Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 06, 2020 | Jun. 30, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | Kannalife Inc | ||
Entity Central Index Key | 0001615999 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
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 Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 74,225,141 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 121,455 | $ 307,131 |
Marketable security (available for sale) | 0 | 2,579,640 |
Prepaid expenses | 9,000 | 0 |
Other receivables | 400 | 99,691 |
Due from related party, net | 0 | 16,334 |
Total Current Assets | 130,855 | 3,002,796 |
NON-CURRENT ASSETS: | ||
Property and equipment, net | 75,401 | 3,074 |
Security deposits | 17,121 | 17,121 |
Total Non-Current Assets | 92,522 | 20,195 |
TOTAL ASSETS | 223,377 | 3,022,991 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 389,195 | 283,996 |
Payroll and related liabilities | 243,208 | 246,067 |
Loan payable | 620,000 | 0 |
Loan payable - related party | 42,092 | 16,173 |
Capital lease obligations | 7,533 | 0 |
Due to related party, net | 25,349 | 0 |
Total Current Liabilities | 1,327,377 | 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, net of $97,534 debt discount | 378,839 | 500,000 |
Capital lease obligation - long term portion | 27,764 | 0 |
Derivative liabilities | 183,451 | 0 |
Total Long Term Liabilities | 590,054 | 1,145,822 |
TOTAL LIABILITIES | 1,917,431 | 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 | (8,496,088) | (5,052,051) |
Non-controlling interest | 0 | (5,756) |
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | (1,694,054) | 1,330,933 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 223,377 | 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 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Debt discount | $ 97,534 | |
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 |
Consolidated Statments of Opera
Consolidated Statments of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
NET REVENUES: | ||
Grant Revenue | $ 126,027 | $ 173,889 |
TOTAL NET REVENUES | 126,027 | 173,889 |
OPERATING EXPENSES: | ||
Research and development | 554,701 | 224,933 |
General and administrative | 1,900,443 | 1,010,764 |
TOTAL OPERATING EXPENSES | 2,455,144 | 1,235,697 |
LOSS FROM OPERATIONS | (2,329,117) | (1,061,808) |
OTHER (EXPENSE) INCOME: | ||
Interest expense, net | (146,909) | (30,764) |
Other (expense) income, net | 0 | 36,183 |
Loss on conversion of convertible debt | 0 | (61,815) |
Realized gain on investment | 0 | 3,901,974 |
Net gains and losses recognized on marketable security | (942,982) | (1,040,727) |
Impairment on investment | (27,490) | 0 |
Change in fair value of derivative liabilities | (4,367) | 0 |
TOTAL OTHER (EXPENSE) INCOME | (1,121,748) | 2,804,851 |
NET (LOSS) INCOME BEFORE INCOME TAX | (3,450,865) | 1,743,043 |
Income tax expense | 0 | 811,984 |
NET (LOSS) INCOME | (3,450,865) | 931,059 |
Net loss attributable to noncontrolling interests | (6,828) | (5,756) |
Net (loss) income attributable to Kannalife, Inc. | $ (3,444,037) | $ 936,815 |
(Loss) income attributable to Kannalife, Inc. per common share - basic | $ (0.05) | $ 0.01 |
(Loss) income attributable to Kannalife, Inc. per common share - diluted | $ (0.05) | $ 0.01 |
Weighted average common shares outstanding - basic | 71,228,125 | 64,417,684 |
Weighted average common shares outstanding - diluted | 71,228,125 | 68,849,054 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - 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 options for services | 10,077 | 10,077 | |||||
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 common stock for cash, Shares | 2,030,000 | ||||||
Issuance of common stock for cash, Amount | $ 203 | 202,797 | 203,000 | ||||
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 | |||||
Effect of reverse recapitalization transaction, Shares | 7,500,000 | ||||||
Effect of reverse recapitalization transaction, Amount | $ 750 | (131,095) | (130,345) | ||||
Net (loss) income | 936,815 | (5,756) | 931,059 | ||||
Ending balance, Shares at Dec. 31, 2018 | 75 | 75 | 69,854,141 | ||||
Ending 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 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 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 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 | (3,444,037) | (6,828) | (3,450,865) | ||||
Ending balance, Shares at Dec. 31, 2019 | 75 | 75 | 74,225,141 | ||||
Ending balance, Amount at Dec. 31, 2019 | $ 7,422 | $ 6,794,612 | $ (8,496,088) | $ (1,694,054) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Cash Flows [Abstract] | ||
Net (loss) income | $ (3,450,865) | $ 931,059 |
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 on marketable security | 942,982 | 1,040,727 |
Depreciation | 5,509 | 0 |
Amortization of debt discount | 2,466 | 0 |
Stock based compensation | 275,878 | 0 |
Issuance of options for services | 0 | 10,077 |
Non-cash interest expense | 79,084 | 0 |
Change in fair value of derivative liabilities | 4,367 | 0 |
Impairment on investment | 27,490 | 0 |
Provision for deferred income taxes | 0 | 772,000 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | (9,000) | 0 |
Other receivables | 99,291 | (99,291) |
Security deposits | 0 | (2,121) |
Accounts payable and accrued expenses | 131,572 | (29,342) |
Payroll and related liabilities | (2,859) | 6,143 |
NET CASH USED IN OPERATING ACTIVITIES | (1,894,085) | (1,210,907) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash received upon acquisition | 0 | 289,654 |
Proceeds from sale of marketable securities | 1,636,658 | 537,966 |
Purchase of equipment | (41,950) | (3,074) |
Purchase of investment | (27,490) | 0 |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 1,567,218 | 824,546 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Due from related party, net | 16,334 | (16,334) |
Due to related party, net | 25,349 | 0 |
Principal payments toward capital lease obligations | (589) | 352,500 |
Proceeds from notes payable - related party | 97 | 0 |
Proceeds from convertible notes payable | 100,000 | 0 |
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 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 141,191 | 689,166 |
Net (decrease) increase in cash | (185,676) | 302,805 |
Cash and cash equivalents, beginning of year | 307,131 | 4,326 |
Cash and cash equivalents, end of year | 121,455 | 307,131 |
NON-CASH ACTIVITIES: | ||
Issuance of common stock for conversion of notes payable and accrued interest | 150,000 | 236,104 |
Issuance of common stock for conversion of notes payable and accrued interest - related party | 0 | 356,176 |
Issuance of common stock for remaining share of non-controlling interest | 12,584 | 0 |
Issuance of common stock for conversion of accrued salaries | 0 | 2,812,810 |
Debt discount upon the issuance of convertible note payable | 100,000 | 0 |
Property and equipment financed through capital leases | 35,886 | 0 |
