Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 10, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 333-189731 | |
Entity Registrant Name | DIEGO PELLICER WORLDWIDE, INC | |
Entity Central Index Key | 0001559172 | |
Entity Tax Identification Number | 33-1223037 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 6160 Plumas Street | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Reno | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89519 | |
City Area Code | 516 | |
Local Phone Number | 900-3799 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 251,592,843 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 273,408 | $ 327,864 |
Accounts receivable | 574,826 | 523,958 |
Prepaid expenses | 11,275 | |
Total current assets | 848,234 | 863,097 |
Other receivables | 605,931 | 1,030,422 |
Security deposits | 90,000 | 90,000 |
Right of use assets | 1,360,775 | 1,062,592 |
Total assets | 2,904,940 | 3,046,111 |
Current liabilities: | ||
Accounts payable | 496,191 | 526,377 |
Accrued payable - related parties | 1,204,175 | 1,332,756 |
Accrued expenses | 1,064,443 | 931,825 |
Notes payable - related party | 140,958 | 140,958 |
Notes payable | 133,403 | 133,403 |
Convertible notes | 2,941,274 | 3,239,274 |
Derivative liabilities | 3,560,066 | 5,997,865 |
Lease liabilities | 373,339 | 327,685 |
Warrant liabilities | 863 | 476 |
Total current liabilities | 9,914,712 | 12,630,619 |
Notes payable - long term | 150,000 | 206,444 |
Lease liabilities, net of current portion | 985,032 | 715,488 |
Total liabilities | 11,049,744 | 13,552,551 |
Redeemable convertible preferred stock, Series C, par value $.00001 per share; 1,500,000 shares authorized, 113,850 and no shares issued and outstanding, net of discount of $82,970 and $0, respectively, | 37,056 | |
Deficiency in stockholders' equity: | ||
Preferred stock, Series A, par value $.0001 per share; 13,000,000 shares authorized, none issued and outstanding | ||
Common stock, par value $.000001 per share;840,000,000 shares authorized, 239,129,265 and 217,271,495 shares issued and outstanding, respectively | 238 | 216 |
Additional paid-in capital | 45,555,862 | 44,554,119 |
Stock to be issued | 164,714 | 49,225 |
Accumulated deficit | (53,902,674) | (55,110,000) |
Total deficiency in stockholders' equity | (8,181,860) | (10,506,440) |
equity | $ 2,904,940 | $ 3,046,111 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Common stock, par value (in dollars per share) | $ 0.000001 | $ 0.000001 |
Common stock, shares authorized | 840,000,000 | 840,000,000 |
Common stock, shares issued | 239,129,265 | 217,271,495 |
Common stock, shares outstanding | 239,129,265 | 217,271,495 |
Series C Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized | 1,500,000 | 1,500,000 |
Preferred stock, shares issued | 113,850 | 113,850 |
Preferred stock, shares outstanding | 0 | 0 |
Net of discount amount | $ 82,970 | $ 0 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Series A And B Preferred Stock [Member] | ||
Preferred stock, shares authorized | 13,000,000 | 13,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues | ||||
Net rental revenue | $ 198,505 | $ 351,502 | $ 582,010 | $ 1,080,382 |
Rental expense | (157,466) | (283,916) | (475,521) | (857,535) |
Gross profit | 41,039 | 67,586 | 106,489 | 222,847 |
Operating expenses: | ||||
General and administrative expenses | 221,289 | 356,305 | 695,787 | 885,960 |
Selling expense | 8,870 | 9,552 | 26,679 | 24,593 |
Loss from operations | (189,120) | (298,271) | (615,977) | (687,706) |
Other income (expense) | ||||
Interest income | 14,931 | 36,279 | 69,511 | 102,058 |
Other income | 7,839 | 7,839 | ||
Forgiveness of debt income | 56,908 | |||
Interest expense | (150,487) | (207,427) | (534,070) | (1,502,058) |
Lease termination payments | 33,851 | 101,554 | ||
Extinguishment of debt | (677) | 389,550 | 1,255 | |
Change in derivative liabilities | 1,093,766 | (372,217) | 2,824,050 | 1,095,821 |
Change in value of warrants | 1,678 | 362 | (387) | 334 |
Total other income (loss), net | 993,739 | (535,841) | 2,907,116 | (294,751) |
Provision for taxes | ||||
Net income (loss) | 804,619 | (834,112) | 2,291,139 | (982,457) |
Deemed dividend on preferred stock | (34,053) | (6,092) | (1,083,813) | (136,701) |
Net income (loss) attributable to common stockholders | $ 770,566 | $ (840,204) | $ 1,207,326 | $ (1,119,158) |
Income (loss) per share - basic | $ 0 | $ (0.01) | $ 0.01 | $ (0.01) |
Income (loss) per share - diluted | $ 0 | $ (0.01) | $ 0 | $ (0.01) |
Weighted average common shares outstanding - basic | 227,062,642 | 150,791,163 | 223,316,795 | 136,131,006 |
Weighted average common shares outstanding - diluted | 453,484,157 | 150,791,163 | 1,688,135,003 | 136,131,006 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders Deficit (Unaudited) - USD ($) | Redeemable Convertible Preferred Stocks [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Common Stock To Be Issued [Member] | Total |
Balance - June 30, 2020 at Dec. 31, 2019 | $ 8,750 | $ 114 | $ 43,478,139 | $ (51,968,902) | $ 127,261 | $ (8,363,388) |
Balance at beginning, shares at Dec. 31, 2019 | 140,000 | 113,926,332 | ||||
Issuance of common shares for services | 2,003 | 2,003 | ||||
Issuance of common shares for services - related parties | 27,026 | 27,026 | ||||
Common stock issued upon conversion of notes payable and accrued interest | $ 14 | 169,723 | 169,737 | |||
Common stock issued upon conversion of notes payable and accrued interest, shares | 13,767,631 | |||||
Series C preferred stock issued for cash, net of costs and discounts | ||||||
Series C preferred stock issued for cash, net of costs and discounts, shares | 55,800 | |||||
Accrued dividends and accretion of conversion feature on Series C preferred stock | $ 19,588 | (19,588) | (19,588) | |||
Deemed dividends related to conversion feature of Series C preferred stock | (38,868) | (38,868) | ||||
Net loss | (511,222) | (511,222) | ||||
Balance - September 30, 2020 at Mar. 31, 2020 | $ 28,338 | $ 128 | 43,688,457 | (52,538,580) | 156,290 | (8,693,705) |
Shares, Outstanding, Ending Balance at Mar. 31, 2020 | 195,800 | 127,693,963 | ||||
Fair value of warrants and options granted for services | 40,595 | 40,595 | ||||
Balance - June 30, 2020 at Dec. 31, 2019 | $ 8,750 | $ 114 | 43,478,139 | (51,968,902) | 127,261 | (8,363,388) |
Balance at beginning, shares at Dec. 31, 2019 | 140,000 | 113,926,332 | ||||
Accrued dividends and accretion of conversion feature on Series C preferred stock | 80,545 | |||||
Net loss | (982,476) | |||||
Balance - September 30, 2020 at Sep. 30, 2020 | $ 15,502 | $ 165 | 44,209,527 | (53,088,078) | 238,947 | (8,639,444) |
Shares, Outstanding, Ending Balance at Sep. 30, 2020 | 55,800 | 164,591,275 | ||||
Balance - June 30, 2020 at Mar. 31, 2020 | $ 28,338 | $ 128 | 43,688,457 | (52,538,580) | 156,290 | (8,693,705) |
Balance at beginning, shares at Mar. 31, 2020 | 195,800 | 127,693,963 | ||||
Issuance of common shares for services | 10,200 | 10,200 | ||||
Issuance of common shares for services - related parties | 3 | 65,630 | (46,822) | 18,811 | ||
Conversion of preferred shares into common shares | $ (12,176) | $ 5 | 86,441 | 86,446 | ||
Conversion of preferred shares into common shares,shares | (39,048) | 4,939,759 | ||||
Issuance of common shares for services - related parties, shares | 2,553,969 | |||||
Series C preferred stock issued for cash, net of costs and discounts | ||||||
Series C preferred stock issued for cash, net of costs and discounts, shares | 55,800 | |||||
Accrued dividends and accretion of conversion feature on Series C preferred stock | $ 40,125 | (40,125) | (40,125) | |||
Deemed dividends related to conversion feature of Series C preferred stock | (32,028) | (32,028) | ||||
Net loss | 362,855 | 362,855 | ||||
Balance - September 30, 2020 at Jun. 30, 2020 | $ 56,287 | $ 136 | 43,881,123 | (52,247,878) | 119,668 | (8,246,951) |
Shares, Outstanding, Ending Balance at Jun. 30, 2020 | 212,552 | 135,187,691 | ||||
Fair value of warrants and options granted for services | 40,595 | 40,595 | ||||
Issuance of common shares for services | $ 2 | 25,598 | 25,600 | 51,200 | ||
Issuance of common shares for services, shares | 2,000,000 | |||||
Issuance of common shares for services - related parties | 46,092 | 46,092 | ||||
Conversion of preferred shares into common shares | $ (61,617) | $ 27 | 262,215 | 262,242 | ||
Conversion of preferred shares into common shares,shares | (156,752) | 27,403,584 | ||||
Common stock issued upon conversion of notes payable and accrued interest | 47,587 | 47,587 | ||||
Accrued dividends and accretion of conversion feature on Series C preferred stock | 20,832 | (20,832) | (20,832) | |||
Deemed dividends related to conversion feature of Series C preferred stock | 14,740 | 14,740 | ||||
Net loss | (834,108) | (834,112) | ||||
Balance - September 30, 2020 at Sep. 30, 2020 | $ 15,502 | $ 165 | 44,209,527 | (53,088,078) | 238,947 | (8,639,444) |
Shares, Outstanding, Ending Balance at Sep. 30, 2020 | 55,800 | 164,591,275 | ||||
Fair value of warrants and options granted for services | 40,591 | 40,591 | ||||
Balance - June 30, 2020 at Dec. 31, 2020 | $ 216 | 44,554,119 | (55,110,000) | 49,225 | (10,506,440) | |
Balance at beginning, shares at Dec. 31, 2020 | 0 | 217,271,495 | ||||
Issuance of common shares for services | 1,915 | 2,000 | 3,915 | |||
Issuance of common shares for services, shares | 30,000 | |||||
Issuance of common shares for services - related parties | 24,843 | 24,843 | ||||
Common stock issued upon conversion of notes payable and accrued interest | $ 5 | 705,630 | 705,635 | |||
Common stock issued upon conversion of notes payable and accrued interest, shares | 5,026,413 | |||||
Series C preferred stock issued for cash, net of costs and discounts | ||||||
Series C preferred stock issued for cash, net of costs and discounts, shares | 293,700 | |||||
Accrued dividends and accretion of conversion feature on Series C preferred stock | $ 13,155 | (13,155) | (13,155) | |||
Deemed dividends related to conversion feature of Series C preferred stock | (992,671) | (992,671) | ||||
