Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 13, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Kannalife Inc | |
Entity Central Index Key | 0001615999 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Is Entity Emerging Growth? | true | |
Is Entity Small Business? | true | |
Entity Extended Transition Period? | false | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 000-55657 | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding | 74,225,141 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 120,550 | $ 307,131 |
Marketable security (available for sale) | 395,205 | 2,579,640 |
Other receivables | 9,299 | 99,691 |
Due from related party, net | 0 | 16,334 |
Total Current Assets | 525,054 | 3,002,796 |
NON-CURRENT ASSETS: | ||
Other assets | 27,490 | 0 |
Property and equipment, net | 79,480 | 3,074 |
Security deposits | 17,121 | 17,121 |
Total Non-Current Assets | 124,091 | 20,195 |
TOTAL ASSETS | 649,145 | 3,022,991 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 290,321 | 283,996 |
Payroll and related liabilities | 247,074 | 246,067 |
Loan payable | 620,000 | 0 |
Loan payable - related party | 42,092 | 16,173 |
Capital lease obligations | 7,460 | 0 |
Total Current Liabilities | 1,206,947 | 546,236 |
LONG TERM LIABILITIES: | ||
Loan payable - long term | 0 | 620,000 |
Loan payable - related party - long term | 0 | 25,822 |
Convertible notes payable - long term | 376,373 | 500,000 |
Capital lease obligation - long term portion | 28,426 | 0 |
Total Long Term Liabilities | 404,799 | 1,145,822 |
TOTAL LIABILITIES | 1,611,746 | 1,692,058 |
Commitments and contingencies | 0 | 0 |
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Common stock, $0.0001 par value, 200,000,000 authorized, 74,225,141 and 69,854,141 issued and outstanding, respectively | 7,422 | 6,985 |
Additional paid-in capital | 6,794,612 | 6,381,755 |
Accumulated deficit | (7,764,635) | (5,052,051) |
Non-controlling interest | 0 | (5,756) |
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | (962,601) | 1,330,933 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 649,145 | 3,022,991 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Preferred stock, $0.0001 par value, 5,000,000 shares authorized Series A preferred stock, 75 shares designated, 75 issued and outstanding (Liquidation preference of $75,000), Series B preferred stock, 75 shares designated, 75 issued and outstanding (Liquidation preference of $75,000) | 0 | 0 |
Series B Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Preferred stock, $0.0001 par value, 5,000,000 shares authorized Series A preferred stock, 75 shares designated, 75 issued and outstanding (Liquidation preference of $75,000), Series B preferred stock, 75 shares designated, 75 issued and outstanding (Liquidation preference of $75,000) | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 74,225,141 | 69,854,141 |
Common Stock, Shares, Outstanding | 74,225,141 | 69,854,141 |
Series A Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 75 | 75 |
Preferred Stock, Shares Issued | 75 | 75 |
Preferred Stock, Shares Outstanding | 75 | 75 |
Liquidation preference | $ 75,000 | $ 75,000 |
Series B Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 75 | 75 |
Preferred Stock, Shares Issued | 75 | 75 |
Preferred Stock, Shares Outstanding | 75 | 75 |
Liquidation preference | $ 75,000 | $ 75,000 |
Condensed Consolidated Statment
Condensed Consolidated Statments of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
NET REVENUES: | ||||
Grant Revenue | $ 23,968 | $ 38,101 | $ 126,027 | $ 104,965 |
TOTAL NET REVENUES | 23,968 | 38,101 | 126,027 | 104,965 |
OPERATING EXPENSES: | ||||
Research and development | 189,443 | 67,059 | 439,680 | 125,696 |
General and administrative | 601,567 | 349,782 | 1,511,334 | 537,217 |
TOTAL OPERATING EXPENSES | 791,010 | 416,841 | 1,951,014 | 662,913 |
LOSS FROM OPERATIONS | (767,042) | (378,740) | (1,824,987) | (557,948) |
OTHER (EXPENSE) INCOME: | ||||
Interest expense, net | (17,794) | (6,962) | (49,754) | (15,112) |
Other (expense) income, net | 0 | 0 | 0 | 31,183 |
Loss on conversion of convertible debt | 0 | 0 | 0 | (61,815) |
Realized gain on investment | 0 | 0 | 0 | 3,901,974 |
Net gains and losses recognized during the period on marketable security | (301,661) | (415,833) | (844,671) | (415,833) |
TOTAL OTHER (EXPENSE) INCOME | (319,455) | (422,795) | (894,425) | 3,440,397 |
NET (LOSS) INCOME BEFORE INCOME TAX | (1,086,497) | (801,535) | (2,719,412) | 2,882,449 |
Income tax expense (benefit) | 0 | 0 | 0 | 772,000 |
NET (LOSS) INCOME | (1,086,497) | (801,535) | (2,719,412) | 2,110,449 |
Net loss attributable to noncontrolling interests | (1,953) | (2,272) | (6,828) | (2,272) |
Net (loss) income attributable to Kannalife, Inc. | $ (1,084,544) | $ (799,263) | $ (2,712,584) | $ 2,112,721 |
(Loss) income attributable to Kannalife, Inc. per common share - basic | $ (0.02) | $ (0.01) | $ (0.04) | $ 0.03 |
(Loss) income attributable to Kannalife, Inc. per common share - diluted | $ (0.02) | $ (0.01) | $ (0.04) | $ 0.03 |
Weighted average common shares outstanding - basic | 70,934,271 | 67,264,467 | 70,218,141 | 62,585,619 |
Weighted average common shares outstanding - diluted | 70,934,271 | 67,264,467 | 70,218,141 | 67,828,952 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Cash Flows [Abstract] | ||
Net (loss) income | $ (2,719,412) | $ 2,110,449 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Loss on issuance of stock for conversion of notes payable and accrued salaries | 0 | 61,815 |
Realized gain on investment | 0 | (3,901,974) |
Net gains and losses recognized during the period on marketable security | 301,661 | 415,833 |
Depreciation | 1,430 | 0 |
Stock based compensation | 275,878 | 7,558 |
Provision for deferred income taxes | 0 | 772,000 |
Changes in operating assets and liabilities: | ||
Security deposits | 0 | (2,121) |
Other receivables | 90,392 | (19,651) |
Accounts payable and accrued expenses | 32,698 | (148,192) |
Payroll and related liabilities | 1,007 | 6,662 |
Due from related party, net | 16,334 | (65,326) |
NET CASH USED IN OPERATING ACTIVITIES | (2,000,012) | (762,947) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash received upon acquisition | 0 | 289,654 |
Proceeds from sale of marketable securities | 1,882,774 | 0 |
Purchase of equipment | (41,950) | 0 |
Purchase of other asset | (27,490) | 0 |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 1,813,334 | 289,654 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of Series A Preferred stock | 0 | 75,000 |
Proceeds from issuance of Series B Preferred stock | 0 | 75,000 |
Proceeds from issuance of common stock | 0 | 203,000 |
Proceeds from notes payable | 0 | 345,000 |
Proceeds from notes payable - related party | 97 | 0 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 97 | 698,000 |
Net (decrease) increase in cash | (186,581) | 224,707 |
Cash and cash equivalents, beginning of period | 307,131 | 4,326 |
Cash and cash equivalents, end of period | 120,550 | 229,033 |
NON-CASH ACTIVITIES: | ||
Issuance of common stock for conversion of notes payable and accrued interest | 150,000 | 236,104 |
Issuance of common stock for remaining share of non-controlling interest | 12,584 | 0 |
Property and equipment financed through capital leases | 35,886 | 0 |
Issuance of common stock for conversion of notes payable and accrued interest - related party | 0 | 356,176 |
Issuance of common stock for conversion of accrued salaries | 0 | 2,812,810 |
Net liabilities assumed from reverse acquisition | $ 0 | $ 130,346 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements Of Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Series A Preferred Stock | Series B Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Noncontrolling Interest | Total |
Beginning balance, Shares at Dec. 31, 2017 | 53,281,932 | ||||||
Beginning balance, Amount at Dec. 31, 2017 | $ 5,328 | $ 2,683,776 | $ (5,988,866) | $ (3,299,762) | |||
Issuance of stock for conversion of notes payable, Shares | 1,537,009 | ||||||
Issuance of stock for conversion of notes payable, Amount | $ 153 | 653,940 | 654,093 | ||||
Issuance of stock for conversion of accrued salaries, Shares | 5,505,200 | ||||||
Issuance of stock for conversion of accrued salaries, Amount | $ 551 | 2,812,260 | 2,812,811 | ||||
Issuance of stock options for services | 7,558 | 7,558 | |||||
Issuance of Series A Preferred stock for cash, Shares | 75 | ||||||
Issuance of Series A Preferred stock for cash, Amount | 75,000 | 75,000 | |||||
Issuance of Series B Preferred stock for cash, Shares | 75 | ||||||
Issuance of Series B Preferred stock for cash, Amount | 75,000 | 75,000 | |||||
Issuance of common stock for cash, Shares | 2,030,000 | ||||||
Issuance of common stock for cash, Amount | $ 203 | 202,797 | 203,000 | ||||
Effect of reverse recapitalization transaction, Shares | 7,500,000 | ||||||
Effect of reverse recapitalization transaction, Amount | $ 750 | (131,096) | (130,346) | ||||
Net (loss) income | 2,112,721 | (2,272) | 2,110,449 | ||||
Ending balance, Shares at Sep. 30, 2018 | 75 | 75 | 69,854,141 | ||||
Ending balance, Amount at Sep. 30, 2018 | $ 6,985 | 6,379,235 | (3,876,145) | (2,272) | 2,507,803 | ||
Beginning balance, Shares at Jun. 30, 2018 | 60,324,141 | ||||||
Beginning balance, Amount at Jun. 30, 2018 | $ 6,032 | 6,155,015 | (3,076,882) | 3,084,165 | |||
Issuance of stock options for services | 2,519 | 2,519 | |||||
Issuance of Series A Preferred stock for cash, Shares | 75 | ||||||
Issuance of Series A Preferred stock for cash, Amount | 75,000 | 75,000 | |||||
Issuance of Series B Preferred stock for cash, Shares | 75 | ||||||
Issuance of Series B Preferred stock for cash, Amount | 75,000 | 75,000 | |||||
Issuance of common stock for cash, Shares | 2,030,000 | ||||||
Issuance of common stock for cash, Amount | $ 203 | 202,797 | 203,000 | ||||
Effect of reverse recapitalization transaction, Shares | 7,500,000 | ||||||
Effect of reverse recapitalization transaction, Amount | $ 750 | (131,096) | (130,346) | ||||
Net (loss) income | (799,263) | (2,272) | (801,535) | ||||
Ending balance, Shares at Sep. 30, 2018 | 75 | 75 | 69,854,141 | ||||
Ending balance, Amount at Sep. 30, 2018 | $ 6,985 | 6,379,235 | (3,876,145) | (2,272) | 2,507,803 | ||