Net liabilities assumed from reverse acquisition | $ 0 | $ 130,345 |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 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 Company’s 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 Company’s voting power immediately following the Share Exchange and Kannalife’s 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 Company’s 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- reverse 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 – long term 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) Year Ended December 31, 2018 Total revenues $ 173,889 Net income $ 819,105 Net income per common share, basic $ 0.01 Net income per common share, diluted $ 0.01 The summarized consolidated pro forma results are not necessarily indicative of results which would have occurred if the reverse acquisition had been in effect for the periods 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 to change its name to Kannalife, Inc. The Company has concurrently submitted a request to FINRA for approval of the name change as well as a ticker symbol change and is awaiting approval. The Company’s name change and ticker change was reviewed and processed by FINRA and went effective January 17, 2019. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 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. All significant consolidated transactions and balances have been eliminated in consolidation. The operations of Kannalife, Inc. are included in the consolidated financial statement from the date of the Share Exchange. Noncontrolling Interests The Company accounts for its less than 100% interests in Kannalife in accordance with ASC Topic 810, Consolidation, and accordingly the Company presents noncontrolling interests as a component of equity on its consolidated balance sheet and reports the noncontrolling interest’s share of Kannalife’s net loss attributable to noncontrolling interests in the 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%. 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, valuation of derivative liabilities 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. Cash and Cash Equivalents Our cash and cash equivalents include short-term, highly liquid investments with original maturities of three months or less when purchased. At times throughout the year, the Company may maintain bank balances that could exceed Federal Deposit Insurance Corporation insured limits. The Company maintains its cash deposit accounts with high credit quality financial institutions, and therefore believes that its loss exposure is minimal. Accounts Receivable Accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts based on a review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions and sets up an allowance for doubtful accounts when collection is uncertain. Customers’ accounts are written off when all attempts to collect have been exhausted. Recoveries of accounts receivable previously written off are recorded as income when received. As of December 31, 2019 and 2018, the Company had no allowance for doubtful account. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to expense when incurred, while renewals and betterments that materially extend the life of an asset are capitalized. When assets are sold, retired or otherwise disposed of, the cost and accumulated depreciation are removed from the balance sheets and any resulting gain or loss is reflected in the statements of operations and members’ deficit in the period realized. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which are as follows: Furniture and equipment 5 years Concentration Risks As of December 31, 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, Inc., 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. The Company has no control or influence over the joint venture and for the year ending December 31, 2019 the Company recorded a loss in investment in the amount of $27,490. 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 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. As of December 31, 2019, the grant has ended. Equity Investments Effective January 1, 2018, with the adoption of ASU 2016-01, our accounting treatment for equity investments differs for those with and without readily determinable fair values. Equity investments with readily determinable fair values are recorded at fair value with changes in fair value recorded in “Unrealized Gain/Loss On Investments.” For equity investments without readily determinable fair values we have elected the “measurement alternative,” and therefore carry these investments at cost, less impairment (if any), plus or minus changes in observable prices. On a quarterly basis, we review our equity investments without readily determinable fair values for impairment. We consider a number of qualitative factors such as whether there is a significant deterioration in earnings performance, credit rating, asset quality, or business prospects of the investee in determining if impairment exists. If the investment is considered impaired, an impairment loss equal to the amount by which the carrying value exceeds its fair value is recorded through a charge to earnings. The impairment loss may be reversed in a subsequent period if there are observable transactions for the identical or similar investment of the same issuer at a higher amount than the carrying amount that was established when the impairment was recognized. Impairment as well as upward or downward adjustments resulting from observable price changes in orderly transactions for identical or similar investments are included in “Income - other.” Realized gains or losses resulting from the sale of equity investments are calculated using the specific identification method and are included in “Net gains and losses recognized on marketable security". Income Taxes The Company accounts for income taxes under FASB ASC Topic 740, Income Taxes Preferred Stock The Company applies the guidance enumerated in FASB ASC Topic 480, Distinguishing Liabilities from Equity Convertible Instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC Topic 815, Derivatives and Hedging Activities Applicable U.S. GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when the Company has determined that the embedded conversion options should not be bifurcated from their host instruments) as follows. The Company records, when necessary, deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded in the preferred shares. 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 4,029,433 for the year ended December 31, 2019. In accordance with ASC 260, “Earnings Per Share”, the following table reconciles basic shares outstanding to fully diluted shares outstanding for the year ended December 31, 2018: December 31, 2018 Weighted average number of common shares outstanding - Basic 64,417,684 Series A preferred stock 37,603 Series B preferred stock 37,603 Convertible notes payable 4,356,164 Weighted average number of common and equivalent shares outstanding-Diluted 68,849,054 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 years ended December 31, 2018 because their effect would be anti-dilutive. 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 consolidated 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. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses” to improve information on credit losses for financial assets and net investment in leases that are not accounted for at fair value through net income. ASU 2016-13 replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. In April 2019 and May 2019, the FASB issued ASU No. 2019-04, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” and ASU No. 2019-05, “Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief” which provided additional implementation guidance on the previously issued ASU. In November 2019, the FASB issued ASU 2019-10, “Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842),” which defers the effective date for public filers that are considered small reporting companies (“SRC”) as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Since the Company is an SRC, implementation is not needed until January 1, 2023. The Company will continue to evaluate the effect of adopting ASU 2016-13 will have on the Company’s consolidated financial statements. |
Going Concern and Management's
Going Concern and Management's Liquidity Plans | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern and Management's Liquidity Plans | NOTE 3 – GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS The Company’s 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 consolidated financial statements, the Company has had a net loss from operations of $2,329,117 and $1,061,808 for the years ended December 31, 2019 and 2018, respectively. The net cash used in operations were $1,894,085 and $1,210,907 for the years ended December 31, 2019 and 2018, respectively. Additionally, the Company had an accumulated deficit of $8,496,088 at December 31, 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. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management plans to raise additional capital through the sale of convertible debt securities offering. However, there are no assurances that such additional funding will be achieved. The Company does not have sufficient cash flow for the next twelve months from the issuance of these audited consolidated financial statements. The Company’s 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 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 | 12 Months Ended |
