Avenir Wellness Solutions (AVRW) 10-Q 21 Nov 22 2022 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2022	Nov. 21, 2022
Cover [Abstract]
Entity Registrant Name	CURE PHARMACEUTICAL HOLDING CORP.
Entity Central Index Key	0001643301
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Sep. 30, 2022
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2022
Entity Common Stock Shares Outstanding		71,376,799
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	333-204857
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	37-1765151
Entity Interactive Data Current	Yes
Entity Address Address Line 1	5805 Sepulveda Blvd
Entity Address Address Line 2	Suite 801
Entity Address City Or Town	Sherman Oaks
Entity Address State Or Province	CA
Entity Address Postal Zip Code	91411
City Area Code	424
Local Phone Number	273-8675
Security 12g Title	Common stock, par value $0.001
Trading Symbol	CURR

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash	$ 4,443	$ 16
Accounts receivable, net	460	357
Inventory, net	640	621
Prepaid expenses and other current assets	508	447
Notes receivable - current	2,200	0
Current assets held for sale	0	340
Total current assets	8,251	1,781
Property and equipment, net	3	4
Operating lease right-of-use assets, net	186	257
Notes receivable - noncurrent	0	200
Investment	216	216
Goodwill, net	4,690	4,690
Intellectual property and patents, net	248	261
Customer relationships, Trade name, and Non-compete agreements, net	1,299	7,297
Other assets	71	48
Long term assets held for sale	0	25,820
Total assets	14,964	40,574
Current liabilities:
Accounts payable	1,630	2,848
Accrued expenses	1,431	3,485
Operating lease payable	118	104
Loans payable	38	235
Related party payable	0	2,011
Notes payable	0	2,877
Convertible promissory notes	550	550
Fair value convertible promissory notes, net	9,984	9,932
Contract liabilities	388	293
Contingent stock consideration	917	1,430
Current liabilities held for sale	0	496
Total current liabilities	15,056	24,261
Operating lease payable	81	174
Long term liabilities held for sale	0	27
Total liabilities	15,137	24,462
Stockholders' equity:
Common stock: $0.001 par value; authorized 150,000,000 shares; 71,376,799 and 68,201,900 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	71	69
Additional paid-in capital	112,257	110,146
Common stock issuable	308	343
Accumulated deficit	(112,809)	(94,446)
Total stockholders' equity (deficit)	(173)	16,112
Total liabilities and stockholders' equity (deficit)	$ 14,964	$ 40,574

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Condensed Consolidated Balance Sheets
Common stock, shares par value	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	71,376,799	68,201,900
Common stock, shares outstanding	71,376,799	68,201,900

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue:
Product sales and shipping revenue, net of discounts and refunds	$ 1,784	$ 1,350	$ 3,983	$ 4,679
Cost of goods sold:
Cost of goods sold	356	436	843	1,469
Gross profit	1,428	914	3,140	3,210
Operating expenses:
Selling, general and administrative expenses	3,612	4,216	9,481	14,182
Change in fair value of contingent stock consideration	322	608	(513)	(947)
Impairment of intangibles	0	0	4,622	0
Total operating expenses	3,933	4,824	13,590	13,235
Net operating loss before other income (expense)	(2,506)	(3,910)	(10,450)	(10,025)
Other income (expense):
Interest income	14	2	17	4
Gain from settlement	0	0	82	2,434
Gain on extinguishment of debt	0	7	40	741
Loss on sale of property, plant and equipment	0	0	0	(41)
Change in fair value of convertible promissory notes	(411)	772	(718)	1,112
Interest expense	(6)	(178)	(393)	(377)
Other income	0	0	26	0
Total other income (expense)	(403)	603	(946)	3,873
Net loss before income taxes	(2,909)	(3,307)	(11,396)	(6,152)
Provision for income taxes	0	0	0	0
Loss from continuing operations	(2,909)	(3,307)	(11,396)	(6,152)
Disposal group:
Loss before provision for income taxes	(119)	(1,036)	(6,402)	(2,683)
Loss on disposition	(565)	0	(565)	0
Provision for income taxes	0	0	0	0
Loss from disposal group	(684)	(1,036)	(6,967)	(2,683)
Net loss	$ (3,593)	$ (4,343)	$ (18,363)	$ (8,835)
Continuing Operations	$ (0.04)	$ (0.05)	$ (0.16)	$ (0.12)
Disposal group	(0.01)	(0.02)	(0.10)	(0.05)
Net loss per share, basic and diluted	$ (0.05)	$ (0.07)	$ (0.26)	$ (0.17)
Weighted average common shares outstanding
Basic and diluted	70,686,677	62,174,822	69,808,785	49,294,190

