Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Apr. 12, 2018 | Jun. 30, 2017 | |
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, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 229,650,261 | ||
Trading symbol | DPWW | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 158,702 | $ 51,333 |
Accounts receivable | 170,677 | |
Prepaid expenses | 21,621 | 482,765 |
Inventory | 32,945 | 47,025 |
Total current assets | 383,945 | 581,123 |
Property and equipment, net | 409,128 | 758,112 |
Investments, at cost | 43,333 | |
Security deposits | 320,000 | 320,000 |
Total assets | 1,113,073 | 1,702,568 |
Current liabilities: | ||
Accounts payable | 626,258 | 823,797 |
Accrued payable - related parties | 449,064 | 509,294 |
Accrued expenses | 207,558 | 1,207,803 |
Notes payable - related parties | 307,312 | 307,312 |
Notes payable | 133,403 | 1,310,678 |
Convertible notes, net of discount and costs | 468,116 | 334,156 |
Deferred rent | 251,878 | 107,957 |
Deferred revenue | 53,000 | 53,000 |
Derivative liabilities | 4,106,521 | 338,282 |
Warrant liabilities | 192,350 | |
Total current liabilities | 6,795,460 | 4,992,279 |
Deferred revenue | 262,000 | 316,000 |
Total liabilities | 7,057,460 | 5,308,279 |
Stockholders' deficit: | ||
Common stock, par value $.000001 per share; 195,000,000 shares authorized, 142,576,974 and 49,081,878 shares issued, respectively, | 143 | 49 |
Additional paid-in capital | 34,422,338 | 24,508,365 |
Stock to be issued | 2,397,218 | |
Accumulated deficit | (42,764,086) | (28,114,125) |
Total stockholders' deficit | (5,944,387) | (3,605,711) |
Total liabilities and stockholders' deficit | 1,113,073 | 1,702,568 |
Series A Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock, Series A and B, par value $.0001 per share; 5,000,000 shares authorized, none issued and outstanding | ||
Series B Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock, Series A and B, par value $.0001 per share; 5,000,000 shares authorized, none issued and outstanding |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Common stock, par value | $ .000001 | $ 0.000001 |
Common stock, shares authorized | 195,000,000 | 195,000,000 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ .0001 | $ .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 Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
REVENUES | ||
Net rental revenue | $ 1,486,997 | $ 310,220 |
Rental expense | (1,212,161) | (1,103,824) |
Gross Profit | 274,836 | (793,604) |
Operating expenses: | ||
General and administrative expenses | 5,704,621 | 5,003,357 |
Selling expense | 95,606 | 8,254 |
Depreciation expense | 456,918 | 9,447 |
Loss from Operations | (5,982,309) | (5,814,662) |
Other Income (Expense) | ||
Licensing revenue | 54,000 | 54,000 |
Other income (expense) | 85,084 | 1,786 |
Interest expense | (2,542,264) | (298,673) |
Interest expense related parties | (33,947) | (9,497) |
Impairment loss | (82,478) | (1,004,998) |
Extinguishment of debt | (4,180,253) | |
Change in derivative liabilities | (1,817,277) | 5,359 |
Change in value of warrants | (150,517) | |
Total Other Income (Loss) | (8,667,652) | (1,252,023) |
Provision for taxes | ||
NET LOSS | $ (14,649,961) | $ (7,066,685) |
Loss per share - basic and diluted | $ (0.23) | $ (0.17) |
Weighted average common shares outstanding - basic and diluted | 62,746,740 | 42,436,405 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Stock Payable [Member] | Accumulated Deficit [Member] | Total |
Balance, beginning at Dec. 31, 2015 | $ 38 | $ 20,111,077 | $ (21,047,440) | $ (936,325) | |
Balance, beginning, 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 services | $ 2 | 1,259,943 | 1,259,945 | ||
Issuance of common shares for services, shares | 2,228,297 | ||||
Non-employee stock compensation | $ 4 | 2,063,308 | 2,063,312 | ||
Non-employee stock compensation, shares | 3,466,040 | ||||
Common stock issued upon conversion of notes payable | 76,522 | 76,522 | |||
Common stock issued upon conversion of notes payable, shares | 255,074 | ||||
Fair value of warrants and options granted for services | 145,362 | 145,362 | |||
Beneficial conversion feature | 6,667 | 6,667 | |||
Shares issued for finance cost | |||||
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 | ||||
Sale of Common stock | $ 2 | 48,274 | 8,675 | 56,951 | |
Sale of Common stock, shares | 1,995,000 | ||||
Issuance of common shares for services | $ 0 | 5,521 | 5,521 | ||
Issuance of common shares for services, shares | 160,000 | ||||
Common stock issued upon conversion of notes payable | $ 83 | 7,293,164 | 33,400 | 7,326,647 | |
Common stock issued upon conversion of notes payable, shares | 83,049,602 | ||||
Fair value of warrants and options granted for services | 1,277,088 | 1,277,088 | |||
Issuance of common shares for services - related parties | $ 4 | 740,759 | 1,960,643 | 2,701,406 | |
Issuance of common shares for services - related parties, shares | 3,430,504 | ||||
Shares issued for finance cost | $ 4 | 256,323 | 256,327 | ||
Shares issued for finance cost, shares | 3,609,990 | ||||
Shares Issued to settle accrued compensation - related parties | $ 1 | 245,599 | 394,500 | 640,100 | |
Shares Issued to settle accrued compensation - related parties, shares | 1,000,000 | ||||
Shares Issued to settle accounts payable | $ 0 | 47,245 | 47,245 | ||
Shares Issued to settle accounts payable, shares | 250,000 | ||||
Net loss | (14,649,961) | (14,649,961) | |||
Balance, ending at Dec. 31, 2017 | $ 143 | $ 34,422,338 | $ 2,397,218 | $ (42,764,086) | $ (5,944,387) |
Balance, ending, shares at Dec. 31, 2017 | 142,576,974 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (14,649,961) | $ (7,066,685) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation | 456,918 | 9,447 |
Impairment on investment | 43,333 | 1,004,998 |
Impairment on leasehold improvement | 39,145 | |
Change in fair value of derivative liability | 1,817,277 | (5,359) |
Change in value of warrants | 150,517 | |
Amortization of discount | 770,301 | 105,169 |
Shares issued for finance fees | 256,327 | |
Extinguishment and conversion of debt | 5,729,836 | |
Stock based compensation - related parties | 3,978,493 | 3,468,619 |
Stock based compensation | 5,521 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (170,677) | 1,110 |
Inventory | 14,080 | 33,946 |
Prepaid expenses | 461,144 | 186,765 |
Other assets | 3,000 | |
Accounts payable | (150,294) | 1,472,125 |
Accrued liability - related parties | 579,870 | 305,152 |
Accrued expenses | (992,842) | (6,250) |
Deferred rent | 143,921 | (12,277) |
Derivative liability | 488,726 | |
Warrant liability | (992,842) | |
Deferred revenue | (54,000) | (54,000) |
Cash used in operating activities | (1,040,532) | (554,240) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (125,000) | (860,469) |
Cash used in investing activities | (125,000) | (860,469) |
Cash flows from financing activities: | ||
Proceeds from note payable | 464,050 | |
Debt costs | (58,500) | |
Proceeds from convertible notes payable | 1,403,500 | 120,500 |
Repayments of notes payable | (129,050) | |
Proceeds from sale of common stock | 56,951 | 845,491 |
Cash provided by financing activities | 1,272,901 | 1,430,041 |
Net increase (decrease) in cash | 107,369 | 15,332 |
Cash, beginning of period | 51,333 | 36,001 |
Cash, end of period | 158,702 | 51,333 |
Cash paid for interest | ||
Cash paid for taxes | ||
Supplemental schedule of noncash financial activities: | ||
Stock issued for accrued liability - related parties | 245,600 | |
Stock issued for accounts payable | 47,245 | |
Convertible notes and accrued interest converted to stock | 2,936,387 | |
Value of common stock to be issued for conversion of notes and accrued interest | 7,586,647 | |
Value of derivative liability extinguished upon conversion of notes and accrued interest | $ 6,066,511 |
Organization and Operations
Organization and Operations | 12 Months Ended |
Dec. 31, 2017 | |
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 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. Until Federal law allows, the Company will not 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, 2017 | |