Beginning balance, Shares at Dec. 31, 2018 | 75 | 75 | 69,854,141 | ||||
Beginning balance, Amount at Dec. 31, 2018 | $ 6,985 | 6,381,755 | (5,052,051) | (5,756) | 1,330,933 | ||
Issuance of stock options for services | 5,878 | 5,878 | |||||
Issuance of stock for conversion of notes payable and accrued interest, Shares | 1,500,000 | ||||||
Issuance of stock for conversion of notes payable and accrued interest, Amount | $ 150 | 149,850 | 150,000 | ||||
Issuance of common stock for services, Shares | 1,750,000 | ||||||
Issuance of common stock for services, Amount | $ 175 | 174,825 | 175,000 | ||||
Issuance of common stock to board members for services, Shares | 950,000 | ||||||
Issuance of common stock to board members for services, Amount | $ 95 | 94,905 | 95,000 | ||||
Issuance of common stock for remaining share of non-controlling interest, Shares | 171,000 | ||||||
Issuance of common stock for remaining share of non-controlling interest, Amount | $ 17 | (12,601) | 12,584 | ||||
Net (loss) income | (2,712,584) | (6,828) | (2,719,412) | ||||
Ending balance, Shares at Sep. 30, 2019 | 75 | 75 | 74,225,141 | ||||
Ending balance, Amount at Sep. 30, 2019 | $ 7,422 | 6,794,612 | (7,764,635) | (962,601) | |||
Beginning balance, Shares at Jun. 30, 2019 | 75 | 75 | 69,854,141 | ||||
Beginning balance, Amount at Jun. 30, 2019 | $ 6,985 | 6,386,793 | (6,680,091) | (10,631) | (296,944) | ||
Issuance of stock options for services | 840 | 840 | |||||
Issuance of stock for conversion of notes payable and accrued interest, Shares | 1,500,000 | ||||||
Issuance of stock for conversion of notes payable and accrued interest, Amount | $ 150 | 149,850 | 150,000 | ||||
Issuance of common stock for services, Shares | 1,750,000 | ||||||
Issuance of common stock for services, Amount | $ 175 | 174,825 | 175,000 | ||||
Issuance of common stock to board members for services, Shares | 950,000 | ||||||
Issuance of common stock to board members for services, Amount | $ 95 | 94,905 | 95,000 | ||||
Issuance of common stock for remaining share of non-controlling interest, Shares | 171,000 | ||||||
Issuance of common stock for remaining share of non-controlling interest, Amount | $ 17 | (12,601) | 12,584 | ||||
Net (loss) income | (1,084,544) | (1,953) | (1,086,497) | ||||
Ending balance, Shares at Sep. 30, 2019 | 75 | 75 | 74,225,141 | ||||
Ending balance, Amount at Sep. 30, 2019 | $ 7,422 | $ 6,794,612 | $ (7,764,635) | $ (962,601) |
Organization and Nature of Oper
Organization and Nature of Operations | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | Note 1 Organization and Nature of Operations Kannalife, Inc. (the Company) was incorporated under the laws of the state of Delaware on March 25, 2013, under the name TYG Solutions Corp. The Company consummated a share exchange transaction on July 25, 2018, with Kannalife Sciences, Inc. (Kannalife), a privately held Delaware corporation formed in 2010, the accounting acquirer. Upon completion of the share exchange transaction, Kannalife is treated as the surviving entity and accounting acquirer although the Company was the legal acquirer. Accordingly, the Companys historical financial statements are those of Kannalife the surviving entity and accounting acquirer. All references that refer to (the Company or we or us or our) are Kannalife, unless otherwise differentiated. Kannalife is a phytomedical/pharmaceutical company that specializes in the research and development of synthetic molecules and therapeutic products derived from botanical sources, including the cannabis taxa. Share Exchange and Corporate Restructuring On July 25, 2018, the Company entered into a Share Exchange Agreement (the Share Exchange Agreement) with Kannalife Sciences, Inc., a Delaware corporation (Kannalife), and certain stockholders of Kannalife (the Kannalife Stockholders). Pursuant to the terms of the Share Exchange Agreement, the Company acquired approximately 99.7% of the issued and outstanding shares of Kannalife by means of a share exchange with the Kannalife Stockholders in exchange for 60,324,141 newly issued shares of the common stock of the Company (the Share Exchange), which increased the Company's issued and outstanding shares of common stock to 69,854,141. As a result of the Share Exchange, Kannalife became a 99.7% owned subsidiary of the Company, which on a going forward basis will result in consolidated financial reporting by the Company to include the results of Kannalife. The initial closing of the Share Exchange occurred concurrently with entry into the Share Exchange Agreement (the Initial Closing). After the Initial Closing and for a period of no more than 120 days thereafter, unless extended in the sole discretion of the Company, the Company may issue, on the same terms and conditions as those contained in the Share Exchange Agreement, additional shares of the common stock of the Company to Kannalife Stockholders that did not participate in the Initial Closing, provided that each additional Kannalife Stockholder becomes a party to the transaction documents (the Additional Closing). On August 30, 2019, the Company acquired the remaining non-controlling interest in Kannalife Sciences, Inc. (which represented 0.30% equity interest held by the original shareholders of Kannalife before the Share Exchange), bringing our ownership interest in Kannalife from 99.7% to 100%. The Share Exchange has been accounted for as a reverse acquisition of the Company by Kannalife but in substance as a capital transaction, rather than a business combination since the Company had nominal operations and assets prior to and as of the closing of the Share Exchange. The former stockholders of Kannalife represent a significant constituency of the Companys voting power immediately following the Share Exchange, and Kannalifes management has assumed operational, financial and governance control. The transaction is deemed a reverse recapitalization and the accounting is similar to that resulting from a reverse acquisition, except that no goodwill or other intangible assets should be recorded. For accounting purposes, Kannalife is treated as the surviving entity and accounting acquirer although the Company was the legal acquirer. Accordingly, the Companys historical financial statements are those of Kannalife. All references to common stock, share and per share amounts have been retroactively restated to reflect the reverse recapitalization as if the transaction had taken place as of the beginning of the earliest period presented. Company assets and liabilities pre-acquisition: Cash and cash equivalents $ 289,654 Note receivable 142,500 Total assets $ 432,154 Accounts payable and accrued expenses $ 20,504 Loan payable - related party - long term 41,995 Convertible notes payable - related party 500,000 Total liabilities 562,499 Total liabilities assumed $ (130,345 ) The following summarized unaudited consolidated pro forma information shows the results of operations of the Company had the reverse acquisition occurred on January 1, 2018: Pro Forma (Unaudited) Nine Months Ended September 30, 2018 Total revenues $ 104,965 Net income $ 2,028,921 Net income per common share, basic $ 0.03 Net income per common share, diluted $ 0.03 The summarized unaudited consolidated pro forma results are not necessarily indicative of results which would have occurred if the acquisition had been in effect for the period presented. Further, the summarized unaudited consolidated pro forma results are not intended to be a projection of future results. Name Change On November 9, 2018, the Company filed an amendment to its certificate of incorporation with the Delaware Secretary of State that changed its name to Kannalife, Inc. The Company concurrently submitted a request to FINRA for approval of the name change as well as a ticker symbol change. The Companys name change and ticker symbol change was reviewed and processed by FINRA and went effective January 17, 2019. Unaudited Interim Financial Information We have prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC) for interim financial reporting. These consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of our balance sheets, operating results, and cash flows for the periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for 2019. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with our audited financial statements and accompanying notes for the year ended December 31, 2018, included in the Companys Annual Report on Form 10-K filed with the SEC on April 9, 2019. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies The significant accounting policies used in the preparation of the consolidated financial statements are as follows: Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. Principles of Consolidation The Company evaluates the need to consolidate affiliates based on standards set forth in ASC 810 Consolidation (“ASC 810”). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Kannalife Sciences, Inc. All significant consolidated transactions and balances have been eliminated in consolidation. The operations of Kannalife Sciences, Inc. are included in the consolidated financial statements from the date of the Share Exchange. Significant risks and uncertainties The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the results of clinical testing and trial activities of the Company’s products, the Company’s ability to obtain regulatory approval to market its products, competition from products manufactured and sold or being developed by other companies, the price of, and demand for, Company products, the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products, and the Company’s ability to raise capital. The Company currently has no commercially approved products, and there can be no assurance that the Company’s research and development will be successfully commercialized. Developing and commercializing a product requires significant time and capital, and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change, and is dependent upon the continued services of its employees and consultants and obtaining and protecting intellectual property. Use of Estimates The preparation of consolidated financial statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the periods. Actual results could differ from those estimates. Significant matters requiring the use of estimates and assumptions include, but are not necessarily limited to, establishing the fair value of marketable securities and periodically evaluating marketable securities for potential impairment, fair value of the Company’s stock, stock based compensation, and valuation allowance relating to the Company’s deferred tax assets. Management believes that its estimates and assumptions are reasonable, based on information that is available at the time they are made. Concentration Risks During the nine months ended September 30, 2019, the Company’s revenue had a concentration of 100% from one grant. The concentration of the Company’s revenue creates a potential risk to future working capital in the event that the Company is not able to continue receiving the grant revenue. Joint Venture On June 18, 2019, the Company, along with MJNA, which is a significant shareholder, and AXIM biotechnologies, whose president is affiliated with a shareholder, entered into a joint venture agreement with an industrial hemp production farm for the supply of certain industrial hemp CBD crops. The purpose of the joint venture is to share in the harvested yield of the hemp production which the Company hopes to result in a steady supply of industrial hemp CBD for research and development purposes. The Company accounts for its participation in the joint venture under the equity method of accounting. Revenue Recognition The FASB issued Accounting Standards Update (“ASU”) No. 2014-09, codified as ASC 606: Revenue from Contracts with Customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company adopted ASC 606 effective January 1, 2018, using modified retrospective basis and the cumulative effect was immaterial to the consolidated financial statements. Revenue consists of research funding from the Company’s National Institute of Health (“NIH”) Grant. Grant revenue is recognized when qualifying costs are incurred and there is reasonable assurance that the conditions of the award have been met for collection. Proceeds received prior to the costs being incurred or the conditions of the award being met are recognized as deferred revenue until the services are performed and the conditions of the award are met. Stock Based Compensation The Company accounts for share-based compensation in accordance with the fair value recognition provision of FASB ASC 718, Compensation – Stock Compensation The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505, Equity–based Payments to Non-Employees . Net Income (Loss) per Share Basic net loss per share is calculated by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period. Diluted net income per share is calculated by dividing income for the period by the weighted-average number of common shares outstanding during the period, increased by potentially dilutive common shares ("dilutive securities") that were outstanding during the period. Dilutive securities include stock options and warrants granted, convertible debt, and convertible preferred stock. The weighted average number of common stock equivalents not included in diluted income per share, because the effects are anti-dilutive, was 4,013,729 for the three and nine months ended September 30, 2019. In accordance with ASC 260, “Earnings Per Share”, the following table reconciles basic shares outstanding to fully diluted shares outstanding for the nine months ended September 30, 2018: September 30, Weighted average number of common shares outstanding - Basic 62,585,619 Potentially dilutive common stock equivalents 5,243,333 Weighted average number of common and equivalent shares outstanding-Diluted 67,828,952 Common stock equivalents are included in the diluted income per share calculation only when option exercise prices are lower than the average market price of the common shares for the period presented. One hundred thousand (100,000) options were not included in the calculation of net loss per common share for the three and nine months ended September 30, 2019 and 2018 because their effect would be anti-dilutive. The weighted average number of common stock equivalents not included in diluted income per share, because the effects are anti-dilutive, was 5,343,333 for the three months ended September 30, 2018. Research and Development In accordance with FASB ASC 730, Research and Development Recently Issued Authoritative Guidance In February 2016, the FASB issued ASU, Leases, which requires lessees to recognize most leases on their balance sheets as a right-of-use asset with a corresponding lease liability. Lessor accounting under the standard is substantially unchanged. Additional qualitative and quantitative disclosures are also required. The Company adopted the standard effective January 1, 2019, using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company adopted the following practical expedients and elected the following accounting policies related to this standard update: • The option to not reassess prior conclusions related to the identification, classification and accounting for initial direct costs for leases that commenced prior to January 1, 2019. • Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less; and • The option to not separate lease and non-lease components for certain equipment lease asset categories such as freight car, vehicles and work equipment. • The package of practical expedients applied to all of its leases, including (i) not reassessing whether any expired or existing contracts are or contain leases, (ii) not reassessing the lease classification for any expired or existing leases, and (iii) not reassessing initial direct costs for any existing leases. The Company has inventoried all leases where the Company is a lessee as of the initial date of application, and has examined other contracts with suppliers, vendors, customers and other outside parties to identify whether such contracts contain an embedded lease as defined under the new guidance. The Company’s lease population comprises of an office and lab, which is immaterial to the consolidated financial statements. As a result of the above, the adoption of ASC 842 did not have a material effect on the financial statements. The Company will review for the existence of embedded leases in future agreements. In June 2018, the FASB issued ASU No. 2018-07, “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. This standard is effective for public companies for annual periods beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted as long as ASU 2014-09 has been adopted. The Company adopted the guidance on January 1, 2019. The adoption did not have a material impact on our consolidated financial statements. |
Going Concern and Management's
Going Concern and Management's Liquidity Plans | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern and Management's Liquidity Plans | Note 3 Going Concern and Managements Liquidity Plans The Companys condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in our accompanying condensed consolidated financial statements, the Company has had a net loss from operations of $1,824,987 and $557,948 for the nine months ended September 30, 2019, and 2018, respectively. The net cash used in operations were $2,000,012 and $762,947 for the nine months ended September 30, 2019, and 2018, respectively. Additionally, the Company had an accumulated deficit of $7,764,635 at September 30, 2019, and has not yet established an adequate ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. As of September 30, 2019, we had $120,550 in cash and cash equivalents. Additionally, we had $395,205 in marketable securities (available for sale). Management plans to raise additional capital through the sale of our marketable securities. We expect that between our existing cash, cash equivalents and marketable securities, we will be able to sufficiently fund our operations and capital requirements for the next 12 months. The Companys history of recurring losses, and uncertainties as to whether its operations will become profitable and generate operating cash flows, raise substantial doubt about its ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 4 Fair Value Measurements The Company follows FASB ASC 820, Fair Value Measurements and Disclosures Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques, and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities, and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts reported in the Companys consolidated financial statements for cash, accounts payable and accrued expenses approximate their fair value because of the immediate or short-term nature of these financial instruments. Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. On March 7, 2014, Kannalife Sciences, Inc. (Kannalife) entered into an agreement with General Hemp LLC (General Hemp) through its wholly-owned subsidiary, Kannaway LLC (Kannaway), for certain rights and agreements to where each company would exchange 4.99% of each companys equity, by way of a stock swap. As such, Kannalife would receive a 4.99% equity stake in Kannaway, and Kannaway would receive 6,408,980 shares of restricted common stock of Kannalife. On or about April 2014, Kannalife delivered 6,408,980 of the aforementioned Kannalife restricted common stock to General Hemp on behalf of Kannaway, and such shares were made to Kannaway as the beneficiary. The Company recorded the fair market value of the common stock at $256,359 or $0.04 per share. The Company valued the shares based upon other transactions of the Company's common stock around the same time frame. The Company accounted for the transaction as a cost investment. On or about December 2015, Medical Marijuana, Inc. (MJNA) purchased Kannaway from General Hemp for which due to a dispute between the Company and General Hemp, the Company wasn't provided any of the consideration. On June 1, 2018, the Company received 41,583,333 shares of MJNA common stock pursuant to a settlement agreement effective July 15, 2017. MJNA is a significant shareholder of the Company, and their Chief Executive Officer is also on the Company's Board of Directors. The following table presents assets that are measured and recognized at fair value as of September 30, 2019, on a recurring basis: September 30, 2019 Level 1 Level 2 Level 3 Total Carrying Value Marketable securities Medical Marijuana, Inc. $ 395,205 $ 395,205 |
