 | $ 204,780 | 43,559,814 | (40,610,054) | 3,154,540 | |
Balance (in Shares) at Mar. 31, 2023 | 204,779,137 | ||||
Balance at Dec. 31, 2023 | $ 210,033 | 45,907,981 | (51,967,256) | (5,849,242) | |
Balance (in Shares) at Dec. 31, 2023 | 210,032,401 | ||||
Common stock issued for vested RSUs for prior period services | $ 1,005 | (1,005) | |||
Common stock issued for vested RSUs for prior period services (in Shares) | 1,004,982 | ||||
Stock options issued for current period services | 57,557 | 57,557 | |||
Stock-based compensation for vested RSUs for current period services | 28,226 | 28,226 | |||
Net loss | (2,554,469) | (2,554,469) | |||
Balance at Mar. 31, 2024 | $ 211,038 | $ 45,992,759 | $ (54,521,725) | $ (8,317,928) | |
Balance (in Shares) at Mar. 31, 2024 | 211,037,383 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (2,554,469) | $ (1,598,526) |
Adjustments to reconcile net loss to net cash used in operating activities from continuing operations: | ||
Amortization of debt discount (premium) | 33,785 | |
Depreciation and amortization expense | 30,179 | 124,529 |
Loss (gain) on foreign exchange related to notes payable | (17,933) | |
Loss on contingent royalty liability | 1,361,000 | |
Principal in-kind interest accrued | 85,860 | |
Common stock issued for vested RSUs for prior period services | 50,000 | |
Stock-based compensation for vested RSUs for current period services | 28,226 | 62,972 |
Stock options issued for current period services | 57,557 | |
Common stock issued for current period services | 65,626 | |
Change in operating assets and liabilities: | ||
Accounts receivable, net | (300) | |
Prepaid expenses | 19,442 | 35,877 |
Accounts payable and accrued expenses | 635,101 | (78,821) |
Deferred revenue | 296,250 | |
Net cash used in operating activities | (25,302) | (1,338,343) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of intangible assets | (13,736) | |
Net cash used in investing activities | (13,736) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net cash used in financing activities | ||
Net increase (decrease) in cash and cash equivalents | (25,302) | (1,352,079) |
Cash and cash equivalents at beginning of period | 49,224 | 2,016,057 |
Cash and cash equivalents at end of period | 23,922 | 663,978 |
Supplemental disclosure of non-cash investing activities: | ||
Purchase of property and equipment on credit | $ (221,577) |
Nature of the Business
Nature of the Business | 3 Months Ended |
Mar. 31, 2024 | |
Nature of the Business [Abstract] | |
Nature of the Business | 1. Nature of the Business Cryomass Technologies Inc. (the “Company”) develops and licenses cutting-edge equipment and processes to refine harvested cannabis, hemp, and other premium crops. The company’s patented technology harnesses liquid nitrogen to reduce biomass and then efficiently isolate, collect and preserve delicate resin glands (trichomes) containing prized compounds like cannabinoids and terpenes. Building on this technology, Cryomass has engineered its premier Trichome Separation unit (CryoSift Separator™), optimized via patented cryogenic processes to rapidly capture intact, high-value cannabis and hemp trichomes (CryoSift™). The Company’s principal office is located at 1001 Bannock St., Suite 612, Denver, CO 80204, and its telephone number is 303-416-7208. The Company’s website is www.cryomass.com. Information appearing on the website is not incorporated by reference into this report. Cryomass Technologies Inc. is the parent company to wholly-owned subsidiaries Cryomass LLC, Cryomass California LLC, and 1304740 B.C. Unlimited Liability Company dba Cryomass Canada. 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 acquired assets included the patented cryogenic process titled “System and method for cryogenic separation of plant material” (US patent #10,864,525) for the reduction of biomass and efficient isolation, collection and preservation of delicate resin glands (trichomes) of harvested of hemp and cannabis, and potentially other high value trichome-rich plants. In September 2021, we were granted an additional patent for our process from the Chinese Intellectual Property Office. In April 2022, we were granted another patent #3,064,896 from the Canadian Intellectual Property Office. We currently are taking steps to gain further protection for our intellectual property through the European Union Intellectual Property Office and other international jurisdictions. The first functional commercial unit, known as a CryoSift Separator™, has been installed at the premises of an operating partner, pursuant to a license and lease arrangement, in California. |
Going Concern Uncertainty, Fina
Going Concern Uncertainty, Financial Conditions and Management’s Plans | 3 Months Ended |
Mar. 31, 2024 | |
Going Concern Uncertainty, Financial Conditions and Management’s Plans [Abstract] | |
Going Concern Uncertainty, Financial Conditions and Management’s Plans | 2. Going Concern Uncertainty, Financial Conditions and Management’s Plans The Company believes that there is substantial doubt about the Company’s ability to continue as a going concern. The Company believes that its available cash balance as of the date of this filing will not be sufficient to fund its anticipated level of operations for at least the next twelve months. The Company believes that, at the present time, its ability to continue operations depends on cash expected to be available from planned equipment sales and royalty payments in connection with future revenue generation, or possibly from debt or equity investments, to fund its anticipated level of operations for at least the next twelve months. As of March 31, 2024, the Company had a working deficit of $3,330,335 and cash balance of $23,922. The Company estimates that it needs approximately $3,200,000 to cover overhead costs and has capital expenditure requirements of up to $3,125,000, based on the current pipeline of customer activity. The Company believes that the Company will continue to incur losses for the immediate future. The Company expects to finance future cash needs from the results of operations and additional financing until the Company can achieve profitability and positive cash flows from operating activities from, for example, our recently signed equipment purchase and revenue sharing agreements. Since the operating expenses of the unit are required to be covered by licensee and not the Company, the royalty payment would be free cash flow which could be used to cover operating expenses. However, there can be no assurance that the Company will receive sufficient operating cash flow from this agreement or that we will be able to attract the necessary financing. 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, debt or other financing to continue operations, and ultimately the attainment of profitable operations. For the three months ended March 31, 2024, our Company used $25,302 of cash for operating activities, incurred a net loss of $2,554,469 and has an accumulated deficit of $54,521,725 since inception. Our financial statements for the three months ended March 31, 2024 have been prepared on a going concern basis and do not include any adjustments that might result from the outcome of this uncertainty. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Principles of Consolidation The accompanying condensedconsolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles. Thecondensed consolidated financial statements include the accounts of the Cryomass Technologies Inc., Cryomass LLC, Cryomass California LLC, and 1304740 B.C. Unlimited Liability Company dba Cryomass Canada. All significant intercompany balances and transactions have been eliminated in consolidation. The Company operates as one segment from its corporate headquarters in Colorado. Use of Estimates The preparation of the Company’s 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 consolidated financial statements, and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these 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. 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. Aside from this, the Company does not believe it is exposed to any unusual credit risk. Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. Subsequently, the FASB issued several other updates related to revenue recognition (collectively with ASU 2014-09, the “new revenue standards” or “ASC 606”). In June 2020, the FASB issued ASU No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, further delaying the effective date for Topic 606 to fiscal years beginning after December 15, 2019 and interim periods within fiscal years beginning after December 15, 2020. Pursuant to ASC 606, entities recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. The model provides that entities follow five steps: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to each performance obligation, and (v) recognize revenue when or as each performance obligation is satisfied (i.e., either point in time or over time). The promised goods or services in the Company’s arrangements typically consist of (1) a license, including rights to the Company’s intellectual property; or / and (2) an obligation to make available for use equipment uniquely suited to apply the intellectual property to customers. Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer and are considered distinct when (i) the customer can benefit from the good or service on its own or together with other readily available resources and (ii) the promised good or service is separately identifiable from other promises in the contract. In assessing whether promised goods or services are distinct, the Company considers factors such as the stage of development of the underlying intellectual property, the capabilities of the customer to develop the intellectual property on its own or whether the required expertise is readily available, and whether the goods or services are integral or dependent to other goods or services in the contract. For performance obligations which consist of products, shipping and distribution activities occur prior to the transfer of control of the Company’s products and are considered activities to fulfill the Company’s promise to deliver goods to the customers. The Company estimates the transaction price based on the amount expected to be entitled to for transferring the promised goods or services in the contract. The consideration may include fixed consideration and variable consideration. At the inception of each arrangement that includes variable consideration, the Company evaluates the amount of potential payment and the likelihood that the underlying constraint will be released. The Company utilizes either the most likely amount method or expected value method to estimate the amount expected to be received based on which method best predicts the amount expected to be received. Variable consideration may be constrained and is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Customer prepayments are recorded as contract liabilities (deferred revenue), which shall be subsequently recognized as revenue upon satisfaction of the underlying performance obligations over the life of the contract. The portion of the liabilities that is expected to be recognized as revenue during the succeeding twelve-month period are recorded in Deferred Revenue and the remaining portion is recorded in Deferred Revenue, long term on the accompanying balance sheets at the end of each reporting period. 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 implementation of internal use software. 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 income (Expenses) consisted of interest expense, net gain (loss) on foreign exchange and loss on extinguishment of debt. 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 condensed 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 Machinery and equipment 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 is recorded straight-line over the estimated useful life of the software. The software has a useful life of 26 months with amortization beginning on April 1, 2023. 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 Patent 120 Months In-process research and development 104 Months Internal-use software 26 Months 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. Due to delays in implementing the Company’s business model of its cryogenic process, management fully impaired goodwill during 2023. Indefinite-Lived Intangible Assets and Intangible Assets Subject to Amortization Indefinite-lived intangible assets are not amortized, but instead are tested annually at December 31 for impairment and upon the occurrence of certain events or substantive changes in circumstances. We account for the impairment of indefinite-lived intangible assets under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 350-30-35, Intangibles – Goodwill and Other – General Intangibles Other Than Goodwill 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 Due to delays in implementing the Company’s business model of its cryogenic process, management fully impaired all related identifiable intangible assets including a patent and in-process research & development in 2023. Internal use software was not impaired as of March 31, 2024. Leases We account for our leases under ASC 842. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases, and are recorded on the condensed consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or our incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For finance leases, interest on the lease liability and the amortization of the right of use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded when incurred. In calculating the right of use and lease liability, we have elected to combine lease and non-lease components. We exclude short-term leases having an initial term of 12 months or less from the new guidance as an accounting policy election, and recognize rent expense on a straight-line basis over the lease term. 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, accounts receivable, prepaid expenses, accounts payable, and notes payable approximate fair values because of the immediate or short-term maturities of these financial instruments. Between April and November 2023, the Company issued warrants in conjunction with promissory notes (the “Promissory Notes”) and common stock subscription agreements (the “Common Stock Subscription Agreements”) to investors as part of a capital raising effort The Company has determined that the Warrants are classified as equity and are initially measured at fair value. The fair value of the Warrants was determined utilizing a Binomial model considering all relevant assumptions at the dates of issuance. As the fair value of the Promissory Notes at the issuance date is less than the cash proceeds received, a debt discount on the Promissory Notes was also recorded. The debt discount will be amortized over the lives of the Promissory Notes using the effective interest method. On September 15, 2022, the Company entered into a $2,000,000 Loan Agreement and Unsecured Promissory Note with CRYM Co-Invest (“CRYM Co-Invest”), which accrued interest at 12% per annum, payable quarterly. On December 31, 2023, the parties amended and restated the agreement includes an additional loan amount of $135,000, disbursed on December 22, 2023. The total principal is $2,289,590, which includes principal in-kind interest and accrues regular interest at an amended rate of 15% annually. The Company is obligated to repay the principal and all remaining accrued interest in full by April 1, 2025. A discounted cash flow analysis was used to determine the fair value of the debt. As an inducement, the Company also issued four tranches of common stock purchase warrants to CRYM Co-Invest that are exercisable up until February 8, 2029 and include a cashless exercise option. The total number of warrant shares issued was 20,000,000 (each tranche for 5,000,000 shares, exercisable at $0.25, $0.50, $0.75 and $1.00, per share, respectively). The fair value of the Warrants was determined utilizing a Binomial model considering all relevant assumptions at the dates of issuance. The Company also included a sale and purchase commitment option feature where CRYM Co-Invest has agreed to direct its affiliates to purchase up to five (5) units of the Company’s equipment for $1,200,000 each. Along with the sale and purchase commitment option, if the Company identifies a suitable lessee to rent the equipment from the affiliate and enter into an equipment rental agreement, then CRYM Co-Invest and the Company will each receive 50% of a monthly processing fee for the term of the equipment rental. Lastly, the amended agreement also includes a net revenue sharing commitment feature that begins after the first equipment purchase by the lender’s affiliate, whereby the Company will remit 10% of the Company’s quarterly net revenue that is generated through non-affiliated rental and non-affiliated sales income. With respect to the measurement of the contingent liability for future net revenue royalty payments, management has measured this based on the best estimate of the expected future liability as of March 31, 2024. Net Loss per Share The Company follows ASC 260, Earnings Per Share |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2024 | |
Revenue [Abstract] | |
Revenue | 4. Revenue On September 23, 2023, the Company recognized a deferred revenue balance of $100,000 on receipt of the upfront fee associated with the delivery of one complete unit of processing equipment and patent license to RubberRock Inc, as defined in the territory license fee section of our licensing agreement. This amount will be amortized straight-line over the 5-year contract term. As such, the Company recognized $5,000 of revenue in Q1 2024. As of March 31, 2024, $100,000 of the territory license fee was paid and $90,000 remained in deferred revenue. The Company additionally recognized $300 of royalty revenue from its contract with RubberRock Inc. in Q1 2024. |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2024 | |
Property and Equipment, Net [Abstract] | |