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 because 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. 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. Reclassifications Certain prior year amounts were reclassified to conform to the manner of presentation in the current period. These reclassifications had no effect on the Company’s balance sheet, net loss or stockholders’ equity. 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 a 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 influence our estimates that could cause actual results to differ from our estimates. The Company intends to re-evaluate all 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 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, 2017 and 2016. 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, and the National Credit Union Share Insurance Fund, 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. Leasehold improvements are amortized over the term of the lease. 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 expectancies: 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 cost basis on the first-in, first-out (“FIFO”) method. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Inventory consists solely of finished goods. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are presented at their face amount, less an allowance for doubtful accounts. Accounts receivable consist of revenue earned and currently due from sub lessees. 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, 2017 and 2016, allowance for doubtful accounts is $9,908. 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 the following criteria are met in accordance with SEC Staff Accounting Bulletin 104, Revenue Recognition When the collectability is reasonably assured, in accordance with ASC Topic 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. When management concludes that the Company is the owner of tenant improvements, 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 an unrelated company. In consideration, the Company received warrants to purchase shares of the licensee’s common stock, the value of the warrants was recorded as an investment and the 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 a line of credit agreement, the Company has deferred collection of such rents until the tenants receive the proper governmental licenses to begin operation. For 2016, management had 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 to licensed cannabis operators for locations that meet the regulatory criteria applicable by the respective regulatory jurisdiction for the sale, production, and development of cannabis products. The Company evaluates the lease to determine its appropriate classification as an operating or capital lease for financial reporting purposes. The Company leases are currently all classified as operating leases. Minimum base rent is recorded on a straight-line basis over the lease term after an initial period during which the tenant is establishing the business and during which the Company may forbear some or all of the rent. The Company is more likely than not to forbear some or all of the rental income which it considers uncollectable during the tenant’s initial ramp-up period (see Revenue Recognition Leases as Lessee The Company recognizes rent expense on a straight-line basis over the non-cancelable lease term and certain 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. 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. 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 Topic 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. 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. The Company 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. 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 The Company utilizes ASC 260, “Earnings Per Share” for calculating the basic and diluted loss per share. In accordance with ASC 260, the basic and diluted loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted net loss per share is computed similar to basic loss per share except that the denominator is adjusted for the potential dilution that could occur if stock options, warrants, and other convertible securities were exercised or converted into common stock. Potentially dilutive securities are not included in the calculation of the diluted loss per share if their effect would be anti-dilutive. The Company has 142,576,974 and 5,417,837 common stock equivalents at December 31, 2017 and 2016, respectively. For the years ended December 31, 2017 and 2016 these potential shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per share. Legal and regulatory environment The cannabis industry is subject to numerous laws and regulations of federal, state and local governments. These laws and regulations include, but are not limited to, matters such as licensure, accreditation, and different taxation between federal and state. Federal government activity may increase in the future with respect to companies involved in the cannabis industry concerning possible violations of federal statutes and regulations. Management believes that the Company is in compliance with local, state and federal regulations, While no regulatory inquiries have been made, compliance with such laws and regulations can be subject to future government review and interpretation, as well as regulatory actions unknown or unasserted at this time. New accounting pronouncements Recent Accounting Pronouncements. On December 22, 2017 the SEC staff issued Staff Accounting Bulletin 118 (SAB 118), which provides guidance on accounting for the tax effects of the Tax Cuts and Jobs Act (the TCJA). SAB 118 provides a measurement period that should not extend beyond one year from the enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the TCJA for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the TCJA is incomplete but for which they are able to determine a reasonable estimate, it must record a provisional amount in the financial statements. Provisional treatment is proper in light of anticipated additional guidance from various taxing authorities, the SEC, the FASB, and even the Joint Committee on Taxation. If a company cannot determine a provisional amount to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the TCJA. The Company has applied this guidance to its financial statements. In May 2014, the FASB issued ASU for guidance to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP and International Financial Reporting Standards. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Lease contracts will be excluded from this revenue recognition criteria In February 2016, the Financial Accounting Standards Board (FASB) issued guidance that requires a lessee to recognize assets and liabilities arising from leases on the balance sheet. Previous GAAP did not require lease assets and liabilities to be recognized for most leases. Additionally, companies are permitted to make an accounting policy election not to recognize lease assets and liabilities for leases with a term of 12 months or less. For both finance leases and operating leases, the lease liability should be initially measured at the present value of the remaining contractual lease payments. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee will not significantly change under this new guidance. This new guidance is effective for the company as of the first quarter of fiscal year 2020. The Company is evaluating the effect that this ASU will have on its financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 clarifies the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. This ASU is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. The Company is currently assessing the potential impact of ASU 2016-15 on its financial statements and related disclosures. In April 2016 the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606). The core principle of Topic 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services This ASU is effective for public business entities for fiscal years, and interim periods within those years, beginning after January 1. 2018. The Company is currently assessing the potential impact of ASU 2016-10 on its financial statements and related disclosures. The Company believes that other 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. |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2017 | |