Accrued Payroll and Payroll Tax
Accrued Payroll and Payroll Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Payroll and Payroll Taxes | Note 5 Accrued Payroll and Payroll Taxes Accrued payroll and payroll taxes at September 30, 2019, and December 31, 2018, consisted of the following: 2019 2018 Payroll $ $ Payroll taxes 247,074 246,067 Totals $ 247,074 $ 246,067 As of September 30, 2019, and December 31, 2018, the Company had accrued payroll taxes in connection with salaries paid and accrued to four officers of the Company. In July of 2018, the Company entered into a new employment agreement with its CEO. The initial term of the agreement was for two years, and the agreement automatically renews for successive one year terms. In July of 2018, the Company entered into new employment agreements with three officers. The initial term of these agreements were for one year, and these agreements automatically renew for successive six month terms. See Note 14 for discussion of accrued payroll converted into common stock. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 6 Notes Payable During the year ended December 31, 2017, the Company borrowed $367,500 and issued a promissory note with a maturity date of October 18, 2017. This note was later amended to extend the maturity to April 18, 2019. During the year ended December 31, 2018, the Company borrowed an additional $352,500 and issued a promissory note with a maturity date of April 18, 2019. These loans incurred 3% interest per annum. On June 29, 2018, these notes were amended to extend the maturity date to July 1, 2020, and the interest rate was changed to 8% per annum. All accrued interest prior to the amendment date was forgiven. Accrued interest related to these notes is $36,690 and $24,460 as of September 30, 2019, and December 31, 2018, respectively. Upon the consolidation of the Company and Kannalife, $100,000 of the above-mentioned borrowings was eliminated due to it being an intercompany transaction. The total, above mentioned, notes payable due was $620,000 as of September 30, 2019, and December 31, 2018. Total interest expense on notes payable amounted to $12,230 and $4,441 for the three months ended September 30, 2019, and 2018, respectively. Total interest expense on notes payable amounted to $36,690 and $12,591 for the nine months ended September 30, 2019, and 2018, respectively. |
Notes Payable - Related Party
Notes Payable - Related Party | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable - Related Party | NOTE 7 – NOTES PAYABLE – RELATED PARTY Prior to the share exchange agreement, the Company borrowed $25,822 and issued a promissory note with a maturity date of March 31, 2020. Additionally, the note holder advanced the Company $16,270 for working capital. The loans represent working capital advances from shareholders, bear interest at 0.5%, and grant a security interest in the Company’s assets as collateral. In March 2019, this note was amended and is now non-interest bearing. Accrued interest related to this note is $226 as of September 30, 2019, and December 31, 2018. |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Convertible Notes Payable | NOTE 8 CONVERTIBLE NOTES PAYABLE On May 15, 2015, the Company borrowed $35,000 and issued a convertible promissory note with a maturity date of April 30, 2016. The loan incurs 10% interest per annum. This note is convertible to the Companys common stock at a price of $1.00 per share. In addition, the Company issued 17,500 warrants to purchase common stock with an exercise price of $1.50 per share and a term of two years. These warrants were valued at $7,525 on a relative fair value basis and were recorded as a debt discount to be amortized over the term. See below for discussion of settlement of liability through share exchange. On August 13, 2015, the Company borrowed $50,000 and issued a convertible promissory note with a maturity date of August 12, 2016. The loan incurs 10% interest per annum and increases to 17% per annum in the event of a default. This note is convertible to the Companys common stock at a price of $1.00 per share. In addition, the Company issued 25,000 warrants to purchase common stock with an exercise price of $1.50 per share and a term of two years. These warrants were valued at $10,751 on a relative fair value basis and were recorded as a debt discount to be amortized over the term. See below for discussion of settlement of liability through share exchange. On November 25, 2015, the Company borrowed $100,000 and issued a convertible promissory note with a maturity date of November 24, 2016. The loan incurs 10% interest per annum and increases to 14% per annum in the event of a default. This note is convertible to the Companys common stock at a price of $1.00 per share. In addition, the Company issued 50,000 warrants to purchase common stock with an exercise price of $1.50 per share and a term of two years. These warrants were valued at $21,500 on a relative fair value basis and were recorded as a debt discount to be amortized over the term. See below for discussion of settlement of liability through share exchange. Prior to the Share Exchange, the Company issued a convertible note to an investor, face value of $500,000, in exchange for $500,000 in cash. The note is unsecured, bears interest at the rate of 3% per annum and matures on February 16, 2030. The note is convertible into common stock of the Company at $0.10 per share at any time at the option of the holder, subject to a 4.9% blocking provision which prohibits the holder from converting into common stock of the Company if such conversion results in the holder owning greater than 4.9% of the outstanding common stock of the Company after giving effect to the conversion. See below for discussion of settlement of liability through share exchange. On September 26, 2019, the Company issued 1,500,000 shares of common stock for the conversion of $123,627 convertible notes payable and $26,373 of related accrued interest. The outstanding balance on this convertible note after the conversion is $376,373. On January 3, 2018, prior to the Share Exchange, the Company issued 563,063 shares of common stock (on a post-Share Exchange basis) for the conversion of $236,104 convertible notes payable and related accrued interest. The Company determined that the transaction should be recorded at fair value due to the difference between the conversion price and the price per the agreements. |
Convertible Notes Payable - Rel
Convertible Notes Payable - Related Party | 9 Months Ended |
Sep. 30, 2019 | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Convertible Notes Payable - Related Party | NOTE 9 CONVERTIBLE NOTES PAYABLE - RELATED PARTY On December 27, 2014, the Company borrowed $150,000 from a stockholder and issued a convertible promissory note with a maturity date of December 31, 2015. The loan incurs 10% interest per annum and increases to 17% per annum in the event of a default. This note is convertible to the Companys common stock at a price of $1.00 per share. See below for discussion of settlement of liability through share exchange. During the year ended December 31, 2015, the Company borrowed $120,000 from the Chief Executive Officer and issued convertible promissory notes that are due on demand. The loans incur 10% interest per annum. These notes are convertible to the Companys common stock at a price of $1.00 per share. On November 20, 2015, the Company borrowed $5,000 from the Chief Executive Officer and issued a convertible promissory note that is due on demand. The loan incurs 10% interest per annum. This note is convertible to the Companys common stock at a price of $0.40 per share. During the year ended December 31, 2016, the Company borrowed $15,000 from the Chief Executive Officer and issued convertible promissory notes that are due on demand. The loans incur 10% interest per annum. These notes are convertible to the Companys common stock at a price of $0.40 per share. During the year ended December 31, 2016, the Company borrowed $10,000 from the Chief Executive Officer and issued convertible promissory notes with a maturity date of December 31, 2016. The loans incur 10% interest per annum and increases to 17% per annum in the event of a default. These notes are convertible to the Companys common stock at a price of $0.40 per share. During the year ended December 31, 2017, the Company borrowed $20,000 from the Chief Executive Officer and issued convertible promissory notes with a maturity date of December 31, 2017. The loans incur 10% interest per annum and increases to 17% per annum in the event of a default. These notes are convertible to the Companys common stock at a price of $0.40 per share. During the year ended December 31, 2017, the Company repaid $23,828 of principal and $16,522 of accrued interest towards the outstanding notes payable. On January 3, 2018, prior to the Share Exchange, the Company converted these notes into 973,946 shares of common stock (on a post-Share Exchange basis) for the conversion of $356,176 convertible notes payable and related accrued interest. The difference of the $58,300 balance of the notes and the fair value of the shares issued was recorded as a loss on conversion of debt. The Company determined that the transaction should be recorded at fair value due to the difference between the conversion price and the price per the agreements. |
Capital Lease Obligations