Net loss | 816,280 | 816,280 | ||||
Balance - September 30, 2020 at Mar. 31, 2021 | $ 13,155 | $ 221 | 45,261,664 | (55,299,546) | 76,068 | (9,961,593) |
Shares, Outstanding, Ending Balance at Mar. 31, 2021 | 293,700 | 222,327,908 | ||||
Balance - June 30, 2020 at Dec. 31, 2020 | $ 216 | 44,554,119 | (55,110,000) | 49,225 | (10,506,440) | |
Balance at beginning, shares at Dec. 31, 2020 | 0 | 217,271,495 | ||||
Accrued dividends and accretion of conversion feature on Series C preferred stock | 94,697 | |||||
Net loss | 2,291,139 | |||||
Balance - September 30, 2020 at Sep. 30, 2021 | $ 37,056 | $ 238 | 45,555,862 | (53,902,674) | 164,714 | (8,181,860) |
Shares, Outstanding, Ending Balance at Sep. 30, 2021 | 113,850 | 239,129,265 | ||||
Balance - June 30, 2020 at Mar. 31, 2021 | $ 13,155 | $ 221 | 45,261,664 | (55,299,546) | 76,068 | (9,961,593) |
Balance at beginning, shares at Mar. 31, 2021 | 293,700 | 222,327,908 | ||||
Issuance of common shares for services | $ 1 | 15,999 | (14,000) | 2,000 | ||
Issuance of common shares for services, shares | 1,137,826 | |||||
Issuance of common shares for services - related parties | $ 2 | 30,974 | 29,835 | 60,811 | ||
Issuance of common shares for services - related parties, shares | 1,967,714 | |||||
Accrued dividends and accretion of conversion feature on Series C preferred stock | 43,934 | (43,934) | (43,934) | |||
Net loss | 670,240 | 670,240 | ||||
Balance - September 30, 2020 at Jun. 30, 2021 | $ 57,089 | $ 224 | 45,308,637 | (54,673,240) | 91,903 | (9,272,476) |
Shares, Outstanding, Ending Balance at Jun. 30, 2021 | 293,700 | 225,433,448 | ||||
Issuance of common shares for services | 2,000 | 2,000 | ||||
Issuance of common shares for services - related parties | 70,811 | 70,811 | ||||
Conversion of preferred shares into common shares | $ (57,642) | $ 14 | 247,225 | 247,239 | ||
Conversion of preferred shares into common shares,shares | (179,850) | 13,695,817 | ||||
Accrued dividends and accretion of conversion feature on Series C preferred stock | $ 37,609 | (34,053) | (34,053) | |||
Net loss | 804,619 | 804,619 | ||||
Balance - September 30, 2020 at Sep. 30, 2021 | $ 37,056 | $ 238 | $ 45,555,862 | $ (53,902,674) | $ 164,714 | $ (8,181,860) |
Shares, Outstanding, Ending Balance at Sep. 30, 2021 | 113,850 | 239,129,265 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 2,291,139 | $ (982,476) |
Adjustments to reconcile net income (loss) to net cash used in | ||
Change in fair value of derivative liability | (2,824,050) | (1,095,821) |
Change in value of warrants | 387 | (334) |
Amortization of debt related costs | 942,601 | |
Noncash finance cost | 2,000 | |
Expense related to additional derivative liability | 283,270 | 299,783 |
Extinguishment of debt | (389,550) | (1,255) |
Stock-based compensation | 164,380 | 213,714 |
Common stock payable issued for services | 63,403 | |
Forgiveness of debt | (56,908) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (50,868) | (107,357) |
Prepaid expenses | 11,275 | 12,111 |
Other assets | 424,491 | (315,152) |
Other current receivable - related parties | 350,000 | |
Accounts payable | (30,186) | (13,372) |
Accrued liability - related parties | (128,581) | 58,170 |
Accrued expenses | 164,730 | 246,705 |
Lease liabilities | 17,015 | 3,085 |
Cash used in operating activities | (121,456) | (326,195) |
Cash flows from investing activities: | ||
Cash flows from financing activities: | ||
Proceeds from notes payable | 206,444 | |
Proceeds from convertible notes payable | 100,000 | |
Repayments of convertible notes payable, net | (200,000) | (7,500) |
Proceeds from sale of preferred stock, net | 267,000 | 100,000 |
Cash provided by financing activities | 67,000 | 398,944 |
Net increase (decrease) in cash | (54,456) | 72,749 |
Cash, beginning of period | 327,864 | 317,446 |
Cash, end of period | 273,408 | 390,195 |
Cash paid for interest | 70,000 | |
Cash paid for taxes | ||
Supplemental schedule of noncash financial activities: | ||
Notes converted to stock | 100,000 | 119,000 |
Conversion of Preferred Stock for Common Stock | 187,044 | 73,793 |
Derivative liability related to convertible notes and convertible Preferred C shares | 1,259,672 | |
Accrued interest converted to stock | 6,256 | 8,166 |
Value of common stock issued for conversion of notes and accrued interest | 705,635 | |
Value of common stock issued for conversion of preferred stock and dividends | 247,239 | |
Value of derivative liability extinguished upon conversion and pay off of notes and accrued interest | 963,539 | 128,582 |
Value of derivative liability extinguished upon conversion of preferred stock and dividends | 193,152 | 276,445 |
Debt discount attributable to convertible notes and preferred stock | 267,000 | 200,000 |
Accrued interest extinguished with note payment | 25,390 | |
Debt discount extinguished with note conversion | 39,843 | |
Discount extinguished with preferred stock conversion | 129,403 | |
Accrued dividends and accretion of conversion feature on Series C preferred stock | 94,697 | 80,545 |
Deemed dividends related to conversion feature of Series C preferred stock | 989,116 | 56,156 |
Noncash increase in right of use asset | $ 627,500 |
Organization and Operations
Organization and Operations | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations | Note 1 – Organization and Operations History On March 13, 2015, Diego Pellicer Worldwide, Inc. (the Company) (f/k/a Type 1 Media, Inc.) closed on a merger and share exchange 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. Diego was merged with and into the Company with the Company to continue as the surviving corporation in the merger. 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. The properties generating rents in 2021 and 2020 are as follows: Purpose Size City State Retail store (recreational and medical) 3,300 sq. Denver CO Cultivation warehouse – terminated October 2020 18,600 sq. Denver CO Cultivation warehouse 14,800 sq. Denver CO The Company’s three properties in Denver, CO (one terminated in October 2020) are leased to Royal Asset Management, LLC (“RAM”). RAM opened the Diego Denver branded flagship store in February 2017. This store is known as “Diego Colorado”. The retail facilities have shown steady growth in sales since opening. For the other two properties subleased (one terminated in October 2020), RAM uses these properties for its cultivation facilities in Denver, CO. Production at these facilities began in late 2016. On July 27, 2021, the Company filed a lawsuit against Royal Asset Management, LLC (“RAM”) and Neil Demers (“Demers”) in the District Court, City and County of Denver, State of Colorado, alleging breach of contract on four subleases for which RAM has failed to make the required payments to the Company pursuant to the respective sublease agreements. (see Note 4). In August 2021, the master lease and sublease associated with the 14,800 In October 2020, the master lease and sublease associated with the 18,600 |
Significant and Critical Accoun
Significant and Critical Accounting Policies and Practices | 9 Months Ended |
Sep. 30, 2021 | |
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 for 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 of operations and that 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. Basis of Presentation The accompanying unaudited condensed consolidated financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and presented in accordance with accounting principles generally accepted in the United States of America (US GAAP). The accompanying consolidated balance sheet at December 31, 2020, has been derived from audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying unaudited condensed consolidated financial statements as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020 have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements, and should be read in conjunction with the audited consolidated financial statements and related notes to the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the U.S. Securities and Exchange Commission (“SEC”). In the opinion of management, all material adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been made to the condensed consolidated financial statements. The condensed consolidated financial statements include all material adjustments (consisting of normal recurring accruals) necessary to make the condensed consolidated financial statements not misleading as required by Regulation S-X Rule 10-01. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or any future periods. Principles of Consolidation The financial statements include the accounts of Diego Pellicer Worldwide, Inc., and its wholly-owned subsidiaries, Diego Pellicer World-wide 1, Inc. and DPWW Management Company, LLC, both of which are inactive at this time. Intercompany balances and transactions have been eliminated in consolidation. 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, the collectability of accounts receivable and other receivables (See Note 4), valuation of right of use assets and lease liabilities 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 and 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 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 September 30, 2021 and December 31, 2020. 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. The following table reflects assets and liabilities that are measured at fair value on a recurring basis (in thousands) As of September 30, 2021 Fair Value Measurement Using Level 1 Level 2 Level 3 Total Derivative liabilities $ — $ — $ 3,560 $ 3,560 Stock warrant liabilities — — 1 1 $ — $ — $ 3,561 $ 3,561 As of December 31, 2020 Fair Value Measurement Using Level 1 Level 2 Level 3 Total Derivative liabilities $ — $ — $ 5,998 $ 5,998 Stock warrant liabilities — — 1 1 $ — $ — $ 5,999 $ 5,999 Derivative liabilities and stock warrant liabilities were valued using the Binomial Option Pricing Model in calculating the embedded conversion features for the three and nine months ended September 30, 2021 and the year ended December 31, 2020. 