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 $6,411,515, and has an accumulated deficit of $42,764,086 at December 31, 2017. 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. The Company believes that it has sufficient cash on hand and cash generated by real estate leases to sustain operations provided that management and board members continue to agree to be paid company stock in exchange for accrued compensation. Through December 31, 2017, management and board members have accepted stock for accrued compensation at the same discount that has been extended to the convertible noteholders of fifty percent. There are other future noncash charges in connection with financing such as a change in derivative liability that will affect income but have no effect on cash flow. Although the Company has been successful raising additional capital, there is no assurance that the company will sell additional shares of stock or borrow additional funds. The Company’s inability to raise 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. 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. However, cash generated from lease revenues is currently exceeding lease costs, but is insufficient to cover operating expenses. |
Investment
Investment | 12 Months Ended |
Dec. 31, 2017 | |
Schedule of Investments [Abstract] | |
Investment | Note 4 – 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. common stock. This licensing agreement carries a 10-year term with an exercise price of $0.01 per share. The Company was to obtain certain trademark rights certified by the government. The warrant has a restriction on them requiring that the sale of such shares must reach a certain traded price of $0.50 per share. In 2014, 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. During the years ended December 31, 2017 and 2016, the Company recorded impairment losses of $43,333 and $73,334, respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 5 – Property and Equipment As of December 31, 2017 and 2016, fixed assets and the estimated lives used in the computation of depreciation are as follows: Estimated Useful Lives December 31, 2017 December 31, 2016 Machinery and equipment 5 years $ - $ 39,145 Leasehold improvements 10 years 853,413 728,413 853,413 767,558 Less: Accumulated depreciation and amortization (444,285 ) (9,446 ) Property and equipment, net $ 409,128 $ 758,112 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. During 2017, the Company abandoned equipment with a cost basis of $39,145. This loss is included in the impairment loss for the year ended December 31, 2017. |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Note 6 – Other Assets Security deposits Deposits – end of lease |
Related Party
Related Party | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party | Note 7 – Related Party As of December 31, 2017 and 2016, the Company has accrued fees to related parties in the amount of $449,064 and $509,294, respectively. For the years ended December 31, 2017 and 2016, total cash based compensation was $693,093 and $2,424,100, respectively to related parties. For the years ended December 31, 2017 and 2016, total share-based compensation was $3,984,014 and $105,233, 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. The balance of the above two notes, aggregating $307,312 at December 31, 2017 and 2016, is reported as related party notes payable on the balance sheet. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2017 | |
Notes Payable [Abstract] | |
Notes Payable | Note 8 – Notes Payable On April 11, 2017, the Company issued two convertible notes aggregating $2,123,676 (see Note 9). These were issued to refinance the following notes: On May 20, 2015, the Company issued a note in total amount of $450,000 with third parties for use as operating capital. As of December 31, 2016, the outstanding principle balance of the note was $450,000. On July 8, 2015, the Company issued a note in total amount of $135,628 with third parties for use as operating capital. As of December 31, 2016, the outstanding principle balance of the note was $135,628. On February 8, 2016, the Company issued 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 was $470,000. In accordance with in accordance with FASB Codification- Liabilities, 470-50-40-10, these liabilities were considered extinguished and a loss on extinguishment of debt was recorded in the amount of $5,607,836. On August 31, 2015, the Company issued a note in total amount of $126,000 with third parties for use as operating capital. The note was amended to include accrued interest on October 31, 2016 and extended the maturity date to October 31, 2018. As of December 31, 2017 and 2016, the outstanding principal balance of the note was $133,403 and $126,000, respectively. 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. This note was extinguished during 2017 by applying the balance against rental income. |
Convertible Notes Payable
Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | Note 9 – Convertible Notes Payable In addition to the two notes issued on April 11, 2017 referred to in Note 8, the Company issued several convertible notes during the year ended December 31, 2017. The note holders shall have the right to convert principal and accrued interest outstanding into shares of common stock at a discounted price to the market price of our common stock. The conversion feature was recognized as an embedded derivative and was valued using a Black Scholes model that resulted in a derivative liability of $4,106,521 at December 31, 2017. In connection with the issuance of certain of these notes, the Company also 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. Several convertible note holders elected to convert their notes to stock during the year ended December 31, 2017. The table below provides a reconciliation of the beginning and ending balances for the liabilities measured using fair significant unobservable inputs (Level 3) for the year ended December 31, 2017: Convertible notes Discount Convertible Note Net of Discount Derivative Liabilities Balance, December 31, 2016 370,500 36,344 334,156 338,282 Issuance of convertible notes 3,587,342 1,403,500 2,183,842 8,017,473 Conversion of convertible notes (2,986,387 ) (166,204 ) (2,820,183 ) (6,066,511 ) Change in fair value of derivatives — — — 1,817,277 Amortization — (770,301 ) 770,301 — Balance December 31, 2017 $ 971,455 $ 503,339 $ 468,116 $ 4,106,521 During the year ended December 31, 2017, $2,986,387 of notes and $139,263 of accrued interest was converted into 83,916,269 shares of common stock. A gain on extinguishment of debt of $1,427,583 has been recorded related to these conversions. The following assumptions were used in calculations of the Black Scholes model for the periods ended December 31, 2017 and 2016. December 31, 2017 December 31, 2016 Risk-free interest rates 1.28-1.76 % 0.29-1.2 % Expected life 0.02-1.23 year 0.25-1 year Expected dividends 0 % 0 % Expected volatility 211-354 % 142-356 Diego Pellicer Worldwide, Inc. Common Stock fair value $ 0.08 $ 0.20 -0.77 |
Stockholder's Equity (Deficit)