Unaudited Consolidated Statemen

Unaudited Consolidated Statements of Stockholders' Equity (deficit) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Common Stock Issuable	Accumulated Deficit
Balance, shares at Dec. 31, 2020		59,476,268
Balance, amount at Dec. 31, 2020	$ 21,279	$ 60	$ 101,807	$ 665	$ (81,253)
Issuance of common stock for professional services, shares		265,512
Issuance of common stock for professional services, amount	508	$ 0	363	145	0
Issuance of common stock from the equity incentive plan, shares		157,693
Issuance of common stock from the equity incentive plan, amount	138	$ 0	190	(52)	0
Issuance of common stock for exercise of warrants, shares		26,936
Issuance of common stock for exercise of warrants, amount	0	$ 0	0	0	0
Fair value of stock options and restricted stock granted	961	0	961	0	0
Fair value of restricted stock units granted	144	0	144	0	0
Net loss	(3,171)	$ 0	0	0	(3,171)
Balance, shares at Mar. 31, 2021		59,926,409
Balance, amount at Mar. 31, 2021	19,859	$ 60	103,465	758	(84,424)
Balance, shares at Dec. 31, 2020		59,476,268
Balance, amount at Dec. 31, 2020	21,279	$ 60	101,807	665	(81,253)
Net loss	(8,835)
Balance, shares at Sep. 30, 2021		65,060,044
Balance, amount at Sep. 30, 2021	18,585	$ 66	108,004	603	(90,088)
Balance, shares at Mar. 31, 2021		59,926,409
Balance, amount at Mar. 31, 2021	19,859	$ 60	103,465	758	(84,424)
Issuance of common stock for professional services, shares		381,000
Issuance of common stock for professional services, amount	243	$ 0	243	0	0
Issuance of common stock from the equity incentive plan, shares		141,693
Issuance of common stock from the equity incentive plan, amount	(157)	$ 0	(2)	(155)	0
Fair value of stock options and restricted stock granted	591	0	591	0	0
Fair value of restricted stock units granted	143	0	143	0	0
Net loss	(1,321)	$ 0	0	0	(1,321)
Issuance of common stock from conversion of convertible promissory notes, shares		2,428,857
Issuance of common stock from conversion of convertible promissory notes, amount	1,835	$ 3	1,832	0	0
Balance, shares at Jun. 30, 2021		62,877,959
Balance, amount at Jun. 30, 2021	21,193	$ 63	106,272	603	(85,745)
Issuance of common stock for professional services, shares		572,975
Issuance of common stock for professional services, amount	0	$ 1	(1)	0	0
Fair value of stock options and restricted stock granted	532	0	532	0	0
Fair value of restricted stock units granted	156	0	156	0	0
Net loss	(4,343)	$ 0	0	0	(4,343)
Issuance of common stock from conversion of convertible promissory notes, shares		1,609,110
Issuance of common stock from conversion of convertible promissory notes, amount	1,047	$ 2	1,045	0	0
Balance, shares at Sep. 30, 2021		65,060,044
Balance, amount at Sep. 30, 2021	18,585	$ 66	108,004	603	(90,088)
Balance, shares at Dec. 31, 2021		68,201,900
Balance, amount at Dec. 31, 2021	16,112	$ 69	110,146	343	(94,446)
Issuance of common stock for professional services, amount	17	0	0	17	0
Fair value of stock options and restricted stock granted	352	0	352	0	0
Fair value of restricted stock units granted	103	0	103	0	0
Net loss	(5,151)	$ 0	0	0	(5,151)
Issuance of common stock from conversion of convertible promissory notes, shares		1,665,000
Issuance of common stock from conversion of convertible promissory notes, amount	666	$ 2	664	0	0
Balance, shares at Mar. 31, 2022		69,866,900
Balance, amount at Mar. 31, 2022	12,099	$ 71	111,265	360	(99,597)
Balance, shares at Dec. 31, 2021		68,201,900
Balance, amount at Dec. 31, 2021	16,112	$ 69	110,146	343	(94,446)
Net loss	(18,363)
Balance, shares at Sep. 30, 2022		71,376,799
Balance, amount at Sep. 30, 2022	(173)	$ 71	112,257	308	(112,809)
Balance, shares at Mar. 31, 2022		69,866,900
Balance, amount at Mar. 31, 2022	12,099	$ 71	111,265	360	(99,597)
Issuance of common stock for professional services, shares		145,000
Issuance of common stock for professional services, amount	(10)	$ 0	42	(52)	0
Fair value of stock options and restricted stock granted	316	0	316	0	0
Fair value of restricted stock units granted	102	0	102	0	0
Net loss	(9,619)	$ 0	0	0	(9,619)
Balance, shares at Jun. 30, 2022		70,011,900
Balance, amount at Jun. 30, 2022	2,888	$ 71	111,725	308	(109,216)
Issuance of common stock for professional services, shares		776,664
Issuance of common stock for professional services, amount	241	$ 0	241	0	0
Fair value of stock options and restricted stock granted	189	0	189	0	0
Fair value of restricted stock units granted	102	0	102	0	0
Net loss	(3,593)	$ 0	0	0	(3,593)
Issuance of restricted stock units, shares		588,235
Issuance of restricted stock units, amount	0	$ 0	0	0	0
Balance, shares at Sep. 30, 2022		71,376,799
Balance, amount at Sep. 30, 2022	$ (173)	$ 71	$ 112,257	$ 308	$ (112,809)

Unaudited Condensed Consolida_2

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Unaudited Condensed Consolidated Statements of Cash Flows
Loss from continuing operations	$ (11,396)	$ (6,152)
Loss from disposal group	(6,967)	(2,683)
Net loss	(18,363)	(8,835)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on disposal of pharmaceutical assets and liabilities	565	0
Stock-based compensation - services	7	752
Stock issued from Equity Incentive Plan	0	(19)
Gain from extinguishment of debt	(40)	(735)
Change in fair value of contingent stock consideration	(513)	(947)
Change in fair value of convertible promissory notes	718	(1,111)
Impairment of intangibles	4,622	0
Depreciation and amortization	1,390	1,741
Amortization of right of use asset	71	63
Bad debt expense	0	6
Recovery of bad debt expense	(35)	(221)
Inventory reserve for obsolescence	108	176
Fair value of vested stock options and restricted stock	1,405	2,527
Changes in operating assets and liabilities:
Accounts receivable	(68)	10
Inventory	(127)	(529)
Prepaid expenses and other current assets	(61)	952
Other assets	(104)	(25)
Accounts payable	(1,178)	107
Accrued expenses	(2,012)	3,302
Operating lease payable	(79)	(68)
Contract liabilities	95	(598)
Assets and liabilities held for sale	5,112	795
Cash (used in) operating activities	(8,487)	(2,657)
Cash flows from investing activities:
Proceeds from the sale of certain pharmaceutical assets and liabilities	13,891	0
Long term assets held for sale	0	(99)
Purchase of note receivable	0	(200)
Collection of note receivable	0	200
Cash provided by (used in) investing activities	13,891	(99)
Cash flows from financing activities:
Proceeds from notes payable	252	1,000
Proceeds from notes payable - disposal group	4,150	0
Repayment of notes payable	(3,129)	0
Proceeds from related party payable	190	400
Repayment of related party payable	(2,243)	0
Proceeds from loans payable	38	0
Repayment of loans payable	(235)	(205)
Cash provided by (used in) financing activities	(977)	1,195
Net increase (decrease) in cash and cash equivalents	4,427	(1,561)
Cash and cash equivalents, beginning of year	16	1,725
Cash and cash equivalents, end of period	4,443	164
Cash paid for interest and income taxes:
Interest	585	102
Income taxes	0	0
Non-cash investing and financing activities:
Cancellation of indebtedness to Buyer of assets sold	(4,150)	0
Receipt of note payable consideration for assets sold	(2,000)	0
Common stock issued for conversion of promissory notes and accrued interest	666	2,881
Reclassification of accrued expense to related party payable	$ 42	$ 0