Dec. 31, 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 Company’s 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 Company’s 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. 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 December 31, 2018, on a recurring basis: December 31, 2018 Level 1 Level 2 Level 3 Total Carrying Value Marketable securities – Medical Marijuana, Inc. $ 2,579,640 — — $ 2,579,640 As of December 31, 2019, the Company did not own any shares of MJNA stock. The following table presents liabilities that are measured and recognized at fair value as of December 31, 2019, on a recurring basis: December 31, 2019 Level 1 Level 2 Level 3 Total Carrying Value Derivative liabilities $ — — 183,451 $ 183,451 |
Marketable Security
Marketable Security | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Security | NOTE 5 – MARKETABLE SECURITY On June 1, 2018, the Company received 41,583,333 shares of Medical Marijuana, Inc. (“MJNA”) common stock 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 of 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 December 31, 2019, the Company held zero (0) shares of MJNA. 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 year ending December 31, 2019: Net gains and (losses) recognized during the period on equity securities $ (942,982 ) Less: Net gains and (losses) recognized during the period on equity securities sold during the period 942,982 Unrealized gains and (losses) recognized during the period on equity securities still held at the reporting date $ — The following table summarizes the gains and losses recognized during the year ending December 31, 2018: Net gains and (losses) recognized during the period on equity securities $ (1,040,727 ) Less: Net gains and (losses) recognized during the period on equity securities sold during the period 167,034 Unrealized gains and (losses) recognized during the period on equity securities still held at the reporting date $ (873,693 ) |
Payroll and Related Liabilities
Payroll and Related Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Payroll and Related Liabilities | NOTE 6 – PAYROLL AND RELATED LIABILITIES Accrued payroll and payroll taxes at December 31, 2019 and 2018 consisted of the following: 2019 2018 Payroll $ — $ — Payroll taxes 243,208 246,067 Totals $ 243,208 $ 246,067 As of December 31, 2019, and 2018, the Company has 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 our CEO. The initial term of the agreement is for two years and 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 are for one year and automatically renew for successive six month terms. See Note 14 for discussion of accrued payroll converted into common stock. |
Loan Payable
Loan Payable | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Loan Payable | NOTE 7 – LOAN 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 the amendment date was forgiven. Accrued interest related to these notes is $73,381 and $24,460 as of December 31, 2019 and 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 is $620,000 as of December 31, 2019. Total interest expense on notes payable, amounted to $48,921 and $24,460 for the years ended December 31, 2019 and 2018, respectively. |
Loan Payable - Related Party
Loan Payable - Related Party | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Loan Payable - Related Party | NOTE 8 – LOAN 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 December 31, 2019 and 2018. |
Capital Lease Obligations
Capital Lease Obligations | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Capital Lease Obligations | Note 9 – 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 $35,297, secured by equipment with carrying value of $63,747, as of December 31, 2019. The future payments under Capital Lease Obligations as of December 31, 2019, are as follows: Future Minimum Principal Payments Twelve Months ended December 31, 2020 $ 7,533 2021 8,471 2022 9,525 2023 9,768 Total capital lease obligations 35,297 Less: current portion (7,533 ) Total non-current term loan obligations $ 27,764 |
Convertible Notes Payable
Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Convertible Notes Payable | NOTE 10 – 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 Company’s 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 increasing to 17% per annum in the event of a default. This note is convertible to the Company’s 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 increasing to 14% per annum in the event of a default. This note is convertible to the Company’s 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. In December 2019, the Company entered into a Securities Purchase Agreement with an investor pursuant to which the Company agreed to sell the investor a $100,000 convertible note bearing interest at 8% per annum (the “Note”). The Note matures two years from the date of issuance. The Note is convertible at the option of the holder at any time into shares of the Company’s common stock at an effective conversion price of 75% of the average closing price of the Company’s common stock on the fifteen days prior to conversion. The Company may not prepay this Note within the first six months. If, after the first six months until the maturity of the Note the Company: (c) elects to repay the Note, it must do so at a premium of one hundred and twenty five percent (125%) of the face amount of the note, together with all unpaid and accrued interest to the date of repayment. (d) elects to involuntarily exercise conversion of this Note to the Holder, the Company must provide written notice to the Holder along with an executed copy of the Company’s Notice of Conversion, specifying that the Note shall be converted into shares of the Company’s Common Stock based upon at an effective conversion price of 75% of the average closing price of the Company’s common stock on the fifteen days prior to conversion. The embedded conversion feature of this Note was deemed to require bifurcation and liability classification, at fair value. Pursuant to the Securities Purchase Agreement, the Company also sold warrants to the investors to purchase up to an aggregate 100,000 shares of common stock. The fair value of the derivative liability and warrants as of the date of issuance was in excess of the Note (see Note 14) resulting in full discount of the Note. Total interest expense on convertible notes payable, inclusive of amortization of debt discount of $2,466 and $0, amounted to $16,739 and $6,250 for the years ended December 31, 2019 and 2018, respectively. |
Convertible Notes Payable - Rel
Convertible Notes Payable - Related Party | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Convertible Notes Payable - Related Party | NOTE 11 – 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 increasing to 17% per annum in the event of a default. This note is convertible to the Company’s common stock at a price of $1.00 per share. 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 Company’s 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 Company’s 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 Company’s 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 increasing to 17% per annum in the event of a default. These notes are convertible to the Company’s 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 increasing to 17% per annum in the event of a default. These notes are convertible to the Company’s common stock at a price of $0.40 per share. 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) valued at $414,476. 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. |
Derivative Liabilities
Derivative Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Notes to Financial Statements | |