Stockholder's Equity (Deficit) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholder's Equity (Deficit) | Note 10 – Stockholders’ Equity (Deficit) 2017 Transactions: During 2017, 1,710,000 common shares valued at $256,327 were issued as payment of finance cost related to convertible notes. During 2017, 1,899,990 common shares were issued as security for the payment of convertible notes. The shares, valued at $257,259 are held in escrow, are refundable and are recorded in a contra equity account. During 2017, we sold 2,331,071 shares of common stock and received proceeds of $56,951. Of these shares, 336,071 valued at $8,675, were not issued as of December 31, 2017. During 2017, 3,430,504 shares of common stock, valued at $740,762 were issued as share-based compensation to related parties. Additionally, 24,973,389 shares, valued at $1,960,643, were authorized to be issued for related party services, but were not issued as of December 31, 2017. During 2017, 160,000 shares of common stock, valued at $5,521, were issued for service. During 2017 the Company recorded total option expense of $1,277,088. During 2017, 1,000,000 shares of common stock, valued at $245,600, were issued for a related party debt settlement. 21,025,254 shares valued at 394,500, were authorized but not issued. During 2017, 250,000 shares of common stock, valued at $47,245, were issued to settle accounts payable to a consultant. During 2017, owners of convertible notes have converted $2,986,387 of notes and $139,263 of accrued interest into 83,916,269 shares of common stock valued at $7,553,246. Additionally, 567,433 shares, valued at $33,401, for the conversion of notes, were authorized but not issued as of December 31, 2017. 866,667 shares, valued at $260,000 were cancelled due to reclassify the fund received to a note payable. As a condition of their employment, the Board of Directors approved employment agreements with three key executives. This agreement provided that additional shares will be granted each year at February 1 over the term of the agreement should their shares as a percentage of the total shares outstanding fall below prescribed ownership percentages. The CEO received an annual grant of additional shares each year to maintain his ownership percentage at 10% of the outstanding stock. The other two executives receive a similar grant to maintain each executive’s ownership percentage at 7.5% of the outstanding stock. At December 31, 2017 there is $1,779,943 accrued for the annual grant at February 1, 2018, representing 23,421,306 shares. 2016 Transactions: During 2016, the Company issued to officers and employees 3,466,040 shares of common stock, valued at $2,063,309 for services. During 2016, the Company issued 2,228,297 shares of common stock, valued at $1,259,944, to various third parties for services. During 2016, the Company sold 5,393,718 shares of common stock for cash proceeds of $865,491. Common 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 1, 2016 1,901,426 1.21 Granted 125,887 - Balance outstanding, December 31, 2016 2,027,313 $ 1.18 Granted 3,250,000 0.26 6.07 Balance outstanding, December 31, 2017 5,277,313 $ 0.61 4.74 Exercisable, December 31, 2017 5,277,313 $ 0.61 4.83 The Company has determined that certain of its warrants are subject to derivative accounting. The table below provides a reconciliation of the beginning and ending balances for the warrant liabilities measured using fair significant unobservable inputs (Level 3) for the year ended December 31, 2017: Balance at January 1, 2016 $ - Issuance of warrants 342,867 Change in fair value during period (150,517 ) Balance at December 31, 2017 $ 192,350 The following assumptions were used in calculations of the Black Scholes model for the periods ended December 31, 2017 and 2016: For the Year Ended December 31, 2017 For the Year Ended December 31, 2016 Annual dividend yield 0 % 0 % Expected life (years) 3-10 5 Risk-free interest rate 1.50 - 2.40 % 0.90 % Expected volatility 177 - 284 % 266 % Common stock option activity 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, 2017, 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. The following represents a summary of all common stock option activity: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Balance outstanding, January 1, 2016 - - Granted 1,000,000 0.30 Balance outstanding, December 31, 2016 1,000,000 $ 0.30 Granted 4,899,180 0.25 Balance outstanding, December 31, 2017 5,899,180 $ 0.26 8.15 Exercisable, December 31, 2017 2,849,590 $ 0.26 8.31 During the years ended December 31, 2017 and 2016, the Company incurred total option expense of $1,277,088 and $145,362, respectively. Unamortized stock option expense at December 31, 2017 is $597,006, which will be charged to expense in 2018. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11 – COMMITMENTS AND CONTINGENCIES Leasing Activity 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 public. Currently the Company has four separate properties under lease in the states of Colorado and Washington. As Lessor In Colorado, there are three properties leased in 2017 and 2016. Properties were leased for a three to five year period with an option for an additional five years, and carry terms requiring triple net payments. Each of the properties have fixed monthly rentals with periodic increases in the monthly rental rate. In Washington, there is one property which was 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. As of December 31, 2017, the aggregate remaining minimal annual lease payments under these operating leases were as follows: 2018 $ 1,131,078 2019 746,039 2020 594,444 2021 431,227 2022 240,000 2023 240,000 2024 240,000 2025 40,000 Total $ 3,662,788 Rent expense for the Company’s operating leases for the years ended December 31, 2017 and 2016 was $1,212,161 and $1,103,824, respectively. As Lessee Employment Agreements As a condition of their employment, the Board of Directors approved employment agreements with three key executives. This agreement provided that additional shares will be granted each year over the term of the agreement should their shares as a percentage of the total shares outstanding fall below prescribed ownership percentages. The CEO received an annual grant of additional shares each year to maintain his ownership percentage at 10% of the outstanding stock. The other two executives receive a similar grant each to maintain his ownership percentage at 7.5% of the outstanding stock. |
Deferred Tax Assets and Income
Deferred Tax Assets and Income Tax Provision | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Deferred Tax Assets and Income Tax Provision | Note 12 – 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, 2017 and for the year ended December 31, 2016 respectively to the Company’s effective tax rate is as follows: Year Ended Year Ended December 31, 2017 December 31, 2016 Statutory federal income tax rate (34 )% (34 )% State income tax, net of federal benefits (3 )% (6 )% Non-deductible expense 7 % - Other 15 % - Tax rate change and true-up 11 % - Change in valuation allowance 4 % 40 % Income tax provision (benefit) - % - % The benefit for income tax is summarized as follows: Year Ended December 31, 2017 Year Ended December 31, 2016 Federal Current $ — $ — Deferred 1,212,219 (2,353,000 ) State Current - — Deferred 106,961 (415,000 ) Change in valuation allowance (1,319180 ) 2,769,000 Income tax provision (benefit) $ - $ - Deferred tax assets (liabilities) consist of the following Year Ended Year Ended December 31, 2017 December 31, 2016 Net operating loss carry forwards $ (13,784,280 ) $ (11,188,000 ) Warrants issued for services 1,480,740 288,000 Impairment of investment 476,760 620,000 Depreciation 38,280 - Interest expense on convertible notes 1,162,320 413,000 Change in fair value of derivative liability - (52,000 ) Loss on sales of assets - 145,069 Total gross deferred tax asset/liabilities (10,626,180 ) (10,064,069 ) Valuation allowance 10,626,180 10,064,069 Net deferred taxes $ - $ - As of December 31, 2017, the Company had accumulated Federal net operating loss carryovers (“NOLs”) of $26,938,000. 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. The Tax Cuts and Jobs Act (the "Act") was enacted on December 22, 2017. Among other things, the Act reduces the U.S. federal corporate tax rate from 34 percent to 21 percent, eliminates the alternative minimum tax (“AMT”) for corporations, and creates a one-time deemed repatriation of profits earned outside of the U.S. The tax rate reduction also resulted in a write-down of the net deferred tax asset of approximately $5 million. The write-down of the net deferred tax asset related to the rate reduction resulted in a corresponding write-down of the valuation allowance of approximately $4 million. The Company fully reserves its deferred tax assets as such there was no impact. 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, 2014. 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, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13 – Subsequent Events Subsequent to the year ended December 31, 2017 through March 23, 2018, the Company issued 87,073,287 shares of common stock for the conversion of debt and the payment of liabilities. 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 Acco20