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 20,000 73,000 Revenue recognition In accordance with ASC 842, Leases, During the initial term of the lease, management has a policy of partial rent forbearance when the tenant first opens the facility to assure that the tenant has the opportunity for success. Management may be required to exercise considerable judgment in estimating revenue to be recognized. When management concludes that the Company is the owner of tenant improvements, the Company records the cost to construct the tenant improvements as a capital asset. In addition, the Company 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, the Company 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, we record 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. The Company analyzes its contracts to assess that they are within the scope and in accordance with ASC 606. In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements, whether for goods and services or licensing, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. Advertising Advertising expense was $ 8,870 9,552 26,679 24,593 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 common 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. Income (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 548,408,152 1,129,526,612 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 and, 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. Recent accounting pronouncements . The Company believes 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 | 9 Months Ended |
Sep. 30, 2021 | |
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 $ 9,066,478 53,902,674 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. There are other future noncash charges in connection with financings 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. |
Accounts Receivables and Other
Accounts Receivables and Other Receivables | 9 Months Ended |
Sep. 30, 2021 | |
Accounts Receivables And Other Receivables | |
Accounts Receivables and Other Receivables | Note 4 – Accounts Receivables and Other Receivables As disclosed in Note 1, the Company subleases two properties in Colorado to Royal Asset Management at September 30, 2021. At September 30, 2021 and December 31, 2020, the Company had outstanding receivables from the subleases totaling $ 574,826 523,958 In addition to the receivables from the subleases, the Company has agreed to provide RAM and affiliates of RAM up to an aggregate amount of $ 1,030,000 12 18 605,931 1,030,422 275,931 300,422 400,000 14,850 36,199 69,279 101,891 400,000 93,770 On September 9, 2020, we closed on a Membership Interest Purchase Agreement dated September 4, 2020, and obtained the right to acquire a 15.13% membership interest in Blue Bronco, LLC. The purchase of the 15.13% interest in Blue Bronco LLC is subject to the approval of the Colorado Marijuana Enforcement Division. Necessary approval by governing authorities is expected to be received in the first quarter of 2022 pending the resolution of a lawsuit between the Company and other parties related to the transaction. Accrued interest receivable of approximately $ 68,000 Lease Termination On October 1, 2020, the master and sublease associated with the 18,600 1,418,480 64,344 We have recorded the promissory notes as long term notes receivable of $ 1,482,824 Additionally, in connection with the termination of the sublease, RAM will continue to pay the remaining future sublease premium payments due to the company on the Denver sublease (the “Future Rent Debt”) beginning on the termination date, and until the earlier of the Maturity Date or June 30, 2024, notwithstanding the termination of the Subleases. However, no payment under the Future Rent Debt agreement will be due to the Company until the Maturity Date, at which time the entire Future Rent Debt shall be due and payable in full, except for any month in which RAM earns $ 725,000 RAM shall continue to accrue debt to the company, assessed on the first day of each month, according to the schedule below Monthly Payments Accrued October 1, 2020 to June 30, 2021 $ 11,284 July 1, 2021 to June 30, 2022 11,622 July 1, 2022 to June 30, 2023 11,971 July 1, 2023 to June 30, 2024 12,330 We will record income pursuant to the Future Rent Debt as payments are received based on the Company’s analysis of collectability including, but not limited to, the potential application toward the purchase price. During 2021, we received nine months of payments and have recorded $ 101,554 |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Note 5 – Other Assets Security deposits: |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 6 – Related Party Transactions As of September 30, 2021 and December 31, 2020, the Company has accrued compensation to its CEO and director and to its CFO aggregating $ 242,189 289,897 961,986 1,042,859 90,000 270,000 70,811 86,683 156,465 213,714 From 2017 to 2019, Mr. Gonfiantini, CEO, personally and through his Company, Crystal Bay Financial LLC, loaned an aggregate amount of $1,020,000 to Royal Asset Management. These notes accrue interest at 17% - 18% per annum, and require monthly payment approximately from $5,000 to $20,000. These notes are personally guaranteed by the managing member of Royal Asset Management, and are secured by certain equipment and other tangible properties of Royal Asset Management. Among these notes, $500,000 is also secured by the medical marijuana licenses held by Royal Asset Management. As of October 20, 2021 these notes were fully paid by Royal Asset Management and the security was released. At September 30, 2021 and December 31, 2020, the Company owed Mr. Throgmartin, former CEO (See Note 10), $ 140,958 8 September 30, 2021 57,835 49,401 |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 7 – Notes Payable On August 31, 2015, the Company issued a note in the amount of $ 126,000 October 31, 2018 133,403 75,090 70,101 On April 22, 2020, the Company was granted a loan from Numerica Credit Union, in the aggregate amount of $ 56,444 1.0 56,908 On June 30, 2020, the Company was granted a loan from the Small Business Association, in the aggregate amount of $ 150,000 3.75 |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2021 | |
Convertible Notes Payable | |
Convertible Notes Payable | Note 8 – Convertible Notes Payable The Company has issued several convertible notes which are outstanding. The note holders 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 features were recognized as embedded derivatives and are valued using a Binomial Option Pricing Model that resulted in a derivative liability of $ 3,422,900 5,997,865 10 Several convertible note holders elected to convert their notes to stock during the nine months ended September 30, 2021 and 2020. The tables below provide the note payable activity for the nine months ended September 30, 2021 and 2020, and also a reconciliation of the beginning and ending balances for the derivative liabilities measured using Level 3 fair value inputs for the nine months ended September 30, 2021 and 2020 Convertible Discount Convertible Derivative Balance, December 31, 2020 $ 3,239,274 $ — $ 3,239,274 $ 5,997,865 Issuance of convertible notes 2,000 — 2,000 266,166 Conversion of convertible notes (100,000 ) — (100,000 ) (661,087 ) Repayment of convertible notes (200,000 ) — (200,000 ) (302,452 ) Change in fair value of derivatives — — — (1,877,592 ) Amortization — — — — Balance September 30, 2021 $ 2,941,274 $ — $ 2,941,274 $ 3,422,900 Convertible Discount Convertible Derivative Balance, December 31, 2019 $ 3,266,775 $ 914,239 $ 2,352,530 $ 4,834,190 Issuance of convertible notes 103,000 103,000 — 394,001 Conversion of convertible notes (119,000 ) (39,843 ) (79,157 ) (128,583 ) Repayment of convertible notes (7,500 ) — (7,500 ) — Change in fair value of derivatives — — — (1,084,517 ) Amortization — (942,602 ) 942,601 — Balance September 30, 2020 $ 3,243,275 $ 34,794 $ 3,208,474 $ 4,015,091 During the nine months ended September 30, 2021, $ 100,000 4,444,444 697,779 59,999 657,778 During the nine months ended September 30, 2021, $ 6,256 581,969 7,856 1,709 3,309 During the nine months ended September 30, 2021, we repaid an aggregate of $ 200,000 177,116 177,116 During the nine months ended September 30, 2021, we paid an aggregate of $ 70,000 150,726 125,336 During the nine months ended September 30, 2021, we recorded noncash additions to convertible notes aggregating $ 2,000 As of September 30, 2021, convertible notes in the aggregate principal amount of $ 2,941,274 The following assumptions were used in the Binomial Option Pricing Model in calculating the embedded conversion features and current liabilities for the nine months ended September 30, 2021 and 2020 September 30, September 30, Risk-free interest rates 0.02 0.09 % 0.10 0.11 % Expected life (years) 0.25 0.25 1.0 Expected dividends 0 % 0 % Expected volatility 133 544 % 147 214 % |
Stockholders_ Deficit