Property and Equipment, Net | 5. Property and Equipment, Net Property and equipment, net, of $709,996 and $723,072 as of March 31, 2024 and December 31, 2023, respectively, consisted entirely of machinery and equipment. March 31, December 31, Machinery and equipment 777,833 777,833 Less: Accumulated depreciation (67,837 ) (54,761 ) $ 709,996 $ 723,072 Depreciation expense for the three months ended March 31, 2024 and 2023, was $13,077 and 10,130, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets The carrying value of goodwill was $0 as of March 31, 2024 and December 31, 2023. We fully impaired goodwill due to delays in implementing our business model, resulting in a $1,190,000 impairment charge in 2023. No additional goodwill has been recognized. The following tables summarize information relating to the Company’s identifiable intangible assets as of March 31, 2024 and December 31, 2023: March 31, 2024 Estimated Gross Accumulated Carrying Useful Life Amount Amortization Impairment Value Amortized Internal-use software 26 months 148,219 (68,409 ) - 79,810 Total identifiable intangible assets $ 148,219 $ (68,409 ) $ - $ 79,810 December 31, 2023 Estimated Gross Accumulated Carrying Useful Life Amount Amortization Impairment Value Amortized Patent 120 months $ 873,263 $ (174,653 ) $ (698,610 ) $ - Internal-use software 26 months 148,219 (51,307 ) - 96,912 In-process research and development 104 months 3,209,000 (254,567 ) (2,954,433 ) - Total identifiable intangible assets $ 4,230,482 $ (480,527 ) $ (3,653,043 ) $ 96,912 Amortization expense was $17,102 and $114,399 for the three months ended March 31, 2024 and 2023, respectively. Years ending December 31, Amount 2024 (remainder of year) 51,309 2025 28,501 79,810 |
Deferred Revenue
Deferred Revenue | 3 Months Ended |
Mar. 31, 2024 | |
Deferred Revenue [Abstract] | |
Deferred Revenue | 7. Deferred Revenue On August 18, 2023, we signed a license agreement with California-based RubberRock Inc and its affiliates (“RubberRock” or the “Licensee”). Under the agreement, RubberRock obtained from us a license to use and rent one unit of our equipment under certain rights for the use of the licensed patent solely in connection with the equipment and solely in California. We retain title to and have access to the equipment at all times. The duration of the agreement is five years from August 18, 2023. We subsequently amended the agreement on January 9, 2024 and on February 28, 2024. Under the terms of the amended agreement, which are further detailed below, RubberRock agreed to license the patented process and deploy a Unit in exchange for a territory license fee (the “Territory License Fee”) of $100,000 payable in one or more payments as determined by the Company. The Equipment was delivered to the agreed upon RubberRock location on September 13, 2023 and RubberRock paid $100,000 of the total Territory License Fee on September 25, 2023. In addition to the Territory License Fee, RubberRock will pay Cryomass monthly royalties. Subsequent to the commencement of the RubberRock agreement, our Chief Executive Officer, Christian Noel, joined the board of directors of RubberRock at the end of September 2023, which created a related party disclosure requirement. Mr. Noel left the board of RubberRock in January, 2024. In the third quarter of 2023, we determined that the $100,000 of territory license fees we received did not yet meet the criteria for revenue recognition and therefore was recorded as deferred revenue. As this amount is recognized as revenue over the five-year life of the contract, we recognized $5,000 of revenue in the first quarter of 2024. As of March 31, 2024, we had total deferred revenue, current and long term of $20,000 and $70,000, respectively, related to this agreement. On May 9, 2024, Cryomass entered into an Equipment Purchase And Sale Agreement wherein CRYM Co-Invest Unit #2 LLP (“CRYM2”), a special purpose vehicle created for the purpose, agreed to purchase one CryoSift Separator Unit for $1.2 million. In turn, CRYM2 entered into a lease agreement with a wholly-owned US subsidiary of Leef Brands Inc of Vancouver, Canada to lease the CryoSift Separator for three years with one three-year options to renew. In the first quarter of 2024, we determined that the $301,250 of payments we received did not yet meet the criteria for revenue recognition and therefore was recorded as deferred revenue. As of March 31, 2024, we had total deferred revenue, current, of $301,250, related to this agreement. |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2024 | |
Notes Payable [Abstract] | |
Notes Payable | 8. Notes Payable Between April and November 2023, the Company issued Promissory Notes to investors as part of a capital raising effort. The Promissory Notes issued have a total principal amount of $1,240,755, or $1,255,206 net of foreign currency adjustments, and bear interest of 12%. Of the $1,240,755 received in Promissory Notes with warrants, $175,000 of the proceeds are from related parties (net of initial debt discount of $54,128), which is further detailed in Note 9. The Promissory Notes have maturities between 24 and 32 months after issuance, at which point repayment is due in full. In conjunction with the Promissory Notes, the Company also issued Warrants to purchase common shares of the Company (the “Common Shares”) to the same investors. The Company issued 3,381,300 warrants with an exercise price of $0.25 and 2,032,500 with an exercise price of $0.09. The Warrants are exercisable for four years from the issuance date. The Company has determined that the Warrants are classified as equity and are initially measured at fair value. The fair value of the Warrants was determined utilizing a Binomial model considering all relevant assumptions at the dates of issuance, including the Company stock price ($0.13 for April subscription agreements, one of which is for Simon Langelier, $0.09 for May subscription agreements, $0.12 for June subscription agreement, $0.14 for July subscription agreement, $0.09 for October subscription agreement, $0.08 for November subscription agreement), term (4 years), historical volatility (152-154%), and risk-free rate (3.8% for April subscription agreements, 3.6% and 3.7% for May subscription agreements for Mario Gobbo and a private investor, respectively, 4.0% for June subscription agreement for Health Diplomats Pte Ltd, 4.2% for July subscription agreement, 5.0% for October subscription agreement, 4.6% for November subscription agreement). The grant date fair value of the Warrants was $351,054. The fair value of the Promissory Notes was $889,701. As the fair value of the Promissory Notes at the issuance date is less than the cash proceeds received, a debt discount on the Promissory Notes of $351,054 was also recorded. As of March 31, 2024, the carrying value of the Promissory Notes was $992,822, net of discount, of which $853,916 relates to non-related parties, and the interest accrued was $112,247. The table below discloses the aggregate amount of long-term borrowings maturing in each of the following years: Years ending December 31, Amount 2024 250,000 2025 812,274 2026 - 2027 - 2028 - Total gross principal 1,062,274 (Less: debt discount, net of amortization) (208,358 ) Carrying value as of March 31, 2024 853,916 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9. Related Party Transactions On September 15, 2022, the Company entered into a loan agreement of $2,000,000 with CRYM Co-Invest LP, of which Alexander Massa, a 23.1% beneficial owner of the Company, has investment control. On December 31, 2023, the parties amended and restated the agreement includes an additional loan amount of $135,000, disbursed on December 22, 2023. The total principal is $2,289,590, which includes principal in-kind interest and accrues regular interest at an amended rate of 15% annually. The Company is obligated to repay the principal and all remaining accrued interest in full by April 1, 2025. A discounted cash flow analysis was used to determine the fair value of the debt. As an inducement, the Company also issued four tranches of common stock purchase warrants to CRYM Co-Invest that are exercisable up until February 8, 2029 and include a cashless exercise option. The total number of warrant shares issued was 20,000,000 (each tranche for 5,000,000 shares, exercisable at $0.25, $0.50, $0.75 and $1.00, per share, respectively). The fair value of the Warrants was determined utilizing a Binomial model considering all relevant assumptions at the dates of issuance, including the Company stock price ($0.04), term (5 years), rounded annual volatility (150%), and risk-free rate (3.84%). The Company also included a sale and purchase commitment option feature where CRYM Co-Invest has agreed to direct its affiliates to purchase up to five (5) units of the Company’s equipment for $1,200,000 each. Along with the sale and purchase commitment option, if the Company identifies a suitable lessee to rent the equipment from the affiliate and enter into an equipment rental agreement, then CRYM Co-Invest and the Company will each receive 50% of a monthly processing