Significant and Critical Accounting Policies and Practices (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
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. |
Reclassifications | Reclassifications Certain prior year amounts were reclassified to conform to the manner of presentation in the current period. These reclassifications had no effect on the Company’s balance sheet, net loss or stockholders’ equity. |
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 a 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 influence our estimates that could cause actual results to differ from our estimates. The Company intends to re-evaluate all 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 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, 2017 and 2016. 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, and the National Credit Union Share Insurance Fund, 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. Leasehold improvements are amortized over the term of the lease. 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 expectancies: 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 cost basis on the first-in, first-out (“FIFO”) method. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Inventory consists solely of finished goods. |
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. Accounts receivable consist of revenue earned and currently due from sub lessees. 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, 2017 and 2016, allowance for doubtful accounts is $9,908. 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 the following criteria are met in accordance with SEC Staff Accounting Bulletin 104, Revenue Recognition When the collectability is reasonably assured, in accordance with ASC Topic 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. When management concludes that the Company is the owner of tenant improvements, 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 an unrelated company. In consideration, the Company received warrants to purchase shares of the licensee’s common stock, the value of the warrants was recorded as an investment and the 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 a line of credit agreement, the Company has deferred collection of such rents until the tenants receive the proper governmental licenses to begin operation. For 2016, management had 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 to licensed cannabis operators for locations that meet the regulatory criteria applicable by the respective regulatory jurisdiction for the sale, production, and development of cannabis products. The Company evaluates the lease to determine its appropriate classification as an operating or capital lease for financial reporting purposes. The Company leases are currently all classified as operating leases. Minimum base rent is recorded on a straight-line basis over the lease term after an initial period during which the tenant is establishing the business and during which the Company may forbear some or all of the rent. The Company is more likely than not to forbear some or all of the rental income which it considers uncollectable during the tenant’s initial ramp-up period (see Revenue Recognition |
Leases as Lessee | Leases as Lessee The Company recognizes rent expense on a straight-line basis over the non-cancelable lease term and certain 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. 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. |
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 Topic 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. 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. The Company 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. 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 The Company utilizes ASC 260, “Earnings Per Share” for calculating the basic and diluted loss per share. In accordance with ASC 260, the basic and diluted loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted net loss per share is computed similar to basic loss per share except that the denominator is adjusted for the potential dilution that could occur if stock options, warrants, and other convertible securities were exercised or converted into common stock. Potentially dilutive securities are not included in the calculation of the diluted loss per share if their effect would be anti-dilutive. The Company has 142,576,974 and 5,417,837 common stock equivalents at December 31, 2017 and 2016, respectively. For the years ended December 31, 2017 and 2016 these potential shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per share. |
Legal and Regulatory Environment | Legal and regulatory environment The cannabis industry is subject to numerous laws and regulations of federal, state and local governments. These laws and regulations include, but are not limited to, matters such as licensure, accreditation, and different taxation between federal and state. Federal government activity may increase in the future with respect to companies involved in the cannabis industry concerning possible violations of federal statutes and regulations. Management believes that the Company is in compliance with local, state and federal regulations, While no regulatory inquiries have been made, compliance with such laws and regulations can be subject to future government review and interpretation, as well as regulatory actions unknown or unasserted at this time. |
New Accounting Pronouncements | New accounting pronouncements Recent Accounting Pronouncements. On December 22, 2017 the SEC staff issued Staff Accounting Bulletin 118 (SAB 118), which provides guidance on accounting for the tax effects of the Tax Cuts and Jobs Act (the TCJA). SAB 118 provides a measurement period that should not extend beyond one year from the enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the TCJA for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the TCJA is incomplete but for which they are able to determine a reasonable estimate, it must record a provisional amount in the financial statements. Provisional treatment is proper in light of anticipated additional guidance from various taxing authorities, the SEC, the FASB, and even the Joint Committee on Taxation. If a company cannot determine a provisional amount to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the TCJA. The Company has applied this guidance to its financial statements. In May 2014, the FASB issued ASU for guidance to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP and International Financial Reporting Standards. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Lease contracts will be excluded from this revenue recognition criteria In February 2016, the Financial Accounting Standards Board (FASB) issued guidance that requires a lessee to recognize assets and liabilities arising from leases on the balance sheet. Previous GAAP did not require lease assets and liabilities to be recognized for most leases. Additionally, companies are permitted to make an accounting policy election not to recognize lease assets and liabilities for leases with a term of 12 months or less. For both finance leases and operating leases, the lease liability should be initially measured at the present value of the remaining contractual lease payments. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee will not significantly change under this new guidance. This new guidance is effective for the company as of the first quarter of fiscal year 2020. The Company is evaluating the effect that this ASU will have on its financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 clarifies the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. This ASU is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. The Company is currently assessing the potential impact of ASU 2016-15 on its financial statements and related disclosures. In April 2016 the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606). The core principle of Topic 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services This ASU is effective for public business entities for fiscal years, and interim periods within those years, beginning after January 1. 2018. The Company is currently assessing the potential impact of ASU 2016-10 on its financial statements and related disclosures. The Company believes that other 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. |