Stockholders’ Deficit | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Stockholders’ Deficit | Note 9 – Stockholders’ Deficit Series C Preferred Stock On February 24, 2021, the Company sold 179,850 10 163,500 30 1,082,441 113,850 103,500 177,231 113,850 137,166 The tables below provide the preferred stock activity for the nine months ended September 30, 2021 and 2020, and also a reconciliation of the beginning and ending balances for the derivative liabilities measured using Level 3 fair value inputs for the nine months ended September 30, 2021 and 2020 Preferred Discount Preferred Derivative Balance , December 31, 2020 $ — — — — Issuance of Series C Preferred shares 293,700 293,700 — 1,259,672 Conversion of Series C Preferred shares (187,044 ) (129,402 ) (57,642 ) (193,152 ) Accretion of discount — (81,328 ) 81,328 — Accretion of dividend on Series C preferred stock 13,370 — 13,370 17,104 Change in fair value of derivatives — — — (946,458 ) Balance September 30, 2021 $ 120,026 $ 82,970 $ 37,056 $ 137,166 Preferred Discount Preferred Derivative Balance , December 31, 2019 $ 140,000 $ 131,250 $ 8,750 $ 190,131 Issuance of Series C Preferred shares 111,600 111,600 — 170,896 Conversion of Series C Preferred shares (206,561 ) (132,768 ) (73,793 ) (302,127 ) Accretion of discount — (67,201 ) 67,201 — Accretion of dividend on Series C preferred stock 13,344 — 13,344 15,610 Change in fair value of derivatives — — — (11,304 ) Balance September 30, 2020 $ 58,383 $ 42,881 $ 15,502 $ 63,206 The following assumptions were used in the Binomial Option Pricing Model in calculating the embedded conversion features and current liabilities for the nine months ended September 30, 2021 and 2020 2021 2020 Risk-free interest rates 0.12 0.25 % 0.12 0.71 % Expected life (years) 1.4 2.0 1.3 2.0 Expected dividends 0 % 0 % Expected volatility 185 196 % 172 262 % Common Stock 2021 Transactions During the nine months ended September 30, 2021, $ 100,000 6,256 5,026,413 705,635 During the nine months ended September 30, 2021, 4,799,258 156,465 1,967,714 30,976 4,563,231 1,731,687 138,853 13,364 During the nine months ended September 30, 2021, 241,098 6,000 1,137,553 16,000 209,402 1,105,857 4,000 14,000 At September 30, 2021 and December 31, 2020, shares to be issued for debt conversions were 31,960 21,861 During the nine months ended September 30, 2021, 13,695,817 179,850 7,194 During the nine months ended September 30, 2021, we issued 30,000 1,915 2020 Transactions During the nine months ended September 30, 2020, $ 119,000 8,166 210 19,501,028 1,255 39,843 128,583 5,733,397 During the nine months ended September 30, 2020, 2,553,969 65,633 3,907,356 28,296 During the nine months ended September 30, 2020, 5,196,378 63,403 2,000,000 3,196,378 37,803 During the nine months ended September 30, 2020, 32,343,343 195,800 Common stock warrant activity: 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 nine months ended September 30, 2021 and 2020 Nine Months ended September 30, 2021 2020 Balance at beginning of period $ 476 $ 967 Additions to derivative instruments — — (Gain) loss on change in fair value of derivative liability 387 (334 ) Balance at end of period $ 863 $ 633 The following assumptions were used in the Binomial Option Pricing Model in calculating the embedded conversion features and current liabilities for the nine months ended September 30, 2021 and 2020 September 30, 2021 September 30, 2020 Annual dividend yield 0 % 0 % Expected life (years) Risk-free interest rate 0.09 1.16 % 0.13 1.83 % Expected volatility 189 243 % 190 243 % |
Note 10 _ Commitments and Conti
Note 10 – Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Note 10 – Commitments and Contingencies | Note 10 – Commitments and Contingencies Leases The Company leases property under operating leases. Property leases include retail and warehouse space with fixed rent payments and lease terms ranging from three to five years. The Company is obligated to pay the lessor for maintenance, real estate taxes, insurance, and other operating expenses on certain property leases. These expenses are variable and are not included in the measurement of the lease asset or lease liability. These expenses are recognized as variable lease expense when incurred. In August 2021, the master lease and sublease associated with the 14,800 sq. cultivation warehouse were extended through July 31, 2024. 20,000 21,118 26,300 28,622 The Company records the lease asset and lease liability at the present value of lease payments over the lease term. The leases typically do not provide an implicit rate; therefore, the Company uses its estimated incremental borrowing rate at the time of lease commencement to discount the present value of lease payments. The Company’s discount rate for operating leases at September 30, 2021 was 12 3.1 As of September, 2021, the maturities of operating leases liabilities are as follows (in thousands Operating Leases 2021 128 2022 513 2023 520 2024 419 2025 45 Total 1,625 Less: amount representing interest (267 ) Present value of future minimum lease payments 1,358 Less: current obligations under leases 373 Long-term lease obligations $ 985 Rent expense is recognized on a straight-line basis over the life of the lease. Rent expense consists of the following Nine months ended September 30, 2021 2020 Operating lease costs $ 330,000 $ 508,199 Variable rent costs 145,521 349,336 Total rent expense $ 475,521 $ 857,535 As of September 30, 2021, the aggregate remaining minimal annual lease payments under these operating leases plus NNN were as follows: (in thousands) 2021 $ 89 2022 386 2023 443 2024 395 2025 45 Total $ 1,358 Other information related to leases is as follows Nine Months ended Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 309,931 Weighted-average remaining lease term - operating leases 3.1 Weighted-average discount rate - operating leases 12 % Right of use assets obtained in exchange for lease liabilities: Operating lease asset $ 627,500 Lease liability $ 625,129 The Company recognized sublease income of $ 198,505 351,502 582,010 1,080,382 These two leases have 2.8 year and 3.3 year terms with optional extensions, expiration dates range from July 2024 to February 2025, and monthly base rent of approximately $20,000-$22,500 plus variable NNN As of September 30, 2021, the maturities of expected base sublease income are as follows (in thousands) Operating Leases 2021 $ 168 2022 678 2023 693 2024 555 2025 and beyond 59 Total $ 2,153 COVID-19 On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency in response to a new strain of a coronavirus (the “COVID-19 outbreak”). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. Management is actively monitoring the global situation and its effects on the Company’s industry, financial condition, liquidity, and operations. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2021. However, if the pandemic continues, it may have a material adverse effect on the Company’s results of future operations, financial position, and liquidity in fiscal year 2021. Employment Agreements As a condition of their employment, the Board of Directors approved employment agreements with two key executives. These agreements provided that additional shares will be granted each year over the term of the agreements should their shares as a percentage of the total shares outstanding fall below prescribed ownership percentages. Nello Gonfiantini III, who became the Company’s CEO in October 2019 receives an annual grant of additional shares each year to maintain his ownership percentage at 10 2 156,000 4,799,258 92,000 6,461,325 138,853 13,364 4,563,231 Departure of Executive Officer On January 30, 2019, the Company executed a Separation Agreement and Release with David Thompson, its former Senior Vice President- Finance, finalizing his departure from the Company as an employee. Pursuant to its material terms, the Company agreed to pay Mr. Thompson aggregate cash payments of $ 206,250 53,717 122,934 122,000 35,872 21,086 126,389 On October 29, 2019, the Company accepted the resignation of Ron Throgmartin from his positions as CEO, President and Director. Mr. Throgmartin’s resignation was not the result of any disagreements with the Company’s plan of operations, policies, or management. On the same date, we appointed Christopher D. Strachan, our Chief Financial Officer, to membership on our Board of Directors and appointed Nello Gonfiantini III, our Chief Operations Officer, to the additional post of Chief Executive Officer. Ron Throgmartin signed a 5 Company acknowledged it owed Mr. Throgmartin the amount of $517,252 in principal and accrued interest of note payable, salary and fees, accrued during the 5 years of his employment. In addition, the Company further acknowledged that it will pay Mr. Throgmartin fifty (50%) percent of his compensation due under the remaining Employment Agreement, or $614,583 under certain conditions, which the Company accrued in full as the date of Mr. Throgmartin’s separation 5,000 500 45,000 45,000 835,597 Legal Proceedings On May 10, 2021, a lawsuit was filed against the Company, along with other defendants, by plaintiff Erin Turoff in the District Court, City and County of Denver, State of Colorado. The specific allegations against the Company include civil theft and civil conspiracy and the plaintiff is seeking actual and compensatory damages. No specific monetary amount was demanded in the lawsuit. On July 8, 2021, the Company filed an answer to the complaint, denying the allegations. The Company believes that the suit is without merit and that the Company will ultimately prevail in any litigation. On July 27, 2021, the Company filed a lawsuit against Royal Asset Management, LLC (“RAM”) and Neil Demers (“Demers”) in the District Court, City and County of Denver, State of Colorado, alleging breach of contract on subleases for which RAM has failed to make the required payments to the Company pursuant to the respective sublease agreements. The alleged damages under the sublease terms and other ancillary agreements amount to $1,480,881, $377,568, $1,027,635, and $1,418,480, respectively. In addition, the lawsuit alleges that RAM failed to make payments pursuant to a promissory note (the “Note”) in which the Company and RAM entered into on April 3, 2018. The Note was for the principal amount of $330,000 with interest at 18% per annum. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11 – Subsequent Events The Company evaluated subsequent events and transactions that occur after the balance sheet date up to the date that the consolidated financial statements are available to be issued. Any material events that occur between the balance sheet date and the date that the consolidated financial statements were available for issuance are disclosed as subsequent events, while the consolidated financial statements are adjusted to reflect any conditions that existed at the balance sheet date. Based upon this review, except as disclosed within the footnotes or as discussed below, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements. During October, 2021, the remaining 113,850 2,463,578 |
