Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Apr. 16, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | DIEGO PELLICER WORLDWIDE, INC | ||
Entity Central Index Key | 1,559,172 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 49,712,731 | ||
Trading symbol | DPWW | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and equivalents | $ 51,333 | $ 36,001 |
Accounts receivable | 1,110 | |
Prepaid expenses | 482,765 | 651,713 |
Inventory | 47,025 | 80,971 |
Other receivables | 17,817 | |
Total current assets | 581,123 | 787,612 |
Property and equipment, net | 758,112 | 838,754 |
Other assets: | ||
Investments, at cost, net of impairment of $482,234 and $408,900 | 43,333 | 116,667 |
Security deposits | 170,000 | 173,000 |
Deposits - end of lease | 150,000 | 150,000 |
Total other assets | 363,333 | 439,667 |
Total assets | 1,702,568 | 2,066,033 |
Current liabilities: | ||
Accounts payable and accrued expense | 2,031,600 | 585,997 |
Accrued expenses - related party | 509,294 | 511,454 |
Accrued compensation | 6,250 | |
Deferred rent | 107,957 | 120,234 |
Deferred revenue | 53,000 | 53,000 |
Notes payable | 1,310,678 | 846,628 |
Notes payable - related parties | 307,312 | |
Convertible notes payable | 334,156 | 300,000 |
Derivative Liabilities | 338,282 | 208,795 |
Total current liabilities | 4,992,279 | 2,632,358 |
Deferred revenue | 316,000 | 370,000 |
Total liabilities | 5,308,279 | 3,002,358 |
Stockholder's deficit | ||
Series A and B preferred stock, $0.0001 par value, 5,000,000 shares authorized, 0 share issued and outstanding as of December 31, 2016 and 2015 | ||
Common stock, $0.000001 par value, 95,000,000 shares authorized, 49,081,878 and 37,805,416 shares were issued and outstanding as of December 31,2016 and 2015, respectively | 49 | 38 |
Additional paid-in capital | 24,508,365 | 20,111,077 |
Accumulated deficit | (28,114,125) | (21,047,440) |
Total stockholder's deficit | (3,605,711) | (936,325) |
Total liabilities and stockholder's deficit | 1,702,568 | 2,066,033 |
Series A Preferred Stock Member [Member] | ||
Stockholder's deficit | ||
Series A and B preferred stock, $0.0001 par value, 5,000,000 shares authorized, 0 share issued and outstanding as of December 31, 2016 and 2015 | ||
Series B Preferred Stock [Member] | ||
Stockholder's deficit | ||
Series A and B preferred stock, $0.0001 par value, 5,000,000 shares authorized, 0 share issued and outstanding as of December 31, 2016 and 2015 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Investments, impairment | $ 482,234 | $ 408,900 |
Preferred Stock, shares outstanding | 0 | |
Common stock, par value | $ 0.000001 | $ 0.000001 |
Common stock, shares authorized | 95,000,000 | 95,000,000 |
Common stock, shares issued | 49,081,878 | 37,805,416 |
Common stock, shares outstanding | 49,081,878 | 37,805,416 |
Series A Preferred Stock Member [Member] | ||
Preferred Stock, par value | $ 0.0001 | $ 0.0001 |
Preferred Stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Series B Preferred Stock [Member] | ||
Preferred Stock, par value | $ 0.0001 | $ 0.0001 |
Preferred Stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | ||
Rental income | $ 310,220 | $ 50,530 |
Product income | 9,959 | |
Licensing revenue | 54,000 | 54,000 |
Total revenues | 374,179 | 104,530 |
Cost of revenue | 8,173 | |
Operating expenses: | ||
General and administrative expenses | 5,021,058 | 13,616,359 |
Rent expense | 1,103,824 | 1,228,028 |
Write-off interest income | (153,523) | |
Total operating expenses | 6,124,882 | 14,997,910 |
Loss from operations | (5,758,876) | (14,893,380) |
Other income (expense): | ||
Interest expense | (298,673) | (811,726) |
Interest expense - related party | (9,497) | |
Interest income | 153,523 | |
Impairment of investment | (73,334) | (408,900) |
Write-off note receivable | (40,000) | |
Impairment of property and equipment | (931,664) | |
Change in fair value of derivative liabilities | 5,359 | 133,809 |
Total other income (expense) | (1,307,809) | (973,294) |
Loss before benefit for taxes | (7,066,685) | (15,866,674) |
Benefit for taxes | ||
Net loss | $ (7,066,685) | $ (15,866,674) |
Loss per share - basic and fully diluted | $ (0.17) | $ (0.62) |
Weighted average common shares outstanding - basic and fully diluted | 42,436,405 | 25,485,231 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Deficit - USD ($) | Common Stock [Member] | Treasury Stock [Member] | Preferred Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance, beginning at Dec. 31, 2014 | $ 14 | $ (87,300) | $ 5 | $ 4,335,817 | $ (5,180,766) | $ (932,230) |
Balance, beginning, shares at Dec. 31, 2014 | 13,520,000 | (58,200) | 5,036,769 | |||
Sale of Preferred stock | $ 75 | 1,129,916 | 1,129,991 | |||
Sale of Preferred stock, shares | 753,332 | |||||
Sale of Common stock | $ 4 | 1,164,371 | $ 1,164,375 | |||
Sale of Common stock, shares | 3,881,251 | 3,881,251 | ||||
Effect of reverse merger | $ 8 | $ 8 | ||||
Effect of reverse merger, shares | 7,743,333 | 50,996 | ||||
Cancellation of Treasury Shares | $ 87,300 | (87,300) | ||||
Cancellation of Treasury Shares, shares | (58,200) | 58,200 | ||||
Conversion of Preferred shares to common | $ 6 | $ (80) | 74 | |||
Conversion of Preferred shares to common, shares | 5,841,097 | (5,841,097) | ||||
Issuance of common shares for consulting services | $ 3 | 9,523,905 | 9,523,908 | |||
Issuance of common shares for consulting services, shares | 4,699,355 | |||||
Common stock issued for note payable conversion | 84,000 | 84,000 | ||||
Common stock issued for note payable conversion, shares | 126,000 | |||||
Non-employee stock compensation | $ 3 | 3,069,561 | 3,069,564 | |||
Non-employee stock compensation, shares | 2,052,580 | |||||
Warrants issued for services | 574,250 | 574,250 | ||||
Warrants issued for note | 316,483 | 316,483 | ||||
Beneficial conversion feature | ||||||
Net loss | (15,866,674) | (15,866,674) | ||||
Balance, ending at Dec. 31, 2015 | $ 38 | 20,111,077 | (21,047,440) | (936,325) | ||
Balance, ending, shares at Dec. 31, 2015 | 37,805,416 | |||||
Sale of Common stock | $ 5 | 845,486 | 845,491 | |||
Sale of Common stock, shares | 5,327,051 | |||||
Issuance of common shares for consulting services | $ 2 | 1,259,943 | 1,259,945 | |||
Issuance of common shares for consulting services, shares | 2,228,297 | |||||
Common stock issued for note payable conversion | 76,522 | 76,522 | ||||
Common stock issued for note payable conversion, shares | 255,074 | |||||
Non-employee stock compensation | $ 4 | 2,063,308 | 2,063,312 | |||
Non-employee stock compensation, shares | 3,466,040 | |||||
Extinguishment of derivative | 10,079 | 10,079 | ||||
Beneficial conversion feature | 6,667 | (6,667) | ||||
Net loss | (7,066,685) | (7,066,685) | ||||
Balance, ending at Dec. 31, 2016 | $ 49 | $ 24,508,365 | $ (28,114,125) | $ (3,605,711) | ||
Balance, ending, shares at Dec. 31, 2016 | 49,081,878 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Activities | ||
Net Loss | $ (7,066,685) | $ (15,866,674) |
Adjustments to reconcile Net Loss to net cash provided by Operations: | ||
Depreciation and amortization | 9,447 | |
Amortization of deferred revenue | (54,000) | (54,000) |
Non-cash interest | 743,087 | |
Beneficial conversion feature | 6,667 | |
Interest income | (153,523) | |
Amortization of debt discount | 82,458 | |
Initial derivative liabilities exceed convertible note principal | 16,044 | |
Impairment of investments | 73,334 | 408,900 |
Impairment of property and equipment | 931,664 | |
Accrued expenses - related party | 305,152 | 387,121 |
Change in fair value of derivative liability | (5,359) | (133,809) |
Fair value of warrants and options issued for services | 145,362 | |
Non-cash stock compensation | 3,323,257 | 13,167,722 |
Write-off note receivable | 40,000 | |
Write-off interest income | 153,523 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other receivable | 186,765 | (660,584) |
Liabilities for Equity Shares to be Issued | ||
Deferred rent | (12,277) | 120,234 |
Inventory | 33,946 | (80,971) |
Accrued compensation | (6,250) | (1,170,313) |
Accounts Receivable | 1,110 | (1,110) |
Accounts Payable | 1,472,125 | 287,059 |
Net cash used in operating activities | (557,240) | (2,813,338) |
Investing Activities | ||
Acquisition of property and equipment | (860,469) | (584,764) |
Security deposits | 3,000 | |
Issuance of note receivable | (40,000) | |
Repayment under line of credit | 200,000 | |
Advances under line of credit | (200,000) | |
Net cash used in investing activities | (857,469) | (624,764) |
Financing Activities | ||
Proceeds from sale of Preferred stock and warrants | 1,129,999 | |
Proceeds from note payable | 464,050 | 846,628 |
Proceeds from convertible note payable | 120,500 | 300,000 |
Proceeds from sale of common stock | 845,491 | 1,164,375 |
Net cash provided by financing activities | 1,430,041 | 3,441,002 |
Net Increase (Decrease) in Cash | 15,332 | 2,900 |
Cash - beginning of period | 36,001 | 33,101 |
Cash - end of the period | 51,333 | 36,001 |
Non-Cash Investing & Financing Disclosure | ||
Derivative liability recognized as debt discount | $ 118,802 | $ 225,920 |
Organization and Operations
Organization and Operations | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations | Note 1 – Organization and Operations History On March 13, 2015 (the “closing date”), Diego Pellicer Worldwide, Inc. (f/k/a Type 1 Media, Inc.) (the “Company”) closed on a merger and share exchange agreement (the “Merger Agreement”) by and among (i) the Company, and (ii) Diego Pellicer World-wide 1, Inc., a Delaware corporation, (“Diego”), and (iii) Jonathan White, the majority shareholder of the Company (the “Majority Shareholder”). Pursuant to the terms of the Merger Agreement, Diego was merged with and into the Company, with the Company to continue as the surviving corporation (the “Surviving Corporation”) in the Merger, and the Company succeeding to and assuming all the rights, assets, liabilities, debts, and obligations of Diego (the “Merger”). Prior to the Merger, 62,700,000 shares of Type 1 Media, Inc. were issued and outstanding. The principal owners of the Company agreed to transfer their 55,000,000 issued and outstanding shares to a third party in consideration for $169,000 and cancellation of their 55,000,000 shares. The remaining issued and outstanding shares are still available for trading in the marketplace. At the time of the Merger, Type 1 Media, Inc. had no assets or liabilities. Accordingly, the business conducted by Type 1 prior to the Merger is not being operated by the combined entity post-Merger. At the closing of the Merger, Diego common stock issued and outstanding immediately prior to the closing of the Merger was exchanged for the right to receive 1 share of the surviving legal entity. An aggregate of 21,632,252 common shares of the surviving entity were issued to the holders of Diego in exchange for their common shares, representing approximately 74% of the combined entity. The Merger has been accounted for as a reverse merger and recapitalization in which Diego is treated as the accounting acquirer and Diego Pellicer Worldwide, Inc. (f/k/a Type 1 Media, Inc.) is the surviving legal entity. Business Operations The Company leases real estate to licensed marijuana operators, including but not limited to, providing complete turnkey growing space, processing space, recreational and medical retail sales space and related facilities to licensed marijuana growers, processors, dispensary and recreational store operators. Additionally, the Company plans to explore ancillary opportunities in the regulated marijuana industry as well as offering for wholesale distribution branded non-marijuana clothing and accessories. The Company does not and will not, until such time as Federal law allows, grow, harvest, process, distribute or sell marijuana or any other substances that violate the laws of the United States of America, or any other country. |