Significant and Critical Acco21
Significant and Critical Accounting Policies and Practices (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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 expectancies: 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, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | As of December 31, 2017 and 2016, fixed assets and the estimated lives used in the computation of depreciation are as follows: Estimated Useful Lives December 31, 2017 December 31, 2016 Machinery and equipment 5 years $ - $ 39,145 Leasehold improvements 10 years 853,413 728,413 853,413 767,558 Less: Accumulated depreciation and amortization (444,285 ) (9,446 ) Property and equipment, net $ 409,128 $ 758,112 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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) for the year ended December 31, 2017: Convertible notes Discount Convertible Note Net of Discount Derivative Liabilities Balance, December 31, 2016 370,500 36,344 334,156 338,282 Issuance of convertible notes 3,587,342 1,403,500 2,183,842 8,017,473 Conversion of convertible notes (2,986,387 ) (166,204 ) (2,820,183 ) (6,066,511 ) Change in fair value of derivatives — — — 1,817,277 Amortization — (770,301 ) 770,301 — Balance December 31, 2017 $ 971,455 $ 503,339 $ 468,116 $ 4,106,521 |
Schedule of Assumptions Used Black Scholes Model | The following assumptions were used in calculations of the Black Scholes model for the periods ended December 31, 2017 and 2016. December 31, 2017 December 31, 2016 Risk-free interest rates 1.28-1.76 % 0.29-1.2 % Expected life 0.02-1.23 year 0.25-1 year Expected dividends 0 % 0 % Expected volatility 211-354 % 142-356 Diego Pellicer Worldwide, Inc. Common Stock fair value $ 0.08 $ 0.20 -0.77 |
Stockholder's Equity (Deficit)
Stockholder's Equity (Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
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 1, 2016 1,901,426 1.21 Granted 125,887 - Balance outstanding, December 31, 2016 2,027,313 $ 1.18 Granted 3,250,000 0.26 6.07 Balance outstanding, December 31, 2017 5,277,313 $ 0.61 4.74 Exercisable, December 31, 2017 5,277,313 $ 0.61 4.83 |
Schedule of Warrant Liabilities Measured Using Fair Significant Unobservable Inputs | The table below provides a reconciliation of the beginning and ending balances for the warrant liabilities measured using fair significant unobservable inputs (Level 3) for the year ended December 31, 2017: Balance at January 1, 2016 $ - Issuance of warrants 342,867 Change in fair value during period (150,517 ) Balance at December 31, 2017 $ 192,350 |
Schedule of Fair Value On Assumptions | The following assumptions were used in calculations of the Black Scholes model for the periods ended December 31, 2017 and 2016: For the Year Ended December 31, 2017 For the Year Ended December 31, 2016 Annual dividend yield 0 % 0 % Expected life (years) 3-10 5 Risk-free interest rate 1.50 - 2.40 % 0.90 % Expected volatility 177 - 284 % 266 % |
Schedule of Stock Option Activity | The following represents a summary of all common stock option activity: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Balance outstanding, January 1, 2016 - - Granted 1,000,000 0.30 Balance outstanding, December 31, 2016 1,000,000 $ 0.30 Granted 4,899,180 0.25 Balance outstanding, December 31, 2017 5,899,180 $ 0.26 8.15 Exercisable, December 31, 2017 2,849,590 $ 0.26 8.31 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Minimal Annual Lease Payments Under Operating Leases | As of December 31, 2017, the aggregate remaining minimal annual lease payments under these operating leases were as follows: 2018 $ 1,131,078 2019 746,039 2020 594,444 2021 431,227 2022 240,000 2023 240,000 2024 240,000 2025 40,000 Total $ 3,662,788 |
Deferred Tax Assets and Incom26
Deferred Tax Assets and Income Tax Provision (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of Effective Income Tax Benefit Rate | Year Ended Year Ended December 31, 2017 December 31, 2016 Statutory federal income tax rate (34 )% (34 )% State income tax, net of federal benefits (3 )% (6 )% Non-deductible expense 7 % - Other 15 % - Tax rate change and true-up 11 % - Change in valuation allowance 4 % 40 % Income tax provision (benefit) - % - % |
Schedule of Income Tax Benefit | The benefit for income tax is summarized as follows: Year Ended December 31, 2017 Year Ended December 31, 2016 Federal Current $ — $ — Deferred 1,212,219 (2,353,000 ) State Current - — Deferred 106,961 (415,000 ) Change in valuation allowance (1,319180 ) 2,769,000 Income tax provision (benefit) $ - $ - |
Schedule of Deferred Tax Assets | Deferred tax assets (liabilities) consist of the following Year Ended Year Ended December 31, 2017 December 31, 2016 Net operating loss carry forwards $ (13,784,280 ) $ (11,188,000 ) Warrants issued for services 1,480,740 288,000 Impairment of investment 476,760 620,000 Depreciation 38,280 - Interest expense on convertible notes 1,162,320 413,000 Change in fair value of derivative liability - (52,000 ) Loss on sales of assets - 145,069 Total gross deferred tax asset/liabilities (10,626,180 ) (10,064,069 ) Valuation allowance 10,626,180 10,064,069 Net deferred taxes $ - $ - |
Organization and Operations (De
Organization and Operations (Details Narrative) - Type 1 Media, Inc [Member] | 12 Months Ended |
Dec. 31, 2017USD ($)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 |
Stock issued during period convertible securities | 21,632,252 |
Percentage of combined entity | 74.00% |
Significant and Critical Acco28
Significant and Critical Accounting Policies and Practices (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for doubtful accounts | $ 9,908 | $ 9,908 |
Common stock equivalents | 142,576,974 | 5,417,837 |
Maximum [Member] | ||
Cash insured by FDIC | $ 250,000 |
Significant and Critical Acco29
Significant and Critical Accounting Policies and Practices - Schedule of Estimated Useful of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Equipment [Member] | |
Property and equipment life expectancy | 5 years |
Leasehold Improvements [Member] | |
Property and equipment life expectancy | 10 years |
Buildings [Member] | |
Property and equipment life expectancy | 20 years |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Working capital deficit | $ 6,411,515 | |
Accumulated deficit | $ 42,764,086 | $ 28,114,125 |
Investment (Details Narrative)
Investment (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 | |
Fair value of warrants | $ 150,517 | |||
Impairment loss of investment | $ 43,333 | $ 73,334 | ||
Plandai Biotechnology, Inc. [Member] | ||||
Fair value of warrants | $ 525,567 | |||
License Agreement [Member] | Plandai Biotechnology, Inc. [Member] | ||||
Issuance of warrants to purchase of common stock, shares | 1,666,667 | |||
License agreement term | 10 years | |||
Warrants exercise price per share | $ 0.01 | |||
Sale of stock price per share | $ 0.50 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Impaired leasehold improvements | $ 39,145 | |
Discounted cash flow from sublease | 30.00% | |
Impairment loss includes equipment abondonment | $ 39,145 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property and equipment, gross | $ 853,413 | $ 767,558 |
Less: Accumulated depreciation and amortization | (444,285) | (9,446) |
Property and equipment, net | 409,128 | 758,112 |
Machinery and Equipment [Member] | ||
Property and equipment, gross | 39,145 | |
Property and Equipment Estimated Useful Lives | 5 years | |