ORGANIZATION AND DESCRIPTION OF

ORGANIZATION AND DESCRIPTION OF BUSINESS	9 Months Ended
	Sep. 30, 2022
ORGANIZATION AND DESCRIPTION OF BUSINESS
ORGANIZATION AND DESCRIPTION OF BUSINESS	NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS Business Operations CURE Pharmaceutical Holding Corp. (“CURE”) is a broad platform technology company focusing on the development of nutraceutical formulation and delivery technologies in novel dosage forms to improve efficacy and enhance wellness. Our mission is to improve lives by redefining how active ingredients are delivered and experienced. Our primary business model is to develop health, wellness and beauty products using our proprietary formulations and technology as well as incubate new technologies for commercial exploitation through product development of new products to be sold under existing or new proprietary brands and the licensing and/or sale of the rights to such technologies to third parties for their use. Development may include conduction clinical trial for substantiation of efficacy of our products. Our wholly-owned subsidiary The Sera Labs, Inc. (“Sera Labs”) is engaged in the development, production and sale of the Company’s products and is a trusted leader in the health, wellness, and beauty sectors with innovative products containing cutting edge technology and superior ingredients. Sera Labs creates high quality products that use science-backed, proprietary oral and topical formulations. We focus on evidence-based wellness products that are differentiated by using proprietary and/or proven active ingredients that we formulate for greater stability, overall quality and increased bioavailability. Wellness and beauty products can be cosmetics, over-the-counter or dietary supplements which do not require approval from the U.S. Food and Drug Administration (“FDA”) but do require following all good manufacturing practices (GMPs). Thus, they are less costly and faster to launch in the marketplace than pharmaceutical products. More than 25 products are sold under the brand names Seratopical™, Seratopical Revolution™ SeraLabs™, and Nutri-Strips™ at affordable prices, making them easily accessible on a global scale. Strategically positioned in the growth categories of beauty, health & wellness, and pet care, Sera Labs products are sold in major national drug, mass retailers, grocery chains and convenience stores. The Company also sells products under private label to major retailers and multi-level marketers, as well as direct-to-consumer (DTC), via online website orders, including opt-in subscriptions. Recent Developments On July 22, 2022, CURE completed the sale of certain assets comprising the pharmaceutical segment of the Company pursuant to an Asset Purchase Agreement (the “APA”) with TF Tech Ventures, Inc. (the “Buyer”), under which the Buyer purchased certain assets (the “Asset Sale”), including certain pharmaceutical patents, trademarks and related machinery and equipment. The Company retained 15 other patents not included in the Asset Sale, which the Company expects to monetize through product development, licensing arrangements and/or the sale of such patents. See Note 6 - Discontinued Operations for additional information.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The summary of significant accounting policies presented below is designed to assist in understanding the Company’s financial statements. Such financial statements and accompanying notes are the representations of Company’s management, who is responsible for their integrity and objectivity. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2022, and the results of operations and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2022 and 2021, are not necessarily indicative of the operating results for the full fiscal year or any future period, given the recent completion of the Asset Sale. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on April 1, 2022 (our “2021 Annual Report”). Principle of Consolidation The unaudited condensed consolidated financial statements include the accounts of CURE and its wholly-owned subsidiaries, collectively referred to as (“we”, “us”, “our” or the “Company”). All significant inter-company balances and transactions have been eliminated in consolidation. The development and production of the Company’s branded health, wellness, and beauty products in both the wellness industry represents the principal operations of the Company. Business acquisitions are included in the unaudited condensed consolidated financial statements from the date of the acquisition. Going Concern and Management’s Liquidity Plans In accordance with the Financial Accounting Standards Board’s (“FASB”) standard on going concern, Accounting Standard Update, or ASU No. 2014-15, the Company assesses going concern uncertainty in its condensed consolidated financial statements to determine if it has sufficient cash, cash equivalents and working capital on hand, including marketable equity securities, and any available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued, which is referred to as the “look-forward period” as defined by ASU No. 2014-15. As part of this assessment, based on conditions that are known and reasonably knowable to the Company, it will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, and its ability to delay or curtail expenditures or programs, if necessary, among other factors. Based on this assessment, as necessary or applicable, the Company makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent the Company deems probable those implementations can be achieved and it has the proper authority to execute them within the look-forward period in accordance with ASU No. 2014-15. The accompanying unaudited condensed consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern. As of September 30, 2022, the Company had approximately $4.4 million of cash on hand, had an accumulated deficit of approximately $112.8 million and a working capital deficit of approximately $6.6 million. Our operating activities consume a portion of our cash resources. We anticipate that we will continue to incur operating losses and negative cash flows from operations as we execute our commercialization and development plans and strategic and business development initiatives. On July 22, 2022, CURE completed the sale of certain pharmaceutical assets pursuant to the asset purchase agreement, see Note 6 Discontinued Operations, for total consideration received at closing in the amount of $20.0 million, which consisted of (i) the cancellation of indebtedness owed by CURE to the Buyer in the amount of $4.15 million, (ii) a $2.0 million one-year note payable in the form of a secured promissory note, and (iii) the remainder in cash. The completion of the Asset Sale has had a positive impact on the Company’s liquidity position. However, the Company may need to complete additional equity or debt financings to fully execute its business plans and strategies. We have previously funded our operating losses primarily through the issuance of common stock and/or promissory notes and cash generated from our product sales. We anticipate that we will incur decreased operating losses and negative cash flows from operations as we execute on our commercialization and development plans and strategic and business development initiatives and with the elimination of overhead and operating expenses related to the Company’s pharmaceutical business segment that have been discontinued in connection with the Asset Sale. There can be no assurance however that the Company will be able to raise additional capital when needed, or at terms deemed acceptable, if at all. Reclassifications Certain reclassifications have been made to prior year’s consolidated financial statements to enhance comparability with the current year’s consolidated financial statements. These reclassifications had no effect on the previously reported net loss. Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Management bases these estimates and assumptions upon historical experience, existing and known circumstances, authoritative accounting pronouncements, and other factors that management believes to be reasonable. In addition, the Company has considered the potential impact of the COVID-19 pandemic, as well as certain macroeconomic factors, including inflation, rising interest rates, and recessionary pressures, on its business and operations. Although the full impact of these factors are unknown and cannot be reasonably estimated, the Company believes it has made appropriate accounting estimates and assumptions based on the facts and circumstances available as of the reporting date. Significant areas requiring the use of management estimates include, but are not limited to, revenue recognition, the allowance for doubtful accounts, valuation of intangible assets and goodwill, depreciative and amortization useful lives, assumptions used to calculate the fair value of the contingent share consideration, stock based compensation, beneficial conversion features, warrant values, deferred taxes and the assumptions used to calculate derivative liabilities and fair values of the purchase price allocations and convertible promissory notes. Actual results could differ materially from such estimates under different assumptions or circumstances. Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. As of September 30, 2022 and December 31, 2021, the Company had no cash equivalents. The Company maintains its cash and cash equivalents in banks insured by the Federal Deposit Insurance Corporation in accounts that at times may be in excess of the federally insured limit of $250,000 per bank. The Company minimizes this risk by placing its cash deposits with major financial institutions. At September 30, 2022, the Company had $4.0 million in cash in excess of the federal insurance limit. Investment in Associates The Company follows Accounting Standards Codification (“ASC”) 325-20, “Cost Method Investments” Accounts Receivable Accounts receivable are generally unsecured. The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management’s evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote. Any future recoveries are applied against the allowance for doubtful accounts. At September 30, 2022 and December 31, 2021 management determined that an allowance of $0 and $0.1 million, respectively, were necessary. Inventory Inventory is stated at the lower of cost or net realizable value (“NRV”). NRV is the amount by which the estimated selling price of the product exceeds the sum of any additional costs expected to be incurred on the sale of such product in the ordinary course of business. The Company determines the cost of its inventory on a first-in, first-out basis. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period. In order to state the inventory at the lower of cost or NRV, we maintain reserves against individual stocking units. Inventory reserves, once established, are not reversed until the related inventories have been sold or scrapped. If future demand or market conditions are less favorable than our projections, a write-down of inventory may be required, and would be reflected in the cost of product sold in the period the revision is made. Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the fair value of net identifiable assets and liabilities. Goodwill is not amortized but is tested for impairment at least annually, or if circumstances indicate its value may no longer be recoverable. Qualitative factors considered in this assessment include industry and market conditions, overall financial performance, and other relevant events and factors affecting the Company’s business. Based on the qualitative assessment, if it is determined that the fair value of goodwill is more likely than not to be less than its carrying amount, the fair value of a reporting unit will be calculated and compared with its carrying amount and an impairment charge will be recognized for the amount that the carrying value exceeds the fair value The Company does not have intangible assets with indefinite useful lives other than goodwill and trademark. Impairment loss on goodwill included in the loss from disposal group amounted to $2.0 million and $4.7 million for the three and nine months ended September 30, 2022, respectively, and $0 for the three and nine months ended September 30 2021, respectively. Business Combinations The results of businesses acquired in a business combination are included in the unaudited condensed consolidated financial statements from the date of acquisition. Purchase accounting results in assets and liabilities of an acquired business being recorded at their estimated fair values on the acquisition date. Any excess consideration over the value of the assets acquired and liabilities assumed is recognized as goodwill. Impairment of Long-Lived Assets Long-lived assets include equipment and intangible assets other than those with indefinite lives. We assess the carrying value of our long-lived asset groups when indicators of impairment exist and recognize an impairment loss when the carrying amount of a long-lived asset is not recoverable when compared to undiscounted cash flows expected to result from the use and eventual disposition of the asset. Indicators of impairment include significant underperformance relative to historical or projected future operating results, significant changes in our use of the assets or in our business strategy, loss of or changes in customer relationships and significant negative industry or economic trends. When indications of impairment arise for a particular asset or group of assets, we assess the future recoverability of the carrying value of the asset (or asset group) based on an undiscounted cash flow analysis. If carrying value exceeds projected, net, undiscounted cash flows, an additional analysis is performed to determine the fair value of the asset (or asset group), typically a discounted cashflow analysis, and an impairment charge is recorded for the excess of carrying value over fair value. Impairment loss on other intangibles amounted to $0 and $4.6 million for the three and nine months ended September 30, 2022, respectively, and $0 for the three and nine months ended September 30, 2021, respectively. Contingent Consideration Liabilities Certain of the Company’s business acquisitions involve the potential for future payment of consideration to former selling stockholders in amounts determined upon the attainment of revenue and gross margin milestones from product sales. The fair value of such liabilities is determined using unobservable inputs. These inputs include the estimated amount and timing of projected cash flows and the risk-adjusted discount rate used to present value the cash flows. These obligations are referred to as contingent consideration. ASC 805, “Business Combinations,” requires that contingent consideration be estimated and recorded at fair value as of the acquisition date as part of the total consideration