Significant and Critical Accoun
Significant and Critical Accounting Policies and Practices | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant and Critical Accounting Policies and Practices | Note 2 – Significant and Critical Accounting Policies and Practices The Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles. Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Principles of Consolidation The financial statements include the accounts of Diego Pellicer Worldwide, Inc., and its wholly-owned subsidiary Diego Pellicer World-wide 1, Inc., Intercompany balances and transactions have been eliminated in consolidation. New accounting pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations and cash flows when implemented. Reclassifications Financial statement amounts for the year ended December 31, 2015 have been reclassified to conform to current period presentation. Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. These estimates and assumptions include valuing equity securities and derivative financial instruments issued in financing transactions and share based payment arrangements, determining the fair value of the warrants received for the licensing agreement, the collectability of accounts receivable and deferred taxes and related valuation allowances. Certain estimates, including evaluating the collectability of accounts receivable, could be affected by external conditions, including those unique to our industry, and general economic conditions. It is possible that these external factors could have an effect on our estimates that could cause actual results to differ from our estimates. The Company intends to re-evaluate all of its accounting estimates at least quarterly based on these conditions and record adjustments when necessary. Fair Value Measurements The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the condensed consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. Fair Value of Financial Instruments As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2016 and 2015. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand. Cash The Company maintains cash balances at various financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company’s accounts at these institutions may, at times, exceed the federal insured limits. The Company has not experienced any losses in such accounts. Property and Equipment, and Depreciation Policy Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred. The Company intends to take depreciation or amortization on a straight-line basis for all properties, beginning when they are put into service, using the following life expectancy: Equipment – 5 years Leasehold Improvements – 10 years, or the term of the lease, whichever is shorter Buildings – 20 years Inventory The Company’s inventory is stated at the lower of cost or estimated realizable value, with cost primarily determined on a weighted-average cost basis on the first-in, first-out (“FIFO”) method. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are presented at their face amount, less an allowance for doubtful accounts, on the balance sheets. Accounts receivable consist of revenue earned and currently due from sub lessee. We evaluate the collectability of accounts receivable based on a combination of factors. We recognize reserves for bad debts based on estimates developed using standard quantitative measures that incorporate historical write-offs and current economic conditions. As of December 31, 2016, the outstanding balance allowance for doubtful accounts is zero. The policy for determining past due status is based on the contractual payment terms of each customer. Once collection efforts by the Company and its collection agency are exhausted, the determination for charging off uncollectible receivables is made. Revenue recognition The Company recognizes revenue from rent, tenant reimbursements, and other revenue sources once all of the following criteria are met in accordance with SEC Staff Accounting Bulletin 104, Revenue Recognition, In accordance with ASC 840 (“Leases”), as amended and interpreted, minimum annual rental revenue is recognized for rental revenues on a straight-line basis over the term of the related lease. Rental revenue recognition commences when the tenant takes possession or controls the physical use of the leased space. In order for the tenant to take possession, the leased space must be substantially ready for its intended use. To determine whether the leased space is substantially ready for its intended use, management evaluates whether the Company or the tenant is the owner of tenant improvements for accounting purposes. When management concludes that the Company is the owner of tenant improvements, rental revenue recognition begins when the tenant takes possession of the finished space, which is when such tenant improvements are substantially complete. In certain instances, when management concludes that the Company is not the owner (the tenant is the owner) of tenant improvements, rental revenue recognition begins when the tenant takes possession of or controls the space. When management concludes that the Company is the owner of tenant improvements, for accounting purposes, management records the cost to construct the tenant improvements as a capital asset. In addition, management records the cost of certain tenant improvements paid for or reimbursed by tenants as capital assets when management concludes that the Company is the owner of such tenant improvements. For these tenant improvements, management records the amount funded or reimbursed by tenants as deferred revenue, which is amortized as additional rental income over the term of the related lease. When management concludes that the tenant is the owner of tenant improvements for accounting purposes, management records the Company’s contribution towards those improvements as a lease incentive, which is amortized as a reduction to rental revenue on a straight-line basis over the term of the lease. In January 2014, the Company entered into an agreement to license certain intellectual property to a third party. In consideration, the Company received warrants to purchase shares of common stock, which were valued based on an appraisal of the warrants by an independent third party appraiser. The revenue from the licensing agreement, which is initially recorded as deferred revenue, is being amortized over the ten year term of the licensing agreement. The Company records rents due from the tenants on a current basis. However, as part of the Line of Credit Agreement, the Company has deferred collection of such rents until the tenants receive the proper governmental licenses to begin operation. Management has decided to reserve these deferred amounts due to the contingency factor and experience with typical delays in governmental action. Leases as Lessor The Company currently leases properties in locations that would be acceptable for regulatory purposes and acceptable to sub-lessees for the manufacturing and development of their products. The Company evaluates the lease to determine its appropriate classification as an operating or capital lease for financial reporting purposes. The Company currently has a number of leases, which are all classified as operating leases. Minimum base rent for the Company’s operating leases, which generally have escalating rentals over the term of the lease, is recorded on a straight-line basis over the lease term. The initial rent term includes the build-out, or may include a short rent holiday period, for the Company’s leases, where no rent payments are typically due under the terms of the lease. Leases For lease agreements that provide for escalating rent payments or free-rent occupancy periods, the Company recognizes rent expense on a straight-line basis over the non-cancelable lease term and option renewal periods where failure to exercise such options would result in an economic penalty in such amount that renewal appears, at the inception of the lease, to be reasonably assured. The lease term commences on the date that the Company takes possession of or controls the physical use of the property. Deferred rent is presented on current liabilities section on the consolidated balance sheets. Income Taxes Income taxes are provided for using the liability method of accounting in accordance with the Income Taxes Topic of the FASB ASC. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized and when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The computation of limitations relating to the amount of such tax assets, and the determination of appropriate valuation allowances relating to the realizing of such assets, are inherently complex and require the exercise of judgment. As additional information becomes available, the Company continually assesses the carrying value of their net deferred tax assets. Research and Development Costs Research and development costs are charged to the statement of operations as incurred. Preferred Stock The Company applies the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity” when determining the classification and measurement of preferred stock. Preferred shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. It classifies conditionally redeemable preferred shares (if any), which includes preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control, as temporary equity. At all other times, it classifies its preferred shares in stockholders’ equity. Preferred shares do not feature any redemption rights within the holders’ control or conditional redemption features not within our control. Accordingly all issuances of preferred stock are presented as a component of consolidated stockholders’ equity (deficit). Common Stock Purchase Warrants and Other Derivative Financial Instruments The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net-cash settlement or settlement in our own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC 815-40 (“Contracts in Entity’s Own Equity”). The Company classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of its common stock purchase warrants and other free standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. Stock-Based Compensation The Company recognizes compensation expense for stock-based compensation in accordance with ASC Topic 718. For employee stock-based awards, it calculates the fair value of the award on the date of grant using the Black-Scholes method for stock options and the quoted price of our common stock for unrestricted shares; the expense is recognized over the service period for awards expected to vest. For non-employee stock-based awards, it calculates the fair value of the award on the date of grant in the same manner as employee awards, however, the awards are revalued at the end of each reporting period and the pro rata compensation expense is adjusted accordingly until such time the nonemployee award is fully vested, at which time the total compensation recognized to date equals the fair value of the stock-based award as calculated on the measurement date, which is the date at which the award recipient’s performance is complete. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. The Company considers many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience. Loss per common share Net loss per share is provided in accordance with ASC Subtopic 260-10. The Company presents basic loss per share (“EPS”) and diluted EPS on the face of statements of operations. Basic EPS is computed by dividing reported losses by the weighted average shares outstanding. Loss per common share has been computed using the weighted average number of common shares outstanding during the year. |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | Note 3 – Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred losses since inception, its current liabilities exceed its current assets by $4,411,156, and has an accumulated deficit of $28,114,125 at December 31, 2016. These factors, among others raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management believes that the Company’s future success is dependent upon its ability to achieve profitable operations, generate cash from operating activities and obtain additional financing. There is no assurance that the Company will be able to generate sufficient cash from operations, sell additional shares of stock or borrow additional funds from its stockholders. The Company’s inability to obtain additional cash could have a material adverse effect on its financial position, results of operations, and its ability to continue in existence. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company intends to continue to raise additional capital to be used for ongoing preopening expenses. Once the tenants commence operations and generate profits, rental revenues should exceed rental expense for the four properties. |
Revolving Credit Line
Revolving Credit Line | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Revolving Credit Line | Note 4 – Revolving Credit Line In 2014 the Company entered into an agreement with a tenant who intended to operate their business out of three separate properties leased to him by the Company. He was required to obtain a state operating license to grow, process and sell cannabis products. Until the tenant received such license, the Company provided the tenant a $2,500,000 revolving line of credit established to provide funding to the tenant, consisting of two separate elements: (a) to fund operating costs until the development is completed, and (b) to underwrite the rent due on the sublease agreements (the “Line”). Interest was accruing at the annual rate of 20% on the average monthly amount due on advances under the Line. During 2014 the Company had extended $707,250 in advances against the Line to underwrite rent due during that period under the lease agreements. As well, the Company incurred accrued and unpaid interest expenses of $70,596 for the period. The total amount, $777,846 was written off as the Company believed these amounts to be uncollectable. During the year ended December 31, 2015, further advances under the Line of $200,000 were made and interest was recorded in the amount of $153,523. On September 7, 2015, the Company entered into an agreement terminating the Line in exchange for a one-time payment of $200,000. The remaining accrued interest as of that date, $153,523 was written off pursuant to the agreement. |
Note Receivable
Note Receivable | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Note Receivable | Note 5 – Note Receivable During 2015 the Company advanced $40,000 to an unrelated third party. The note was non-interest bearing and due on November 10, 2015. The Company determined that the amount was uncollectable as of December 31, 2015 and wrote off the amount as uncollectible. |
Investment
Investment | 12 Months Ended |
Dec. 31, 2016 | |
Schedule of Investments [Abstract] | |
Investment | Note 6 – Investment In January 2014, the Company entered into an agreement with Plandai Biotechnology, Inc. (a publicly traded company) to license to them certain intellectual property rights in exchange for warrants to purchase 1,666,667 shares of Plandai Biotechnology, Inc. (“Plandai”) common stock. This licensing agreement carries a 10-year term with an exercise price of $0.01 per share. The Company is to obtain certain trademark rights certified by the government (expected by the end of 2016). On October 10, 2014 the Company filed its Notice of Exercise to execute the warrants to acquire the shares of Plandai, as of December 31, 2016 the shares had not yet been issued. The sale of such shares has a “leak out” restriction on them requiring that the sale of such shares must reach a certain traded price of $0.50 per share. The Company used a third party appraisal firm to ascertain the fair value of warrants held by the Company, which was determined to be $525,567 at the date of issuance. With the Plandai shares trading at $.07 per share, the Company recorded an impairment loss of $408,900 during the year ended December 31, 2015. During the year ended December 31, 2016, the Company recorded an additional impairment loss of $73,334 based on the trading price of $0.026 per share as of December 31, 2016. The Company accounts for its investment under the cost method of accounting. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 7 – Property and Equipment The Company has incurred expenses in the build-out of one of its leased properties and acquired a large POD equipment for use in growing operations by lessee. As of December 31, 2016 and 2015, fixed assets and the estimated lives used in the computation of depreciation are as follows: Estimated Useful Lives December 31, 2016 December 31, 2015 Machinery and equipment 5 years $ 39,145 $ 174,145 Leasehold improvements 10 years 728,414 664,609 767,559 838,754 Less: Accumulated depreciation and amortization (9,447 ) - Property and equipment, net $ 758,112 $ 838,754 During the year ended December 31, 2016, the Company recorded an impairment loss of $1,066,664 for leasehold improvements to adjust the carrying value to the estimated fair value. The fair value was estimated at 30% discounted cash flow from sublease revenues net of lease. |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Note 8 – Other Assets Security deposits Security deposits reflect the deposits on various property leases, most of which require for two months’ rental expense in the form of a deposit. Deposits – end of lease These deposits represent an additional two months of rent on various property leases that apply to the “end-of-lease” period. |
Related Party
Related Party | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party | Note 9 – Related Party As of December 31, 2016 and December 31, 2015, the Company has accrued and unpaid consulting fees to related parties in the amount of $509,294 and $511,454, respectively. For the year ended December 31, 2016 and 2015, the consulting fees expense was $715,533 and $652,500, respectively to related parties. These amounts are included in general and administrative expenses in the accompanying financial statements. On April 14, 2016, the Company issued 1,900,000 shares of common stock to Phoenix Consulting Enterprises valued at $1,577,000, a company owned by Mr. Throgmartin, for services. On August 12, 2016, the Company entered into an agreement for the balance of accrued compensation payable to Alan Valdes in the amount of $332,709 as of June 1, 2016, to be converted (a) 50% of the accrued amount ($166,355) will be converted into restricted common stock at the price of $0.30 per share (554,517 shares), and; (b) 50% of the accrued amount ($166,355) will be converted into Company promissory notes, accruing interest at the rate of eight (8%) percent, per annum, and payable upon the earlier date of (i) the second anniversary date of the promissory notes, (ii) the date all of the current investor notes, in the outstanding aggregate principal and accrued interest amount of approximately $1,480,000, at June 30, 2016, have been paid in full and the Company has achieved gross revenues of at least $3,000,000 over any consecutive 12-month period. On August 12, 2016, the Company entered into an agreement for the balance of accrued compensation payable to Mr. Throgmartin in amount of $281,914 as of June 1, 2016 to be converted (a) 50% of the accrued amount ($140,957) will be converted into restricted common stock at the price of $0.30 per share (396,190 shares), and; (b) 50% of the accrued amount ($140,957) will be converted into Company promissory notes, accruing interest at the rate of eight (8%) percent, per annum, and payable upon the earlier date of (i) the second anniversary date of the promissory notes, (ii) the date all of the current investor notes, in the outstanding aggregate principal and accrued interest amount of approximately $1,480,000, at June 30, 2016, have been paid in full and the Company has achieved gross revenues of at least $3,000,000 over any consecutive 12-month period. |
Note Payable