fee for the term of the equipment rental. Lastly, the amended agreement also includes a net revenue sharing commitment feature that begins after the first equipment purchase by the lender’s affiliate, whereby the Company will remit 10% of the Company’s quarterly net revenue that is generated through non-affiliated rental and non-affiliated sales income. With respect to the measurement of the contingent liability for future net revenue royalty payments, management has measured this based on the best estimate of the expected future liability as of March 31, 2024. The Company received $100,000, $50,000, and $25,000 from Simon Langelier, Health Diplomats Pte Ltd, and Mario Gobbo, respectively. Mr. Langelier and Mr. Gobbo are directors of the Company. Dr. Delon Human is also a director of the Company and is the President of Health Diplomats Pte Ltd. The notes mature on April 17, 2025, June 5, 2025 and May 2, 2025, respectively, and accrue interest at 12% per annum. In conjunction with the loans, the respective parties were issued warrants to purchase 454,500, 227,250, and 113,625 shares of common stock with an exercise price of $0.25 per share. The warrants expire on April 17, 2027, June 5, 2027 and May 2, 2027, respectively. The table below discloses the aggregate amount of long-term borrowings from related parties maturing in each of the following years: Years ending December 31, Amount 2024 - 2025 2,550,450 2026 - 2027 - 2028 - Total gross principal 2,550,450 Debt premium, net of amortization 38,728 (Less: debt discount, net of amortization) (36,094 ) Carrying value as of March 31, 2024 2,553,084 |
Shareholders_ Equity
Shareholders’ Equity | 3 Months Ended |
Mar. 31, 2024 | |
Shareholders’ Equity [Abstract] | |
Shareholders’ Equity | 10. Shareholders’ Equity From January to March 2023, the Company issued 62,500 shares of common stock for a total dollar value of $21,875 for prior period services, 187,500 shares of common stock for a total dollar value of $65,626 for current period services, 777,932 shares of common stock for a total dollar value of $50,000 for vested RSUs for current period services, and 1,100,000 shares of common stock for a total dollar value of $197,890 for vested RSUs for prior period services. From January to March 2024, the Company issued 1,004,982 shares of common stock for a total dollar value of $49,956 for vested RSUs for prior period services. 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 was to enhance the ability to attract, motivate, and retain the services of qualified employees, officers and directors. Any RSUs granted under the 2019 Plan were 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 three months ended March 31, 2024 and 2023, respectively, is as follows: Restricted Weighted Outstanding at December 31, 2023 2,185,210 $ 0.20 Granted - - Vested (1,004,982 ) 0.23 Forfeited (68,500 ) .13 Outstanding at March 31, 2024 1,111,728 $ 0.18 Restricted Weighted Outstanding at December 31, 2022 1,453,857 $ 0.30 Granted 2,760,660 0.17 Vested (1,877,932 ) 0.23 Forfeited - - Outstanding at March 31, 2023 2,336,585 $ 0.21 The total fair value of RSUs vested during the three months ending March 31, 2024 and 2023 was $233,889 and $424,640, respectively. As of March 31, 2024 and 2023, there was $77,957 and $303,663, respectively, of unrecognized stock-based compensation cost related to non-vested RSU’s, which is expected to be recognized over the remaining vesting period ending January 10, 2025. Stock-based compensation expense relating to RSU’s was $28,226 and $112,972 for the three months ending March 31, 2024 and 2023, respectively. Expenses for stock-based compensation are included on the accompanying condensed consolidated statements of operations in general and administrative expense. Stock Option Awards A summary of the Company’s stock option activity for the three months ended March 31, 2024 and 2023, respectively, is as follows: Stock Weighted Weighted Aggregate Outstanding at December 31, 2023 11,513,214 $ 0.17 7.3 $ 1,962,017 Granted 8,085,081 0.05 5.4 57,557 Forfeited - - - - Outstanding at March 31, 2024 19,598,295 $ 0.12 6.4 $ 2,019,574 Stock Weighted Weighted Aggregate Outstanding at December 31, 2022 8,500,000 $ 0.18 8.5 $ 1,579,108 Granted - - - - Forfeited - - - - Outstanding at March 31, 2023 8,500,000 $ 0.18 8.0 $ 1,579,108 During the three months ended March 31, 2024, the Company granted options to purchase 8,085,081 shares of common stock of the Company with an exercise price of $0.05 per share. Of these shares, 5,056,800 vest immediately and expire on January 1, 2029, 2,500,000 vest on January 1, 2026 and expire on January 1, 2031, and 528,281 vest on January 1, 2025 and expire on January 1, 2030. Warrants A summary of the Company’s warrant activity for the three months ended March 31, 2024 and 2023, respectively, is as follows: Warrant Weighted Weighted Aggregate Outstanding at December 31, 2023 51,662,689 $ 0.45 2.9 $ 2,817,424 Granted - - - - Exercised - - - - Expired - - - - Outstanding at March 31, 2024 51,662,689 $ 0.45 2.7 $ 2,817,424 Warrant Weighted Weighted Aggregate Outstanding at December 31, 2022 73,950,000 $ 0.40 1.0 $ 1,867,754 Granted - - - - Exercised - - - - Expired (15,000,000 ) - - - Outstanding at March 31, 2023 58,950,000 $ 0.40 0.9 $ 1,867,754 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Taxes [Abstract] | |
Income Taxes | 11. 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 three months ended March 31, 2024 was 0.0%, |
Commitments & Contingencies
Commitments & Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments & Contingencies [Abstract] | |
Commitments & Contingencies | 12. Commitments & Contingencies Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. On December 31, 2023, the Company entered into a net revenue sharing agreement with CRYM Co-Invest in which the Company is obligated to pay royalties equal to 10% of its net revenues. Management determined its best estimate of future expected liability as of March 31, 2024 to be $2,546,000, which is classified as a contingent royalty liability in long-term liabilities on the Company’s balance sheet. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events On April 23, 2024, a holder of a $250,000 promissory note agreed to cancel the note and accrued interest in exchange for 7,647,494 common shares and 7,647,494 warrants exercisable at $0.07 per share for four years. On May 9, 2024, Cryomass entered into an Equipment Purchase And Sale Agreement wherein CRYM Co-Invest Unit #2 LLP (“CRYM2”), a special purpose vehicle created for the purpose, agreed to purchase one CryoSift Separator Unit for $1.2 million. In turn, CRYM2 entered into a lease agreement with a wholly-owned US subsidiary of Leef Brands Inc of Vancouver, Canada to lease the CryoSift Separator for three years with one three-year options to renew. To date, a substantial portion of the proceeds of the sale have been received from CRYM2. On June 11, 2024, the Company entered into equity subscription agreements with two private investors for $500,000. Per terms of the agreement, upon receipt of proceeds, the Company will issue 8,000,000 shares of common stock, 12,500,000 common stock purchase warrants at an exercise price of $0.06, and 4,500,000 common stock purchase warrants at an exercise price of $0.0001 per share. On June 12, 2024, an investor invested C$150,700 for 2,750,000 common shares and 2,750,000 five-year warrants exercisable at $0.06 per share. On June 13, 2024, an investor invested C$100,010 for 1,825,000 common shares and 1,825,000 five-year warrants exercisable at $0.06 per share. That same investor also surrendered a promissory note with accrued interest totaling C$116,450 in exchange for 2,125,000 common shares and 2,125,000 five-year warrants exercisable at $0.06 per share. On June 13, 2024, a consultant to the Company forgave $50,000 in unpaid consulting fees in exchange for 1,250,000 common shares and 1,250,000 five-year warrants exercisable at $0.06 per share. On June 13, 2024, an investor invested $26,000 for 650,000 common shares and 650,000 five-year warrants exercisable at $0.06 per share. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (2,554,469) | $ (1,598,526) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying condensedconsolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles. Thecondensed consolidated financial statements include the accounts of the Cryomass Technologies Inc., Cryomass LLC, Cryomass California LLC, and 1304740 B.C. Unlimited Liability Company dba Cryomass Canada. All significant intercompany balances and transactions have been eliminated in consolidation. The Company operates as one segment from its corporate headquarters in Colorado. |
Use of Estimates | Use of Estimates The preparation of the Company’s 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 consolidated financial statements, and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these 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. |
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. Aside from this, the Company does not believe it is exposed to any unusual credit risk. |