transferred. Contingent consideration is an obligation of the acquirer to transfer additional assets or equity interests to the selling stockholders in the future if certain future events occur or conditions are met, such as: (i) the attainment of product development milestones; and/or (ii) the achievement of components of earnings, such as “earn-out” provisions or percentage of future revenue. The fair value of contingent consideration after the acquisition date is reassessed by the Company as changes in circumstances and conditions occur, with the subsequent change in fair value recorded in the consolidated statements of operations. Changes in key assumptions can materially affect the estimated fair value of contingent consideration liabilities and, accordingly, the resulting gain or loss is recorded in its unaudited condensed consolidated financial statements. See Note 19 – Business Combination for additional information. Related Party Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, “Revenue Recognition.” Revenue under Topic 606 are required to be recognized either at a “point in time” or “over time,” depending on the facts and circumstances of the arrangement, and are evaluated using a five-step model. To achieve the core principle of Topic 606, we perform the following steps: · identify the contract(s) with customer; · identify the performance obligations in the contract; · determine the transactions price; · allocate the transactions price to the performance obligations in the contract; and · recognize revenue when (or as) we satisfy a performance obligation. Under Topic 606, the Company recognizes revenue as, or when, we satisfy performance obligations under a contract. We account for a contract when the parties approved the contract and are committed to perform on it, the rights of each party and the payment terms are identified, the contract has commercial substance and it is probable that we will collect substantially all of the consideration. A performance obligation is a promise in a contract to transfer a distinct good or service, or a series of distinct goods or services, to a customer. The transaction price of a contract must be allocated to each performance obligation and recognized as the performance obligation is satisfied. In essence, we recognize revenue when or as control of the promised goods or services transfer to the customer. Sera Labs Revenue Sera Labs recognizes revenue as, or when, we satisfy performance obligations under a contract. We account for a contract when the parties approved the contract and are committed to perform on it, the rights of each party and the payment terms are identified, the contract has commercial substance and it is probable that we will collect substantially all of the consideration. A performance obligation is a promise in a contract to transfer a distinct good or service, or a series of distinct goods or services, to a customer. The transaction price of a contract must be allocated to each performance obligation and recognized as the performance obligation is satisfied. In essence, we recognize revenue when or as control of the promised goods or services transfer to the customer. Revenue from eCommerce sales, including DTC sales, are recognized upon delivery of merchandise to the customer. We also elected to adopt the practical expedient related to shipping and handling fees which allows us to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as performance obligations. Therefore, shipping and handling activities are considered part of the Company’s obligation to transfer the products and therefore are recorded as direct selling expenses, as incurred. Shipping revenue is recorded upon delivery to the customer. Practical Expedients and Exemptions The Company has elected certain practical expedients and policy elections as permitted under ASC Topic 606 as follows: · the Company adopted the practical expedient related to not adjusting the promised amount of consideration for the effects of a significant financing component if the period between transfer of product and customer payment is expected to be less than one year at the time of contract inception; · the Company made the accounting policy election to exclude any sales and similar taxes from the transaction price; and · the Company adopted the practical expedient not to disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. Sales Tax The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods or services to a customer, excluding sales taxes. The net amount of sales tax payable to the taxation authority is included sales tax payable in the unaudited condensed consolidated balance sheets. Sales Returns, Discounts and Warranties Sales returns, discount and warranties are considered variable consideration under ASC 606. The Company reduces revenue for estimated future returns, discounts and warranties which may occur with distributors and retailers. When evaluating the adequacy of sales returns, discounts and warranties, the Company analyzes the following: historical credit allowances, current sell-through of inventory of the Company’s products, current trends in retail industry, changes in customer demand, acceptance of products, and other related factors. Cost to Obtain a Contract The Company pays sales commission to its employees and outside sales representatives for contracts that they obtain relating to the wholesale sales of our products. The Company applies the optional practical expedient to immediately expense costs to obtain a contract if the amortization period of the asset that would have been recognized is one year or less. As such, sales commissions are immediately recognized as an expense and included as part of sales and marketing expenses. Contract Liabilities Advance payments and billings in excess of revenue recognized represent contract liabilities and are recorded as deferred revenue when customers remit contractual cash payments in advance before satisfying performance obligations under contractual arrangements. Contract liabilities are derecognized when revenue is recognized, and the performance obligation is satisfied. Advance payments and billings in excess of revenue recognized are included in deferred revenue, which is classified as current or noncurrent based on the timing of when the Company expects to recognize revenue. At September 30, 2022 and December 31, 2021, we had contract liabilities of $0.4 million and $0.3 million, respectively. Contract liabilities is made up of the following as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Customer deposits for commercial products $ 388 $ 293 The following table summarizes the changes in contract liabilities during the nine months ended September 30, 2022 and year ended December 31, 2021 (in thousands): Balance at December 31, 2020 $ 994 Additions 435 Customer deposits returned (713 ) Transfers to revenue (208 ) Contract liabilities held for sale (215 ) Balance at December 31, 2021 293 Additions 26 Customer deposits returned (45 ) Transfers to revenue (84 ) Contract liabilities held for sale but not assumed 198 Balance at September 30, 2022 $ 388 Cost of Revenue Cost of revenue primarily consists of costs for our products incurred to third-party manufacturers. Advertising Expense The Company expenses marketing, promotions and advertising costs as incurred. Such costs are included in general and administrative expense in the accompanying unaudited condensed consolidated statements of operations. The Company recorded advertising costs of $0.7 million and $1.4 million for the three and nine months ended September 30, 2022, respectively. The Company recorded advertising costs of $0.7 million and $2.2 million for the three and nine months ended September 30, 2021, respectively. Research and Development Costs incurred in connection with the development of new products and processes are charged to research and development expenses as incurred. The Company recorded research and development expenses of $0.03 million and $0.5 million for the three and nine months ended September 30, 2022, respectively. The Company recorded research and development expenses of $0.6 million and $1.9 million for the three and nine months ended September 30, 2021, respectively. Research and development expenses for 2022 and 2021 are presented as part of the loss from disposal group on the unaudited condensed consolidated statements of operations. Income Taxes The Company utilizes FASB ASC 740, “ Income Taxes The Company generated a deferred tax asset through net operating loss carry-forward. However, a valuation allowance of 100% has been established due to the uncertainty of the Company’s realization of the net operating loss carry forward prior to its expiration. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in response to the outbreak of a novel strain of the coronavirus, COVID-19. The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”). Under the CARES Act, net operating losses (“NOLs”) arising in tax years beginning after December 31, 2017, and before January 1, 2021 may be carried back to each of the five tax years preceding the tax year of such loss. Moreover, under the 2017 Tax Act as modified by the CARES Act, federal NOLs of our corporate subsidiaries generated in tax years ending after December 31, 2017 may be carried forward indefinitely, but the deductibility of federal NOLs, particularly for tax years beginning on or after January 1, 2021, may be limited. The accounting for the material income tax impacts has been reflected in the year ended December 31, 2021 financial statements. It is uncertain if and to what extent various states will conform to the 2017 Tax Act or the CARES Act. The Company is currently assessing the impact the CARES Act will have on the unaudited condensed consolidated financial statements. Stock-Based Compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718, “Stock Compensation,” which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC 2018-07 (Topic 718) for share-based payments to employees, consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the grant date. For awards of restricted stock, the Company determines grant date fair value based on the closing price of the Company’s common stock on the grant date as reported on the over-the-counter market (the “OTC Market”). For awards of stock options, the Company uses the Black-Scholes option valuation model to estimate grant date fair value. Compensation expense is recognized for the portion of the award that is ultimately expected to vest over the period during which the recipient renders the required services to the Company generally using the straight-line single option method. See Note 17 – Stock Incentive Plans for additional information. Fair Value Measurements The Company follows FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements and establishes a framework for measuring fair value and expands disclosure about such fair value measurements. ASC 820 establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and expands on required disclosures about fair value measurement. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. ASC 820 describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following: · Level 1 – Quoted prices in active markets for identical assets and liabilities. · Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted market prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. When a part of the purchase consideration consists of shares of the Company common stock, the Company calculates the purchase price attributable to those shares, a Level 1 security, by determining the fair value of those shares quoted on the OTC Market as of the acquisition date. The Company recognizes estimated fair values of the tangible assets and identifiable intangible assets acquired, including in-process research and development, and liabilities assumed, including any contingent consideration, as of the acquisition date. Goodwill is recognized as any amount of the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed in excess of the consideration transferred. ASC 805 precludes the recognition of an assembled workforce as an asset, effectively subsuming any assembled workforce value into goodwill. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, and also considers counterparty credit risk in its assessment of fair value. At September 30, 2022 and December, 31, 2021, the Company had no financial assets or liabilities recorded at fair value on a recurring basis, except for the Series A and B Notes, for which we elected the fair value option, and the contingent stock consideration. These liabilities are measured at fair value using the period-end quoted market prices of the Company’s common stock as a Level 3 input. The Company also has certain derivative liabilities and contingent consideration liabilities which are carried at fair value based on Level 3 inputs. The carrying amounts of cash equivalents, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate fair values because of the short-term nature of these items. The fair value of contingent stock consideration is evaluated each reporting period using projected financial information, discount rates, and key inputs. Projected contingent payment amounts are discounted back to the current period using a discount rate. Financial information is based on the Company’s most recent internal forecasts. Changes in projected financial information, the Company’s stock price, discount rate and time for settlement of milestones and earnouts may result in higher or lower fair value measurements. Increases (decreases) in any of those inputs in isolation may result in a significantly lower (higher) fair value measurement. For the period from the date of acquisition to September 30, 2022, the Company’s stock price, volatility percentage and the weighted average present value probability of each the various estimates of milestones, earn-out amounts and achievements being accomplished resulted in a decrease of the fair value of the contingent stock consideration. For the period from the December 31, 2021 to September 30, 2022, the Company’s stock price, volatility percentage and the weighted average present value probability of each the various estimates of milestones, earn-out amounts and achievements being accomplished resulted in a decrease of the fair value of the contingent stock consideration. In determining the fair value, the Company evaluated each of the target threshold scenarios as to the potential earn-out payment at each level based on the estimated net sales and gross profit. If the expected gross profit considered in the scenario with the lowest gross profit is less than $6.0 million during the Clawback Period, the value of the stock earn-out payment would be $0. However, if the expected gross profit during the Clawback Period was at least $8.0 million (and the net sales target is achieved), the value of the stock earn-out payment would be approximately $2.8 million. The Company has elected the fair va