Note Payable | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Note Payable | Note 10 – Notes Payable On May 20, 2015, the Company entered into notes in total amount of $450,000 with third parties for use as operating capital. The notes payable agreements required the Company to repay the principal, together with 10% annual interest upon earlier of (i) the maturity date of November 17, 2015 and (ii) the date the Company raises capital whether through the issuance of debt, equity or any other securities, whichever occurs first. The Company will not raise this capital unless either (a) the proceeds of such financing are being directed at the closing of such financing to irrevocably repay this note in full, or (b) Investor consents to an alternative use of proceeds from such financing. The Company received a waiver from investor for the convertible note entered into May 29, 2015 (see Note 11). As of December 31, 2016 and December 31, 2015, the outstanding principle balance of the note is $450,000. Subsequent to the period ended December 31, 2016 and on April 11, 2017, this note was consolidated into a convertible note due April 10, 2019. On July 8, 2015, the Company entered into notes in total amount of $135,628 with third parties for use as operating capital. The notes payable agreements required the Company to repay the principal, together with 10% annual interest upon earlier of (i) the maturity date of October 6, 2015 and (ii) the date the Company raises capital whether through the issuance of debt, equity or any other securities , whichever occurs first. The Company will not raise this capital unless either (a) the proceeds of such financing are being directed at the closing of such financing to irrevocably repay this note in full, or (b) Investor consents to an alternative use of proceeds from such financing. In connection with the issuance of these notes, the Company issued warrants to purchase its common stock. The Company allocated the proceeds of the notes and warrants based on the relative fair value at inception. The Company allocated $90,563 to the warrants and $45,065 to the debt. The difference between the face value of the notes and the allocated value has been accreted to interest expense over the life of the loan. As of December 31, 2016, the outstanding principle balance of the note is $135,628. Subsequent to the period ended December 31, 2016 and on April 11, 2017, this note was consolidated into a convertible note due April 10, 2019. On August 31, 2015, the Company entered into notes in total amount of $126,000 with third parties for use as operating capital. The notes payable agreements required the Company to repay the principal, together with 5% annual interest by the maturity date of October 31, 2015 or the closing of a financing whereby the company receives a minimum of $126,000. In connection with the issuance of these notes, the Company issued 126,000 shares of common stock. The Company allocated the proceeds of the notes and warrants based on the relative fair value at inception. The Company allocated $84,000 to the common stock and $42,000 to the debt. The difference between the face value of the notes and the allocated value has been accreted to interest expense over the life of the loan. As of December 31, 2016, the outstanding principal balance of the note is $126,000. On November 27, 2015, the Company entered into notes in total amount of $135,000 with third parties for purchasing a fixed asset. The notes payable agreements require the Company to repay the principal, together with $15,000 interest by the maturity date of January 26, 2016. During the year ended December 31, 2016, the Company paid $15,000 towards accrued interest and $5,950 towards principal. As of December 31, 2016, the outstanding principle balance of the note is $129,050. On February 8, 2016, the Company entered into notes in total amount of $470,000 with third parties, bearing interest at 12% per annum with a maturity date of February 7, 2017. As of December 31, 2016, the outstanding principle balance of the note is $470,000. Subsequent to the period ended December 31, 2016 and on April 11, 2017, this note was consolidated into a convertible note due April 10, 2019. |
Convertible Note Payable
Convertible Note Payable | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Convertible Note Payable | Note 11 – Convertible Note Payable On May 29, 2015, the Company entered into convertible notes in total amount of $300,000 with third parties for use as operating capital. The convertible notes require the Company to repay the principal, together with 10% annual interest by the maturity date of November 26, 2015. In the event that the Note is not paid on the maturity date and the common stock price has a set price below $1.50, then the note holder shall have the right to convert the amount outstanding into shares of common stock at a price of ninety percent of the lowest trade VWAP (Volume Weighted Average Price) of twenty days prior to conversion. The Company evaluated the conversion feature embedded in the notes in amount of $342,604 on default. In connection with the issuance of these notes, the Company issued warrants to purchase its common stock. The Company allocated the proceeds of the notes and warrants based on the relative fair value at inception. The Company allocated $225,920 to the warrants and $74,080 to the convertible debt. The difference between the face value of the notes and the allocated value has been accreted to interest expense over the life of the loan. On November 26, 2015, pursuant to the original terms of the note, the holder received the rights to convert the principal balance into common shares of the Company. The conversion feature was recognized as an embedded derivative and was valued using a Black Scholes model that resulted in a derivative liability of $342,604 as of the measurement date. As of December 31, 2016 and December 31, 2015, the outstanding principle balance of the note is $300,000. On April 1, 2016, the Company converted outstanding invoice due to a convertible note in total amount of $25,000 with a third party. The convertible notes require the Company to repay the principal, together with 8% annual interest by the maturity date of October 1, 2016. This note is currently at default. The convertible notes can be converted into common stock of the Company valued at 80% of the lowest closing price for the Company’s common stock during the five (5) trading days immediately preceding a conversion date, as reported by OTC Markets. In any event, the conversion price for this Note can never be less than $0.30 per share. The conversion feature was recognized as an embedded derivative and was valued using a Black Scholes model that resulted in a derivative liability of $12,608 as of the measurement date. On December 31, 2016, principle balance of $25,000 and accrued interest of $1,522 were converted into 88,407 shares of common stock. On July 11, 2016, the Company entered into a convertible note in total amount of $50,000 with third parties for use as operating capital. The convertible note requires the Company to repay the principal, together with 12% annual interest by the maturity date of April 11, 2017. The convertible note can be converted into common stock of the Company at the lower of (i) a 45% discount to the lowest trading price during the previous twenty (20) trading days to the date of a Conversion Notice; or (ii) a 45% discount to the lowest trading price during the previous twenty (20) trading days before the date that this note was executed. The conversion feature was recognized as an embedded derivative and was valued using a Black Scholes model that resulted in a derivative liability of $85,274 as of the measurement date. As of December 31, 2016, the outstanding principle balance of the note is $50,000. On October 17, 2016, the Company entered into convertible notes in total amount of $2,500 with third parties for use as operating capital. The convertible note requires the Company to repay the principal, together with 10% annual interest by the second anniversary date of this note. The convertible note can be converted into common stock of the Company at the lower of (A) fifty (50%) percent of the 10-day trailing average closing price of the Company’s Common Stock, calculated on the Conversion Date, or (B) $0.20 (the “Fixed Price Component”) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events and issuances of securities at specified lower prices). The conversion feature was recognized as an embedded derivative and was valued using a Black Scholes model that resulted in a derivative liability of $4,905 as of the measurement date. $2,500 was recorded as debt discount and the remaining $2,405 was expensed immediately. As of December 31, 2016, the outstanding principle balance of the note is $2,500. On October 21, 2016, the Company entered into convertible notes in total amount of $50,000 with third parties for use as operating capital. The convertible note requires the Company to repay the principal, together with 10% annual interest by the second anniversary date of this note. The convertible note can be converted into common stock of the Company at the lower of (A) fifty (50%) percent of the 10-day trailing average closing price of the Company’s Common Stock, calculated on the Conversion Date, or (B) $0.20 (the “Fixed Price Component”) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events and issuances of securities at specified lower prices). The Company recorded beneficial conversion feature in amount of $6,667. As of December 31, 2016, the outstanding principle balance of the note is $50,000. On October 24, 2016, the Company entered into convertible notes in total amount of $3,000 with third parties for use as operating capital. The convertible note requires the Company to repay the principal, together with 10% annual interest by the second anniversary date of this note. The convertible note can be converted into common stock of the Company at the lower of (A) fifty (50%) percent of the 10-day trailing average closing price of the Company’s Common Stock, calculated on the Conversion Date, or (B) $0.20 (the “Fixed Price Component”) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events and issuances of securities at specified lower prices). The conversion feature was recognized as an embedded derivative and was valued using a Black Scholes model that resulted in a derivative liability of $5,273 as of the measurement date. $3,000 was recorded as debt discount and the remaining $2,273 was expensed immediately. As of December 31, 2016, the outstanding principle balance of the note is $3,000. On October 24, 2016, the Company entered into convertible notes in total amount of $15,000 with third parties for use as operating capital. The convertible note requires the Company to repay the principal, together with 10% annual interest by the second anniversary date of this note. The convertible note can be converted into common stock of the Company at the lower of (A) fifty (50%) percent of the 10-day trailing average closing price of the Company’s Common Stock, calculated on the Conversion Date, or (B) $0.20 (the “Fixed Price Component”) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events and issuances of securities at specified lower prices). The conversion feature was recognized as an embedded derivative and was valued using a Black Scholes model that resulted in a derivative liability of $26,366 as of the measurement date. $15,000 was recorded as debt discount and the remaining $11,366 was expensed immediately. As of December 31, 2016, the outstanding principle balance of the note is $15,000. The table below provides a reconciliation of the beginning and ending balances for the liabilities measured using fair significant unobservable inputs (Level 3): Balance at January 1, 2015 $ - Issuance of embedded conversion features on convertible note 342,604 Change in fair value during period (133,809 ) Balance at December 31, 2015 208,795 Issuance of embedded conversion features on convertible note 134,846 Change in fair value during period (5,359 ) Balance at December 31, 2016 $ 338,282 The following assumptions were used in calculations of the Black Scholes model for the year ended December 31, 2016 and 2015 Year ended December 31, 2016 2015 Risk-free interest rates 0.29-1.20 % 0.52-0.65 % Expected life 0.25-1 year 1 year Expected dividends 0 % 0 % Expected volatility 142-356 % 345-348 Diego Pellicer Worldwide, Inc. Common Stock fair value $ 0.20 -0.77 $ $0.75 -$1.24 