Derivative Liabilities | NOTE 12 – DERIVATIVE LIABILITIES The Company issued debts that consist of the issuance of convertible notes with variable conversion provisions. In addition, the Company issued warrants with variable conversion provisions. The conversion terms of the convertible notes and warrants are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion option and warrants and shares to be issued were recorded as derivative liabilities on the issuance date. Based on the various convertible notes described in Note 10, the fair value of applicable derivative liabilities on notes, warrants and change in fair value of derivative liability are as follows as of December 31, 2019: The following table presents the activity for derivative liabilities measured at estimated fair value: Derivative Liability - Convertible Notes Derivative Liability - Warrants Total Balance as of December 31, 2018 $ — $ — $ — Additions during the period 61,321 117,763 179,084 Change in fair value 109 4,258 4,367 Change due to exercise / redemptions — — — Balance as of December 31, 2019 $ 61,430 $ 122,021 $ 183,451 The fair value of the derivative liability – convertible notes is estimated using a Monty Carlo Pricing Model with the following assumptions: Market value of common stock on issuance date $ 4.20 Expected volatility 100 % Expected term (in years) 1 Risk-free interest rate 2.00 % The fair value of the derivative liability – warrants is estimated using a Monty Carlo Pricing Model with the following assumptions: Market value of common stock on issuance date $ 4.20 Expected volatility 122 % Expected term (in years) 3 Risk-free interest rate 2.16 % |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 13 – 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 one year lease arrangement for office space, with the option to renew the lease annually. The lease has been renewed through April 2020. 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 October 31, 2020. The monthly rent payment is $359, 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 June 30, 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 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. 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 Company’s CEO, the Company’s 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 grant to the Company from the inventors 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 these royalty agreements were terminated. In August 2019, the Company issued shares of common stock to the Company’s CEO, the Company’s CMO, three advisory board members of the Company, and an unrelated third party in exchange for them giving up their rights to any future royalty payments. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 14 – STOCKHOLDERS’ EQUITY (DEFICIT) 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 any annual or special meeting 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 Corp. 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 any annual or special meeting 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 $0.0001 par value common stock. 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 December 31, 2019 and 2018, there were 74,225,141 and 69,854,141 shares of common stock issued and outstanding, respectively. See Note 10 and 11 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 consolidated statement of operations for the years ended December 31, 2019 and 2018: Year Ended December 31, 2019 2018 Research and Development $ 90,000 $ — General and Administrative $ 185,878 $ 10,077 Stock Options On September 1, 2017, the Company entered into an agreement for consulting services. As compensation the Company granted options to purchase 100,000 shares of common stock at a price of $2.00 per share and are exercisable for five years. The stock option vests in equal monthly installments of 24 months. These options were valued at $20,154 using a Black-Scholes Options Pricing Model. For the years ended December 31, 2019 and 2018, the Company recorded $5,878 and $10,077, respectively, as stock based compensation which is included in the general and administrative expenses in the consolidated statement of operations. The remaining compensation expense outstanding for future periods is $0. The fair value of the options is estimated using a Black-Scholes Options Pricing Model with the following assumptions: Market value of common stock on issuance date $ 0.40 Exercise price $ 2.00 Expected volatility 100 % Expected term (in years) 5 Risk-free interest rate 1.73 % Expected dividend yields — On August 14, 2019, the Board authorized the Kannalife, Inc. 2019 Equity Incentive Plan (the “2019 Plan”) in order to facilitate the grant of cash and equity incentives to directors, employees (including our named executive officers) and consultants of our company and certain of its affiliates and to enable our company and certain of its affiliates to obtain and retain services of these individuals, which is essential to our long-term success. Our 2019 Plan allows for the grant of a variety of equity vehicles to provide flexibility in implementing equity awards, including incentive stock options, non-qualified stock options, restricted stock grants, unrestricted stock grants and restricted stock units. Authorized Shares. A total of 7,500,000 shares of common stock were authorized under the 2019 Plan. Warrants In December 2019, the Company entered into a Securities Purchase Agreement with an investor pursuant to which the Company agreed to sell the investor a $100,000 convertible note bearing interest at 8% per annum (the “Note”). The Company also sold warrants to the investors to purchase up to an aggregate 100,000 shares of common stock at a per share purchase price of one hundred twenty five percent (125%) of the voluntary or involuntary conversion price of the Company’s 8% convertible note. The warrant is fully vested and was fully expensed as of the issuance date with an exercise term of three (3) years. See Note 10 and 12. The following is a summary of outstanding and exercisable warrants: Number of Shares Weighted Average Exercise Price Balance at December 31, 2017 — — Issued — — Expired — — Balance at December 31, 2018 — — Issued 100,000 3.26 Expired — — Balance at December 31, 2019 100,000 3.26 As of December 31, 2019, 100,000 warrants for common stock were exercisable and the intrinsic value of these warrants was $108,750. As of December 31, 2019, the weighted average remaining contractual life was 2.98 years for warrants outstanding. The Company did not issue any warrants for the year ended December 31, 2018. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 15 – RELATED PARTY TRANSACTIONS The Company’s Chief Executive Officer shares the use of the leased office space for personal living quarters. The CEO reimburses the Company for 50% of the monthly rent, or $2,700 per month. As of December 31, 2019, the Company owes the CEO $25,349 for expenses the CEO incurred on behalf of the Company. This loan is non-interest bearing and due on demand. 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 December 31, 2019, $0 is due from GGCP. See Notes 8, 11 and 14 for additional related party transactions. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 16 – INCOME TAXES We file income tax returns in the United States federal jurisdiction and in various state and local jurisdictions. In the normal course of business, we are subject to examination by taxing authorities. The tax years ending 2016 through 2019 remain subject to examination for federal tax purposes and remain subject to examination in significant state tax jurisdictions. On December 22, 2017, the United States enacted significant changes to the U.S. tax law following the passage and signing of H.R.1, "An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018" (the "Tax Act") (previously known as "The Tax Cuts and Jobs Act"). The Tax Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the corporate tax rate from 35% to 21%. The Tax Act reduced the U.S. corporate income tax rate reduction to 21% becomes effective January 1, 2018. The Company re-measured its deferred tax assets and liabilities as of December 31, 2017, applying the reduced corporate income tax rate and recorded a provisional decrease to the deferred tax assets of $787,700, with a corresponding adjustment to the valuation allowance. As of December 31, 2019, and 2018, the Company had federal and state net operating