Significant and Critical Acco_2
Significant and Critical Accounting Policies and Practices (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and presented in accordance with accounting principles generally accepted in the United States of America (US GAAP). The accompanying consolidated balance sheet at December 31, 2020, has been derived from audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying unaudited condensed consolidated financial statements as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020 have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements, and should be read in conjunction with the audited consolidated financial statements and related notes to the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the U.S. Securities and Exchange Commission (“SEC”). In the opinion of management, all material adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been made to the condensed consolidated financial statements. The condensed consolidated financial statements include all material adjustments (consisting of normal recurring accruals) necessary to make the condensed consolidated financial statements not misleading as required by Regulation S-X Rule 10-01. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or any future periods. |
Principles of Consolidation | Principles of Consolidation The financial statements include the accounts of Diego Pellicer Worldwide, Inc., and its wholly-owned subsidiaries, Diego Pellicer World-wide 1, Inc. and DPWW Management Company, LLC, both of which are inactive at this time. Intercompany balances and transactions have been eliminated in consolidation. |
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, the collectability of accounts receivable and other receivables (See Note 4), valuation of right of use assets and lease liabilities 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 and 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 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 September 30, 2021 and December 31, 2020. 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. The following table reflects assets and liabilities that are measured at fair value on a recurring basis (in thousands) As of September 30, 2021 Fair Value Measurement Using Level 1 Level 2 Level 3 Total Derivative liabilities $ — $ — $ 3,560 $ 3,560 Stock warrant liabilities — — 1 1 $ — $ — $ 3,561 $ 3,561 As of December 31, 2020 Fair Value Measurement Using Level 1 Level 2 Level 3 Total Derivative liabilities $ — $ — $ 5,998 $ 5,998 Stock warrant liabilities — — 1 1 $ — $ — $ 5,999 $ 5,999 Derivative liabilities and stock warrant liabilities were valued using the Binomial Option Pricing Model in calculating the embedded conversion features for the three and nine months ended September 30, 2021 and the year ended December 31, 2020. |
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 20,000 73,000 |
Revenue recognition | Revenue recognition In accordance with ASC 842, Leases, During the initial term of the lease, management has a policy of partial rent forbearance when the tenant first opens the facility to assure that the tenant has the opportunity for success. Management may be required to exercise considerable judgment in estimating revenue to be recognized. When management concludes that the Company is the owner of tenant improvements, the Company records the cost to construct the tenant improvements as a capital asset. In addition, the Company 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, the Company 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, we record 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. The Company analyzes its contracts to assess that they are within the scope and in accordance with ASC 606. In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements, whether for goods and services or licensing, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. |
Advertising | Advertising Advertising expense was $ 8,870 9,552 26,679 24,593 |
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 common 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. |
Income (loss) per common share | Income (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 548,408,152 1,129,526,612 |
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 and, 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. |
Recent accounting pronouncements | Recent accounting pronouncements . The Company believes 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. |
Organization and Operations (Ta
Organization and Operations (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The properties generating rents in 2021 and 2020 are as follows: | The properties generating rents in 2021 and 2020 are as follows: Purpose Size City State Retail store (recreational and medical) 3,300 sq. Denver CO Cultivation warehouse – terminated October 2020 18,600 sq. Denver CO Cultivation warehouse 14,800 sq. Denver CO |
Significant and Critical Acco_3
Significant and Critical Accounting Policies and Practices (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
The following table reflects assets and liabilities that are measured at fair value on a recurring basis (in thousands) | The following table reflects assets and liabilities that are measured at fair value on a recurring basis (in thousands) As of September 30, 2021 Fair Value Measurement Using Level 1 Level 2 Level 3 Total Derivative liabilities $ — $ — $ 3,560 $ 3,560 Stock warrant liabilities — — 1 1 $ — $ — $ 3,561 $ 3,561 As of December 31, 2020 Fair Value Measurement Using Level 1 Level 2 Level 3 Total Derivative liabilities $ — $ — $ 5,998 $ 5,998 Stock warrant liabilities — — 1 1 $ — $ — $ 5,999 $ 5,999 |
Accounts Receivables and Othe_2
Accounts Receivables and Other Receivables (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounts Receivables And Other Receivables | |
RAM shall continue to accrue debt to the company, assessed on the first day of each month, according to the schedule below | Additionally, in connection with the termination of the sublease, RAM will continue to pay the remaining future sublease premium payments due to the company on the Denver sublease (the “Future Rent Debt”) beginning on the termination date, and until the earlier of the Maturity Date or June 30, 2024, notwithstanding the termination of the Subleases. However, no payment under the Future Rent Debt agreement will be due to the Company until the Maturity Date, at which time the entire Future Rent Debt shall be due and payable in full, except for any month in which RAM earns $ 725,000 RAM shall continue to accrue debt to the company, assessed on the first day of each month, according to the schedule below Monthly Payments Accrued October 1, 2020 to June 30, 2021 $ 11,284 July 1, 2021 to June 30, 2022 11,622 July 1, 2022 to June 30, 2023 11,971 July 1, 2023 to June 30, 2024 12,330 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Convertible Notes Payable | |
Several convertible note holders elected to convert their notes to stock during the nine months ended September 30, 2021 and 2020. The tables below provide the note payable activity for the nine months ended September 30, 2021 and 2020, and also a reconciliation of the beginning and ending balances for the derivative liabilities measured using Level 3 fair value inputs for the nine months ended September 30, 2021 and 2020 | Several convertible note holders elected to convert their notes to stock during the nine months ended September 30, 2021 and 2020. The tables below provide the note payable activity for the nine months ended September 30, 2021 and 2020, and also a reconciliation of the beginning and ending balances for the derivative liabilities measured using Level 3 fair value inputs for the nine months ended September 30, 2021 and 2020 Convertible Discount Convertible Derivative Balance, December 31, 2020 $ 3,239,274 $ — $ 3,239,274 $ 5,997,865 Issuance of convertible notes 2,000 — 2,000 266,166 Conversion of convertible notes (100,000 ) — (100,000 ) (661,087 ) Repayment of convertible notes (200,000 ) — (200,000 ) (302,452 ) Change in fair value of derivatives — — — (1,877,592 ) Amortization — — — — Balance September 30, 2021 $ 2,941,274 $ — $ 2,941,274 $ 3,422,900 Convertible Discount Convertible Derivative Balance, December 31, 2019 $ 3,266,775 $ 914,239 $ 2,352,530 $ 4,834,190 Issuance of convertible notes 103,000 103,000 — 394,001 Conversion of convertible notes (119,000 ) (39,843 ) (79,157 ) (128,583 ) Repayment of convertible notes (7,500 ) — (7,500 ) — Change in fair value of derivatives — — — (1,084,517 ) Amortization — (942,602 ) 942,601 — Balance September 30, 2020 $ 3,243,275 $ 34,794 $ 3,208,474 $ 4,015,091 |
Binomial Option Pricing Model in calculating the embedded conversion features and current liabilities for the nine months ended September 30, 2021 and 2020 | The following assumptions were used in the Binomial Option Pricing Model in calculating the embedded conversion features and current liabilities for the nine months ended September 30, 2021 and 2020 September 30, September 30, Risk-free interest rates 0.02 0.09 % 0.10 0.11 % Expected life (years) 0.25 0.25 1.0 Expected dividends 0 % 0 % Expected volatility 133 544 % 147 214 % |
Stockholders_ Deficit (Tables)
Stockholders’ Deficit (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