Revenue Recognition | Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. Subsequently, the FASB issued several other updates related to revenue recognition (collectively with ASU 2014-09, the “new revenue standards” or “ASC 606”). In June 2020, the FASB issued ASU No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, further delaying the effective date for Topic 606 to fiscal years beginning after December 15, 2019 and interim periods within fiscal years beginning after December 15, 2020. Pursuant to ASC 606, entities recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. The model provides that entities follow five steps: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to each performance obligation, and (v) recognize revenue when or as each performance obligation is satisfied (i.e., either point in time or over time). The promised goods or services in the Company’s arrangements typically consist of (1) a license, including rights to the Company’s intellectual property; or / and (2) an obligation to make available for use equipment uniquely suited to apply the intellectual property to customers. Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer and are considered distinct when (i) the customer can benefit from the good or service on its own or together with other readily available resources and (ii) the promised good or service is separately identifiable from other promises in the contract. In assessing whether promised goods or services are distinct, the Company considers factors such as the stage of development of the underlying intellectual property, the capabilities of the customer to develop the intellectual property on its own or whether the required expertise is readily available, and whether the goods or services are integral or dependent to other goods or services in the contract. For performance obligations which consist of products, shipping and distribution activities occur prior to the transfer of control of the Company’s products and are considered activities to fulfill the Company’s promise to deliver goods to the customers. The Company estimates the transaction price based on the amount expected to be entitled to for transferring the promised goods or services in the contract. The consideration may include fixed consideration and variable consideration. At the inception of each arrangement that includes variable consideration, the Company evaluates the amount of potential payment and the likelihood that the underlying constraint will be released. The Company utilizes either the most likely amount method or expected value method to estimate the amount expected to be received based on which method best predicts the amount expected to be received. Variable consideration may be constrained and is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Customer prepayments are recorded as contract liabilities (deferred revenue), which shall be subsequently recognized as revenue upon satisfaction of the underlying performance obligations over the life of the contract. The portion of the liabilities that is expected to be recognized as revenue during the succeeding twelve-month period are recorded in Deferred Revenue and the remaining portion is recorded in Deferred Revenue, long term on the accompanying balance sheets at the end of each reporting period. |
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 implementation of internal use software. 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 income (Expenses) consisted of interest expense, net gain (loss) on foreign exchange and loss on extinguishment of debt. |
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 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 condensed 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 Machinery and equipment 15 years |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of the purchase price of an acquired entity over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. Indefinite-lived intangible assets established in connection with business combinations consist of 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 is recorded straight-line over the estimated useful life of the software. The software has a useful life of 26 months with amortization beginning on April 1, 2023. 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 Patent 120 Months In-process research and development 104 Months Internal-use software 26 Months |
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. Due to delays in implementing the Company’s business model of its cryogenic process, management fully impaired goodwill during 2023. Indefinite-Lived Intangible Assets and Intangible Assets Subject to Amortization Indefinite-lived intangible assets are not amortized, but instead are tested annually at December 31 for impairment and upon the occurrence of certain events or substantive changes in circumstances. We account for the impairment of indefinite-lived intangible assets under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 350-30-35, Intangibles – Goodwill and Other – General Intangibles Other Than Goodwill 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 Due to delays in implementing the Company’s business model of its cryogenic process, management fully impaired all related identifiable intangible assets including a patent and in-process research & development in 2023. Internal use software was not impaired as of March 31, 2024. |
Leases | Leases We account for our leases under ASC 842. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases, and are recorded on the condensed consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or our incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For finance leases, interest on the lease liability and the amortization of the right of use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded when incurred. In calculating the right of use and lease liability, we have elected to combine lease and non-lease components. We exclude short-term leases having an initial term of 12 months or less from the new guidance as an accounting policy election, and recognize rent expense on a straight-line basis over the lease term. |
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, accounts receivable, prepaid expenses, accounts payable, and notes payable approximate fair values because of the immediate or short-term maturities of these financial instruments. Between April and November 2023, the Company issued warrants in conjunction with promissory notes (the “Promissory Notes”) and common stock subscription agreements (the “Common Stock Subscription Agreements”) to investors as part of a capital raising effort The Company has determined that the Warrants are classified as equity and are initially measured at fair value. The fair value of the Warrants was determined utilizing a Binomial model considering all relevant assumptions at the dates of issuance. As the fair value of the Promissory Notes at the issuance date is less than the cash proceeds received, a debt discount on the Promissory Notes was also recorded. The debt discount will be amortized over the lives of the Promissory Notes using the effective interest method. On September 15, 2022, the Company entered into a $2,000,000 Loan Agreement and Unsecured Promissory Note with CRYM Co-Invest (“CRYM Co-Invest”), which accrued interest at 12% per annum, payable quarterly. On December 31, 2023, the parties amended and restated the agreement includes an additional loan amount of $135,000, disbursed on December 22, 2023. The total principal is $2,289,590, which includes principal in-kind interest and accrues regular interest at an amended rate of 15% annually. The Company is obligated to repay the principal and all remaining accrued interest in full by April 1, 2025. A discounted cash flow analysis was used to determine the fair value of the debt. As an inducement, the Company also issued four tranches of common stock purchase warrants to CRYM Co-Invest that are exercisable up until February 8, 2029 and include a cashless exercise option. The total number of warrant shares issued was 20,000,000 (each tranche for 5,000,000 shares, exercisable at $0.25, $0.50, $0.75 and $1.00, per share, respectively). The fair value of the Warrants was determined utilizing a Binomial model considering all relevant assumptions at the dates of issuance. The Company also included a sale and purchase commitment option feature where CRYM Co-Invest has agreed to direct its affiliates to purchase up to five (5) units of the Company’s equipment for $1,200,000 each. Along with the sale and purchase commitment option, if the Company identifies a suitable lessee to rent the equipment from the affiliate and enter into an equipment rental agreement, then CRYM Co-Invest and the Company will each receive 50% of a monthly processing fee for the term of the equipment rental. Lastly, the amended agreement also includes a net revenue sharing commitment feature that begins after the first equipment purchase by the lender’s affiliate, whereby the Company will remit 10% of the Company’s quarterly net revenue that is generated through non-affiliated rental and non-affiliated sales income. With respect to the measurement of the contingent liability for future net revenue royalty payments, management has measured this based on the best estimate of the expected future liability as of March 31, 2024. |