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | Note 12 – Stockholders’ Equity (Deficit) During the year ended December 31, 2016, the Company issued Mr. Throgmartin 2,428,193 shares of common stock valued at $1,735,455 for services. During the year ended December 31, 2016, the Company issued Mr. Valdes 671,181 shares of common stock valued at $201,354 for services. During the year ended December 31, 2016, the Company issued Mr. Norris 238,333 shares of common stock valued at $88,000 for services. During the year ended December 31,2016, the Company issued Mr. Strachan for 128,333 shares of common stock valued at $38,500 for services. During the year ended December 31,2016, the Company issued 2,228,297 shares of common stock to various third parties valued at $1,259,944 for services. During the year ended December 31,2016, the Company issued to various investors 5,393,718 shares of common stock for cash received in amount of $865,491. For the year ended December 31, 2015, the Company issued 37,805,416 shares of common stock as follows ● At the completion of the merger, 29,498,165 restricted common shares of the new Company were issued to the former Diego shareholders as follows: o The original Founders of the Company converted their 13,520,000 shares into restricted common shares on a 1:1 basis. o 7,743,333 shares were issued to former Diego shareholders. o The Series A and B Preferred shareholders converted 5,841,097 shares into restricted common shares on a 1:1 basis. o Non-employees, which consisted of founding members and others were awarded a total of 2,451,935 shares, at a value of $0.9375 per share. o 58,200 shares of common stock were returned as treasury stock. ● 4,300,000 shares of common stock issued for services provided. ● 3,881,251 shares issued for $1,164,375. ● 126,000 shares of common stock issued in connection with $126,000 promissory note (see Note 10). For the year ended December 31, 2015, 753,333 Preferred shares were issued and subsequently converted to common shares in the reverse merger. As of December 31, 2015, there were no Preferred shares outstanding. The common shares and the preferred shares, have a par value of $0.000001. As of December 31, 2016, there are currently 1,991,172 warrants outstanding relating to the former Diego shareholders. The following table presents our warrants and embedded conversion features which have no observable market data and are derived using Black-Scholes measured at fair value on a recurring basis, using Level 3 inputs, as of December 31, 2016 and 2015: For the Year Ended December 31, 2016 For the Year Ended December 31, 2015 Annual dividend yield 0 % 0 % Expected life (years) 5 1-10 Risk-free interest rate 0.90 % 0.52% – 2.14 % Expected volatility 266 % 323%-354 % The following represents a summary of all common stock warrant activity: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term Balance outstanding, January 31, 2015 790,798 0.26 4.03 Granted 1,110,628 1.17 5.18 Balance outstanding, December 31, 2015 1,901,426 $ 1.21 4.40 Granted 125,887 - - Balance outstanding, December 31, 2016 2,027,313 $ 1.18 3.43 Exercisable, December 31, 2016 1,991,172 $ 1.18 3.43 The Company maintains an Equity Incentive Plan pursuant to which 2,480,000 shares of Common Stock are reserved for issuance thereunder. This Plan was established to award certain founding members, who were instrumental in the development of the Company, as well as key employees, directors and consultants, and to promote the success of the Company’s business. The terms allow for each option to vest immediately, with a term no greater than 10 years from the date of grant, at an exercise price equal to par value at date of the grant. As of December 31, 2016, 1,775,000 shares had been granted, with 200,000 of those shares granted with warrants attached. There remain 705,000 shares available for future grants. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13 – COMMITMENTS AND CONTINGENCIES The Company’s business is to lease property in appropriate and desirable locations, and to make available such property for sub-lease to specifically assigned businesses that grow, process and sell certain products to the general public. Currently the Company has four (4) separate properties under lease in the states of Colorado and Washington. In Colorado, there are three properties leased in 2016 and 2015. Properties were leased for a three (3) to five (5) year period with an option for an additional five (5) years, and carry terms requiring triple net (NNN) conditions. Each of the properties, except for one, have fixed monthly rentals (exclusive of the triple net terms). As of December 31, 2016, the aggregate remaining minimal annual lease payments under these operating leases were as follows: 2017 $ 1,055,472 2018 868,038 2019 346,566 Total $ 2,270,076 In Washington, there is one (1) property leased in 2014. The property was leased for a five (5) year period with an option for an additional five (5) years, and carry terms requiring triple net (NNN) conditions. The property has an escalating annual rental (exclusive of the triple net terms). As of September 30, 2016, the aggregate remaining minimal annual lease payments due under these operating leases were as follows: 2017 $ 87,723 2018 67,365 Total $ 155,088 Rent expense for the Company’s operating leases for the year ended December 31, 2016 and 2015 was $1,103,824 and $1,228,028, respectively. |
Deferred Tax Assets and Income
Deferred Tax Assets and Income Tax Provision | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Deferred Tax Assets and Income Tax Provision | Note 14 – Deferred Tax Assets and Income Tax Provision The reconciliation of income tax benefit at the U.S. statutory rate of 34% for the year ended December 31, 2016 and for the year ended December 31, 2015 respectively to the Company’s effective tax rate is as follows: Year Ended Year Ended December 31, 2016 December 31, 2015 Statutory federal income tax rate -34 % -34 % State income tax, net of federal benefits -6 % -6 % Change in valuation allowance 40 % 40 % Income tax provision (benefit) - % - % The benefit for income tax is summarized as follows: Year Ended December 31, 2016 Year Ended December 31, 2015 Federal Current $ -- $ -- Deferred (2,353,000 ) (5,395,000 ) State Current - -- Deferred (415,000 ) (952,000 ) Change in valuation allowance 2,769,000 6,347,000 Income tax provision (benefit) $ - $ - Deferred tax assets (liabilities) consist of the following Year Ended Year Ended December 31, 2016 December 31, 2015 Net operating loss carry forwards $ (11,1880,000 ) $ (8,419,000 ) Warrants issued for services 288,000 230,000 Impairment of investment 620,000 164,000 Interest expense on convertible notes 413,000 297,000 Change in fair value of derivative liability (52,000 ) (54,000 ) Total gross deferred tax asset/liabilities (10,064,069 ) (7,782,000 ) Valuation allowance 10,064,069 7,782,000 Net deferred taxes $ - $ - As of December 31, 2016, the Company had accumulated Federal net operating loss carryovers (“NOLs”) of $25,160,000. These NOLs begin to expire in 2033, and the utilization of NOLs may be subject to limitation under the Internal Revenue Code Section 382 should there be a greater than 50% ownership change as determined under the regulations. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against the entire deferred tax asset relating to NOLs for every period because it is more likely than not that all of the deferred tax asset will not be realized. The Company files U.S. Federal and various State tax returns that are subject to audit by tax authorities beginning with the year ended December 31, 2013. The Company’s policy is to classify assessments, if any, for tax and related interest and penalties as tax expense. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 15 – Subsequent Events Subsequent to the year ended December 31, 2016, the Company issued 161,593 shares of common stock for services of $41,659 and 469,260 shares of common stock for conversion $50,000 of debt. Subsequent to the year ended December 31, 2016 and on April 11, 2017, the Company agreed with one of its lenders to amend the terms of several of its loans. See Note 10, Notes Payable. |
Significant and Critical Acco22
Significant and Critical Accounting Policies and Practices (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Principles of Consolidation | Principles of Consolidation The financial statements include the accounts of Diego Pellicer Worldwide, Inc., and its wholly-owned subsidiary Diego Pellicer World-wide 1, Inc., Intercompany balances and transactions have been eliminated in consolidation. |
New Accounting Pronouncements | New accounting pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations and cash flows when implemented. |
Reclassifications | Reclassifications Financial statement amounts for the year ended December 31, 2015 have been reclassified to conform to current period presentation. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. These estimates and assumptions include valuing equity securities and derivative financial instruments issued in financing transactions and share based payment arrangements, determining the fair value of the warrants received for the licensing agreement, the collectability of accounts receivable and deferred taxes and related valuation allowances. Certain estimates, including evaluating the collectability of accounts receivable, could be affected by external conditions, including those unique to our industry, and general economic conditions. It is possible that these external factors could have an effect on our estimates that could cause actual results to differ from our estimates. The Company intends to re-evaluate all of its accounting estimates at least quarterly based on these conditions and record adjustments when necessary. |
Fair Value Measurements | Fair Value Measurements The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the condensed consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2016 and 2015. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand. |
Cash | Cash The Company maintains cash balances at various financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company’s accounts at these institutions may, at times, exceed the federal insured limits. The Company has not experienced any losses in such accounts. |
Property and Equipment and Depreciation Policy | Property and Equipment, and Depreciation Policy Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred. The Company intends to take depreciation or amortization on a straight-line basis for all properties, beginning when they are put into service, using the following life expectancy: Equipment – 5 years Leasehold Improvements – 10 years, or the term of the lease, whichever is shorter Buildings – 20 years |