The tables below provide the preferred stock activity for the nine months ended September 30, 2021 and 2020, and also a reconciliation of the beginning and ending balances for the derivative liabilities measured using Level 3 fair value inputs for the nine months ended September 30, 2021 and 2020 | The tables below provide the preferred stock activity for the nine months ended September 30, 2021 and 2020, and also a reconciliation of the beginning and ending balances for the derivative liabilities measured using Level 3 fair value inputs for the nine months ended September 30, 2021 and 2020 Preferred Discount Preferred Derivative Balance , December 31, 2020 $ — — — — Issuance of Series C Preferred shares 293,700 293,700 — 1,259,672 Conversion of Series C Preferred shares (187,044 ) (129,402 ) (57,642 ) (193,152 ) Accretion of discount — (81,328 ) 81,328 — Accretion of dividend on Series C preferred stock 13,370 — 13,370 17,104 Change in fair value of derivatives — — — (946,458 ) Balance September 30, 2021 $ 120,026 $ 82,970 $ 37,056 $ 137,166 Preferred Discount Preferred Derivative Balance , December 31, 2019 $ 140,000 $ 131,250 $ 8,750 $ 190,131 Issuance of Series C Preferred shares 111,600 111,600 — 170,896 Conversion of Series C Preferred shares (206,561 ) (132,768 ) (73,793 ) (302,127 ) Accretion of discount — (67,201 ) 67,201 — Accretion of dividend on Series C preferred stock 13,344 — 13,344 15,610 Change in fair value of derivatives — — — (11,304 ) Balance September 30, 2020 $ 58,383 $ 42,881 $ 15,502 $ 63,206 |
The following assumptions were used in the Binomial Option Pricing Model in calculating the embedded conversion features and current liabilities for the nine months ended September 30, 2021 and 2020 | The following assumptions were used in the Binomial Option Pricing Model in calculating the embedded conversion features and current liabilities for the nine months ended September 30, 2021 and 2020 2021 2020 Risk-free interest rates 0.12 0.25 % 0.12 0.71 % Expected life (years) 1.4 2.0 1.3 2.0 Expected dividends 0 % 0 % Expected volatility 185 196 % 172 262 % |
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 nine months ended September 30, 2021 and 2020 | 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 nine months ended September 30, 2021 and 2020 Nine Months ended September 30, 2021 2020 Balance at beginning of period $ 476 $ 967 Additions to derivative instruments — — (Gain) loss on change in fair value of derivative liability 387 (334 ) Balance at end of period $ 863 $ 633 |
The following assumptions were used in the Binomial Option Pricing Model in calculating the embedded conversion features and current liabilities for the nine months ended September 30, 2021 and 2020 | The following assumptions were used in the Binomial Option Pricing Model in calculating the embedded conversion features and current liabilities for the nine months ended September 30, 2021 and 2020 September 30, 2021 September 30, 2020 Annual dividend yield 0 % 0 % Expected life (years) Risk-free interest rate 0.09 1.16 % 0.13 1.83 % Expected volatility 189 243 % 190 243 % |
Note 10 _ Commitments and Con_2
Note 10 – Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
the maturities of operating leases liabilities are as follows (in thousands | As of September, 2021, the maturities of operating leases liabilities are as follows (in thousands Operating Leases 2021 128 2022 513 2023 520 2024 419 2025 45 Total 1,625 Less: amount representing interest (267 ) Present value of future minimum lease payments 1,358 Less: current obligations under leases 373 Long-term lease obligations $ 985 |
Rent expense is recognized on a straight-line basis over the life of the lease. Rent expense consists of the following | Rent expense is recognized on a straight-line basis over the life of the lease. Rent expense consists of the following Nine months ended September 30, 2021 2020 Operating lease costs $ 330,000 $ 508,199 Variable rent costs 145,521 349,336 Total rent expense $ 475,521 $ 857,535 |
the aggregate remaining minimal annual lease payments under these operating leases plus NNN were as follows: (in thousands) | As of September 30, 2021, the aggregate remaining minimal annual lease payments under these operating leases plus NNN were as follows: (in thousands) 2021 $ 89 2022 386 2023 443 2024 395 2025 45 Total $ 1,358 |
Other information related to leases is as follows | Other information related to leases is as follows Nine Months ended Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 309,931 Weighted-average remaining lease term - operating leases 3.1 Weighted-average discount rate - operating leases 12 % |
Right of use assets obtained in exchange for lease liabilities: | Right of use assets obtained in exchange for lease liabilities: Operating lease asset $ 627,500 Lease liability $ 625,129 |
the maturities of expected base sublease income are as follows (in thousands) | As of September 30, 2021, the maturities of expected base sublease income are as follows (in thousands) Operating Leases 2021 $ 168 2022 678 2023 693 2024 555 2025 and beyond 59 Total $ 2,153 |
The properties generating rents
The properties generating rents in 2021 and 2020 are as follows: (Details) | 9 Months Ended |
Sep. 30, 2021ft² | |
City | 516 |
State | DE |
Retail Store Recreational And Medical [Member] | |
Area | 3,300 |
City | Denver |
State | CO |
Cultivation Warehouse [Member] | |
Area | 18,600 |
City | Denver |
State | CO |
Cultivation Warehouse 1 [Member] | |
Area | 14,800 |
City | Denver |
State | CO |
Organization and Operations (De
Organization and Operations (Details Narrative) - ft² | Aug. 31, 2021 | Oct. 31, 2020 |
Cultivation Warehouse 1 [Member] | ||
[custom:AreaExtended-0] | 14,800 | 18,600 |
The following table reflects as
The following table reflects assets and liabilities that are measured at fair value on a recurring basis (in thousands) (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Defined Benefit Plan Disclosure [Line Items] | ||
Derivative liabilities | $ 3,560 | $ 5,998 |
Stock warrant liabilities | 1 | 1 |
3,561 | 5,999 | |
Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Derivative liabilities | ||
Stock warrant liabilities | ||
Fair Value, Inputs, Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Derivative liabilities | ||
Stock warrant liabilities | ||
Fair Value, Inputs, Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Derivative liabilities | 3,560 | 5,998 |
Stock warrant liabilities | 1 | 1 |
$ 3,561 | $ 5,999 |
Significant and Critical Acco_4
Significant and Critical Accounting Policies and Practices (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||||
Cash, Uninsured Amount | $ 20,000 | $ 20,000 | $ 73,000 | ||
Advertising Expense | 8,870 | $ 9,552 | $ 26,679 | $ 24,593 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 548,408,152 | 1,129,526,612 | |||
Maximum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Cash, FDIC Insured Amount | $ 250,000 | $ 250,000 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Working capital | $ 9,066,478 | |
Retained Earnings (Accumulated Deficit) | $ 53,902,674 | $ 55,110,000 |
RAM shall continue to accrue de
RAM shall continue to accrue debt to the company, assessed on the first day of each month, according to the schedule below (Details) | Sep. 30, 2021USD ($) |
Monthly Payments Accrued | |
October 1, 2020 to June 30, 2021 | $ 11,284 |
July 1, 2021 to June 30, 2022 | 11,622 |
July 1, 2022 to June 30, 2023 | 11,971 |
July 1, 2023 to June 30, 2024 | $ 12,330 |
Accounts Receivables and Othe_3
Accounts Receivables and Other Receivables (Details Narrative) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Apr. 30, 2021USD ($) | Dec. 31, 2020USD ($) | Oct. 01, 2020USD ($)ft² | Sep. 09, 2020USD ($) | |
Receivables From Subleases | $ 574,826 | $ 574,826 | $ 523,958 | |||||
Financing Receivable, after Allowance for Credit Loss | 605,931 | 605,931 | 1,030,422 | |||||
Interest receivable | 275,931 | 275,931 | $ 93,770 | $ 300,422 | ||||
Receivables Guaranteed | 400,000 | 400,000 | ||||||
Interest Income (Expense), Net | 14,850 | $ 36,199 | 69,279 | $ 101,891 | ||||
Debt Instrument face amount | $ 400,000 | |||||||
Long term notes receivable | 1,482,824 | 1,482,824 | ||||||
Gain (Loss) on Termination of Lease | $ 33,851 | $ 101,554 | ||||||
Cultivation Warehouse 1 [Member] | ||||||||
[custom:AreaTerminated-0] | ft² | 18,600 | |||||||
Membership Purchase Agreements [Member] | ||||||||
Interest receivable | $ 68,000 | |||||||
Minimum [Member] | ||||||||
Debt Instrument, Interest Rate During Period | 12.00% | |||||||
Maximum [Member] | ||||||||
Debt Instrument, Interest Rate During Period | 18.00% | |||||||
R A M [Member] | ||||||||
Proceeds From Sublease | $ 1,030,000 | |||||||
Deferred Rent Credit | $ 1,418,480 | |||||||
V P C [Member] | ||||||||
Deferred Rent Credit | $ 64,344 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Apr. 30, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||||||
Accrued Liabilities Related Parties Current | $ 242,189 | $ 242,189 | $ 289,897 | ||||
Accrued Liabilities | 961,986 | 961,986 | 1,042,859 | ||||
Cash Based Compensation Related Parties | 90,000 | 270,000 | |||||
Stock Based Compensation Related Parties | 70,811 | $ 86,683 | 156,465 | $ 213,714 | |||
Related Party Transaction, Description of Transaction | From 2017 to 2019, Mr. Gonfiantini, CEO, personally and through his Company, Crystal Bay Financial LLC, loaned an aggregate amount of $1,020,000 to Royal Asset Management. These notes accrue interest at 17% - 18% per annum, and require monthly payment approximately from $5,000 to $20,000. These notes are personally guaranteed by the managing member of Royal Asset Management, and are secured by certain equipment and other tangible properties of Royal Asset Management. Among these notes, $500,000 is also secured by the medical marijuana licenses held by Royal Asset Management. As of October 20, 2021 these notes were fully paid by Royal Asset Management and the security was released. | ||||||
Debt Instrument, Face Amount | $ 400,000 | ||||||
Interest Payable | $ 75,090 | $ 75,090 | 70,101 | ||||
Mr Throgmartin [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt Instrument, Face Amount | 140,958 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | 8.00% | |||||
Debt Instrument, Maturity Date | Sep. 30, 2021 | ||||||
Interest Payable | $ 57,835 | $ 57,835 | $ 49,401 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Aug. 31, 2015 | Jun. 30, 2020 | Apr. 22, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Apr. 30, 2021 | Dec. 31, 2020 |
Short-term Debt [Line Items] | |||||||||