loss carry forwards of $4,248,000 and $862,000, respectively, of which $.8 million of the 2019 amount will expire in 2032 through 2037, and $3.4 million will not expire. The non-expiring portion is limited to 80% of the current year taxable income of the respective entity. The reconciliation of income tax expense computed at the U.S. federal statutory rate to the income tax provision for the years ended December 31, 2019 and 2018 is as follows: For the Years ended December 31, 2019 2018 % % Statutory federal tax rate 21.0 21.0 State taxes, net of federal benefit 4.7 2.8 Valuation allowance (20.0 ) 22.2 Permanent items (5.2 ) — Other, net (.5 ) 0.6 Provision for income taxes — 46.6 The change in the Company's net increase in the valuation allowance was caused by the change in estimation of NOL utilization. Deferred income taxes reflect the net tax effects of: (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes; and (b) operating loss and tax credit carry-forwards. We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. Significant components of deferred tax assets as December 31, 2019 and 2018 were as follows: For the Years ended December 31, 2019 2018 Deferred Tax Assets: Federal net operating loss carryforwards $ 892,000 $ 181,023 Capital Losses over Capital Gains — (17,290 ) Non-cash interest 39,954 29,132 Non-cash accrued compensation 794,880 825,713 Mark to Market Adjustment - Investments held for sale — 240,965 State taxes 316,238 92,298 Net deferred tax assets before valuation allowance 2,043,072 1,351,841 Valuation Allowance (2,043,072 ) (1,351,841 ) Net Deferred Tax Assets $ — $ — Utilization of the net operating losses (NOL) carryforwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code (IRC) of 1986, as amended (the Code), as well as similar state provisions. These ownership changes may limit the amount of NOL carryforwards that can be utilized annually to offset future taxable income. In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders. At the time of closing the books, the Company had not yet completed a study to determine the extent of the limitation. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 17 – SUBSEQUENT EVENTS In In February 2020, the Company sold an additional $50,000, to the CEO of MJNA, a significant shareholder, under the Note and sold warrants to purchase up to an aggregate 50,000 shares of common stock to an investor under the Securities Purchase Agreement. See Note 10. On March 12, 2020, Kannalife, Inc., a Delaware corporation (the “Company”) entered into securities purchase agreements (the “Purchase Agreements”) with two different accredited investors (each an “Investor”, and together the “Investors”) pursuant to which each Investor purchased an 8% unsecured convertible promissory note (each a “Note”, and together the “Notes”) from the Company. The terms and conditions of each of the Notes are substantially the same. Each Note has a principal amount of $105,000 less a $5,000 original issue discount (“OID”) for a purchase price of $100,000, with a maturity date of March 12, 2021. All principal amounts and the interest thereon are convertible into shares of the Company’s common stock (the “Common Stock”) at the option of each Investor, after six (6) months from the date of the Notes. These Notes have a variable conversion price and the Company expects to record embedded derivative liabilities. In December 2019, a novel strain of coronavirus (Item 5-19) surfaced. The spread of COVID-19 around the world in the first quarter of 2020 has caused significant volatility in U.S. and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies and, as such, the Company is unable to determine if it will have a material impact to its operations. The Company’s operations may be affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19) which in March 2020, was declared a pandemic by the World Health Organization. The ultimate disruption which may be caused by the outbreak is uncertain; however, it may result in a material adverse impact on the Company’s financial position, operations and cash flows. Possible areas that may be affected include, but are not limited to, disruption to the Company’s labor workforce, unavailability of products and supplies used in operations, and the decline in value of assets held by the Company. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 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. All significant consolidated transactions and balances have been eliminated in consolidation. The operations of Kannalife, Inc. are included in the consolidated financial statement from the date of the Share Exchange. |
Noncontrolling Interests | Noncontrolling Interests The Company accounts for its less than 100% interests in Kannalife in accordance with ASC Topic 810, Consolidation, and accordingly the Company presents noncontrolling interests as a component of equity on its consolidated balance sheet and reports the noncontrolling interest’s share of Kannalife’s net loss attributable to noncontrolling interests in the 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%. |
Significant risks and uncertainties | 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 | 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, valuation of derivative liabilities 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. |
Cash and Cash Equivalents | Cash and Cash Equivalents Our cash and cash equivalents include short-term, highly liquid investments with original maturities of three months or less when purchased. At times throughout the year, the Company may maintain bank balances that could exceed Federal Deposit Insurance Corporation insured limits. The Company maintains its cash deposit accounts with high credit quality financial institutions, and therefore believes that its loss exposure is minimal. |
Accounts Receivable | Accounts Receivable Accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts based on a review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions and sets up an allowance for doubtful accounts when collection is uncertain. Customers’ accounts are written off when all attempts to collect have been exhausted. Recoveries of accounts receivable previously written off are recorded as income when received. As of December 31, 2019 and 2018, the Company had no allowance for doubtful account. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to expense when incurred, while renewals and betterments that materially extend the life of an asset are capitalized. When assets are sold, retired or otherwise disposed of, the cost and accumulated depreciation are removed from the balance sheets and any resulting gain or loss is reflected in the statements of operations and members’ deficit in the period realized. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which are as follows: Furniture and equipment 5 years |
Concentration Risks | Concentration Risks As of December 31, 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 | Joint Venture On June 18, 2019, the Company, along with MJNA, which is a significant shareholder, and AXIM Biotechnologies, Inc., 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. The Company has no control or influence over the joint venture and for the year ending December 31, 2019 the Company recorded a loss in investment in the amount of $27,490. |
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 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. As of December 31, 2019, the grant has ended. |