Capital Lease Obligations | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Capital Lease Obligations | Note 10 Capital lease obligations In September 2019, the Company entered into a lease agreement with Thermo Fisher Scientific to acquire equipment with 48 monthly payments of $941, payable through September 1, 2023, with an effective interest rate of 12% per annum. The outstanding balance of this capital lease was $35,886 as of September 30, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11 Commitments and Contingencies Legal Proceedings From time to time, the Company may get involved in legal proceedings arising in the ordinary course of business. Other than as set forth in Legal Proceedings in Part II below, the Company believes there is no litigation pending that could have, individually or in the aggregate, a material adverse effect on its results of operations or financial condition. Occupancy Leases On April 1, 2014, the Company entered into a month-to-month lease arrangement for office space. The monthly rent payment is $5,400, and the security deposit is $15,000. On September 15, 2015, the Company entered into a one year lease arrangement for office space. The Company has amended this lease to extend the term through September 30, 2019. The monthly rent payment is $249, and the security deposit is $183. On February 1, 2018, the Company entered into a month-to-month lease arrangement for laboratory space. The monthly rent payment is $500. On July 1, 2018, the Company entered into a one year lease arrangement for office space, with the option to renew the lease annually. The Company has amended this lease to extend the term through July 1, 2020. On September 1, 2018, the Company subleased this office space to a third party. The Sublessee will pay 100% of the rent for months September through November 2018, and will pay 50% of the rent until expiration of the lease. The monthly rent payment is $2,723, and the security deposit is $2,121. Royalty Agreements On June 12, 2012, the Company entered into a Patent License Agreement (the License Agreement) with agencies of the United States Public Health Services within the Department of Health and Human Services (PHS). Under the License Agreement, PHS granted the Company an exclusive right to use and develop certain patents relating to Cannabinoids as Antioxidants and Neuroprotectants (the License). In exchange for the License, the Company has agreed to the following payments: a $30,000 license issue royalty within 90 days of the execution of the agreement a minimum annual royalty in the amount of $10,000 3% royalty on net sales from any sales of licensed products or practice of licensed processes milestone payment of $40,000 upon initiation of first Phase I clinical trial milestone payment of $100,000 upon initiation of first Phase II clinical trial milestone payment of $250,000 upon completion of first Phase III clinical trial milestone payment of $500,000 upon first marketing approval by FDA a sublicensing royalty of 12% on the fair market value of any consideration received for granting each sublicense On December 31, 2014, the Company executed five exclusive pharmaceutical license agreements with the Companys CEO, the Companys CMO, three advisory board members of the Company, and an unrelated third party. These agreements provide the Company the worldwide exclusive rights to certain drug technologies and methods (and systems) for collection, processing and use of data for the dispensing of phyto-medical and botanically derived materials for consumption. The license agreements granted the Company the rights to develop, market, make, use, and sell certain drug formulations, which are applied to humans through the use of certain drug technology. In return for these exclusive rights from the inventors, the Company has agreed to compensate the inventors under the agreements with royalties ranging from 1.5% to 2.5% on all net sales by the Company of licensed products covered by a valid claim of a patent or patent application of the inventor patent rights. Additionally, the Company retains the rights to sublicense the drug formulations, and upon such sublicense, shall pay the inventors from 1.5% up to 5% of all royalties and sublicense fees paid to the Company on account of sublicenses under the inventor patent rights and inventor technology rights, less all appropriate expenses associated with such sublicenses incurred by the Company. However, if the inventor supplies licensed products to sublicensees of the Company pursuant to such sublicenses, the inventor shall supply such licensed products at its cost. Prior to the Share Exchange, this royalty agreement was terminated. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 12 Related Party Transactions The Companys Chief Executive Officer shares the use of the leased office space for personal living quarters. From time to time, the Company sends money to Golden Gate Capital (GGCP), a company owned by our CEO, for the advances of certain expenses and to be deposited into the bank account of Kannalife. Due to the timing of the funds transferred and expenses incurred, at times, there remains a balance due from GGCP. As of September 30, 2019, $0 is due from GGCP. See Notes 7, 9 and 14 for additional related party transactions. |
Marketable Security
Marketable Security | 9 Months Ended |
Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Security | Note 13 – Marketable Security On June 1, 2018, the Company received 41,583,333 shares of common stock of Medical Marijuana, Inc. (“MJNA”) pursuant to a settlement agreement. In 2014, the Company entered into a revenue sharing agreement with Kannaway LLC, whereas, among the considerations and obligations, the parties agreed to a share exchange, whereby the Company issued 6,408,980 shares of its common stock in exchange for 4.99% ownership of Kannaway. A significant shareholder of the Company owned the remaining ownership of Kannaway LLC. Subsequently, Kannaway was sold by its parent company to MJNA for 833,333,333 shares of MJNA common stock. The settlement agreement called for the release of all obligations in exchange for the issuance of 41,583,333 shares of common stock in MJNA to the Company. The investment in MJNA has been recorded as an investment in non-consolidated entities, and is revalued every quarter with fluctuations in fair value recorded to earnings. The fair value of the investment is based on the closing price of the shares reported on the principal stock exchange on which they are traded. At September 30, 2019, the Company held 11,939,732 shares of MJNA which traded at a closing price of $0.0331, or value of $395,205. In the following table, gains/losses on equity securities sold in the period reflect the difference between proceeds from sales and the fair value of the equity security sold at the beginning of the period or the purchase date, if later. See Note 4 for additional information. The following table summarizes the gains and losses recognized during the three month period ending September 30, 2019: Net gains and (losses) recognized during the period on equity securities $ (301,661 ) Less: Net gains and (losses) recognized during the period on equity securities sold during the period 55,702 Unrealized gains and (losses) recognized during the period on equity securities still held at the reporting date $ (245,959 ) The following table summarizes the gains and losses recognized during the nine month period ending September 30, 2019: Net gains and (losses) recognized during the period on equity securities $ (844,671 ) Less: Net gains and (losses) recognized during the period on equity securities sold during the period 146,713 Unrealized gains and (losses) recognized during the period on equity securities still held at the reporting date $ (697,958 ) |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Note 14 – Stockholders’ Equity Series A Preferred Stock – Kannalife Pre-Share Exchange In July 2018, prior to the Share Exchange, the Company converted 4,893,510 shares of preferred stock into 4,893,510 shares of common stock (on a post-Share Exchange basis). Series A Preferred Stock Effective May 3, 2018, the Company’s Board of Directors authorized and designated 75 shares of the Company’s Preferred Stock as Series A Preferred Stock. Each share of the Series A Preferred Stock is entitled to a liquidation preference of $1,000 per share, and is convertible into 1,000 shares of the Company’s common stock. The holders of a majority of the Series A Preferred Stock are entitled to elect up to four (4) directors to the Company’s board of directors, and have preferential rights in regard to the election of Series A directors. In all other voting matters, the holders of Series A Preferred Stock are entitled to cast 1,000 votes per share. In July 2018, the Company issued 75 shares of Series A Preferred Stock to Naturewell, Inc., an entity controlled by the former CEO of TYG Solutions, Inc., in exchange for $75,000. Series B Preferred Stock Effective May 3, 2018, the Company’s Board of Directors authorized and designated 75 shares of the Company’s Preferred Stock as Series B Preferred Stock. Each share of the Series B Preferred Stock is entitled to a liquidation preference of $1,000 per share, and is convertible into 1,000 shares of the Company’s common stock. The holders of a majority of the Series B Preferred Stock are entitled to elect up to three (3) directors to the Company’s board of directors, and have preferential rights in regard to the election of Series B directors. In all other voting matters, the holders of Series B Preferred Stock are entitled to cast 1,000 votes per share. In July 2018, the Company issued 75 shares of Series B Preferred Stock to our CEO in exchange for $75,000. Common Stock The Company is authorized to issue 200,000,000 shares of common stock, par value $0.0001. All common stock shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative, and therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company, subject to the rights of the preferred stockholders. On January 3, 2018, prior to the Share Exchange, the Company issued 5,505,200 shares of common stock (on a post-Share Exchange basis) to four officers, valued at $2,342,813, for the conversion of accrued salaries. The difference of $469,997 between the balance of accrued salaries and the fair value of the shares issued was recorded as a capital contribution recorded within additional paid-in capital. The transaction was viewed as being on behalf of the Company in connection with the pending share exchange transaction. In July 2018, the Company issued 2,030,000 shares of common stock to an entity commonly controlled by the $500,000 convertible note holder in exchange for $203,000. In August 2019, the Company issued 950,000 shares of common stock at the price of $0.10 per share to board members