Debt Instrument, Face Amount | $ 400,000 | ||||||||
Notes Payable, Current | $ 133,403 | $ 133,403 | $ 133,403 | ||||||
Interest Payable | 75,090 | 75,090 | $ 70,101 | ||||||
Forgiveness Of DebtIncome | $ 56,908 | ||||||||
Numerica Credit Union [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Proceeds from Loans | $ 56,444 | ||||||||
Debt Instrument, Interest Rate During Period | 1.00% | ||||||||
Small Business Association [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Proceeds from Loans | $ 150,000 | ||||||||
Debt Instrument, Interest Rate During Period | 3.75% | ||||||||
Third Parties [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Debt Instrument, Face Amount | $ 126,000 | ||||||||
Debt Instrument, Maturity Date | Oct. 31, 2018 |
Several convertible note holder
Several convertible note holders elected to convert their notes to stock during the nine months ended September 30, 2021 and 2020. The tables below provide the note payable activity for the nine months ended September 30, 2021 and 2020, and also a reconci (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Short-term Debt [Line Items] | ||
Issuance of convertible notes | $ 100,000 | |
Repayment of convertible notes | (200,000) | (7,500) |
Convertible Debt [Member] | ||
Short-term Debt [Line Items] | ||
Balance, December 31, 2019 | 3,239,274 | 3,266,775 |
Issuance of convertible notes | 2,000 | 103,000 |
Conversion of convertible notes | (100,000) | (119,000) |
Repayment of convertible notes | (200,000) | (7,500) |
Change in fair value of derivatives | ||
Amortization | ||
Balance September 30, 2020 | 2,941,274 | 3,243,275 |
Discount [Member] | ||
Short-term Debt [Line Items] | ||
Balance, December 31, 2019 | 914,239 | |
Issuance of convertible notes | 103,000 | |
Conversion of convertible notes | (39,843) | |
Repayment of convertible notes | ||
Change in fair value of derivatives | ||
Amortization | (942,602) | |
Balance September 30, 2020 | 34,794 | |
Convertible Note Netof Discount [Member] | ||
Short-term Debt [Line Items] | ||
Balance, December 31, 2019 | 3,239,274 | 2,352,530 |
Issuance of convertible notes | 2,000 | |
Conversion of convertible notes | (100,000) | (79,157) |
Repayment of convertible notes | (200,000) | (7,500) |
Change in fair value of derivatives | ||
Amortization | 942,601 | |
Balance September 30, 2020 | 2,941,274 | 3,208,474 |
Derivative Liabilities [Member] | ||
Short-term Debt [Line Items] | ||
Balance, December 31, 2019 | 5,997,865 | 4,834,190 |
Issuance of convertible notes | 266,166 | 394,001 |
Conversion of convertible notes | (661,087) | (128,583) |
Repayment of convertible notes | (302,452) | |
Change in fair value of derivatives | (1,877,592) | (1,084,517) |
Amortization | ||
Balance September 30, 2020 | $ 3,422,900 | $ 4,015,091 |
Binomial Option Pricing Model i
Binomial Option Pricing Model in calculating the embedded conversion features and current liabilities for the nine months ended September 30, 2021 and 2020 (Details) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Risk Free Interest Rates [Member] | Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Assumptions Rate | 0.02% | 0.10% |
Risk Free Interest Rates [Member] | Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Assumptions Rate | 0.09% | 0.11% |
Expected Life [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Assumptions Term | 3 months | |
Expected Life [Member] | Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Assumptions Term | 3 months | |
Expected Life [Member] | Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Assumptions Term | 1 year | |
Expected Dividends [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Assumptions Rate | 0.00% | 0.00% |
Expected Volatility [Member] | Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Assumptions Volatility | 133.00% | 147.00% |
Expected Volatility [Member] | Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Assumptions Volatility | 544.00% | 214.00% |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) - USD ($) | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Short-term Debt [Line Items] | ||||
Derivative Liability, Noncurrent | $ 3,422,900 | $ 5,997,865 | ||
Debt Instrument, Interest Rate, Increase (Decrease) | 10.00% | |||
Gain (Loss) on Extinguishment of Debt | $ 389,550 | $ 1,255 | ||
Noncash Finance Cost | 2,000 | |||
Holders [Member] | ||||
Short-term Debt [Line Items] | ||||
Debt Conversion, Converted Instrument, Amount | $ 100,000 | $ 119,000 | ||
Interest converted into value | 5,026,413 | 19,501,028 | ||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 705,635 | |||
Gain (Loss) on Extinguishment of Debt | $ 1,255 | |||
Increase (Decrease) in Derivative Liabilities | 128,583 | |||
Interest converted into share | 6,256 | $ 8,166 | ||
[custom:ConvertibleNotesPstDue-0] | 2,941,274 | |||
Convertible Notes [Member] | ||||
Short-term Debt [Line Items] | ||||
Debt Conversion, Converted Instrument, Amount | $ 100,000 | |||
Interest converted into value | 4,444,444 | |||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 697,779 | |||
Gain (Loss) on Extinguishment of Debt | 59,999 | |||
Increase (Decrease) in Derivative Liabilities | 657,778 | |||
Convertible Debt One [Member] | ||||
Short-term Debt [Line Items] | ||||
Interest converted into value | 581,969 | |||
Stock Issued During Period, Value, Conversion of Convertible Securities | 7,856 | |||
Gain (Loss) on Extinguishment of Debt | 1,709 | |||
Increase (Decrease) in Derivative Liabilities | 3,309 | |||
Interest converted into share | 6,256 | |||
Convertible Debt Two [Member] | ||||
Short-term Debt [Line Items] | ||||
Gain (Loss) on Extinguishment of Debt | 177,116 | |||
Increase (Decrease) in Derivative Liabilities | 177,116 | |||
Repayments of Debt | 200,000 | |||
Convertible Deb Three [Member] | ||||
Short-term Debt [Line Items] | ||||
Gain (Loss) on Extinguishment of Debt | 150,726 | |||
Increase (Decrease) in Derivative Liabilities | 125,336 | |||
Debt Instrument, Periodic Payment, Interest | $ 70,000 |
The tables below provide the pr
The tables below provide the preferred stock activity for the nine months ended September 30, 2021 and 2020, and also a reconciliation of the beginning and ending balances for the derivative liabilities measured using Level 3 fair value inputs for the nin (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Discount [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance , December 31, 2019 | $ 131,250 | |
Issuance of Series C Preferred shares | 293,700 | 111,600 |
Conversion of Series C Preferred shares | (129,402) | (132,768) |
Accretion of discount | (81,328) | (67,201) |
Accretion of dividend on Series C preferred stock | ||
Change in fair value of derivatives | ||
Balance September 30, 2020 | 82,970 | 42,881 |
Derivative Liabilities [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance , December 31, 2019 | 190,131 | |
Issuance of Series C Preferred shares | 1,259,672 | 170,896 |
Conversion of Series C Preferred shares | (193,152) | (302,127) |
Accretion of discount | ||
Accretion of dividend on Series C preferred stock | 17,104 | 15,610 |
Change in fair value of derivatives | (946,458) | (11,304) |
Balance September 30, 2020 | 137,166 | 63,206 |
Preferred Stock And Accrued Dividend [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance , December 31, 2019 | 140,000 | |
Issuance of Series C Preferred shares | 293,700 | 111,600 |
Conversion of Series C Preferred shares | (187,044) | (206,561) |
Accretion of discount | ||
Accretion of dividend on Series C preferred stock | 13,370 | 13,344 |
Change in fair value of derivatives | ||
Balance September 30, 2020 | 120,026 | 58,383 |
Preferred Stock And Accrued Dividend Net Of Discount [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance , December 31, 2019 | 8,750 | |
Issuance of Series C Preferred shares | ||
Conversion of Series C Preferred shares | (57,642) | (73,793) |
Accretion of discount | 81,328 | 67,201 |
Accretion of dividend on Series C preferred stock | 13,370 | 13,344 |
Change in fair value of derivatives | ||
Balance September 30, 2020 | $ 37,056 | $ 15,502 |
The following assumptions were
The following assumptions were used in the Binomial Option Pricing Model in calculating the embedded conversion features and current liabilities for the nine months ended September 30, 2021 and 2020 (Details) | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share based compensation arrangement by share based payment award fair value assumption expected dividend rate | 0.00% | 0.00% | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | |
Minimum [Member] | |||
Share based compensation arrangement by share based payment award fair value assumption risk free interest rate | 0.12% | 0.12% | |
Share basedCompensation arrangemen by share based payment award fair value assumption expected term one | 1 year 4 months 24 days | 1 year 3 months 19 days | |
Share based compensation arrangement by share based payment award fair value assumption expected volatility rate | 185.00% | 172.00% | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.09% | 0.13% | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 189.00% | 190.00% | |
Maximum [Member] | |||
Share based compensation arrangement by share based payment award fair value assumption risk free interest rate | 0.25% | 0.71% | |
Share basedCompensation arrangemen by share based payment award fair value assumption expected term one | 2 years | 2 years | |
Share based compensation arrangement by share based payment award fair value assumption expected volatility rate | 196.00% | 262.00% | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.16% | 1.83% | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 243.00% | 243.00% |
The Company has determined that
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 (L (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Equity [Abstract] | ||
Balance at beginning of period | $ 476 | $ 967 |
Additions to derivative instruments | ||
(Gain) loss on change in fair value of derivative liability | 387 | (334) |