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE	9 Months Ended
	Sep. 30, 2022
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE	NOTE 3 - ACCOUNTS RECEIVABLE As of September 30, 2022 and December 31, 2021, accounts receivable consisted of the following (in thousands): September 30, 2022 December 31, 2021 Customer billed $ 460 $ 437 Allowance for doubtful accounts - (80 ) Accounts receivable, net $ 460 $ 357 Customer billed accounts receivable represents amounts billed to clients that have yet to be collected. Allowances for doubtful accounts have been determined through specific identification of amounts considered to be uncollectible and potential write-offs, plus a non-specific allowance for other amounts for which some potential loss has been determined to be probable based on current and past experiences.

PREPAID EXPENSES AND OTHER CURR

PREPAID EXPENSES AND OTHER CURRENT ASSETS	9 Months Ended
	Sep. 30, 2022
PREPAID EXPENSES AND OTHER CURRENT ASSETS
PREPAID EXPENSES AND OTHER CURRENT ASSETS	NOTE 4 - PREPAID EXPENSES AND OTHER CURRENT ASSETS As of September 30, 2022 and December 31, 2021, prepaid expenses and other current assets consisted of the following (in thousands): September 30, 2022 December 31, 2021 Prepaid insurance $ 91 $ 302 Prepaid deposits for inventory - 89 Prepaid expenses 359 10 Other current assets 58 46 Prepaid expenses and other current assets $ 508 $ 447

INVENTORY

INVENTORY	9 Months Ended
	Sep. 30, 2022
INVENTORY
INVENTORY	NOTE 5 - INVENTORY Inventory consists of finished goods. The Company’s inventory is stated at the lower of cost (FIFO cost basis) or net realized value. As of September 30, 2022 and December 31, 2021, the carrying value of inventory consisted of the following (in thousands): September 30, 2022 December 31, 2021 Finished Goods $ 750 $ 730 Reserve for obsolescence (110 ) (109 ) Total inventory $ 640 $ 621 For the three months ended September 30, 2022 and 2021, inventory reserve adjustments amounted to $0.102 million and $0.173 million, respectively.