for general compensation for services rendered. In August 2019, the Company issued 500,000 shares of common stock at the price of $0.10 per share to an investor relations consultant for services rendered. In August 2019, the Company issued 150,000 shares of common stock at the price of $0.10 per share to a product development consultant for services rendered. In August 2019, the Company issued 400,000 shares of common stock at the price of $0.10 per share to a marketing consultant for services rendered. In August 2019, the Company issued 700,000 shares of common stock at the price of $0.10 per share to consultants for general compensation for services rendered. This compensation is included in research and development on the condensed consolidated statement of operations. On August 30, 2019, the Company issued 171,000 shares of common stock at a price of $0.07 per share to acquire the remaining non-controlling interest in Kannalife Sciences, Inc., bringing our ownership interest from 99.7% to 100%. On September 26, 2019, the Company issued 1,500,000 shares of common stock at a price of $0.10 per share for the conversion of $123,627 convertible notes payable and $26,373 of related accrued interest. As of September 30, 2019, and December 31, 2018, there were 74,225,141 and 69,854,141 shares of common stock issued and outstanding, respectively. See Note 8 and 9 for discussion of the conversion of notes payable and accrued interest into common stock. The Company determined fair value of its shares of common and preferred stock based on the price at which the Company was selling its shares of common and preferred stock to third party investors and based on the conversion price of convertible debt. Stock Based Compensation The following table shows share-based compensation expense included in the condensed consolidated statement of operations for the three and nine month periods ended September 30, 2019 and 2018: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Research and Development $ 90,000 $ — $ 90,000 $ — General and Administrative $ 180,840 $ 2,519 $ 185,878 $ 7,558 Stock Options On September 1, 2017, the Company entered into an agreement for consulting services. As compensation, the Company issued a stock option to purchase 100,000 shares of common stock at a price of $2.00 per share and is exercisable for five years. The stock option vests in equal monthly installments over 24 months. These options were valued at $20,154 using a Black-Scholes Options Pricing Model. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 15 Subsequent Events From October 1, 2019 through the issuance of these condensed consolidated financial statements, the Company sold an additional 6,839,732 shares of MJNA stock. The net proceeds from these sales were $165,276. The following table summarizes the gains and losses recognized on marketable securities from October 1, 2019 through the issuance of these condensed consolidated financial statements: Net gains and losses recognized during the period on equity securities $ (76,929 ) Less: Net gains and losses recognized during the period on equity securities sold during the period 61,119 Unrealized gains and losses recognized during the period on equity securities still held at the reporting date $ (15,810 ) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. |
Principles of Consolidation | Principles of Consolidation The Company evaluates the need to consolidate affiliates based on standards set forth in ASC 810 Consolidation (ASC 810). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Kannalife Sciences, Inc. All significant consolidated transactions and balances have been eliminated in consolidation. The operations of Kannalife Sciences, Inc. are included in the consolidated financial statements from the date of the Share Exchange. |
Significant risks and uncertainties | Significant risks and uncertainties The Companys operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the results of clinical testing and trial activities of the Companys products, the Companys ability to obtain regulatory approval to market its products, competition from products manufactured and sold or being developed by other companies, the price of, and demand for, Company products, the Companys ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products, and the Companys ability to raise capital. The Company currently has no commercially approved products, and there can be no assurance that the Companys research and development will be successfully commercialized. Developing and commercializing a product requires significant time and capital, and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change, and is dependent upon the continued services of its employees and consultants and obtaining and protecting intellectual property. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the periods. Actual results could differ from those estimates. Significant matters requiring the use of estimates and assumptions include, but are not necessarily limited to, establishing the fair value of marketable securities and periodically evaluating marketable securities for potential impairment, fair value of the Companys stock, stock based compensation, and valuation allowance relating to the Companys deferred tax assets. Management believes that its estimates and assumptions are reasonable, based on information that is available at the time they are made. |
Concentration Risks | Concentration Risks During the nine months ended September 30, 2019, the Companys revenue had a concentration of 100% from one grant. The concentration of the Companys revenue creates a potential risk to future working capital in the event that the Company is not able to continue receiving the grant revenue. |
Joint Venture | Joint Venture On June 18, 2019, the Company, along with MJNA, which is a significant shareholder, and AXIM biotechnologies, whose president is affiliated with a shareholder, entered into a joint venture agreement with an industrial hemp production farm for the supply of certain industrial hemp CBD crops. The purpose of the joint venture is to share in the harvested yield of the hemp production which the Company hopes to result in a steady supply of industrial hemp CBD for research and development purposes. The Company accounts for its participation in the joint venture under the equity method of accounting. |
Revenue Recognition | Revenue Recognition The FASB issued Accounting Standards Update (ASU) No. 2014-09, codified as ASC 606: Revenue from Contracts with Customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company adopted ASC 606 effective January 1, 2018, using modified retrospective basis and the cumulative effect was immaterial to the consolidated financial statements. Revenue consists of research funding from the Companys National Institute of Health (NIH) Grant. Grant revenue is recognized when qualifying costs are incurred and there is reasonable assurance that the conditions of the award have been met for collection. Proceeds received prior to the costs being incurred or the conditions of the award being met are recognized as deferred revenue until the services are performed and the conditions of the award are met. |
Stock Based Compensation | Stock Based Compensation The Company accounts for share-based compensation in accordance with the fair value recognition provision of FASB ASC 718, Compensation Stock Compensation The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505, Equitybased Payments to Non-Employees . |
Net Income (Loss) per Share | Net Income (Loss) per Share Basic net loss per share is calculated by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period. Diluted net income per share is calculated by dividing income for the period by the weighted-average number of common shares outstanding during the period, increased by potentially dilutive common shares ("dilutive securities") that were outstanding during the period. Dilutive securities include stock options and warrants granted, convertible debt, and convertible preferred stock. The weighted average number of common stock equivalents not included in diluted income per share, because the effects are anti-dilutive, was 4,013,729 for the three and nine months ended September 30, 2019. In accordance with ASC 260, “Earnings Per Share”, the following table reconciles basic shares outstanding to fully diluted shares outstanding for the nine months ended September 30, 2018: September 30, Weighted average number of common shares outstanding - Basic 62,585,619 Potentially dilutive common stock equivalents 5,243,333 Weighted average number of common and equivalent shares outstanding-Diluted 67,828,952 Common stock equivalents are included in the diluted income per share calculation only when option exercise prices are lower than the average market price of the common shares for the period presented. One hundred thousand (100,000) options were not included in the calculation of net loss per common share for the three and nine months ended September 30, 2019 and 2018 because their effect would be anti-dilutive. The weighted average number of common stock equivalents not included in diluted income per share, because the effects are anti-dilutive, was 5,343,333 for the three months ended September 30, 2018. |
Research and Development | Research and Development In accordance with FASB ASC 730, Research and Development |