Balance at end of period | $ 863 | $ 633 |
Stockholders_ Deficit (Details
Stockholders’ Deficit (Details Narrative) - USD ($) | Mar. 16, 2021 | Feb. 24, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Class of Stock [Line Items] | |||||
Derivative Liability | $ 3,560 | $ 5,998 | |||
Number of shares to be issued for services shares | 4,799,258 | ||||
Number of shares to be issued for services value | $ 156,465 | ||||
Stock Issued During Period, Shares, New Issues | 1,967,714 | ||||
Stock Issued During Period, Value, New Issues | $ 30,976 | ||||
Stock to be issued (in shares) | 4,563,231 | 1,731,687 | |||
Stock to be issued | $ 138,853 | $ 13,364 | |||
Stock to be issued (in shares) | 241,098 | ||||
Stock issued during period shares issued for services 1 | $ 6,000 | ||||
Sttock issued during period shares new issues one | 1,137,553 | ||||
Sttock issued during period value new issues one | $ 16,000 | ||||
Stock to be issued | 209,402 | 1,105,857 | |||
Stock to be issued | $ 4,000 | ||||
[custom:NumberOfSharesToBeIssuedForServicesValueNine] | $ 14,000 | ||||
Number of shares to be issued for debt conversions shares | 31,960 | ||||
Number of shares to be issued for debt conversions value | 21,861 | ||||
Conversion of Stock, Amount Converted | $ 100,000 | $ 119,000 | |||
Common stock issued for consulting services shares | 30,000 | ||||
Common stock issued for consulting services value | $ 1,915 | ||||
Gain (Loss) on Extinguishment of Debt | $ 389,550 | 1,255 | |||
Number of shares but not issued for debt conversions shares | $ 5,733,397 | ||||
Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Conversion of Stock, Shares Issued | 13,695,817 | ||||
Stock issued during period shares issued for services of related party | 2,553,969 | ||||
Stock issued during period value issued for services of related party | $ 65,633 | ||||
Stock to be issued during period shares issued for services of related party | 3,907,356 | ||||
Stock to be issued during period value issued for services of related party | $ 28,296 | ||||
Aggregate stock to be issued during period shares issued for services one | 5,196,378 | ||||
Aggregate stock to be issued during period value issued for services one | $ 63,403 | ||||
[custom:StockIssuedDuringPeriodSharesIssuedForServicesOne] | 2,000,000 | ||||
Stock to be issued during period shares issued for services one | 3,196,378 | ||||
Stock to be issued during period value issued for services one | $ 37,803 | ||||
Holders [Member] | |||||
Class of Stock [Line Items] | |||||
Debt Conversion, Converted Instrument, Amount | $ 100,000 | 119,000 | |||
[custom:InterestConvertedIntoShare] | $ 6,256 | $ 8,166 | |||
Debt Conversion, Converted Instrument, Shares Issued | 5,026,413 | 19,501,028 | |||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 705,635 | ||||
Additional fee | $ 210 | ||||
Gain (Loss) on Extinguishment of Debt | 1,255 | ||||
Write off of Deferred Debt Issuance Cost | 39,843 | ||||
Increase (Decrease) in Derivative Liabilities | $ 128,583 | ||||
Series C Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock sold | 113,850 | 179,850 | 113,850 | ||
Preferred Stock, Dividend Rate, Percentage | 10.00% | ||||
Derivative Liability | $ 177,231 | $ 1,082,441 | $ 137,166 | ||
Debt Conversion, Converted Instrument, Shares Issued | 195,800 | ||||
Conversion of Stock, Shares Issued | 32,343,343 | ||||
Conversion of Stock, Shares Converted | 179,850 | ||||
Conversion of Stock, Amount Converted | $ 7,194 | ||||
Series C Preferred Stock [Member] | Geneva [Member] | |||||
Class of Stock [Line Items] | |||||
Cash received from sale of preferred stock | $ 103,500 | $ 163,500 | |||
Common stock discount percentage | 30.00% |
the maturities of operating lea
the maturities of operating leases liabilities are as follows (in thousands (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 128 |
2022 | 513 |
2023 | 520 |
2024 | 419 |
2025 | 45 |
Total | 1,625 |
Less: amount representing interest | (267) |
Present value of future minimum lease payments | 1,358 |
Less: current obligations under leases | 373 |
Long-term lease obligations | $ 985 |
Rent expense is recognized on a
Rent expense is recognized on a straight-line basis over the life of the lease. Rent expense consists of the following (Details) - USD ($) | 9 Months Ended | 21 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease costs | $ 330,000 | $ 508,199 |
Variable rent costs | 145,521 | 349,336 |
Total rent expense | $ 475,521 | $ 857,535 |
the aggregate remaining minimal
the aggregate remaining minimal annual lease payments under these operating leases plus NNN were as follows: (in thousands) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
2021 | $ 89 | $ 168 |
2022 | 386 | 678 |
2023 | 443 | 693 |
2024 | 395 | 555 |
2025 | 45 | 59 |
Total | $ 1,358 | $ 2,153 |
Other information related to le
Other information related to leases is as follows (Details) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
[custom:OperatingCashFlowsFromOperatingLeases] | $ 309,931 |
Finance Lease, Weighted Average Remaining Lease Term | 3 years 1 month 6 days |
Operating Lease, Weighted Average Discount Rate, Percent | 0.12% |
Right of use assets obtained in
Right of use assets obtained in exchange for lease liabilities: (Details) | Sep. 30, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Operating lease asset | $ 627,500 |
Lease liability | $ 625,129 |
the maturities of expected base
the maturities of expected base sublease income are as follows (in thousands) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
2021 | $ 89 | $ 168 |
2022 | 386 | 678 |
2023 | 443 | 693 |
2024 | 395 | 555 |
2025 and beyond | 45 | 59 |
Total | $ 1,358 | $ 2,153 |
Note 10 _ Commitments and Con_3
Note 10 – Commitments and Contingencies (Details Narrative) - USD ($) | Jul. 27, 2021 | Oct. 19, 2019 | Feb. 01, 2019 | Jan. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Dec. 31, 2020 |
Loss Contingencies [Line Items] | ||||||||||
Lessee, Operating Lease, Description | In August 2021, the master lease and sublease associated with the 14,800 sq. cultivation warehouse were extended through July 31, 2024. | |||||||||
Lease Expiration Date | Jul. 31, 2024 | |||||||||
Operating Lease, Expense | $ 330,000 | $ 508,199 | ||||||||
Sublease Income | $ 198,505 | $ 351,502 | $ 582,010 | $ 1,080,382 | ||||||
Lessee, Operating Lease, Discount Rate | 12.00% | 12.00% | 12.00% | |||||||
Operating Lease, Weighted Average Remaining Lease Term | 3 years 1 month 6 days | 3 years 1 month 6 days | 3 years 1 month 6 days | |||||||
Lessor, Operating Lease, Description | These two leases have 2.8 year and 3.3 year terms with optional extensions, expiration dates range from July 2024 to February 2025, and monthly base rent of approximately $20,000-$22,500 plus variable NNN | |||||||||
Accrued compensation | $ 138,853 | $ 138,853 | $ 138,853 | $ 13,364 | ||||||
Accrued compensastion, Shares | 4,563,231 | |||||||||
Sub Lease [Member] | R A M [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Alleged damages under the sublease terms | The alleged damages under the sublease terms and other ancillary agreements amount to $1,480,881, $377,568, $1,027,635, and $1,418,480, respectively. In addition, the lawsuit alleges that RAM failed to make payments pursuant to a promissory note (the “Note”) in which the Company and RAM entered into on April 3, 2018. The Note was for the principal amount of $330,000 with interest at 18% per annum. | |||||||||
Employment Agreements [Member] | Ron Throgmartin [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Accrued compensation | $ 156,000 | $ 92,000 | $ 156,000 | $ 92,000 | $ 156,000 | |||||
Accrued compensastion, Shares | 4,799,258 | 6,461,325 | ||||||||
Employment Agreements [Member] | Chief Executive Officer [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Equity Method Investment, Ownership Percentage | 10.00% | 10.00% | 10.00% | |||||||
Employment Agreements [Member] | Other Executives [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Equity Method Investment, Ownership Percentage | 2.00% | 2.00% | 2.00% | |||||||
Separation Agreement [Member] | Ron Throgmartin [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Share-based Payment Arrangement, Expense | $ 45,000 | $ 45,000 | ||||||||
Lessor, Operating Lease, Term of Contract | 5 years | |||||||||
Debt Instrument, Description | Company acknowledged it owed Mr. Throgmartin the amount of $517,252 in principal and accrued interest of note payable, salary and fees, accrued during the 5 years of his employment. In addition, the Company further acknowledged that it will pay Mr. Throgmartin fifty (50%) percent of his compensation due under the remaining Employment Agreement, or $614,583 under certain conditions, which the Company accrued in full as the date of Mr. Throgmartin’s separation | |||||||||
Accrued Salaries, Current | $ 5,000 | |||||||||
Diem fee | $ 500 | |||||||||
Accounts Payable, Related Parties | $ 835,597 | 835,597 | $ 835,597 | |||||||
Separation Agreement [Member] | Executive Officer [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Accrued compensation | $ 126,389 | 126,389 | $ 126,389 | |||||||
Cash payment | $ 206,250 | |||||||||
Stock grant for restricted common shares for accrued salary | 53,717 | |||||||||
Restricted common share Issued for stock option | 122,934 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 122,000 | |||||||||
Share-based Payment Arrangement, Expense | 35,872 | $ 21,086 | ||||||||
Maximum [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Operating Lease, Expense | 20,000 | |||||||||
Sublease Income | 26,300 | |||||||||
Minimum [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Operating Lease, Expense | 21,118 | |||||||||
Sublease Income | $ 28,622 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] | 1 Months Ended |
Oct. 31, 2021shares | |
Subsequent Event [Line Items] | |
This is the number of preferred shares converted to common | 113,850 |
This is the number of common shares issued upon conversion of preferred stock | 2,463,578 |