Inventory | Inventory The Company’s inventory is stated at the lower of cost or estimated realizable value, with cost primarily determined on a weighted-average cost basis on the first-in, first-out (“FIFO”) method. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are presented at their face amount, less an allowance for doubtful accounts, on the balance sheets. Accounts receivable consist of revenue earned and currently due from sub lessee. We evaluate the collectability of accounts receivable based on a combination of factors. We recognize reserves for bad debts based on estimates developed using standard quantitative measures that incorporate historical write-offs and current economic conditions. As of December 31, 2016, the outstanding balance allowance for doubtful accounts is zero. The policy for determining past due status is based on the contractual payment terms of each customer. Once collection efforts by the Company and its collection agency are exhausted, the determination for charging off uncollectible receivables is made. |
Revenue Recognition | Revenue recognition The Company recognizes revenue from rent, tenant reimbursements, and other revenue sources once all of the following criteria are met in accordance with SEC Staff Accounting Bulletin 104, Revenue Recognition, In accordance with ASC 840 (“Leases”), as amended and interpreted, minimum annual rental revenue is recognized for rental revenues on a straight-line basis over the term of the related lease. Rental revenue recognition commences when the tenant takes possession or controls the physical use of the leased space. In order for the tenant to take possession, the leased space must be substantially ready for its intended use. To determine whether the leased space is substantially ready for its intended use, management evaluates whether the Company or the tenant is the owner of tenant improvements for accounting purposes. When management concludes that the Company is the owner of tenant improvements, rental revenue recognition begins when the tenant takes possession of the finished space, which is when such tenant improvements are substantially complete. In certain instances, when management concludes that the Company is not the owner (the tenant is the owner) of tenant improvements, rental revenue recognition begins when the tenant takes possession of or controls the space. When management concludes that the Company is the owner of tenant improvements, for accounting purposes, management records the cost to construct the tenant improvements as a capital asset. In addition, management records the cost of certain tenant improvements paid for or reimbursed by tenants as capital assets when management concludes that the Company is the owner of such tenant improvements. For these tenant improvements, management records the amount funded or reimbursed by tenants as deferred revenue, which is amortized as additional rental income over the term of the related lease. When management concludes that the tenant is the owner of tenant improvements for accounting purposes, management records the Company’s contribution towards those improvements as a lease incentive, which is amortized as a reduction to rental revenue on a straight-line basis over the term of the lease. In January 2014, the Company entered into an agreement to license certain intellectual property to a third party. In consideration, the Company received warrants to purchase shares of common stock, which were valued based on an appraisal of the warrants by an independent third party appraiser. The revenue from the licensing agreement, which is initially recorded as deferred revenue, is being amortized over the ten year term of the licensing agreement. The Company records rents due from the tenants on a current basis. However, as part of the Line of Credit Agreement, the Company has deferred collection of such rents until the tenants receive the proper governmental licenses to begin operation. Management has decided to reserve these deferred amounts due to the contingency factor and experience with typical delays in governmental action. |
Leases as Lessor | Leases as Lessor The Company currently leases properties in locations that would be acceptable for regulatory purposes and acceptable to sub-lessees for the manufacturing and development of their products. The Company evaluates the lease to determine its appropriate classification as an operating or capital lease for financial reporting purposes. The Company currently has a number of leases, which are all classified as operating leases. Minimum base rent for the Company’s operating leases, which generally have escalating rentals over the term of the lease, is recorded on a straight-line basis over the lease term. The initial rent term includes the build-out, or may include a short rent holiday period, for the Company’s leases, where no rent payments are typically due under the terms of the lease. |
Leases | Leases For lease agreements that provide for escalating rent payments or free-rent occupancy periods, the Company recognizes rent expense on a straight-line basis over the non-cancelable lease term and option renewal periods where failure to exercise such options would result in an economic penalty in such amount that renewal appears, at the inception of the lease, to be reasonably assured. The lease term commences on the date that the Company takes possession of or controls the physical use of the property. Deferred rent is presented on current liabilities section on the consolidated balance sheets. |
Income Taxes | Income Taxes Income taxes are provided for using the liability method of accounting in accordance with the Income Taxes Topic of the FASB ASC. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized and when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The computation of limitations relating to the amount of such tax assets, and the determination of appropriate valuation allowances relating to the realizing of such assets, are inherently complex and require the exercise of judgment. As additional information becomes available, the Company continually assesses the carrying value of their net deferred tax assets. |
Research and Development Costs | Research and Development Costs Research and development costs are charged to the statement of operations as incurred. |
Preferred Stock | Preferred Stock The Company applies the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity” when determining the classification and measurement of preferred stock. Preferred shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. It classifies conditionally redeemable preferred shares (if any), which includes preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control, as temporary equity. At all other times, it classifies its preferred shares in stockholders’ equity. Preferred shares do not feature any redemption rights within the holders’ control or conditional redemption features not within our control. Accordingly all issuances of preferred stock are presented as a component of consolidated stockholders’ equity (deficit). |
Common Stock Purchase Warrants and Other Derivative Financial Instruments | Common Stock Purchase Warrants and Other Derivative Financial Instruments The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net-cash settlement or settlement in our own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC 815-40 (“Contracts in Entity’s Own Equity”). The Company classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of its common stock purchase warrants and other free standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes compensation expense for stock-based compensation in accordance with ASC Topic 718. For employee stock-based awards, it calculates the fair value of the award on the date of grant using the Black-Scholes method for stock options and the quoted price of our common stock for unrestricted shares; the expense is recognized over the service period for awards expected to vest. For non-employee stock-based awards, it calculates the fair value of the award on the date of grant in the same manner as employee awards, however, the awards are revalued at the end of each reporting period and the pro rata compensation expense is adjusted accordingly until such time the nonemployee award is fully vested, at which time the total compensation recognized to date equals the fair value of the stock-based award as calculated on the measurement date, which is the date at which the award recipient’s performance is complete. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. The Company considers many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience. |
Loss Per Common Share | Loss per common share Net loss per share is provided in accordance with ASC Subtopic 260-10. The Company presents basic loss per share (“EPS”) and diluted EPS on the face of statements of operations. Basic EPS is computed by dividing reported losses by the weighted average shares outstanding. Loss per common share has been computed using the weighted average number of common shares outstanding during the year. |
Significant and Critical Acco23
Significant and Critical Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful of Property and Equipment | The Company intends to take depreciation or amortization on a straight-line basis for all properties, beginning when they are put into service, using the following life expectancy: Equipment – 5 years Leasehold Improvements – 10 years, or the term of the lease, whichever is shorter Buildings – 20 years |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | As of December 31, 2016 and 2015, fixed assets and the estimated lives used in the computation of depreciation are as follows: Estimated Useful Lives December 31, 2016 December 31, 2015 Machinery and equipment 5 years $ 39,145 $ 174,145 Leasehold improvements 10 years 728,414 664,609 767,559 838,754 Less: Accumulated depreciation and amortization (9,447 ) - Property and equipment, net $ 758,112 $ 838,754 |
Convertible Note Payable (Table
Convertible Note Payable (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Liabilities Measured Using Fair Significant Unobservable Inputs (Level 3) | The table below provides a reconciliation of the beginning and ending balances for the liabilities measured using fair significant unobservable inputs (Level 3): Balance at January 1, 2015 $ - Issuance of embedded conversion features on convertible note 342,604 Change in fair value during period (133,809 ) Balance at December 31, 2015 208,795 Issuance of embedded conversion features on convertible note 134,846 Change in fair value during period (5,359 ) Balance at December 31, 2016 $ 338,282 |
Schedule of Assumptions Used Black Scholes Model | The following assumptions were used in calculations of the Black Scholes model for the year ended December 31, 2016 and 2015 Year ended December 31, 2016 2015 Risk-free interest rates 0.29-1.20 % 0.52-0.65 % Expected life 0.25-1 year 1 year Expected dividends 0 % 0 % Expected volatility 142-356 % 345-348 Diego Pellicer Worldwide, Inc. Common Stock fair value $ 0.20 -0.77 $ $0.75 -$1.24 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Fair Value on a Recuring Basis | The following table presents our warrants and embedded conversion features which have no observable market data and are derived using Black-Scholes measured at fair value on a recurring basis, using Level 3 inputs, as of December 31, 2016 and 2015: For the Year Ended December 31, 2016 For the Year Ended December 31, 2015 Annual dividend yield 0 % 0 % Expected life (years) 5 1-10 Risk-free interest rate 0.90 % 0.52% – 2.14 % Expected volatility 266 % 323%-354 % |