Equity Investments | Equity Investments Effective January 1, 2018, with the adoption of ASU 2016-01, our accounting treatment for equity investments differs for those with and without readily determinable fair values. Equity investments with readily determinable fair values are recorded at fair value with changes in fair value recorded in “Unrealized Gain/Loss On Investments.” For equity investments without readily determinable fair values we have elected the “measurement alternative,” and therefore carry these investments at cost, less impairment (if any), plus or minus changes in observable prices. On a quarterly basis, we review our equity investments without readily determinable fair values for impairment. We consider a number of qualitative factors such as whether there is a significant deterioration in earnings performance, credit rating, asset quality, or business prospects of the investee in determining if impairment exists. If the investment is considered impaired, an impairment loss equal to the amount by which the carrying value exceeds its fair value is recorded through a charge to earnings. The impairment loss may be reversed in a subsequent period if there are observable transactions for the identical or similar investment of the same issuer at a higher amount than the carrying amount that was established when the impairment was recognized. Impairment as well as upward or downward adjustments resulting from observable price changes in orderly transactions for identical or similar investments are included in “Income - other.” Realized gains or losses resulting from the sale of equity investments are calculated using the specific identification method and are included in “Net gains and losses recognized on marketable security". |
Income Taxes | Income Taxes The Company accounts for income taxes under FASB ASC Topic 740, Income Taxes |
Preferred Stock | Preferred Stock The Company applies the guidance enumerated in FASB ASC Topic 480, Distinguishing Liabilities from Equity |
Convertible Instruments | Convertible Instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC Topic 815, Derivatives and Hedging Activities Applicable U.S. GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when the Company has determined that the embedded conversion options should not be bifurcated from their host instruments) as follows. The Company records, when necessary, deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded in the preferred shares. |
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, Equity–based 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 4,029,433 for the year ended December 31, 2019. In accordance with ASC 260, “Earnings Per Share”, the following table reconciles basic shares outstanding to fully diluted shares outstanding for the year ended December 31, 2018: December 31, 2018 Weighted average number of common shares outstanding - Basic 64,417,684 Series A preferred stock 37,603 Series B preferred stock 37,603 Convertible notes payable 4,356,164 Weighted average number of common and equivalent shares outstanding-Diluted 68,849,054 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 years ended December 31, 2018 because their effect would be anti-dilutive. |
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 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 consolidated 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. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses” to improve information on credit losses for financial assets and net investment in leases that are not accounted for at fair value through net income. ASU 2016-13 replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. In April 2019 and May 2019, the FASB issued ASU No. 2019-04, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” and ASU No. 2019-05, “Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief” which provided additional implementation guidance on the previously issued ASU. In November 2019, the FASB issued ASU 2019-10, “Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842),” which defers the effective date for public filers that are considered small reporting companies (“SRC”) as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Since the Company is an SRC, implementation is not needed until January 1, 2023. The Company will continue to evaluate the effect of adopting ASU 2016-13 will have on the Company’s consolidated financial statements. |
Organization and Nature of Op_2
Organization and Nature of Operations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule Of Pre-Acquisition Assets And Liabilities | Company assets and liabilities pre- reverse 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 – long term 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) Year Ended December 31, 2018 Total revenues $ 173,889 Net income $ 819,105 Net income per common share, basic $ 0.01 Net income per common share, diluted $ 0.01 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 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 year ended December 31, 2018: December 31, 2018 Weighted average number of common shares outstanding - Basic 64,417,684 Series A preferred stock 37,603 Series B preferred stock 37,603 Convertible notes payable 4,356,164 Weighted average number of common and equivalent shares outstanding-Diluted 68,849,054 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis | The following table presents assets that are measured and recognized at fair value as of December 31, 2018, on a recurring basis: December 31, 2018 Level 1 Level 2 Level 3 Total Carrying Value Marketable securities – Medical Marijuana, Inc. $ 2,579,640 — — $ 2,579,640 |
Fair Value, Assets Measured on Recurring Basis | The following table presents liabilities that are measured and recognized at fair value as of December 31, 2019, on a recurring basis: December 31, 2019 Level 1 Level 2 Level 3 Total Carrying Value Derivative liabilities $ — — 183,451 $ 183,451 |
Marketable Security (Tables)
Marketable Security (Tables) | 12 Months Ended |
Dec. 31, 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 year ending December 31, 2019: Net gains and (losses) recognized during the period on equity securities $ (942,982 ) Less: Net gains and (losses) recognized during the period on equity securities sold during the period 942,982 Unrealized gains and (losses) recognized during the period on equity securities still held at the reporting date $ — The following table summarizes the gains and losses recognized during the year ending December 31, 2018: Net gains and (losses) recognized during the period on equity securities $ (1,040,727 ) Less: Net gains and (losses) recognized during the period on equity securities sold during the period 167,034 Unrealized gains and (losses) recognized during the period on equity securities still held at the reporting date $ (873,693 ) |
Payroll and Related Liabiliti_2
Payroll and Related Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule Of Payroll and Related Liabilities | Accrued payroll and payroll taxes at December 31, 2019 and 2018 consisted of the following: 2019 2018 Payroll $ — $ — Payroll taxes 243,208 246,067 Totals $ 243,208 $ 246,067 |
Capital Lease Obligations (Tabl
Capital Lease Obligations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments for Capital Leases | The future payments under Capital Lease Obligations as of December 31, 2019, are as follows: Future Minimum Principal Payments Twelve Months ended December 31, 2020 $ 7,533 2021 8,471 2022 9,525 2023 9,768 Total capital lease obligations 35,297 Less: current portion (7,533 ) Total non-current term loan obligations $ 27,764 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Derivative Liabilities | The following table presents the activity for derivative liabilities measured at estimated fair value: Derivative Liability - Convertible Notes Derivative Liability - Warrants Total Balance as of December 31, 2018 $ — $ — $ — Additions during the period 61,321 117,763 179,084 Change in fair value 109 4,258 4,367 Change due to exercise / redemptions — — — Balance as of December 31, 2019 $ 61,430 $ 122,021 $ 183,451 |
Warrants | |
Schedule of share-based payment award, stock options, valuation assumptions | The fair value of the derivative liability – warrants is estimated using a Monty Carlo Pricing Model with the following assumptions: Market value of common stock on issuance date $ 4.20 Expected volatility 122 % Expected term (in years) 3 Risk-free interest rate 2.16 % |
Convertible Notes | |