Net Loss per Share | Net Loss per Share The Company follows ASC 260, Earnings Per Share |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of Straight-Line Method Over the Estimated Useful Life of Each Asset | Depreciation and amortization expense is recognized using the straight-line method over the estimated useful life of each asset, as follows: Estimated Machinery and equipment 15 years |
Schedule of Estimated Useful Lives of Intangible Assets | The estimated useful lives of intangible assets are detailed in the table below: Estimated Patent 120 Months In-process research and development 104 Months Internal-use software 26 Months |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property and Equipment, Net [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net, of $709,996 and $723,072 as of March 31, 2024 and December 31, 2023, respectively, consisted entirely of machinery and equipment. March 31, December 31, Machinery and equipment 777,833 777,833 Less: Accumulated depreciation (67,837 ) (54,761 ) $ 709,996 $ 723,072 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets [Abstract] | |
Schedule of Identifiable Intangible Assets | The following tables summarize information relating to the Company’s identifiable intangible assets as of March 31, 2024 and December 31, 2023: March 31, 2024 Estimated Gross Accumulated Carrying Useful Life Amount Amortization Impairment Value Amortized Internal-use software 26 months 148,219 (68,409 ) - 79,810 Total identifiable intangible assets $ 148,219 $ (68,409 ) $ - $ 79,810 December 31, 2023 Estimated Gross Accumulated Carrying Useful Life Amount Amortization Impairment Value Amortized Patent 120 months $ 873,263 $ (174,653 ) $ (698,610 ) $ - Internal-use software 26 months 148,219 (51,307 ) - 96,912 In-process research and development 104 months 3,209,000 (254,567 ) (2,954,433 ) - Total identifiable intangible assets $ 4,230,482 $ (480,527 ) $ (3,653,043 ) $ 96,912 |
Schedule of Amortization Expense | Amortization expense was $17,102 and $114,399 for the three months ended March 31, 2024 and 2023, respectively. Years ending December 31, Amount 2024 (remainder of year) 51,309 2025 28,501 79,810 |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Notes Payable [Abstract] | |
Schedule of Discloses the Aggregate Amount of Long-Term Borrowings | The table below discloses the aggregate amount of long-term borrowings maturing in each of the following years: Years ending December 31, Amount 2024 250,000 2025 812,274 2026 - 2027 - 2028 - Total gross principal 1,062,274 (Less: debt discount, net of amortization) (208,358 ) Carrying value as of March 31, 2024 853,916 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Related Parties [Member] | |
Related Party Transactions (Tables) [Line Items] | |
Schedule of Aggregate Amount of Long-term Borrowings from Related Parties Maturing | The table below discloses the aggregate amount of long-term borrowings from related parties maturing in each of the following years: Years ending December 31, Amount 2024 - 2025 2,550,450 2026 - 2027 - 2028 - Total gross principal 2,550,450 Debt premium, net of amortization 38,728 (Less: debt discount, net of amortization) (36,094 ) Carrying value as of March 31, 2024 2,553,084 |
Shareholders_ Equity (Tables)
Shareholders’ Equity (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Shareholders’ Equity [Abstract] | |
Schedule of Company's RSU Award Activity | A summary of the Company’s RSU award activity for the three months ended March 31, 2024 and 2023, respectively, is as follows: Restricted Weighted Outstanding at December 31, 2023 2,185,210 $ 0.20 Granted - - Vested (1,004,982 ) 0.23 Forfeited (68,500 ) .13 Outstanding at March 31, 2024 1,111,728 $ 0.18 Restricted Weighted Outstanding at December 31, 2022 1,453,857 $ 0.30 Granted 2,760,660 0.17 Vested (1,877,932 ) 0.23 Forfeited - - Outstanding at March 31, 2023 2,336,585 $ 0.21 |
Schedule of Stock Option Activity | A summary of the Company’s stock option activity for the three months ended March 31, 2024 and 2023, respectively, is as follows: Stock Weighted Weighted Aggregate Outstanding at December 31, 2023 11,513,214 $ 0.17 7.3 $ 1,962,017 Granted 8,085,081 0.05 5.4 57,557 Forfeited - - - - Outstanding at March 31, 2024 19,598,295 $ 0.12 6.4 $ 2,019,574 Stock Weighted Weighted Aggregate Outstanding at December 31, 2022 8,500,000 $ 0.18 8.5 $ 1,579,108 Granted - - - - Forfeited - - - - Outstanding at March 31, 2023 8,500,000 $ 0.18 8.0 $ 1,579,108 |
Schedule of Warrant Activity | A summary of the Company’s warrant activity for the three months ended March 31, 2024 and 2023, respectively, is as follows: Warrant Weighted Weighted Aggregate Outstanding at December 31, 2023 51,662,689 $ 0.45 2.9 $ 2,817,424 Granted - - - - Exercised - - - - Expired - - - - Outstanding at March 31, 2024 51,662,689 $ 0.45 2.7 $ 2,817,424 Warrant Weighted Weighted Aggregate Outstanding at December 31, 2022 73,950,000 $ 0.40 1.0 $ 1,867,754 Granted - - - - Exercised - - - - Expired (15,000,000 ) - - - Outstanding at March 31, 2023 58,950,000 $ 0.40 0.9 $ 1,867,754 |
Going Concern Uncertainty, Fi_2
Going Concern Uncertainty, Financial Conditions and Management’s Plans (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Going Concern Uncertainty, Financial Conditions and Management’s Plans [Abstract] | |||
Working deficit | $ 3,330,335 | ||
Cash balance | 23,922 | $ 49,224 | |
Overhead costs | 3,200,000 | ||
Capital expenditures | 3,125,000 | ||
Cash for operating activities | (25,302) | $ (1,338,343) | |
Incurred net loss | (2,554,469) | $ (1,598,526) | |
Accumulated deficit | $ (54,521,725) | $ (51,967,256) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | |||
Sep. 15, 2022 | Mar. 31, 2024 | Jun. 11, 2024 | Dec. 22, 2023 | |
Summary of Significant Accounting Policies [Line Items] | ||||
Tax position percentage | 0% | |||
Loan agreement (in Dollars) | $ 2,000,000 | |||
Interest per annum | 12% | |||
Additional loan amount (in Dollars) | $ 135,000 | |||
Principal amount (in Dollars) | $ 2,289,590 | |||
Amended rate | 15% | |||
Warrant shares (in Shares) | 12,500,000 | |||
Equipment rental | 50% | |||
Net revenue | 10% | |||
Warrant [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Warrant shares (in Shares) | 20,000,000 | |||
Purchase commitment option (in Dollars) | $ 1,200,000 | |||
Share-Based Payment Arrangement, Tranche One [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Warrant shares (in Shares) | 5,000,000 | |||
Issued, per share (in Dollars per share) | $ 0.25 | |||
Share-Based Payment Arrangement, Tranche Two [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Issued, per share (in Dollars per share) | 0.5 | |||
Share-Based Payment Arrangement, Tranche Three [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Issued, per share (in Dollars per share) | 0.75 | |||
Share-Based Payment Arrangement, Tranche Four [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Issued, per share (in Dollars per share) | $ 1 | |||
Maximum [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Tax position percentage | 50% | |||
Maximum [Member] | Warrant [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Warrant shares (in Shares) | 3,381,300 | |||
Minimum [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Tax position percentage | 50% | |||
Minimum [Member] | Warrant [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Warrant shares (in Shares) | 2,032,500 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of Straight-Line Method Over the Estimated Useful Life of Each Asset | Mar. 31, 2024 |
Machinery and equipment [Member] | |
Schedule of Straight-Line Method Over the Estimated Useful Life of Each Asset [Abstract] | |
Machinery and equipment | 15 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of Estimated Useful Lives of Intangible Assets | Mar. 31, 2024 |
Patent [Member] | |
Schedule of Estimated Useful Lives of Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 120 months |
In Process research and development [Member] | |
Schedule of Estimated Useful Lives of Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 104 months |
Internal use software [Member] | |
Schedule of Estimated Useful Lives of Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 26 months |
Revenue (Details)
Revenue (Details) - RubberRock Inc [Member] - USD ($) | 3 Months Ended | |
Sep. 23, 2023 | Mar. 31, 2024 | |
Revenue [Line Items] | ||
Revenue recognition | $ 100,000 | |
Contract term | 5 years | |
Revenue | $ 5,000 | |
Territory license fees | 100,000 | |
Deferred revenue | 90,000 | |
Royalty revenue | $ 300 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Property and Equipment, Net [Abstract] | |||
Property and equipment, net | $ 709,996 | $ 723,072 | |