Schedule of Stock Warrant Activity | The following represents a summary of all common stock warrant activity: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term Balance outstanding, January 31, 2015 790,798 0.26 4.03 Granted 1,110,628 1.17 5.18 Balance outstanding, December 31, 2015 1,901,426 $ 1.21 4.40 Granted 125,887 - - Balance outstanding, December 31, 2016 2,027,313 $ 1.18 3.43 Exercisable, December 31, 2016 1,991,172 $ 1.18 3.43 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Colorado [Member] | |
Schedule of Minimal Annual Lease Payments Under Operating Leases | As of December 31, 2016, the aggregate remaining minimal annual lease payments under these operating leases were as follows: 2017 $ 1,055,472 2018 868,038 2019 346,566 Total $ 2,270,076 |
Washington [Member] | |
Schedule of Minimal Annual Lease Payments Under Operating Leases | As of September 30, 2016, the aggregate remaining minimal annual lease payments due under these operating leases were as follows: 2017 $ 87,723 2018 67,365 Total $ 155,088 |
Deferred Tax Assets and Incom28
Deferred Tax Assets and Income Tax Provision (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of Effective Income Tax Benefit Rate | The reconciliation of income tax benefit at the U.S. statutory rate of 34% for the year ended December 31, 2016 and for the year ended December 31, 2015 respectively to the Company’s effective tax rate is as follows: Year Ended Year Ended December 31, 2016 December 31, 2015 Statutory federal income tax rate -34 % -34 % State income tax, net of federal benefits -6 % -6 % Change in valuation allowance 40 % 40 % Income tax provision (benefit) - % - % |
Schedule of Income Tax Benefit | The benefit for income tax is summarized as follows: Year Ended December 31, 2016 Year Ended December 31, 2015 Federal Current $ -- $ -- Deferred (2,353,000 ) (5,395,000 ) State Current - -- Deferred (415,000 ) (952,000 ) Change in valuation allowance 2,769,000 6,347,000 Income tax provision (benefit) $ - $ - |
Schedule of Deferred Tax Assets | Deferred tax assets (liabilities) consist of the following Year Ended Year Ended December 31, 2016 December 31, 2015 Net operating loss carry forwards $ (11,1880,000 ) $ (8,419,000 ) Warrants issued for services 288,000 230,000 Impairment of investment 620,000 164,000 Interest expense on convertible notes 413,000 297,000 Change in fair value of derivative liability (52,000 ) (54,000 ) Total gross deferred tax asset/liabilities (10,064,069 ) (7,782,000 ) Valuation allowance 10,064,069 7,782,000 Net deferred taxes $ - $ - |
Organization and Operations (De
Organization and Operations (Details Narrative) - Type 1 Media, Inc [Member] | 12 Months Ended |
Dec. 31, 2016USD ($)shares | |
Number of shares issued and outstanding prior merger | 62,700,000 |
Number of shares agreed to issued and outstanding by principal owner | $ | $ 55,000,000 |
Consideration for agreed shares | $ | $ 169,000 |
Number of shares cancellation during the period | 55,000,000 |
Exchanged for right to receive share | 1 |
Number of common shares issued to exchange for common shares | 21,632,252 |
Percentage of combined entity | 74.00% |
Significant and Critical Acco30
Significant and Critical Accounting Policies and Practices (Details Narrative) | Dec. 31, 2016USD ($) |
Accounting Policies [Abstract] | |
Cash insured by FDIC | $ 250,000 |
Allowance for doubtful accounts | $ 0 |
Significant and Critical Acco31
Significant and Critical Accounting Policies and Practices - Schedule of Estimated Useful of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Equipment [Member] | |
Property and equipment life expectancy | 5 years |
Leasehold Improvements [Member] | |
Property and equipment life expectancy | 10 years |
Building [Member] | |
Property and equipment life expectancy | 20 years |
Going Concern (Details Narrativ
Going Concern (Details Narrative) | 12 Months Ended | |
Dec. 31, 2016USD ($)Integer | Dec. 31, 2015USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Working capital deficit | $ 4,411,156 | |
Accumulated deficit | $ (28,114,125) | $ (21,047,440) |
Number of leased property | Integer | 4 |
Revolving Credit Line (Details
Revolving Credit Line (Details Narrative) - USD ($) | Sep. 07, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Advances under line of credit | $ 200,000 | $ 707,250 | ||
Accrued interest | 153,523 | 70,596 | ||
Written off uncollectable line of credits | 777,846 | |||
Repayment received under line of credit | $ 200,000 | 200,000 | ||
Interest income | $ 153,523 | |||
Revolving Credit Facility [Member] | Tenant [Member] | ||||
Line of credit | $ 2,500,000 | |||
Line of credit annual interest rate | 20.00% |
Note Receivable (Details Narrat
Note Receivable (Details Narrative) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Receivables [Abstract] | |
Advanced to unrelated third party | $ 40,000 |
Note due date | Nov. 10, 2015 |
Investment (Details Narrative)
Investment (Details Narrative) - USD ($) | Oct. 10, 2014 | Jan. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 |
Common stock exercise price per share | $ 0.026 | |||
Impairment loss of investment | $ 73,334 | $ 408,900 | ||
Plandai Biotechnology, Inc. [Member] | ||||
Common stock exercise price per share | $ 0.07 | |||
Sale of stock price per share | $ 0.50 | |||
Fair value of warrants | $ 525,567 | |||
Impairment loss of investment | $ 408,900 | |||
License Agreement [Member] | Plandai Biotechnology, Inc. [Member] | ||||
Issuance of warrant to purchase of common stock, shares | 1,666,667 | |||
License agreement term | 10 years | |||
Common stock exercise price per share | $ 0.01 |
Property and Equipment (Details
Property and Equipment (Details Narrative) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Property, Plant and Equipment [Abstract] | |
Impaired leasehold improvements | $ 1,066,664 |
Discounted cash flow from sublease | 30.00% |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property and Equipment, gross | $ 767,559 | $ 838,754 |
Less: Accumulated depreciation and amortization | (9,447) | |
Property and Equipment, net | 758,112 | 838,754 |
Machinery and Equipment [Member] | ||
Property and Equipment, gross | $ 39,145 | 174,145 |
Property and Equipment Estimated Useful Lives | 5 years | |
Leasehold Improvements [Member] | ||
Property and Equipment, gross | $ 728,414 | $ 664,609 |
Property and Equipment Estimated Useful Lives | 10 years |
Related Party (Details Narrativ
Related Party (Details Narrative) - USD ($) | Jun. 30, 2016 | Jun. 02, 2016 | Apr. 14, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Aug. 12, 2016 |
Unpaid consulting fees to related party | $ 509,294 | $ 511,454 | ||||
Consulting fees expenses | 715,533 | $ 652,500 | ||||
Number of common stock issued for service, shares | 3,881,251 | |||||
Number of common stock issued for service | 1,259,945 | $ 9,523,908 | ||||
Accrued compensation | $ 6,250 | |||||
Share issued price per share | $ 0.026 | |||||
Mr. Throgmartin [Member] | ||||||
Number of common stock issued for service, shares | 1,900,000 | |||||
Number of common stock issued for service | $ 1,577,000 | $ 1,735,455 | ||||
Accrued compensation | $ 281,914 | |||||
Conversion of stock, amount converted | $ 140,957 | |||||
Conversion of stock, shares converted | 396,190 | |||||
Stock conversion percentage | 50.00% | |||||
Share issued price per share | $ 0.30 | |||||
Debt instrument interest rate | 8.00% | |||||
Aggregate principal and accrued interest amount | $ 1,480,000 | |||||
Gross revenues | 3,000,000 | |||||
Alan Valdes [Member] | ||||||
Number of common stock issued for service | $ 201,354 | |||||
Accrued compensation | $ 332,709 | |||||
Conversion of stock, amount converted | $ 166,355 | |||||
Conversion of stock, shares converted | 554,517 | |||||
Stock conversion percentage | 50.00% | |||||
Share issued price per share | $ 0.30 | |||||
Debt instrument interest rate | 8.00% | |||||
Aggregate principal and accrued interest amount | 1,480,000 | |||||
Gross revenues | $ 3,000,000 |
Note Payable (Details Narrative
Note Payable (Details Narrative) - USD ($) | Feb. 08, 2016 | Nov. 27, 2015 | Aug. 31, 2015 | Jul. 08, 2015 | May 20, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Note maturity date | Nov. 10, 2015 | ||||||
Note payable | $ 1,310,678 | $ 846,628 | |||||
Received minimum note payable amount | $ 40,000 | ||||||
Number of common stock issued, shares | 3,881,251 | ||||||
Common stock issued during period | 845,491 | $ 1,164,375 | |||||
Note Payable One [Member] | |||||||
Note payable principal amount | $ 450,000 | ||||||
Annual interest rate | 10.00% | ||||||
Note maturity date | Nov. 17, 2015 | ||||||
Note payable | $ 450,000 | $ 450,000 | |||||
Note Payable One [Member] | April 11, 2017 [Member] | |||||||
Note maturity date | Apr. 10, 2019 | ||||||
Note Payable Two [Member] | |||||||
Note payable principal amount | $ 135,628 | ||||||
Annual interest rate | 10.00% | ||||||
Note maturity date | Oct. 6, 2015 | ||||||
Note payable | $ 135,628 | ||||||
Fair value of warrants | $ 90,563 | ||||||
Proceeds from debt | $ 45,065 | ||||||
Note Payable Two [Member] | April 11, 2017 [Member] | |||||||
Note maturity date | Apr. 10, 2019 | ||||||
Note Payable Three [Member] | |||||||
Note payable principal amount | $ 126,000 | ||||||
Annual interest rate | 5.00% | ||||||
Note maturity date | Oct. 31, 2015 | ||||||
Note payable | $ 126,000 | ||||||
Proceeds from debt | $ 42,000 | ||||||
Received minimum note payable amount | $ 126,000 | ||||||
Number of common stock issued, shares | 126,000 | ||||||
Common stock issued during period | $ 84,000 | ||||||
Note Payable Four [Member] | |||||||
Note payable principal amount | $ 135,000 | 5,950 | |||||
Note maturity date | Jan. 26, 2016 | ||||||
Note payable | 129,050 | ||||||
Accrued interest | $ 15,000 | 15,000 | |||||
Note Payable Five [Member] | |||||||
Note payable principal amount | $ 470,000 | ||||||
Annual interest rate | 12.00% | ||||||
Note maturity date | Feb. 7, 2017 | ||||||
Note payable | $ 470,000 | ||||||
Note Payable Five [Member] | April 11, 2017 [Member] | |||||||
Note maturity date | Apr. 10, 2019 |
Convertible Note Payable (Detai
Convertible Note Payable (Details Narrative) - USD ($) | Oct. 24, 2016 | Oct. 21, 2016 | Oct. 17, 2016 | Jul. 11, 2016 | Apr. 02, 2016 | May 29, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 26, 2015 | Dec. 31, 2014 |
Note maturity date | Nov. 10, 2015 | |||||||||
Conversion feature embedded in notes | $ (6,667) | |||||||||
Convertible debt outstanding principle balance | 334,156 | 300,000 | ||||||||
Debt discount | $ 82,458 | |||||||||
Accrued interest | 153,523 | $ 70,596 | ||||||||
Fixed price per share | $ 0.026 | |||||||||
Warrant [Member] | ||||||||||
Proceeds of the notes and warrants fair value | $ 225,920 | |||||||||
Convertible Debt [Member] | ||||||||||
Proceeds of the notes and warrants fair value | 74,080 | |||||||||
Third Parties [Member] | ||||||||||