Schedule of share-based payment award, stock options, valuation assumptions | The fair value of the derivative liability – convertible notes is estimated using a Monty Carlo Pricing Model with the following assumptions: Market value of common stock on issuance date $ 4.20 Expected volatility 100 % Expected term (in years) 1 Risk-free interest rate 2.00 % |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of share-based compensation expense | The following table shows share-based compensation expense included in the consolidated statement of operations for the years ended December 31, 2019 and 2018: Year Ended December 31, 2019 2018 Research and Development $ 90,000 $ — General and Administrative $ 185,878 $ 10,077 |
Schedule of outstanding and exercisable warrants | The following is a summary of outstanding and exercisable warrants: Number of Shares Weighted Average Exercise Price Balance at December 31, 2017 — — Issued — — Expired — — Balance at December 31, 2018 — — Issued 100,000 3.26 Expired — — Balance at December 31, 2019 100,000 3.26 |
Option [Member] | |
Schedule of share-based payment award, stock options, valuation assumptions | The fair value of the options is estimated using a Black-Scholes Options Pricing Model with the following assumptions: Market value of common stock on issuance date $ 0.40 Exercise price $ 2.00 Expected volatility 100 % Expected term (in years) 5 Risk-free interest rate 1.73 % Expected dividend yields — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of income tax expense computed at the U.S. federal statutory rate to the income tax provision for the years ended December 31, 2019 and 2018 is as follows: For the Years ended December 31, 2019 2018 % % Statutory federal tax rate 21.0 21.0 State taxes, net of federal benefit 4.7 2.8 Valuation allowance (20.0 ) 22.2 Permanent items (5.2 ) — Other, net (.5 ) 0.6 Provision for income taxes — 46.6 |
Schedule of Deferred Tax Assets and Liabilities | Significant components of deferred tax assets as December 31, 2019 and 2018 were as follows: For the Years ended December 31, 2019 2018 Deferred Tax Assets: Federal net operating loss carryforwards $ 892,000 $ 181,023 Capital Losses over Capital Gains — (17,290 ) Non-cash interest 39,954 29,132 Non-cash accrued compensation 794,880 825,713 Mark to Market Adjustment - Investments held for sale — 240,965 State taxes 316,238 92,298 Net deferred tax assets before valuation allowance 2,043,072 1,351,841 Valuation Allowance (2,043,072 ) (1,351,841 ) Net Deferred Tax Assets $ — $ — |
Organization and Nature of Op_3
Organization and Nature of Operations - Schedule Of Pre-Acquisition Assets And Liabilities (Details) | Dec. 31, 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 - long term | 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 ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Total revenues | $ 126,027 | $ 173,889 |
Net income | (3,450,865) | $ 931,059 |
Pro Forma | ||
Total revenues | 173,889 | |
Net income | $ 819,105 | |
Net income per common share, basic | $ 0.01 | |
Net income per common share, diluted | $ 0.01 |
Organization and Nature of Op_5
Organization and Nature of Operations (Details Narrative) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Date of Incorporation | Mar. 25, 2013 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Earnings Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Weighted average number of common shares outstanding - Basic | 71,228,125 | 64,417,684 |
Series A preferred stock | 37,603 | |
Series B preferred stock | 37,603 | |
Convertible notes payable | 4,356,164 | |
Weighted average number of common and equivalent shares outstanding-Diluted | 71,228,125 | 68,849,054 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Aug. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 26, 2019 | |
Accounting Policies [Abstract] | ||||
Allowance for doubtful account | $ 0 | $ 0 | ||
Weighted average number of common stock, anti-dilutive | 4,029,433 | 100,000 | ||
Research and Development | $ 554,701 | $ 224,933 | ||
Share Price | $ .07 | $ 0.10 | ||
Stock Issued During Period, Shares, Acquisitions | 171,000 | |||
Furniture and equipment Useful Life | 5 years |
Going Concern and Management'_2
Going Concern and Management's Liquidity Plans (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Net loss from operations | $ (2,329,117) | $ (1,061,808) |
Net cash used in operating activities | (1,894,085) | (1,210,907) |
Accumulated deficit | $ (8,496,088) | $ (5,052,051) |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value, Liabilities Measured on Recurring Basis (Details) | Dec. 31, 2019USD ($) |
Level 1 | |
Marketable securities - Medical Marijuana, Inc. | $ 2,579,640 |
Level 2 | |
Marketable securities - Medical Marijuana, Inc. | 0 |
Level 3 | |
Marketable securities - Medical Marijuana, Inc. | 0 |
Total Carrying Value | |
Marketable securities - Medical Marijuana, Inc. | $ 2,579,640 |
Fair Value Measurements - Fai_2
Fair Value Measurements - Fair Value, Assets Measured on Recurring Basis (Details) | Dec. 31, 2019USD ($) |
Level 1 | |
Derivative liabilities | $ 0 |
Level 2 | |
Derivative liabilities | 0 |
Level 3 | |
Derivative liabilities | 183,451 |
Total Carrying Value | |
Derivative liabilities | $ 183,451 |
Fair Value Measurements (Detail
Fair Value Measurements (Details Narrative) - USD ($) | Dec. 31, 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 |
Marketable Security - Schedule
Marketable Security - Schedule of gains and lossed on marketable securities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | ||
Net gains and (losses) recognized during the period on equity securities | $ (942,982) | $ (1,040,727) |
Less: Net gains and (losses) recognized during the period on equity securities sold during the period | 942,982 | 167,034 |
Unrealized gains and (losses) recognized during the period on equity securities still held at the reporting date | $ 0 | $ (873,693) |
Marketable Security (Details Na
Marketable Security (Details Narrative) - shares | Dec. 31, 2019 | Apr. 30, 2014 |
Investments, Debt and Equity Securities [Abstract] | ||
Marketable securities in MJNA | 41,583,333 | |
Restricted common stock exchanged | 6,408,980 |
Payroll and Related Liabiliti_3
Payroll and Related Liabilities - Schedule Of Accrued Payroll And Payroll Taxes (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Accrued Payroll And Payroll Taxes - Schedule Of Accrued Payroll And Payroll Taxes | ||
Payroll | $ 0 | $ 0 |
Payroll taxes | 243,208 | 246,067 |
Totals | $ 243,208 | $ 246,067 |
Loan Payable (Details Narrative
Loan Payable (Details Narrative) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 30, 2018 | Dec. 30, 2017 | Jun. 29, 2018 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | ||||||
Promissory note value | $ 352,500 | $ 367,500 | ||||
Interest rate | 3.00% | 8.00% | 3.00% | |||
Maturity date | Jul. 1, 2020 | Jul. 1, 2020 | ||||
Accrued interest | $ 73,381 | $ 24,460 | ||||
Loan payable - long term | 620,000 | $ 620,000 | ||||
Interest expense | $ 48,921 | $ 24,460 |
Loan Payable - Related Party (D
Loan Payable - Related Party (Details Narrative) - USD ($) | 7 Months Ended | 12 Months Ended | |||||
Jul. 25, 2018 | Dec. 30, 2018 | Dec. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 29, 2018 | Dec. 31, 2017 | |
Maturity date | Jul. 1, 2020 | Jul. 1, 2020 | |||||
Interest rate | 3.00% | 8.00% | 3.00% | ||||
Advanced from related party | $ 25,349 | $ 0 | |||||
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 |
Capital Lease Obligations - Sch
Capital Lease Obligations - Schedule of Future Minimum Lease Payments for Capital Leases (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
2020 | $ 7,533 | |
2021 | 8,471 | |
2022 | 9,525 | |
2023 | 9,768 | |
Total capital lease obligations | 35,297 | |
Less: current portion | (7,533) | $ 0 |
Total non-current term loan obligations | $ 27,764 | $ 0 |
Capital Lease Obligations (Deta
Capital Lease Obligations (Details Narrative) - USD ($) | 1 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Effective interest rate | 12.00% | |
Monthly payment | $ 941 | |
Capital Lease Obligations | $ 35,297 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 26, 2019 | 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 | $ 376,373 | ||||||||||
Interest rate | 3.00% | 8.00% | 3.00% | |||||||||
Common stock issued | 74,225,141 | 74,225,141 | 69,854,141 | 5,505,200 | ||||||||
Accrued interest | $ 26,373 | |||||||||||
Amortization of debt discount | $ 2,466 | $ 0 | ||||||||||