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS	9 Months Ended
	Sep. 30, 2022
Unaudited Condensed Consolidated Statements of Operations
DISCONTINUED OPERATIONS	NOTE 6 - DISCONTINUED OPERATIONS On July 22, 2022, CURE completed the sale of certain assets comprising the pharmaceutical segment of the Company pursuant to an Asset Purchase Agreement (the “APA”) with TF Tech Ventures, Inc. (the “Buyer”), under which the Buyer purchased certain assets of the Company (the “Asset Sale”), including certain pharmaceutical patents, trademarks and related machinery and equipment. The total consideration received at closing in connection with the Asset Sale was $20.0 million, which consisted of (i) the cancellation of indebtedness owed by the Company to the Buyer in an amount equal to $4.15 million, (ii) a $2.0 million one-year note payable in the form of a secured promissory note, and (iii) the remainder in cash reduced by approximately $41,000 in assumed liabilities transferred to the Buyer at closing. The Company retained 15 other patents that were not included in the Asset Sale, which the Company expects to monetize through product development, licensing arrangements and/or the sale of such patents. The following table calculates the net cash received from the Asset Sale (in thousands): Sales price $ 20,000 Forgiveness of Buyer advances (4,150 ) Holdback secured by promissory note (2,000 ) Obligations assumed by Buyer (41 ) Buyer expenses paid by seller 82 Net cash received $ 13,891 The following table calculates the loss incurred from the Asset Sale (in thousands): Sales price for assets sold $ 20,000 Net book value of assets sold 20,616 Net book value of liabilities sold (51 ) Net book value of net assets sold 20,565 Loss on sale of net assets $ (565 ) As of June 30, 2022, the cost of assets and liabilities held for sale were $20.6 million and $4.0 million, respectively. Included in the liabilities held for sale were notes payable amounting to $3.4 million which form part of the $20.0 million consideration received from the Buyer. To write down the total net assets to fair value an additional impairment loss of $2.0 million, including $0.1 million of estimated cost to sell, was charged to impairment of goodwill as of June 30, 2022 and included in the disposal group loss. The following table presents the aggregate carrying amounts of assets and liabilities held for sale of in the unaudited condensed consolidated balance sheet as of the date indicated (in thousands): December 31, 2021 Carrying amounts of assets included as part of assets held for sale: Inventory, net $ 243 Prepaid expenses and other assets 97 Property and equipment, net 1,837 Finance lease right-of-use assets, net 40 Goodwill, net 9,178 Intellectual property and patents, net 14,401 In-process research and development, net 329 Other assets 35 Total assets classified as assets held for sale in the unaudited condensed consolidated balance sheet $ 26,160 Carrying amounts of liabilities included as part of liabilities held for sale: Accrued expenses $ 268 Finance lease payable 40 Contract liabilities 215 Total liabilities classified as liabilities held for sale in the unaudited condensed consolidated balance sheet $ 523 The following table presents the financial results of the pharmaceutical segment for the three and nine months ended September 30, 2022 and 2021 which is presented as loss from disposal group on our unaudited condensed consolidated statements of operations (in thousands): For the Three Months Ended For the Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Revenue: Product sales, net of discounts and refunds $ - $ 16 $ 108 $ 151 Consulting research & development income - - 58 52 Shipping and other sales - 18 40 57 Total revenue - 34 206 260 Cost of goods sold: Cost of goods sold - 75 75 256 Gross profit - (41 ) 131 4 Operating expenses: Research and development expenses 28 601 492 1,944 Selling, general and administrative expenses 91 394 1,313 743 Loss on disposition 565 - 565 - Impairment of goodwill - - 4,728 - Total operating expenses 684 995 6,533 2,687 Net loss before income taxes (684 ) (1,036 ) (6,967 ) (2,683 ) Provision for income taxes - - - - Net loss $ (684 ) $ (1,036 ) $ (6,402 ) $ (2,683 )

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	9 Months Ended
	Sep. 30, 2022
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT	NOTE 7 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following (in thousands): September 30, 2022 December 31, 2021 Computer and other equipment $ 7 $ 7 Less accumulated depreciation (4 ) (3 ) Property and Equipment, net $ 3 $ 4 For the three and nine months ended September 30, 2022, depreciation expense amounted to $0 and $0.001 million, respectively. Depreciation expense for the three and nine months ended September 30, 2021 was $0 and $0.001 million, respectively.

NOTES RECEIVABLE

NOTES RECEIVABLE	9 Months Ended
	Sep. 30, 2022
NOTES RECEIVABLE
NOTES RECEIVABLE	NOTE 8 – NOTES RECEIVABLE In May 2021, the Company purchased a convertible loan (the “May 2021 Loan”) with Biopharmaceutical Research Company (“BRC”) for a total amount of $0.2 million. The May 2021 Loan shall accrue interest at 6% per annum and shall become due and payable to the Company at the earlier of the conversion date or the maturity date of May 26, 2023. In the event of conversion by the Company, the outstanding amount of the May 2021 Loan and any unpaid accrued interest shall be converted into shares of BRC by dividing the May 2021 Loan plus accrued interest by the price per share obtained by dividing $20.0 million by the number of outstanding shares of common stock of BRC immediately prior to such conversion subject to certain exclusions. In the event the Company has not requested for conversion, the May 2021 Loan can automatically convert if BRC sells shares of preferred stock (the “Qualified Financing Securities”) to one or more investors in a single transaction or series of related transactions for aggregate proceeds to BRC of at least $4.0 million (a “Qualified Financing”). The May 2021 Loan shall automatically convert at the initial closing of and on the same terms and conditions of the Qualified Financing into a total number of Qualified Financing Securities obtained by dividing the May 2021 Loan plus any unpaid accrued interest by the lesser of (i) 80% of the price per share paid for the Qualified Financing Securities by investors in the Qualified Financing and (ii) $20.0 million by the number of outstanding shares of common stock of BRC immediately prior to such conversion subject to certain exclusions. On July 22, 2022, the Company received a promissory note in the amount of $2.0 million in connection with the Asset Sale. The note bears interest at 2.63% per annum and is due on or before July 22, 2023. The note is subject to offset for any claims related to the Assets Sale and is secured by the assets underlying the Asset Sale. As of September 30, 2022, there have been no claims made against the note. Notes receivable consists of the following (in thousands): September 30, 2022 December 31, 2021 Biopharmaceutical Research Company $ 200 $ 200 TF Tech Ventures, LLC 2,000 - Less: Allowance for doubtful accounts - - Current portion of notes receivable, net (2,200 ) - Notes receivable, net of current portion $ - $ 200