Convertible debt principal amount | $ 3,000 | $ 50,000 | $ 2,500 | $ 50,000 | $ 25,000 | $ 300,000 | ||||
Annual interest rate | 10.00% | 10.00% | 10.00% | 12.00% | 8.00% | 10.00% | ||||
Note maturity date | Apr. 11, 2017 | Oct. 1, 2016 | Nov. 26, 2015 | |||||||
Common stock price | $ 0.30 | $ 1.50 | ||||||||
Conversion feature embedded in notes | $ 6,667 | $ 342,604 | ||||||||
Derivative liability | $ 5,273 | $ 4,905 | $ 85,274 | $ 12,608 | $ 342,604 | |||||
Convertible debt outstanding principle balance | $ 300,000 | $ 300,000 | ||||||||
Lowest closing price of common stock | 50.00% | 50.00% | 50.00% | 45.00% | 80.00% | |||||
Debt discount | $ 2,500 | |||||||||
Debt issuance cost | $ 2,405 | |||||||||
Fixed price per share | $ 0.20 | $ 0.20 | $ 0.20 | |||||||
Third Parties 1 [Member] | ||||||||||
Convertible debt principal amount | $ 15,000 | |||||||||
Annual interest rate | 10.00% | |||||||||
Derivative liability | $ 26,366 | |||||||||
Convertible debt outstanding principle balance | 25,000 | |||||||||
Lowest closing price of common stock | 50.00% | |||||||||
Accrued interest | $ 1,522 | |||||||||
Number of common stock shares converted | 88,407 | |||||||||
Fixed price per share | $ 0.20 | |||||||||
Third Parties 2 [Member] | ||||||||||
Convertible debt outstanding principle balance | $ 50,000 | |||||||||
Third Parties 3 [Member] | ||||||||||
Convertible debt outstanding principle balance | 2,500 | |||||||||
Third Parties 4 [Member] | ||||||||||
Convertible debt outstanding principle balance | 50,000 | |||||||||
Third Parties 5 [Member] | ||||||||||
Convertible debt outstanding principle balance | 3,000 | |||||||||
Debt discount | 3,000 | |||||||||
Debt issuance cost | 2,273 | |||||||||
Third Parties 6 [Member] | ||||||||||
Convertible debt outstanding principle balance | 15,000 | |||||||||
Debt discount | 15,000 | |||||||||
Debt issuance cost | $ 11,366 |
Convertible Note Payable - Sche
Convertible Note Payable - Schedule of Liabilities Measured Using Fair Significant Unobservable Inputs (Level 3) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Disclosure [Abstract] | ||
Balance, beginning | $ 208,795 | |
Issuance of embedded conversion features on convertible note | 134,846 | 342,604 |
Change in fair value during period | 4,720 | (133,809) |
Balance, ending | $ 338,282 | $ 208,795 |
Convertible Note Payable - Sc42
Convertible Note Payable - Schedule of Assumptions Used Black Scholes Model (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Expected life | 1 year | |
Expected dividends | 0.00% | 0.00% |
Minimum [Member] | ||
Risk-free interest rates | 0.29% | 0.52% |
Expected life | 3 months | |
Expected volatility | 142.00% | 345.00% |
Diego Pellicer Worldwide, Inc. Common Stock fair value | $ 0.20 | $ 0.75 |
Maximum [Member] | ||
Risk-free interest rates | 1.20% | 0.65% |
Expected life | 1 year | |
Expected volatility | 356.00% | 348.00% |
Diego Pellicer Worldwide, Inc. Common Stock fair value | $ 0.77 | $ 1.24 |
Stockholders' Equity (Deficit43
Stockholders' Equity (Deficit) (Details Narrative) - USD ($) | Jun. 02, 2016 | Apr. 14, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 24, 2016 | Oct. 21, 2016 | Oct. 17, 2016 |
Number of common stock issued for services | $ 1,259,945 | $ 9,523,908 | |||||
Number of common stock issued, shares | 3,881,251 | ||||||
Number of common stock issued | $ 845,491 | $ 1,164,375 | |||||
Common stock exercise price per share | $ 0.026 | ||||||
Number of common stock shares were returned as treasury stock | 58,200 | ||||||
Number of shares issued | 126,000 | ||||||
Number of shares issued, value | $ 126,000 | ||||||
Preferred stock shares issued and subsequently converted to common shares in reverse merger | 753,333 | ||||||
Preferred stock shares par value | $ 0.000001 | $ 0.000001 | |||||
Preferred Stock, shares outstanding | 0 | ||||||
Warrants outstanding | 1,991,172 | ||||||
Equity Incentive Plan [Member] | |||||||
Common stock shares reserved | 2,480,000 | ||||||
Stock option term | 10 years | ||||||
Stock option granted | 1,775,000 | ||||||
Shares available for future grants | 705,000 | ||||||
Warrant [Member] | |||||||
Stock option granted | 200,000 | ||||||
Common Stock [Member] | |||||||
Number of common stock issued for services, shares | 4,300,000 | ||||||
Number of common stock issued, shares | 37,805,416 | ||||||
Mr. Throgmartin [Member] | |||||||
Number of common stock issued for services, shares | 2,428,193 | ||||||
Number of common stock issued for services | $ 1,577,000 | $ 1,735,455 | |||||
Number of common stock issued, shares | 1,900,000 | ||||||
Common stock shares converted | 396,190 | ||||||
Common stock exercise price per share | $ 0.30 | ||||||
Alan Valdes [Member] | |||||||
Number of common stock issued for services, shares | 671,181 | ||||||
Number of common stock issued for services | $ 201,354 | ||||||
Common stock shares converted | 554,517 | ||||||
Common stock exercise price per share | $ 0.30 | ||||||
Mr. Steve Norris [Member] | |||||||
Number of common stock issued for services, shares | 238,333 | ||||||
Number of common stock issued for services | $ 88,000 | ||||||
Mr. Strachan [Member] | |||||||
Number of common stock issued for services, shares | 128,333 | ||||||
Number of common stock issued for services | $ 38,500 | ||||||
Third Parties [Member] | |||||||
Number of common stock issued for services, shares | 2,228,297 | ||||||
Number of common stock issued for services | $ 1,259,944 | ||||||
Common stock exercise price per share | $ 0.20 | $ 0.20 | $ 0.20 | ||||
Investors [Member] | |||||||
Number of common stock issued, shares | 5,393,718 | ||||||
Number of common stock issued | $ 865,491 | ||||||
Former Shareholders [Member] | Parent Company [Member] | |||||||
Restricted common stock shares issued | $ 29,498,165 | ||||||
Former Shareholders [Member] | Parent Company [Member] | Restricted Stock [Member] | |||||||
Common stock shares converted | 13,520,000 | ||||||
Common stock conversion basis | restricted common shares on a 1:1 basis. | ||||||
Former Shareholders [Member] | Series A and B Preferred Stock [Member] | Parent Company [Member] | Restricted Stock [Member] | |||||||
Common stock shares converted | 5,841,097 | ||||||
Common stock conversion basis | restricted common shares on a 1:1 basis. | ||||||
Non Employees [Member] | |||||||
Number common stock shares awarded | 2,451,935 | ||||||
Common stock exercise price per share | $ 0.9375 |
Stockholders' Equity (Deficit44
Stockholders' Equity (Deficit) - Fair Value on a Recuring Basis (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Annual dividend yield | 0.00% | 0.00% |
Expected life (years) | 5 years | |
Risk-free interest rate | 0.90% | |
Risk-free interest rate, Minimum | 0.52% | |
Risk-free interest rate, Maximum | 2.14% | |
Expected volatility | 266.00% | |
Expected volatility, Minimum | 323.00% | |
Expected volatility, Maximum | 354.00% | |
Maximum [Member] | ||
Expected life (years) | 1 year | |
Minimum [Member] | ||
Expected life (years) | 10 years |
Stockholders' Equity (Deficit45
Stockholders' Equity (Deficit) - Schedule of Stock Warrant Activity (Details) - Warrant [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Warrants, Outstanding, Beginning balance | 1,901,426 | 790,798 |
Number of Warrants, Granted | 125,887 | 1,110,628 |
Number of Warrants, Outstanding, Ending balance | 2,027,313 | 1,901,426 |
Number of Warrants, Exercisable | 1,991,172 | |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 1.21 | $ 0.26 |
Weighted Average Exercise Price, Granted | 1.17 | |
Weighted Average Exercise Price, Outstanding, Ending balance | 1.18 | $ 1.21 |
Weighted Average Exercise Price, Exercisable | $ 1.18 | |
Weighted Average Remaining Contractual Term, Beginning | 4 years 4 months 24 days | 4 years 11 days |
Weighted Average Remaining Contractual Term, Ending | 3 years 5 months 5 days | 4 years 4 months 24 days |
Weighted Average Remaining Contractual Term, Exercisable | 3 years 5 months 5 days |
Commitments and Contingencies46
Commitments and Contingencies (Details Narrative) | 12 Months Ended | |
Dec. 31, 2016USD ($)Integer | Dec. 31, 2015USD ($) | |
Number of leased property | 4 | |
Operating lease rent expenses | $ | $ 1,103,824 | $ 1,228,028 |
Colorado And Washington [Member] | ||
Number of leased property | 4 | |
Colorado [Member] | ||
Lease term | 5 years | |
Colorado [Member] | Minimum [Member] | ||
Lease term | 3 years | |
Colorado [Member] | Maximum [Member] | ||
Lease term | 5 years | |
Washington [Member] | ||
Number of leased property | 1 | |
Lease term | 5 years | |
Option term | 5 years |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Minimal Annual Lease Payments Under Operating Leases (Details) | Dec. 31, 2016USD ($) |
Colorado [Member] | |
2,017 | $ 1,055,472 |
2,018 | 868,038 |
2,019 | 346,566 |
Total | 2,270,076 |
Washington [Member] | |
2,017 | 87,723 |
2,018 | 67,365 |
Total | $ 155,088 |
Deferred Tax Assets and Incom48
Deferred Tax Assets and Income Tax Provision (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Percentage of reconciliation of income tax benefit at U.S. statutory rate | 34.00% | 34.00% |
Federal net operating loss carryovers | $ 25,160,000 | |
Net operating loss carryovers expire year | 2,033 | |
Percentage of changes in ownership | 50.00% |
Deferred Tax Assets and Incom49
Deferred Tax Assets and Income Tax Provision - Schedule of Reconciliation of Effective Income Tax Benefit Rate (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal income tax rate | (34.00%) | (34.00%) |
State income tax, net of federal benefits | (6.00%) | (6.00%) |
Change in valuation allowance | 40.00% | 40.00% |
Income tax provision (benefit) |
Deferred Tax Assets and Incom50
Deferred Tax Assets and Income Tax Provision - Schedule of Income Tax Benefit (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Federal Current | ||
Federal Deferred | (2,353,000) | (5,395,000) |
State Current | ||
State Deferred | (415,000) | (952,000) |
Change in valuation allowance | 2,769,000 | 6,347,000 |
Income tax provision (benefit) |
Deferred Tax Assets and Incom51
Deferred Tax Assets and Income Tax Provision - Schedule of Deferred Tax Assets Liabilities (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forwards | $ (111,880,000) | $ (8,419,000) |
Warrants issued for services | 288,000 | 230,000 |
Impairment of investment | 620,000 | 164,000 |
Interest expense on convertible notes | 413,000 | 297,000 |
Change in fair value of derivative liability | (52,000) | (54,000) |
Total gross deferred tax asset/liabilities | (10,064,069) | (7,782,000) |
Valuation allowance | 10,064,069 | 7,782,000 |
Net deferred taxes |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Number of common stock issued for services | $ 1,259,945 | $ 9,523,908 |
Number of shares issued for conversion of debt | 126,000 | |
Number of shares issued for conversion of debt value | $ 126,000 | |
Subsequent Event [Member] | ||
Number of common stock issued for services, shares | 161,593 | |
Number of common stock issued for services | $ 41,659 | |
Number of shares issued for conversion of debt | 469,260 | |
Number of shares issued for conversion of debt value | $ 50,000 |