Leasehold Improvements [Member] | ||
Property and equipment, gross | $ 853,413 | $ 728,413 |
Property and Equipment Estimated Useful Lives | 10 years |
Other Assets (Details Narrative
Other Assets (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Security deposits | $ 170,000 | $ 170,000 |
Deposits - end of lease | $ 150,000 | $ 150,000 |
Related Party (Details Narrativ
Related Party (Details Narrative) - USD ($) | Jun. 30, 2016 | Jun. 02, 2016 | Apr. 14, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Aug. 12, 2016 |
Accrued fees - related parties | $ 449,064 | $ 509,294 | ||||
Cash based compensation - related parties | 693,093 | 2,424,100 | ||||
Share based compensation - related parties | 3,978,493 | 3,468,619 | ||||
Number of common stock issued for service | 5,521 | 1,259,945 | ||||
Gross revenues | 274,836 | (793,604) | ||||
Notes payable related parties | 307,312 | 307,312 | ||||
Related Party [Member] | ||||||
Share based compensation - related parties | $ 3,984,014 | $ 105,233 | ||||
Mr. Throgmartin [Member] | ||||||
Number of common stock issued for service, shares | 1,900,000 | |||||
Number of common stock issued for service | $ 1,577,000 | |||||
Accrued compensation | $ 281,914 | |||||
Share issued price per share | $ 0.30 | |||||
Conversion of stock, shares converted | 396,190 | |||||
Debt instrument interest rate | 8.00% | |||||
Aggregate principal and accrued interest amount | $ 1,480,000 | |||||
Gross revenues | 3,000,000 | |||||
Mr. Throgmartin [Member] | Promissory Note [Member] | ||||||
Stock conversion percentage | 50.00% | |||||
Conversion of stock, amount converted | $ 140,957 | |||||
Mr. Throgmartin [Member] | Restricted Common Stock [Member] | ||||||
Stock conversion percentage | 50.00% | |||||
Conversion of stock, amount converted | $ 140,957 | |||||
Alan Valdes [Member] | ||||||
Accrued compensation | $ 332,709 | |||||
Share issued price per share | $ 0.30 | |||||
Conversion of stock, shares converted | 554,517 | |||||
Debt instrument interest rate | 8.00% | |||||
Aggregate principal and accrued interest amount | 1,480,000 | |||||
Gross revenues | $ 3,000,000 | |||||
Alan Valdes [Member] | Promissory Note [Member] | ||||||
Stock conversion percentage | 50.00% | |||||
Conversion of stock, amount converted | $ 166,355 | |||||
Alan Valdes [Member] | Restricted Common Stock [Member] | ||||||
Stock conversion percentage | 50.00% | |||||
Conversion of stock, amount converted | $ 166,355 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Feb. 08, 2016 | Nov. 27, 2015 | Aug. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 11, 2017 | Jul. 08, 2015 | May 20, 2015 |
Note payable | $ 133,403 | $ 126,000 | ||||||
Extinguishment of debt | $ 5,607,836 | $ 1,427,583 | ||||||
Two Convertible Notes [Member] | ||||||||
Note payable principal amount | $ 2,123,676 | |||||||
Note Payable One [Member] | ||||||||
Note payable principal amount | $ 450,000 | |||||||
Note payable | 450,000 | |||||||
Note Payable Two [Member] | ||||||||
Note payable principal amount | $ 135,628 | |||||||
Note payable | 135,628 | |||||||
Note Payable Three [Member] | ||||||||
Note payable principal amount | $ 470,000 | |||||||
Note payable | 470,000 | |||||||
Annual interest rate | 12.00% | |||||||
Note maturity date | Feb. 7, 2017 | |||||||
Note Payable Four [Member] | ||||||||
Note payable principal amount | $ 126,000 | |||||||
Note maturity date | Oct. 31, 2018 | |||||||
Note Payable Five [Member] | ||||||||
Note payable principal amount | $ 135,000 | 5,950 | ||||||
Note payable | 129,050 | |||||||
Note maturity date | Jan. 26, 2016 | |||||||
Repayment of debt | $ 15,000 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) - USD ($) | Feb. 08, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | |||
Derivative liability | $ 4,106,521 | ||
Debt instruments conversion amount | 2,986,387 | $ 75,000 | |
Accrued interest | $ 139,263 | ||
Debt instruments conversion into shares | 83,916,269 | 255,074 | |
Gain on extinguishment of debt | $ 5,607,836 | $ 1,427,583 |
Convertible Notes Payable - Sch
Convertible Notes Payable - Schedule of Liabilities Measured Using Fair Significant Unobservable Inputs (Level 3) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Issuance of convertible notes | $ 1,403,500 | $ 120,500 |
Debt instruments conversion amount | 2,986,387 | 75,000 |
Change in fair value of derivatives | 488,726 | |
Convertible Notes [Member] | ||
Balance, beginning | 370,500 | |
Issuance of convertible notes | 3,587,342 | |
Debt instruments conversion amount | (2,986,387) | |
Change in fair value of derivatives | ||
Amortization | ||
Balance, ending | 971,455 | 370,500 |
Discount [Member] | ||
Balance, beginning | 36,344 | |
Issuance of convertible notes | 1,403,500 | |
Debt instruments conversion amount | (166,204) | |
Change in fair value of derivatives | ||
Amortization | (770,301) | |
Balance, ending | 503,339 | 36,344 |
Convertible Note Net of Discount [Member] | ||
Balance, beginning | 334,156 | |
Issuance of convertible notes | 2,183,842 | |
Debt instruments conversion amount | (2,820,183) | |
Change in fair value of derivatives | ||
Amortization | 770,301 | |
Balance, ending | 468,116 | 334,156 |
Derivative Liabilities [Member] | ||
Balance, beginning | 338,282 | |
Issuance of convertible notes | 8,017,473 | |
Debt instruments conversion amount | (6,066,511) | |
Change in fair value of derivatives | 1,817,277 | |
Amortization | ||
Balance, ending | $ 4,106,521 | $ 338,282 |
Convertible Notes Payable - S39
Convertible Notes Payable - Schedule of Assumptions Used Black Scholes Model (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Expected dividends | 0.00% | 0.00% |
Diego Pellicer Worldwide, Inc. Common Stock fair value | $ 0.08 | |
Minimum [Member] | ||
Risk-free interest rates | 1.28% | 0.29% |
Expected life | 7 days | 2 months 30 days |
Expected volatility | 211.00% | 142.00% |
Diego Pellicer Worldwide, Inc. Common Stock fair value | $ 0.20 | |
Maximum [Member] | ||
Risk-free interest rates | 1.76% | 1.20% |
Expected life | 1 year 2 months 23 days | 1 year |
Expected volatility | 354.00% | 356.00% |
Diego Pellicer Worldwide, Inc. Common Stock fair value | $ 0.77 |
Stockholder's Equity (Deficit40
Stockholder's Equity (Deficit) (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Debt converted into share | 83,916,269 | 255,074 |
Debt converted into share, value | $ 2,986,387 | $ 75,000 |
Stock issued during period, value, new issues | $ 56,951 | $ 845,491 |
Common stock, shares authorized but not issued | 195,000,000 | 195,000,000 |
Common stock, shares authorized but not issued, value | ||
Number of common stock issued for services | 5,521 | $ 1,259,945 |
Stock option expenses | $ 1,277,088 | $ 145,362 |
Ownership interest | 10.00% | |
Stock option granted | 4,899,180 | 1,000,000 |
Unamortized stock option | $ 597,006 | |
Warrant [Member] | ||
Stock option granted | 200,000 | |
Equity Incentive Plan [Member] | ||
Shares available for future grants | 705,000 | |
Common stock shares reserved | 2,480,000 | |
Stock option term | 10 years | |
Stock option granted | 1,775,000 | |
February 1 2018 [Member] | ||
Accrued value annual grant | $ 1,779,943 | |
Shares available for future grants | 23,421,306 | |
Two Executives [Member] | ||
Ownership interest | 7.50% | |
2017 Transactions [Member] | ||
Debt converted into share | 1,710,000 | |
Debt converted into share, value | $ 256,327 | |
Number of common stock issued, shares | 2,331,071 | |
Stock issued during period, value, new issues | $ 56,951 | |
Number of unissued shares during period | 336,071 | |
Number of unissued shares during period, value | $ 8,675 | |
Number of common stock issued for services, shares | 160,000 | |
Number of common stock issued for services | $ 5,521 | |
Stock option expenses | $ 1,277,088 | |
2017 Transactions [Member] | Consultant [Member] | ||
Number of common stock issued for services, shares | 250,000 | |
Number of common stock issued for services | $ 47,245 | |
2017 Transactions [Member] | Owners [Member] | ||
Debt converted into share | 83,916,269 | |
Debt converted into share, value | $ 7,553,246 | |
Debt conversion amount | 2,986,387 | |