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS	9 Months Ended
	Sep. 30, 2022
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS	NOTE 9 - GOODWILL AND INTANGIBLE ASSETS Intangible Asset Summary Goodwill and intangible assets, net, consisted of the following (in thousands): September 30, 2022 December 31, 2021 Goodwill $ 4,690 $ 4,690 Intangible assets subject to amortization: Customer relationships - 7,110 Trade name 2,613 2,610 Non-compete agreements 462 462 3,075 10,182 Accumulated amortization (1,776 ) (2,885 ) Customer relationships, Trade name, Non-compete agreements, net $ 1,299 $ 7,297 Intellectual property and patents $ 316 $ 316 Accumulated amortization (68 ) (55 ) Intellectual property and patents, net $ 248 $ 261 As of June 30, 2022, the Company’s management determined that the customer relationships have no future value and recorded an impairment charge as of that date. Impairment loss amounted to $0 and $4.6 million for the three and nine months ended September 30, 2022, respectively, and $0 for the three and nine months ended September 30, 2021, respectively. Amortization expense was $0.2 million and $0.6 million for the three months ended September 30, 2022 and 2021, respectively. Amortization expense was $1.4 million and $1.7 million for the nine months ended September 30, 2022 and 2021, respectively. The estimated aggregate future amortization expense is as follows (in thousands): 2022 (remaining) $ 169 2023 675 2024 512 2025 23 2026 18 2027 17 Thereafter 133 Total Amortization $ 1,547

INVESTMENT

INVESTMENT	9 Months Ended
	Sep. 30, 2022
INVESTMENT
INVESTMENT	NOTE 10 – INVESTMENT In accordance with ASC 325-20, “Cost Method Investments,” equity securities that do not have readily determinable fair values (i.e., non-marketable equity securities) and are not required to be accounted for under the equity method are typically carried at cost (i.e., cost method investments). Investments of this nature are initially recorded at cost. From November 2019 to February 2020, the Company purchased Convertible Loans (“Loans”) from ReLeaf Europe B.V. (“ReLeaf”) in the amount of $0.5 million which shall bear interest at 6% per annum and shall become due and payable to the Company at the earlier of the conversion date, the date when the Loans are repaid or at the maturity date of October 31, 2021. In the event of conversion by the Company, the outstanding amount of the Loans and any unpaid accrued interest shall be converted into shares of ReLeaf (“Shares”) based on a price per share on a post money valuation of $10.9 million. As of September 30, 2022 and December 31, 2021, the Company recorded an investment in ReLeaf using the cost method of accounting and recorded accrued interest relating to these Loans as well as a reserve on the investment. As of the filing date of this Quarterly Report, the Company has agreed to convert the Loans and receive Shares as per the Loan terms. The issuance of such shares to the Company is currently pending. Our investment, at cost, consisted of the following (in thousands): September 30, 2022 December 31, 2021 Investment in ReLeaf Europe B.V. $ 566 $ 566 Valuation reserve (350 ) (350 ) Investment, net $ 216 $ 216 As of September 30, 2022 and December 31, 2021, the net investment is based on management’s best estimate of net realizable value, which resulted in a valuation reserve amount of $0.4 million and $0.4 million, respectively.

ACCRUED EXPENSES

ACCRUED EXPENSES	9 Months Ended
	Sep. 30, 2022
ACCRUED EXPENSES
ACCRUED EXPENSES	NOTE 11 – ACCRUED EXPENSES Accrued expenses consisted of the following (in thousands): September 30, 2022 December 31, 2021 Accounts payable $ 14 $ 1,722 Refunds and returns liability 5 445 Accrued interest expense 222 390 Accrued payroll - 178 Accrued vacation leave 60 173 Accrued expenses 813 243 Sales tax payable 317 334 Accrued Expenses $ 1,431 $ 3,485

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	9 Months Ended
	Sep. 30, 2022
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS	NOTE 12 – RELATED PARTY TRANSACTIONS The Company and other related entities have had a commonality of ownership and/or management control, and as a result, the reported operating results and /or financial position of the Company could significantly differ from what would have been obtained if such entities were autonomous. In August 2020, the Company entered into an unsecured promissory note (the “August Note”) with John Bell (“Mr. Bell”), for a principal amount of $0.2 million. The August Note was due on August 6, 2021 and had an interest rate of 8% per annum, payable in quarterly payments. On August 6, 2021, both the Company and Mr. Bell agreed to roll the amount of principal and accrued interest as of August 6, 2021 into a new secured promissory note (“Secured August Note”) with a new principal amount of $0.2 million and an interest rate of 10% per annum, payable at maturity. The Secured August Note was due on June 30, 2022 and was secured by all the Company’s personal property. On July 22, 2022, the Secured August Note was paid. In October 2020, the Company completed its acquisition of Sera Labs and pursuant to the Sera Labs Merger Agreement, the Company issued a promissory note in the principal amount of $1.1 million owed to the Chief Executive Officer of Sera Labs (“Duitch Note”), of which $1.0 million is the upfront payment in connection with the closing of the Sera Labs Merger, and $0.1 million is for certain liabilities of Sera Labs due to Mrs. Duitch. The Duitch Note was due on September 30, 2021 and had an interest rate of 8% per annum. On November 9, 2020, a payment of $0.3 million was made and applied to principal only. On June 30, 2021, both the Company and the Chief Executive Officer of Sera Labs agreed to roll the amount of principal and accrued interest as of June 30, 2021 as well as other amounts due to the Chief Executive Officer of Sera Labs into a new secured promissory note (“Secured Duitch Note”) with a new principal amount of $1.05 million and an interest rate of 10% per annum, payable at maturity. The Secured Duitch Note was secured by all the Company’s personal property. The Secured Duitch Note was due on April 15, 2022, and on July 22, 2022, the Secured Duitch Note was paid. On November 16, 2021, the Company entered into a secured promissory note (the “Secured November Note”) with Mr. Bell for a principal amount of $0.05 million. The Secured November Note was due on June 30, 2022 and had an interest rate of 10% per annum, payable at maturity. The Secured November Note was secured by all the Company’s personal property. On July 22, 2022, the Secured November Note was paid. From May 3, 2021 through December 28, 2021, the Company entered into several secured promissory notes (the “Secured Notes”) with several of Dov Szapiro’s affiliated investment companies (“Mr. Szaprio”) for a total principal amount of $0.7 million. The Secured Notes were due on June 30, 2022 and had an interest rate of 10% per annum, payable at maturity. The Secured Notes were secured by all the Company’s personal property. On July 22, 2022, the Secured Notes were paid. On January 12, 2022, the Company entered into a secured promissory note (the “Secured January Note”) with the Chief Executive Officer of Sera Labs for a principal amount of $0.04 million (the “Second Duitch Note”) with an interest rate of 10% per annum, payable at maturity. The Second Duitch Note was secured by all the Company’s personal property. The Second Duitch Note was due on April 11, 2022, and on July 22, 2022, the Second Duitch Note was paid. On January 10, 2022, the Company entered into several secured promissory notes (the “Secured January Notes”) with Mr. Szaprio for a total principal amount of $0.2 million. The Secured January Notes were due on June 30, 2022 and had an interest rate of 10% per annum, payable at maturity. The Secured January Notes were secured by all the Company’s personal property. On July 22, 2022, the Secured January Notes were paid. On July 25, 2022, the Company entered into a consulting agreement with Rob Davidson under which Mr. Davidson will provide advisory services on matters including strategic, financial, fund raising, product development and technology in exchange for compensation in the amount of $12,000 per month. The term of the agreement is through July 25, 2023 and requires Mr. Davidson provide approximately 20 to 25 hours of service per week. Total consulting expense incurred for the three and nine months ended September 30, 2022 was $27,000. As of September 30, 2022 and December 31, 2021, the Company recorded $0 and $0.1 million, respectively, of accrued related party interest and is recorded in accrued expenses. Interest expense in regard to related party payables for the nine months ended September 30, 2022 and 2021 was $0.1 million and $0.04 million, respectively.