Recently Issued Authoritative Guidance | Recently Issued Authoritative Guidance In February 2016, the FASB issued ASU, Leases, which requires lessees to recognize most leases on their balance sheets as a right-of-use asset with a corresponding lease liability. Lessor accounting under the standard is substantially unchanged. Additional qualitative and quantitative disclosures are also required. The Company adopted the standard effective January 1, 2019, using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company adopted the following practical expedients and elected the following accounting policies related to this standard update: The option to not reassess prior conclusions related to the identification, classification and accounting for initial direct costs for leases that commenced prior to January 1, 2019. Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less; and The option to not separate lease and non-lease components for certain equipment lease asset categories such as freight car, vehicles and work equipment. The package of practical expedients applied to all of its leases, including (i) not reassessing whether any expired or existing contracts are or contain leases, (ii) not reassessing the lease classification for any expired or existing leases, and (iii) not reassessing initial direct costs for any existing leases. The Company has inventoried all leases where the Company is a lessee as of the initial date of application, and has examined other contracts with suppliers, vendors, customers and other outside parties to identify whether such contracts contain an embedded lease as defined under the new guidance. The Companys lease population comprises of an office and lab, which is immaterial to the consolidated financial statements. As a result of the above, the adoption of ASC 842 did not have a material effect on the financial statements. The Company will review for the existence of embedded leases in future agreements. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. This standard is effective for public companies for annual periods beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted as long as ASU 2014-09 has been adopted. The Company adopted the guidance on January 1, 2019. The adoption did not have a material impact on our consolidated financial statements. |
Organization and Nature of Op_2
Organization and Nature of Operations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule Of Pre-Acquisition Assets And Liabilities | Company assets and liabilities pre-acquisition: Cash and cash equivalents $ 289,654 Note receivable 142,500 Total assets $ 432,154 Accounts payable and accrued expenses $ 20,504 Loan payable - related party - long term 41,995 Convertible notes payable - related party 500,000 Total liabilities 562,499 Total liabilities assumed $ (130,345 ) |
Schedule Of Consolidated Pro Forma Information Showing Results Of Operations | The following summarized unaudited consolidated pro forma information shows the results of operations of the Company had the reverse acquisition occurred on January 1, 2018: Pro Forma (Unaudited) Nine Months Ended September 30, 2018 Total revenues $ 104,965 Net income $ 2,028,921 Net income per common share, basic $ 0.03 Net income per common share, diluted $ 0.03 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Earnings Per Share | In accordance with ASC 260, “Earnings Per Share”, the following table reconciles basic shares outstanding to fully diluted shares outstanding for the nine months ended September 30, 2018: September 30, Weighted average number of common shares outstanding - Basic 62,585,619 Potentially dilutive common stock equivalents 5,243,333 Weighted average number of common and equivalent shares outstanding-Diluted 67,828,952 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule Of Assets That Are Measured And Recognized At Fair Value | The following table presents assets that are measured and recognized at fair value as of September 30, 2019, on a recurring basis: September 30, 2019 Level 1 Level 2 Level 3 Total Carrying Value Marketable securities Medical Marijuana, Inc. $ 395,205 $ 395,205 |
Accrued Payroll and Payroll T_2
Accrued Payroll and Payroll Taxes (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule Of Accrued Payroll And Payroll Taxes | Accrued payroll and payroll taxes at September 30, 2019, and December 31, 2018, consisted of the following: 2019 2018 Payroll $ $ Payroll taxes 247,074 246,067 Totals $ 247,074 $ 246,067 |
Marketable Security (Tables)
Marketable Security (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of gains and lossed on marketable securities | The following table summarizes the gains and losses recognized during the three month period ending September 30, 2019: Net gains and (losses) recognized during the period on equity securities $ (301,661 ) Less: Net gains and (losses) recognized during the period on equity securities sold during the period 55,702 Unrealized gains and (losses) recognized during the period on equity securities still held at the reporting date $ (245,959 ) The following table summarizes the gains and losses recognized during the nine month period ending September 30, 2019: Net gains and (losses) recognized during the period on equity securities $ (844,671 ) Less: Net gains and (losses) recognized during the period on equity securities sold during the period 146,713 Unrealized gains and (losses) recognized during the period on equity securities still held at the reporting date $ (697,958 ) |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of share-based compensation expense | The following table shows share-based compensation expense included in the condensed consolidated statement of operations for the three and nine month periods ended September 30, 2019 and 2018: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Research and Development $ 90,000 $ — $ 90,000 $ — General and Administrative $ 180,840 $ 2,519 $ 185,878 $ 7,558 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Summary of gains and losses recognized on marketable securities | The following table summarizes the gains and losses recognized on marketable securities from October 1, 2019 through the issuance of these condensed consolidated financial statements: Net gains and losses recognized during the period on equity securities $ (76,929 ) Less: Net gains and losses recognized during the period on equity securities sold during the period 61,119 Unrealized gains and losses recognized during the period on equity securities still held at the reporting date $ (15,810 ) |
Organization and Nature of Op_3
Organization and Nature of Operations - Schedule Of Pre-Acquisition Assets And Liabilities (Details) | Sep. 30, 2019USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Cash and cash equivalents | $ 289,654 |
Note receivable | 142,500 |
Total assets | 432,154 |
Accounts payable and accrued expenses | 20,504 |
Loan payable - related party - long term | 41,995 |
Convertible notes payable - related party | 500,000 |
Total liabilities | 562,499 |
Total liabilities assumed | $ (130,345) |
Organization and Nature of Op_4
Organization and Nature of Operations - Schedule Of Consolidated Pro Forma Information Showing Results Of Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Total revenues | $ 23,968 | $ 38,101 | $ 126,027 | $ 104,965 |
Net income | $ (1,086,497) | $ (801,535) | (2,719,412) | $ 2,110,449 |
Pro Forma | ||||
Total revenues | 104,965 | |||
Net income | $ 2,028,921 | |||
Net income per common share, basic | $ 0.03 | |||
Net income per common share, diluted | $ 0.03 |
Organization and Nature of Op_5
Organization and Nature of Operations (Details Narrative) | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Date of Incorporation | Mar. 25, 2013 |
Former Legal or Registered Name | TYG Solutions Corp |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Earnings Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accounting Policies [Abstract] | ||||
Weighted average number of common shares outstanding - Basic | 70,934,271 | 67,264,467 | 70,218,141 | 62,585,619 |
Potentially dilutive common stock equivalents | 5,243,333 | |||
Weighted average number of common and equivalent shares outstanding-Diluted | 70,934,271 | 67,264,467 | 70,218,141 | 67,828,952 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accounting Policies [Abstract] | ||||
Weighted average number of common stock, anti-dilutive | 4,013,729 | 5,343,333 | ||
Research and Development | $ 189,443 | $ 67,059 | $ 439,680 | $ 125,696 |
Going Concern and Management'_2
Going Concern and Management's Liquidity Plans (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Net loss from operations | $ (767,042) | $ (378,740) | $ (1,824,987) | $ (557,948) | ||
Net cash used in operating activities | (2,000,012) | (762,947) | ||||
Accumulated deficit | (7,764,635) | (7,764,635) | $ (5,052,051) | |||
Cash and cash equivalents | 120,550 | $ 229,033 | 120,550 | $ 229,033 | 307,131 | $ 4,326 |
Marketable security (available for sale) | $ 395,205 | $ 395,205 | $ 2,579,640 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule Of Assets That Are Measured And Recognized At Fair Value (Details) | Sep. 30, 2019USD ($) |
Level 1 | |
Marketable securities - Medical Marijuana, Inc. | $ 395,205 |
Level 2 | |
Marketable securities - Medical Marijuana, Inc. | 0 |
Level 3 | |
Marketable securities - Medical Marijuana, Inc. | 0 |
Total Carrying Value | |
Marketable securities - Medical Marijuana, Inc. | $ 395,205 |
Fair Value Measurements (Detail
Fair Value Measurements (Details Narrative) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Jan. 03, 2018 | Apr. 30, 2014 |
Fair Value Disclosures [Abstract] | ||||
Restricted common stock exchanged | 6,408,980 | |||
Fair value of common stock | $ 7,422 | $ 6,985 | $ 2,342,813 | $ 256,359 |
Per share value of common stock | $ 0.0001 | $ 0.0001 | $ 0.04 |
Accrued Payroll and Payroll T_3
Accrued Payroll and Payroll Taxes - Schedule Of Accrued Payroll And Payroll Taxes (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Accrued Payroll And Payroll Taxes - Schedule Of Accrued Payroll And Payroll Taxes | ||
Payroll | $ 0 | $ 0 |
Payroll taxes | 247,074 | 246,067 |
Totals | $ 247,074 | $ 246,067 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Sep. 01, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Jun. 29, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||||||||
Promissory note value | $ 367,500 | $ 352,500 | ||||||
Interest rate | 3.00% | 8.00% | 3.00% | |||||
Maturity date | Jul. 1, 2020 | Jul. 1, 2020 | ||||||
Accrued interest | $ 36,690 | $ 24,460 | ||||||
Loan payable - long term | $ 620,000 | 620,000 | $ 620,000 | |||||
Interest expense | $ 12,230 | $ 4,441 | $ 36,690 | $ 12,591 |
Notes Payable - Related Party (
Notes Payable - Related Party (Details Narrative) - USD ($) | Sep. 01, 2017 | Jul. 25, 2018 | Dec. 31, 2018 | Sep. 30, 2019 | Jun. 29, 2018 | Dec. 31, 2017 |
Maturity date | Jul. 1, 2020 | Jul. 1, 2020 | ||||
Interest rate | 3.00% | 8.00% | 3.00% | |||
Related Party Promissory Note | ||||||