Accrued interest converted into shares | $ 139,263 | |
Number of additional debt converted into shares | 567,433 | |
Number of additional debt converted into shares, value | $ 33,401 | |
Stock issued during period of cancellation, shares | 866,667 | |
Stock issued during period of cancellation | $ 260,000 | |
2017 Transactions [Member] | Debt Settlement [Member] | ||
Common stock, shares authorized but not issued | 21,025,254 | |
Common stock, shares authorized but not issued, value | $ 394,500 | |
2017 Transactions [Member] | Related Party [Member] | ||
Stock issued during period, shares, share-based compensation, gross | 3,430,504 | |
Stock issued during period, value, share-based compensation | $ 740,762 | |
Common stock, shares authorized but not issued | 24,973,389 | |
Common stock, shares authorized but not issued, value | $ 1,960,643 | |
2017 Transactions [Member] | Related Party [Member] | Debt Settlement [Member] | ||
Debt converted into share | 1,000,000 | |
Debt converted into share, value | $ 245,600 | |
2017 Transactions [Member] | Escrow [Member] | ||
Common shares issued for security payment of convertible notes | 1,899,990 | |
Common shares issued for security payment of convertible notes, value | $ 257,259 | |
2016 Transactions [Member] | Officers and Employees [Member] | ||
Number of common stock issued for services, shares | 3,466,040 | |
Number of common stock issued for services | $ 2,063,309 | |
2016 Transactions [Member] | Third Parties [Member] | ||
Number of common stock issued, shares | 5,393,718 | |
Stock issued during period, value, new issues | $ 865,491 | |
Number of common stock issued for services, shares | 2,228,297 | |
Number of common stock issued for services | $ 1,259,944 |
Stockholder's Equity (Deficit41
Stockholder's Equity (Deficit) - Schedule of Stock Warrant Activity (Details) - Warrant [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Warrants, Outstanding, Beginning balance | 2,027,313 | 1,901,426 |
Number of Warrants, Granted | 3,250,000 | 125,887 |
Number of Warrants, Outstanding, Ending balance | 5,277,313 | 2,027,313 |
Number of Warrants, Exercisable | 5,277,313 | |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 1.18 | $ 1.21 |
Weighted Average Exercise Price, Granted | 0.26 | |
Weighted Average Exercise Price, Outstanding, Ending balance | 0.61 | 1.18 |
Weighted Average Exercise Price, Exercisable | $ 0.61 | |
Weighted Average Remaining Contractual Term, Granted | 6 years 26 days | 0 years |
Weighted Average Remaining Contractual Term, Outstanding | 4 years 8 months 26 days | 0 years |
Weighted Average Remaining Contractual Term, Exercisable | 4 years 9 months 29 days | 0 years |
Stockholder's Equity (Deficit42
Stockholder's Equity (Deficit) - Schedule of Warrant Liabilities Measured Using Fair Value Significant Unobservable Inputs (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Change in fair value during period | $ 150,517 | |
Fair Value, Inputs, Level 3 [Member] | ||
Balance at January 1, 2016 | ||
Issuance of warrants | 342,867 | |
Change in fair value during period | (150,517) | |
Balance at December 31, 2017 | $ 192,350 |
Stockholder's Equity (Deficit43
Stockholder's Equity (Deficit) - Schedule of Fair Value on Recurring Basis (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Annual dividend yield | 0.00% | 0.00% |
Expected life (years) | 5 years | |
Risk-free interest rate | 0.90% | |
Expected volatility | 266.00% | |
Minimum [Member] | ||
Expected life (years) | 3 years | |
Risk-free interest rate | 1.50% | |
Expected volatility | 177.00% | |
Maximum [Member] | ||
Expected life (years) | 10 years | |
Risk-free interest rate | 2.40% | |
Expected volatility | 284.00% |
Stockholder's Equity - Schedule
Stockholder's Equity - Schedule of Stock Option Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Equity [Abstract] | ||
Number of Options, Beginning balance | 1,000,000 | |
Number of Options, Granted | 4,899,180 | 1,000,000 |
Number of Options, Ending balance | 5,899,180 | 1,000,000 |
Number of Options, Exercisable ending balance | 2,849,590 | |
Weighted Average Exercise Price, Beginning balance | $ 0.30 | |
Weighted Average Exercise Price, Granted | 0.25 | 0.30 |
Weighted Average Exercise Price, Ending balance | 0.26 | 0.30 |
Weighted Average Exercise Price, Exercisable ending balance | $ 0.26 | |
Weighted Average Remaining Contractual Term, | 8 years 1 month 24 days | 0 years |
Weighted Average Remaining Contractual Term, Exercisable ending balance | 8 years 3 months 22 days | 0 years |
Commitments and Contingencies45
Commitments and Contingencies (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2017USD ($)Integer | Dec. 31, 2016USD ($)Integer | Dec. 31, 2014Integer | |
Operating lease rent expenses | $ | $ 1,212,161 | $ 1,103,824 | |
Ownership percentage | 10.00% | ||
Employment Agreements [Member] | CEO [Member] | |||
Ownership percentage | 10.00% | ||
Employment Agreements [Member] | Other Two Executives [Member] | |||
Ownership percentage | 7.50% | ||
Colorado [Member] | |||
Number of leased property | 3 | 3 | |
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 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Minimal Annual Lease Payments Under Operating Leases (Details) | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 1,131,078 |
2,019 | 746,039 |
2,020 | 594,444 |
2,021 | 431,227 |
2,022 | 240,000 |
2,023 | 240,000 |
2,024 | 240,000 |
2,025 | 40,000 |
Total | $ 3,662,788 |
Deferred Tax Assets and Incom47
Deferred Tax Assets and Income Tax Provision (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
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 | $ 26,938,000 | |
Net operating loss carryovers expire year | 2,033 | |
Percentage of changes in ownership | 50.00% | |
Income tax examination, description | The Tax Cuts and Jobs Act (the "Act") was enacted on December 22, 2017. Among other things, the Act reduces the U.S. federal corporate tax rate from 34 percent to 21 percent, eliminates the alternative minimum tax (AMT) for corporations, and creates a one-time deemed repatriation of profits earned outside of the U.S. | |
Write-down of net deferred asset after reduction | $ 5,000,000 | |
Write-down of valuation allowance after reduction | $ 4,000,000 |
Deferred Tax Assets and Incom48
Deferred Tax Assets and Income Tax Provision - Schedule of Reconciliation of Effective Income Tax Benefit Rate (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal income tax rate | (34.00%) | (34.00%) |
State income tax, net of federal benefits | (3.00%) | (6.00%) |
Non-deductible expense | 7.00% | 0.00% |
Other | 15.00% | 0.00% |
Tax rate change and true-up | 11.00% | 0.00% |
Change in valuation allowance | 4.00% | 40.00% |
Income tax provision (benefit) | 0.00% | 0.00% |
Deferred Tax Assets and Incom49
Deferred Tax Assets and Income Tax Provision - Schedule of Income Tax Benefit (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Federal Current | ||
Federal Deferred | 1,212,219 | (2,353,000) |
State Current | ||
State Deferred | 106,961 | (415,000) |
Change in valuation allowance | (1,319,180) | 2,769,000 |
Income tax provision (benefit) |
Deferred Tax Assets and Incom50
Deferred Tax Assets and Income Tax Provision - Schedule of Deferred Tax Assets Liabilities (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forwards | $ (13,784,280) | $ (11,188,000) |
Warrants issued for services | 1,480,740 | 288,000 |
Impairment of investment | 476,760 | 620,000 |
Depreciation | 38,280 | |
Interest expense on convertible notes | 1,162,320 | 413,000 |
Change in fair value of derivative liability | (52,000) | |
Loss on sales of assets | 145,069 | |
Total gross deferred tax asset/liabilities | (10,626,180) | (10,064,069) |
Valuation allowance | 10,626,180 | 10,064,069 |
Net deferred taxes |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 23, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of shares issued for conversion of debt and the payment of liabilities, value | $ 2,986,387 | $ 75,000 | |
Subsequent Event [Member] | |||
Number of shares issued for conversion of debt and the payment of liabilities, value | $ 87,073,287 |