Securities Purchase Agreement [Member] | ||||||||||||
Number of warrants sold | 100,000 | |||||||||||
Proceeds from sale of warrants | $ 100,000 | |||||||||||
Interest rate | 8.00% | |||||||||||
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 | |||||||||||
Interest expense | 16,739 | 6,250 | ||||||||||
Amortization of debt discount | $ 2,466 | $ 0 |
Convertible Notes Payable - R_2
Convertible Notes Payable - Related Party (Details Narrative) - USD ($) | Dec. 31, 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% | |||||||||||
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 | $ 414,476 | |||||||||||||
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 |
Derivative Liabilities - Schedu
Derivative Liabilities - Schedule of Derivative Liabilities (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Balance at beginning | $ 0 |
Additions during the period | 179,084 |
Change in fair value | 4,367 |
Change due to exercise / redemptions | 0 |
Balance at end | 183,451 |
Convertible Notes | |
Balance at beginning | 0 |
Additions during the period | 117,763 |
Change in fair value | 4,258 |
Change due to exercise / redemptions | 0 |
Balance at end | 122,021 |
Warrants | |
Balance at beginning | 0 |
Additions during the period | 61,321 |
Change in fair value | 109 |
Change due to exercise / redemptions | 0 |
Balance at end | $ 61,430 |
Derivative Liabilities - Assump
Derivative Liabilities - Assumptions - Convertible notes (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Sep. 26, 2019 | Aug. 30, 2019 | |
Market value of common stock on issuance date | $ 0.10 | $ .07 | |
Convertible Notes | |||
Market value of common stock on issuance date | $ 4.20 | ||
Expected volatility | 100.00% | ||
Expected term (in years) | 1 year | ||
Risk-free interest rate | 2.00% |
Derivative Liabilities - Assu_2
Derivative Liabilities - Assumptions - Warrants (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Sep. 26, 2019 | Aug. 30, 2019 | |
Market value of common stock on issuance date | $ 0.10 | $ .07 | |
Warrants | |||
Market value of common stock on issuance date | $ 4.20 | ||
Expected volatility | 122.00% | ||
Expected term (in years) | 3 years | ||
Risk-free interest rate | 2.16% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Dec. 31, 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 | $ 359 | $ 5,400 | |||
Security Deposit | $ 2,121 | $ 183 | $ 15,000 |
Stockholders' Equity (Deficit_2
Stockholders' Equity (Deficit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Based Compensation | $ 275,878 | $ 0 |
Research and Development Expense [Member] | ||
Stock Based Compensation | 0 | 90,000 |
General and Administrative Expense [Member] | ||
Stock Based Compensation | $ 10,077 | $ 185,878 |
Stockholders' Equity (Deficit_3
Stockholders' Equity (Deficit) - Schedule of share-based payment award, stock options, valuation assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Sep. 26, 2019 | Aug. 30, 2019 | |
Market value of common stock on issuance date | $ 0.10 | $ .07 | |
Option [Member] | |||
Market value of common stock on issuance date | $ 0.40 | ||
Exercise price | $ 2 | ||
Expected volatility | 100.00% | ||
Expected term (in years) | 5 years | ||
Risk-free interest rate | 1.73% | ||
Expected dividend yields | 0.00% |
Stockholders' Equity (Deficit_4
Stockholders' Equity (Deficit) - Summary of outstanding and exercisable warrants (Details) - Warrants - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Warrants | ||
Number of Warrants Outstanding, Beginning | 0 | 0 |
Number of Warrants Issued | 100,000 | 0 |
Number of Warrants Expired | 0 | 0 |
Number of Warrants Outstanding, Ending | 100,000 | 0 |
Weighted Average Exercise Price | ||
Weighted Average Exercise Price Outstanding, Beginning | $ 0 | $ .00 |
Weighted Average Exercise Price Issued | 3.26 | 0 |
Weighted Average Exercise Price Expired | 0 | 0 |
Weighted Average Exercise Price Outstanding, Ending | $ 3.26 | $ 0 |
Stockholders' Equity (Deficit_5
Stockholders' Equity (Deficit) (Details Narrative) - USD ($) | Sep. 01, 2017 | Dec. 31, 2019 | Sep. 26, 2019 | Aug. 31, 2019 | Aug. 30, 2019 | Jul. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 03, 2018 | Apr. 30, 2014 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
Preferred Stock, Shares Authorized | 5,000,000 | 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 | $ 0.0001 | $ 0.04 | ||||||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | 200,000,000 | |||||||
Common Stock, Shares, Issued | 74,225,141 | 74,225,141 | 69,854,141 | 5,505,200 | ||||||
Common Stock, Shares, Outstanding | 74,225,141 | 74,225,141 | 69,854,141 | |||||||
Common stock value | $ 7,422 | $ 7,422 | $ 6,985 | $ 2,342,813 | $ 256,359 | |||||
Capital contribution | 6,794,612 | 6,794,612 | 6,381,755 | $ 469,997 | ||||||
Share Price | $ 0.10 | $ .07 | ||||||||
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 | |||||||||
Stock based compensation | 275,878 | $ 0 | ||||||||
Unrecognized compensation expense | $ 0 | $ 0 | ||||||||
Common stock authorized under plan | 7,500,000 | 7,500,000 | ||||||||
Warrant Exercisable | 100,000 | 100,000 | ||||||||
Intrinsic value of warrants | $ 108,750 | $ 108,750 | ||||||||
Weighted average remaining contractual life of warrants outstanding | 2 years 11 months 23 days | |||||||||
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 | 75 | |||||||
Preferred Stock, Shares Issued | 75 | 75 | 75 | 75 | ||||||
Preferred Stock Issued, Value | $ 0 | $ 75,000 | $ 0 | $ 0 | ||||||
Preferred Stock, Shares Outstanding | 75 | 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 | 75 | |||||||
Preferred Stock, Shares Issued | 75 | 75 | 75 | 75 | ||||||
Preferred Stock Issued, Value | $ 0 | $ 75,000 | $ 0 | $ 0 | ||||||
Preferred Stock, Shares Outstanding | 75 | 75 | 75 | |||||||
Securities Purchase Agreement [Member] | ||||||||||
Number of warrants sold | 100,000 | |||||||||
Proceeds from sale of warrants | $ 100,000 | |||||||||
Interest rate | 8.00% | |||||||||
Warrant term | 3 years |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Chief Executive Officer | |
Related party cost | $ 25,349 |
GGCP | |
Due from related party | $ 0 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Tax Assets: | ||
Federal net operating loss carryforwards | $ 892,000 | $ 181,023 |
Capital Losses over Capital Gains | 0 | (17,290) |
Non-cash interest | 39,954 | 29,132 |
Non-cash accrued compensation | 794,880 | 825,713 |
Mark to Market Adjustment - Investments held for sale | 0 | 240,965 |
State taxes | 316,238 | 92,298 |
Net deferred tax assets before valuation allowance | 2,043,072 | 1,351,841 |
Valuation Allowance | (2,043,072) | (1,351,841) |
Net Deferred Tax Assets | $ 0 | $ 0 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Text Block [Abstract] | ||
Statutory federal tax rate | 21.00% | 21.00% |
State taxes, net of federal benefit | 4.70% | 2.80% |
Valuation allowance | (20.00%) | 22.20% |
Permanent items | (5.20%) | 0.00% |
Other, net | (0.50%) | 0.60% |
Provision for income taxes | 0.00% | 46.60% |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Corporate tax rate | 21.00% | 35.00% |
Operating loss carry forwards | $ 4,248,000 | $ 862,000 |
Decrease in deferred tax assets | $ 787,700 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Mar. 12, 2020 | Feb. 29, 2020 | Jan. 31, 2020 | Dec. 31, 2019 | Dec. 30, 2018 | Dec. 30, 2017 |
Maturity date | Jul. 1, 2020 | Jul. 1, 2020 | ||||
Securities Purchase Agreement [Member] | ||||||
Number of warrants sold | 100,000 | |||||
Proceeds from sale of warrants | $ 100,000 | |||||
Interest rate | 8.00% | |||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Kettner Investments | ||||||
Number of warrants sold | 100,000 | |||||
Proceeds from sale of warrants | $ 100,000 | |||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Chief Executive Officer | ||||||
Number of warrants sold | 50,000 | |||||
Proceeds from sale of warrants | $ 50,000 | |||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Investors [Member] | ||||||
Interest rate | 8.00% | |||||
Principal amount | $ 105,000 | |||||
Original issue discount | 5,000 | |||||
Purchase price | $ 100,000 | |||||
Maturity date | Mar. 12, 2021 |