Depreciation expense | $ 13,077 | $ 10,130 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details) - Schedule of Property and Equipment, Net - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Schedule of Property and Equipment, Net [Abstract] | ||
Machinery and equipment | $ 777,833 | $ 777,833 |
Less: Accumulated depreciation | (67,837) | (54,761) |
Property and equipment, net | $ 709,996 | $ 723,072 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Goodwill and Intangible Assets [Abstract] | |||
Goodwill | $ 0 | $ 0 | |
Impairment charges | $ 1,190,000 | ||
Amortization expense | $ 17,102 | $ 114,399 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details) - Schedule of Identifiable Intangible Assets - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Amortized | ||
Amortized intangible assets, Gross Amount | $ 148,219 | $ 4,230,482 |
Amortized intangible assets, Accumulated Amortization | (68,409) | (480,527) |
Amortized intangible assets, Impairment | (3,653,043) | |
Amortized intangible assets, Carrying Value | $ 79,810 | $ 96,912 |
Internal use software [Member] | ||
Amortized | ||
Amortized intangible assets, Estimated Useful Life (Years) | 26 months | 26 months |
Amortized intangible assets, Gross Amount | $ 148,219 | $ 148,219 |
Amortized intangible assets, Accumulated Amortization | (68,409) | (51,307) |
Amortized intangible assets, Impairment | ||
Amortized intangible assets, Carrying Value | $ 79,810 | $ 96,912 |
Patent [Member] | ||
Amortized | ||
Amortized intangible assets, Estimated Useful Life (Years) | 120 months | |
Amortized intangible assets, Gross Amount | $ 873,263 | |
Amortized intangible assets, Accumulated Amortization | (174,653) | |
Amortized intangible assets, Impairment | (698,610) | |
Amortized intangible assets, Carrying Value | ||
In-process research and development [Member] | ||
Amortized | ||
Amortized intangible assets, Estimated Useful Life (Years) | 104 months | |
Amortized intangible assets, Gross Amount | $ 3,209,000 | |
Amortized intangible assets, Accumulated Amortization | (254,567) | |
Amortized intangible assets, Impairment | (2,954,433) | |
Amortized intangible assets, Carrying Value |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Details) - Schedule of Amortization Expense - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Schedule of Amortization Expense [Abstract] | ||
2024 (remainder of year) | $ 51,309 | |
2025 | 28,501 | |
Total amortization expense | $ 79,810 | $ 96,912 |
Deferred Revenue (Details)
Deferred Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
May 09, 2024 | Sep. 25, 2023 | Aug. 18, 2023 | Mar. 31, 2024 | Sep. 30, 2023 | Dec. 31, 2023 | |
Deferred Revenue [Line Items] | ||||||
Deferred revenue agreement term | 5 years | |||||
Territory license fee | $ 100,000 | $ 100,000 | $ 100,000 | |||
Territory license fee agreement, description | Territory License Fee, RubberRock will pay Cryomass monthly royalties. | |||||
Revenue | $ 5,000 | |||||
Deferred revenue long term | $ 70,000 | $ 75,000 | ||||
Lease agreement description | three years with one three-year options to renew | |||||
Revenue recognition | $ 301,250 | |||||
Deferred revenue, current | 321,250 | $ 20,000 | ||||
Related Party [Member] | ||||||
Deferred Revenue [Line Items] | ||||||
Revenue | 20,000 | |||||
Subsequent Event [Member] | ||||||
Deferred Revenue [Line Items] | ||||||
Agreed to purchase | $ 1,200,000 | |||||
Board of Directors Chairman [Member] | ||||||
Deferred Revenue [Line Items] | ||||||
Deferred revenue, current | $ 301,250 | |||||
Board of Directors Chairman [Member] | Subsequent Event [Member] | ||||||
Deferred Revenue [Line Items] | ||||||
Agreed to purchase | $ 1,200,000 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2024 | Jun. 13, 2024 | Jun. 12, 2024 | Jun. 11, 2024 | Apr. 23, 2024 | |
Notes Payable [Line Items] | |||||
Debt discount | $ 351,054 | ||||
Warrants issued (in Shares) | 12,500,000 | ||||
Exercise price (in Dollars per share) | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.07 | |
Subscriptions agreements, description | The fair value of the Warrants was determined utilizing a Binomial model considering all relevant assumptions at the dates of issuance, including the Company stock price ($0.13 for April subscription agreements, one of which is for Simon Langelier, $0.09 for May subscription agreements, $0.12 for June subscription agreement, $0.14 for July subscription agreement, $0.09 for October subscription agreement, $0.08 for November subscription agreement), term (4 years), historical volatility (152-154%), and risk-free rate (3.8% for April subscription agreements, 3.6% and 3.7% for May subscription agreements for Mario Gobbo and a private investor, respectively, 4.0% for June subscription agreement for Health Diplomats Pte Ltd, 4.2% for July subscription agreement, 5.0% for October subscription agreement, 4.6% for November subscription agreement). | ||||
Fair value of warrants | $ 351,054 | ||||
Fair value of promissory notes | 889,701 | ||||
Carrying value of the promissory notes | 992,822 | ||||
Relates to non related parties | $ 853,916 | ||||
Warrant [Member] | |||||
Notes Payable [Line Items] | |||||
Warrants issued (in Shares) | 20,000,000 | ||||
Warrant term | 4 years | ||||
Promissory Note [Member] | |||||
Notes Payable [Line Items] | |||||
Bear interest | 12% | ||||
Received in promissory notes with warrants | $ 1,240,755 | ||||
Proceeds from warrants | 175,000 | ||||
Debt discount | $ 54,128 | ||||
Maturity date, description | The Promissory Notes have maturities between 24 and 32 months | ||||
Interest accrued | $ 112,247 | ||||
Minimum [Member] | Warrant [Member] | |||||
Notes Payable [Line Items] | |||||
Warrants issued (in Shares) | 2,032,500 | ||||
Exercise price (in Dollars per share) | $ 0.09 | ||||
Minimum [Member] | Promissory Note [Member] | |||||
Notes Payable [Line Items] | |||||
Total principal amount | $ 1,240,755 | ||||
Maximum [Member] | Warrant [Member] | |||||
Notes Payable [Line Items] | |||||
Warrants issued (in Shares) | 3,381,300 | ||||
Exercise price (in Dollars per share) | $ 0.25 | ||||
Maximum [Member] | Promissory Note [Member] | |||||
Notes Payable [Line Items] | |||||
Total principal amount | $ 1,255,206 |
Notes Payable (Details) - Sched
Notes Payable (Details) - Schedule of Discloses the Aggregate Amount of Long-Term Borrowings | Mar. 31, 2024 USD ($) |
Schedule of Discloses the Aggregate Amount of Long-Term Borrowings [Abstract] | |
2024 | $ 250,000 |
2025 | 812,274 |
2026 | |
2027 | |
2028 | |
Total gross principal | 1,062,274 |
(Less: debt discount, net of amortization) | (208,358) |
Carrying value as of March 31, 2024 | $ 853,916 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2024 | Jun. 11, 2024 | Dec. 22, 2023 | Sep. 15, 2022 | |
Related Party Transactions [Line Items] | ||||
Loan agreement (in Dollars) | $ 2,000,000 | |||
Additional loan amount (in Dollars) | $ 135,000 | |||
Principal amount (in Dollars) | $ 2,289,590 | |||
Amended rate | 15% | |||
Purchase warrants (in Shares) | 12,500,000 | |||
Equipment rental | 50% | |||
Net revenue | 10% | |||
Accrued interest percentage | 12% | |||
Exercise price per share (in Dollars per share) | $ 0.25 | |||
Accrued interest [Member] | ||||
Related Party Transactions [Line Items] | ||||
Maturity date | Apr. 17, 2025 | |||
Warrant [Member] | ||||
Related Party Transactions [Line Items] | ||||
Purchase warrants (in Shares) | 20,000,000 | |||
Purchase commitment option (in Dollars) | $ 1,200,000 | |||
Share-Based Payment Arrangement, Tranche One [Member] | ||||
Related Party Transactions [Line Items] | ||||
Purchase warrants (in Shares) | 5,000,000 | |||
Issued, per share (in Dollars per share) | $ 0.25 | |||
Share-Based Payment Arrangement, Tranche Two [Member] | ||||
Related Party Transactions [Line Items] | ||||
Issued, per share (in Dollars per share) | 0.5 | |||
Share-Based Payment Arrangement, Tranche Three [Member] | ||||
Related Party Transactions [Line Items] | ||||
Issued, per share (in Dollars per share) | 0.75 | |||
Share-Based Payment Arrangement, Tranche Four [Member] | ||||
Related Party Transactions [Line Items] | ||||
Issued, per share (in Dollars per share) | $ 1 | |||
Measurement Input, Share Price [Member] | ||||
Related Party Transactions [Line Items] | ||||
Warrants and rights outstanding, measurement input | 0.04 | |||
Measurement Input, Expected Term [Member] | ||||
Related Party Transactions [Line Items] | ||||
Warrants and rights outstanding, measurement input | 5 | |||
Measurement Input, Option Volatility [Member] | ||||
Related Party Transactions [Line Items] | ||||
Warrants and rights outstanding, measurement input | 150 | |||
Measurement Input, Risk Free Interest Rate [Member] | ||||
Related Party Transactions [Line Items] | ||||
Warrants and rights outstanding, measurement input | 3.84 | |||
Simon Langelier [Member] | ||||
Related Party Transactions [Line Items] | ||||
Proceeds from related parties (in Dollars) | $ 100,000 | |||
Warrants issued (in Shares) | 454,500 | |||
Health Diplomats Pte Ltd [Member] | ||||
Related Party Transactions [Line Items] | ||||