Note payable, related party | $ 25,822 | |||||
Maturity date | Mar. 31, 2020 | |||||
Interest rate | 0.05% | |||||
Accrued interest, related party note | $ 226 | $ 226 | ||||
Advanced from related party | $ 16,270 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) - USD ($) | Sep. 30, 2019 | Sep. 26, 2019 | Dec. 31, 2018 | Jun. 29, 2018 | Jan. 03, 2018 | Dec. 31, 2017 | Nov. 25, 2015 | Aug. 13, 2015 | Jul. 24, 2015 | May 15, 2015 | Dec. 27, 2014 |
Convertible debt | $ 376,373 | ||||||||||
Interest rate | 3.00% | 8.00% | 3.00% | ||||||||
Common stock issued | 74,225,141 | 69,854,141 | 5,505,200 | ||||||||
Accrued interest | $ 26,373 | ||||||||||
Convertible Debt | |||||||||||
Convertible debt | $ 100,000 | $ 50,000 | $ 500,000 | $ 35,000 | $ 150,000 | ||||||
Maturity date | Nov. 24, 2016 | Aug. 12, 2016 | Feb. 16, 2030 | Apr. 30, 2016 | Dec. 31, 2015 | ||||||
Interest rate | 10.00% | 10.00% | 3.00% | 10.00% | 10.00% | ||||||
Convertible price per share | $ 1 | $ 1 | $ 0.10 | $ 1 | $ 1 | ||||||
Warrants issued | 50,000 | 25,000 | 17,500 | ||||||||
Value of warrants | $ 21,500 | $ 10,751 | $ 7,525 | ||||||||
Warrants per share value | $ 1.50 | $ 1.50 | $ 1.50 | ||||||||
Common stock issued | 1,500,000 | 563,063 | |||||||||
Value of notes converted | $ 123,627 | $ 236,104 | |||||||||
Accrued interest | $ 26,373 |
Convertible Notes Payable - R_2
Convertible Notes Payable - Related Party (Details Narrative) - USD ($) | Sep. 01, 2017 | Sep. 30, 2019 | Sep. 26, 2019 | Dec. 31, 2018 | Jun. 29, 2018 | Jan. 03, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 25, 2015 | Nov. 20, 2015 | Aug. 13, 2015 | Jul. 24, 2015 | May 15, 2015 | Dec. 27, 2014 |
Convertible debt | $ 376,373 | ||||||||||||||
Interest rate | 3.00% | 8.00% | 3.00% | ||||||||||||
Repayment of convertible notes | $ 23,828 | ||||||||||||||
Repayment of accrued interest | $ 16,522 | ||||||||||||||
Common stock issued | 74,225,141 | 69,854,141 | 5,505,200 | ||||||||||||
Convertible Debt - Related Party | |||||||||||||||
Common stock issued | 973,946 | ||||||||||||||
Value of notes converted | $ 356,176 | ||||||||||||||
Loss on conversion of debt | $ 58,300 | ||||||||||||||
Convertible Debt | |||||||||||||||
Convertible debt | $ 100,000 | $ 50,000 | $ 500,000 | $ 35,000 | $ 150,000 | ||||||||||
Maturity date | Nov. 24, 2016 | Aug. 12, 2016 | Feb. 16, 2030 | Apr. 30, 2016 | Dec. 31, 2015 | ||||||||||
Interest rate | 10.00% | 10.00% | 3.00% | 10.00% | 10.00% | ||||||||||
Convertible price per share | $ 1 | $ 1 | $ 0.10 | $ 1 | $ 1 | ||||||||||
Common stock issued | 1,500,000 | 563,063 | |||||||||||||
Value of notes converted | $ 123,627 | $ 236,104 | |||||||||||||
Convertible Debt | Chief Executive Officer | |||||||||||||||
Convertible debt | $ 20,000 | $ 15,000 | $ 120,000 | $ 5,000 | |||||||||||
Interest rate | 10.00% | 10.00% | 10.00% | 10.00% | |||||||||||
Convertible price per share | $ 0.40 | $ 0.40 | $ 1 | $ 0.40 | |||||||||||
Convertible Debt (2) | Chief Executive Officer | |||||||||||||||
Convertible debt | $ 10,000 | ||||||||||||||
Interest rate | 10.00% | ||||||||||||||
Convertible price per share | $ 0.40 |
Capital Lease Obligations (Deta
Capital Lease Obligations (Details Narrative) | 1 Months Ended |
Sep. 30, 2019USD ($) | |
Debt Disclosure [Abstract] | |
Effective interest rate | 12.00% |
Monthly payment | $ 941 |
Capital Lease Obligations | $ 35,886 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Jul. 31, 2018 | Jul. 02, 2018 | Sep. 15, 2015 | Apr. 01, 2014 |
Security Deposit | $ 17,121 | $ 17,121 | ||||
Laboratory Space | ||||||
Monthly Rent | $ 500 | |||||
Office Space | ||||||
Monthly Rent | $ 2,723 | $ 249 | $ 5,400 | |||
Security Deposit | $ 2,121 | $ 183 | $ 15,000 |
Marketable Security - Marketabl
Marketable Security - Marketable Security - Schedule of gains and lossed on marketable securities (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | ||
Net gains and (losses) recognized during the period on equity securities | $ (301,661) | $ (844,671) |
Less: Net gains and (losses) recognized during the period on equity securities sold during the period | 55,702 | 146,713 |
Unrealized gains and (losses) recognized during the period on equity securities still held at the reporting date | $ (245,959) | $ (697,958) |
Marketable Security (Details Na
Marketable Security (Details Narrative) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Investments, Debt and Equity Securities [Abstract] | ||
Marketable securities in MJNA | 11,939,732 | |
Marketable securities, per share | $ 0.0331 | |
Marketable security (available for sale) | $ 395,205 | $ 2,579,640 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Stock Based Compensation | $ 275,878 | $ 7,558 | ||
Research and Development Expense [Member] | ||||
Stock Based Compensation | $ 90,000 | $ 0 | 90,000 | 0 |
General and Administrative Expense [Member] | ||||
Stock Based Compensation | $ 180,840 | $ 2,519 | $ 185,878 | $ 7,558 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Sep. 01, 2017 | Sep. 26, 2019 | Aug. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Jul. 31, 2019 | Dec. 31, 2018 | Jul. 31, 2018 | Jan. 03, 2018 | Apr. 30, 2014 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | ||||||||
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 | ||||||||
Common Stock Description | All common stock shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative, and therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company, subject to the rights of the preferred stockholders. | |||||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.04 | |||||||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | ||||||||
Common Stock, Shares, Issued | 74,225,141 | 69,854,141 | 5,505,200 | |||||||
Common Stock, Shares, Outstanding | 74,225,141 | 69,854,141 | ||||||||
Common stock value | $ 7,422 | $ 6,985 | $ 2,342,813 | $ 256,359 | ||||||
Capital contribution | $ 6,794,612 | $ 6,381,755 | $ 469,997 | |||||||
Share Price | $ 0.10 | $ 0.10 | ||||||||
Stock Issued During Period, Shares, Acquisitions | 171,000 | |||||||||
Number of common stock converted | 1,500,000 | |||||||||
Value of notes converted | $ 123,627 | $ 654,093 | ||||||||
Accrued interest | $ 26,373 | |||||||||
Options granted | 100,000 | |||||||||
Options granted, exercise price | $ 2 | |||||||||
Vesting period | 5 years | |||||||||
Value of option | $ 20,154 | |||||||||
Board members | ||||||||||
Stock Issued During Period, Shares, Issued for Services | 950,000 | |||||||||
Share Price | $ 0.10 | |||||||||
Investor Relations Consultant | ||||||||||
Stock Issued During Period, Shares, Issued for Services | 500,000 | |||||||||
Share Price | $ 0.10 | |||||||||
Product Development Consultant | ||||||||||
Stock Issued During Period, Shares, Issued for Services | 150,000 | |||||||||
Share Price | $ 0.10 | |||||||||
Marketing Consultant | ||||||||||
Stock Issued During Period, Shares, Issued for Services | 400,000 | |||||||||
Share Price | $ 0.10 | |||||||||
Consultant | ||||||||||
Stock Issued During Period, Shares, Issued for Services | 700,000 | |||||||||
Share Price | $ 0.10 | |||||||||
Series A Preferred Stock [Member] | ||||||||||
Number of Preferred stock stock issued | 4,893,510 | |||||||||
Number of common stock converted | 4,893,510 | |||||||||
Preferred stock description | Company’s Board of Directors authorized and designated 75 shares of the Company’s Preferred Stock as Series A Preferred Stock. Each share of the Series A Preferred Stock is entitled to a liquidation preference of $1,000 per share, and is convertible into 1,000 shares of the Company’s common stock. The holders of a majority of the Series A Preferred Stock are entitled to elect up to four (4) directors to the Company’s board of directors, and have preferential rights in regard to the election of Series A directors. In all other voting matters, the holders of Series A Preferred Stock are entitled to cast 1,000 votes per share. | |||||||||
Preferred Stock, Shares Authorized | 75 | 75 | ||||||||
Preferred Stock, Shares Issued | 75 | 75 | 75 | |||||||
Preferred Stock Issued, Value | $ 0 | $ 0 | $ 75,000 | |||||||
Preferred Stock, Shares Outstanding | 75 | 75 | ||||||||
Series B Preferred Stock [Member] | ||||||||||
Preferred stock description | Company’s Board of Directors authorized and designated 75 shares of the Company’s Preferred Stock as Series B Preferred Stock. Each share of the Series B Preferred Stock is entitled to a liquidation preference of $1,000 per share, and is convertible into 1,000 shares of the Company’s common stock. The holders of a majority of the Series B Preferred Stock are entitled to elect up to three (3) directors to the Company’s board of directors, and have preferential rights in regard to the election of Series B directors. In all other voting matters, the holders of Series B Preferred Stock are entitled to cast 1,000 votes per share. | |||||||||
Preferred Stock, Shares Authorized | 75 | 75 | ||||||||
Preferred Stock, Shares Issued | 75 | 75 | 75 | |||||||
Preferred Stock Issued, Value | $ 0 | $ 0 | $ 75,000 | |||||||
Preferred Stock, Shares Outstanding | 75 | 75 |
Subsequent Events - Summary of
Subsequent Events - Summary of gains and losses recognized on marketable securities (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Nov. 13, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | |
Net gains and (losses) recognized during the period on equity securities | $ (301,661) | $ (844,671) | |
Less: Net gains and (losses) recognized during the period on equity securities sold during the period | 55,702 | 146,713 | |
Unrealized gains and (losses) recognized during the period on equity securities still held at the reporting date | $ (245,959) | $ (697,958) | |
Subsequent Event [Member] | |||
Net gains and (losses) recognized during the period on equity securities | $ (76,929) | ||
Less: Net gains and (losses) recognized during the period on equity securities sold during the period | 61,119 | ||
Unrealized gains and (losses) recognized during the period on equity securities still held at the reporting date | $ (15,810) |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] | 1 Months Ended |
Nov. 13, 2019USD ($)shares | |
Number of common stock sold | shares | 6,839,732 |
Proceeds from sale of stock | $ | $ 165,276 |