Proceeds from related parties (in Dollars) | $ 50,000 | |||
Warrants issued (in Shares) | 227,250 | |||
Mario Gobbo [Member] | ||||
Related Party Transactions [Line Items] | ||||
Proceeds from related parties (in Dollars) | $ 25,000 | |||
Warrants issued (in Shares) | 113,625 | |||
Warrant [Member] | ||||
Related Party Transactions [Line Items] | ||||
Warrants expire date | Apr. 17, 2027 | |||
CRYM Co-Invest [Member] | ||||
Related Party Transactions [Line Items] | ||||
Beneficial owner investment control percentage | 23.10% | |||
Purchase commitment option (in Dollars) | $ 1,200,000 |
Related Party Transactions (D_2
Related Party Transactions (Details) - Schedule of Aggregate Amount of Long-term Borrowings from Related Parties Maturing - Related Parties [Member] | Mar. 31, 2024 USD ($) |
Schedule of Aggregate Amount of Long-term Borrowings from Related Parties Maturing [Line Items] | |
2024 | |
2025 | 2,550,450 |
2026 | |
2027 | |
2028 | |
Total gross principal | 2,550,450 |
Debt premium, net of amortization | 38,728 |
(Less: debt discount, net of amortization) | (36,094) |
Carrying value as of March 31, 2024 | $ 2,553,084 |
Shareholders_ Equity (Details)
Shareholders’ Equity (Details) - USD ($) | 3 Months Ended | |||
Jan. 01, 2026 | Jan. 01, 2025 | Mar. 31, 2024 | Mar. 31, 2023 | |
Shareholders’ Equity [Line Items] | ||||
Shares issued for prior period services (in Shares) | 62,500 | |||
Shares issued for prior period service value | $ 21,875 | |||
Shares issued for current period services (in Shares) | 187,500 | |||
Shares issued for current period services value | $ 65,626 | |||
Shares issued for vested RSUs for current period services value | 50,000 | |||
Common stock issued for vested RSUs for current period services | $ 233,889 | 424,640 | ||
Unrecognized stock-based compensation cost | $ 77,957 | $ 303,663 | ||
Shares of common stock (in Shares) | 8,085,081 | |||
Exercise price (in Dollars per share) | $ 0.05 | |||
Shares vested (in Shares) | 5,056,800 | |||
Vested expire term | Jan. 01, 2029 | |||
RSUs [Member] | ||||
Shareholders’ Equity [Line Items] | ||||
Shares issued for vested RSUs for current period services (in Shares) | 777,932 | |||
Shares issued for vested RSUs for current period services value | $ 50,000 | |||
Shares issued for vested RSUs for current period services (in Shares) | 1,100,000 | |||
Common stock issued for vested RSUs for current period services | $ 49,956 | $ 197,890 | ||
Stock-based compensation expense | $ (28,226) | $ 112,972 | ||
Common Stock [Member] | ||||
Shareholders’ Equity [Line Items] | ||||
Shares issued for prior period services (in Shares) | 62,500 | |||
Shares issued for prior period service value | $ 62 | |||
Shares issued for current period services (in Shares) | 187,500 | |||
Shares issued for current period services value | $ 188 | |||
Shares issued for vested RSUs for current period services (in Shares) | 777,932 | |||
Shares issued for vested RSUs for current period services value | $ 778 | |||
Shares issued for vested RSUs for current period services (in Shares) | 1,004,982 | |||
Forecast [Member] | ||||
Shareholders’ Equity [Line Items] | ||||
Shares vested (in Shares) | 2,500,000 | 528,281 | ||
Vested expire term | Jan. 01, 2031 | Jan. 01, 2030 |
Shareholders_ Equity (Details)
Shareholders’ Equity (Details) - Schedule of Company's RSU Award Activity - Restricted Stock Units (RSUs) [Member] - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Schedule of Company's RSU Award Activity [Line Items] | ||
Restricted Stock Units, Outstanding Beginning | 2,185,210 | 1,453,857 |
Weighted Average Grant Date Fair Value, Outstanding Beginning | $ 0.2 | $ 0.3 |
Restricted Stock Units, Granted | 2,760,660 | |
Weighted Average Grant Date Fair Value, Granted | $ 0.17 | |
Restricted Stock Units, Vested | (1,004,982) | (1,877,932) |
Weighted Average Grant Date Fair Value, Vested | $ 0.23 | $ 0.23 |
Restricted Stock Units, Forfeited | (68,500) | |
Weighted Average Grant Date Fair Value, Forfeited | $ 0.13 | |
Restricted Stock Units, Outstanding Ending | 1,111,728 | 2,336,585 |
Weighted Average Grant Date Fair Value, Outstanding Ending | $ 0.18 | $ 0.21 |
Shareholders_ Equity (Detail_2
Shareholders’ Equity (Details) - Schedule of Stock Option Activity - USD ($) | 3 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2024 | Mar. 31, 2023 | |
Schedule of Stock Option Activity [Abstract] | ||||
Stock Option Shares, Granted | 8,085,081 | |||
Weighted Average Exercise Price, Granted | $ 0.05 | |||
Weighted Average Remaining Contractual Term, Granted | 5 years 4 months 24 days | |||
Aggregate Intrinsic Value, Granted | $ 57,557 | |||
Stock Option Shares, Forfeited | ||||
Weighted Average Exercise Price, Forfeited | ||||
Weighted Average Remaining Contractual Term, Forfeited | ||||
Aggregate Intrinsic Value, Forfeited | ||||
Stock Option Shares, Outstanding, Ending Balance | 11,513,214 | 8,500,000 | 19,598,295 | 8,500,000 |
Weighted Average Exercise Price, Outstanding, Ending Balance | $ 0.17 | $ 0.18 | $ 0.12 | $ 0.18 |
Weighted Average Remaining Contractual Term, Outstanding, Ending Balance | 7 years 3 months 18 days | 8 years 6 months | 6 years 4 months 24 days | 8 years |
Aggregate Intrinsic Value, Outstanding, Ending Balance | $ 1,962,017 | $ 1,579,108 | $ 2,019,574 | $ 1,579,108 |
Shareholders_ Equity (Detail_3
Shareholders’ Equity (Details) - Schedule of Warrant Activity - Warrant [Member] - USD ($) | 3 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2024 | Mar. 31, 2023 | |
Schedule of Warrant Activity [Line Items] | ||||
Warrant Shares, Granted | ||||
Weighted Average Exercise Price, Granted | ||||
Weighted Average Remaining Contractual Term, Granted | ||||
Aggregate Fair Value, Granted | ||||
Warrant Shares, Exercised | ||||
Weighted Average Exercise Price, Exercised | ||||
Weighted Average Remaining Contractual Term, Exercised | ||||
Aggregate Fair Value, Exercised | ||||
Warrant Shares, Expired | (15,000,000) | |||
Weighted Average Exercise Price, Expired | ||||
Weighted Average Remaining Contractual Term, Expired | ||||
Aggregate Fair Value, Expired | ||||
Warrant Shares, Outstanding, Ending Balance | 51,662,689 | 73,950,000 | 51,662,689 | 58,950,000 |
Weighted Average Exercise Price, Outstanding, Ending Balance | $ 0.45 | $ 0.4 | $ 0.45 | $ 0.4 |
Weighted Average Remaining Contractual Term, Outstanding, Ending Balance | 2 years 10 months 24 days | 1 year | 2 years 8 months 12 days | 10 months 24 days |
Aggregate Fair Value, Outstanding, Ending Balance | $ 2,817,424 | $ 1,867,754 | $ 2,817,424 | $ 1,867,754 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended |
Mar. 31, 2024 | |
Income Taxes [Abstract] | |
Effective tax rate | 0% |
Commitments & Contingencies (De
Commitments & Contingencies (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2023 | Mar. 31, 2024 | |
Commitments & Contingencies [Abstract] | ||
Net revenue percenatge | 10% | |
Contingent royalty liability | $ 2,546,000 |
Subsequent Events (Details)
Subsequent Events (Details) | Jun. 13, 2024 USD ($) $ / shares shares | Jun. 13, 2024 CAD ($) shares | Jun. 12, 2024 CAD ($) shares | May 09, 2024 USD ($) | Apr. 23, 2024 USD ($) $ / shares shares | Jun. 13, 2024 CAD ($) shares | Jun. 12, 2024 $ / shares shares | Jun. 11, 2024 USD ($) $ / shares shares |
Subsequent Events [Line Items] | ||||||||
Promissory note (in Dollars) | $ | $ 250,000 | |||||||
Common shares | 7,647,494 | 1,825,000 | 2,750,000 | 8,000,000 | ||||
Warrants exercisable | 1,825,000 | 1,825,000 | 2,750,000 | 7,647,494 | ||||
Warrants exercisable (in Dollars per share) | $ / shares | $ 0.06 | $ 0.07 | $ 0.06 | $ 0.06 | ||||
Equity subscription agreements (in Dollars) | $ | $ 500,000 | |||||||
Purchase warrants | 12,500,000 | |||||||
Investor invested shares | $ 26,000 | $ 100,010 | $ 150,700 | |||||
Promissory note with accrued interest (in Dollars) | $ | $ 116,450 | |||||||
Unpaid consulting fees (in Dollars) | $ | $ 50,000 | |||||||
Purchase Warrants [Member] | ||||||||
Subsequent Events [Line Items] | ||||||||
Warrants exercisable | 1,250,000 | 1,250,000 | ||||||
Warrants exercisable (in Dollars per share) | $ / shares | $ 0.06 | $ 0.0001 | ||||||
Purchase warrants | 4,500,000 | |||||||
Subsequent Event [Member] | ||||||||
Subsequent Events [Line Items] | ||||||||
Agreed to purchase (in Dollars) | $ | $ 1,200,000 | |||||||
Common Stock [Member] | ||||||||
Subsequent Events [Line Items] | ||||||||
Common shares | 2,125,000 | |||||||
Common Stock [Member] | Purchase Warrants [Member] | ||||||||
Subsequent Events [Line Items] | ||||||||
Common shares | 650,000 | |||||||
Forecast [Member] | ||||||||
Subsequent Events [Line Items] | ||||||||
Warrants exercisable | 2,125,000 | 2,125,000 | ||||||
Warrants exercisable (in Dollars per share) | $ / shares | $ 0.06 | |||||||
Forecast [Member] | Purchase Warrants [Member] | ||||||||
Subsequent Events [Line Items] | ||||||||
Warrants exercisable | 650,000 | 650,000 | ||||||
Warrants exercisable (in Dollars per share) | $ / shares | $ 0.06 | |||||||
Forecast [Member] | Common Stock [Member] | ||||||||
Subsequent Events [Line Items] | ||||||||
Common shares | 1,250,000 |