LOANS PAYABLE

LOANS PAYABLE	9 Months Ended
	Sep. 30, 2022
LOANS PAYABLE
LOANS PAYABLE	NOTE 13 – LOANS PAYABLE Loans payable consists of the following at September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Loan due September 29, 2022, monthly payments including interest at 4.32% per annum; unsecured $ - $ 195 Loan due June 6, 2022, monthly payments including interest at 4.42% per annum; unsecured - 40 Loan due June 6, 2023, monthly payments including interest at 8.07% per annum; unsecured 38 - Current portion of loan payable (38 ) (235 ) Loan payable, less current portion $ - $ - Interest expense for the three and nine months ended September 30, 2022 was $0.003 million and $0.006 million, respectively. Interest expense for the three and nine months ended September 30, 2021 was $0.001 million and $0.003 million, respectively.

NOTES PAYABLE

NOTES PAYABLE	9 Months Ended
	Sep. 30, 2022
NOTES PAYABLE
NOTES PAYABLE	NOTE 14 – NOTES PAYABLE Notes payable consist of the following at September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Note to an individual, non-interest bearing, unsecured and due on demand $ - $ 50 Secured Promissory note to a company originally due June 30, 2022; interest at 10% per annum payable at maturity - 270 Secured Promissory note to a company originally due May 18, 2021 due June 30, 2022; interest at 10% per annum payable at maturity - 540 Secured Promissory note to a company originally due January 13, 2022 was due June 30, 2022; interest at 10% per annum payable at maturity - 500 Secured promissory notes to a company originally due April 8, 2022 and October 30, 2021 was rolled into a new secured promissory notes now due June 30, 2022; interest at 10% per annum payable at maturity - 502 Secured promissory note to a company due May 31, 2022; interest at 10% per annum payable at maturity - 300 Secured promissory note to a company due May 31, 2022; interest at 10% per annum payable at maturity - 100 Promissory notes to a company, non-interest bearing; due on demand - 415 Secured promissory notes to a company originally due June 30, 2022; interest at 10% per annum payable at maturity - 200 Secured promissory notes to a company originally due June 30, 2022; interest at 10% per annum payable at maturity - Current portion of note payable $ - $ 2,877 In May 2020 and August 2020, the Company entered into unsecured promissory notes (the “ Notes”) with an investor for $0.3 million and $0.5 million, respectively. The Notes were due on May 18, 2021 and August 12, 2021, respectively, and have an interest rate of 8% per annum, payable in quarterly payments. On October 30, 2021, both the Company and the investor agreed to roll the amount of principal and accrued interest as of October 30, 2021 into new secured promissory notes (“New August & May Notes”) with a new principal amount of $0.3 million and $0.5 million, respectively. The New August & May Notes were due on June 15, 2022 and had an interest rate of 10% per annum, payable at maturity. The New August & May Notes were secured by all the Company’s personal property. On July 22, 2022, the New August & May Notes were paid. In January 2021 and February 2021, the Company received a total of $0.5 million from an investment company in exchange for a promissory note. At the time the Company received the $0.5 million, terms of promissory note were not yet finalized. In October 2021, both the Company and the investment company agreed to roll the amount of principal and accrued interest as of October 30, 2021 into a new secured promissory note (“New January 2021 Note”) with a principal amount of $0.5 million. The New January 2021 Note was due on June 15, 2022 and had an interest rate of 10% per annum, payable at maturity. The New January 2021 Note was secured by all the Company’s personal property. On July 22, 2022, the New January 2021 Note was paid. In April 2021 and September 2021, the Company received $0.3 million and $0.3 million, respectively, from an investment company in exchange for two promissory notes. At the time the Company received the total amount of $0.5 million, terms of promissory notes were not yet finalized. On October 30, 2021, both the Company and the investment company agreed to roll the amount of principal and accrued interest as of October 30, 2021 into new secured promissory notes (“New April & September 2021 Notes”) with principal amounts of $0.3 million and $0.3 million. The New April & September 2021 Notes were due on June 15, 2022 and had an interest rate of 10% per annum, payable at maturity. The New April & September 2021 Notes were secured by all the Company’s personal property. On July 22, 2022, the New April & September 2021 Notes were paid. In October 2021, the Company received $0.3 million from an investment company in exchange for a secured promissory note (“October 2021 Note”). The October 2021 Note was due on May 31, 2022 and had an interest rate of 10% per annum, payable at maturity. The October 2021 Note was secured by all the Company’s personal property. On July 22, 2022, the October 2021 Note was paid. In November 2021, the Company received $0.1 million from an investment company in exchange for a secured promissory note (“November 2021 Note”). The November 2021 Note was due on May 31, 2022 and had an interest rate of 10% per annum, payable at maturity. The November 2021 Note was secured by all the Company’s personal property. On July 22, 2022, the November 2021 Note was paid. From October 2021 to December 2021, the Company received at total of $0.4 million from an investment company in exchange for promissory notes. On July 22, 2022, these promissory notes were paid. In December 2021, the Company received at total of $0.2 million from an investment company in exchange for secured promissory note (“December 2021 Note”). The December 2021 Note was due on June 15, 2022 and had an interest rate of 10% per annum, payable at maturity. The December 2021 Note was secured by all the Company’s personal property. On July 22, 2022, the December 2021 Note was paid. On January 18, 2022, the Company received $0.2 million from an investment company in exchange for a secured promissory note (“January 2022 Note”). The January 2022 Note was due on June 30, 2022 and had an interest rate of 10% per annum, payable at maturity. The January 2022 Note was secured by all the Company’s personal property. On July 22, 2022, the January 2022 Note was paid. Interest expense for the three months ended September 30, 2022 and 2021 was $0.1 million and $0.1 million, respectively. Interest expense for the nine months ended September 30, 2022 and 2021 was $0.2 million and $0.1 million, respectively.

CONVERTIBLE PROMISSORY NOTES AN

CONVERTIBLE PROMISSORY NOTES AND FAIR VALUE OF CONVERTIBLE PROMISSORY NOTES	9 Months Ended
	Sep. 30, 2022
CONVERTIBLE PROMISSORY NOTES AND FAIR VALUE OF CONVERTIBLE PROMISSORY NOTES
CONVERTIBLE PROMISSORY NOTES AND FAIR VALUE OF CONVERTIBLE PROMISSORY NOTES	NOTE 15 – CONVERTIBLE PROMISSORY NOTES AND FAIR VALUE OF CONVERTIBLE PROMISSORY NOTES Convertible promissory notes consist of the following at September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Convertible promissory notes due January 31, 2019, interest payable at 8% per annum; unsecured; principal and accrued interest convertible into common stock at the lower of $1.32 per share (the price per share of the latest closing of a debt or equity offering by the Company greater than $3.0 million); accrued interest due January 31, 2019 and currently in default. The Company has offered to either repay the notes or convert them into shares of common stock of the Company. The beneficial owners of the notes have not yet communicated their intent to either receive payment or shares. $ 550 $ 550 Current portion of convertible promissory notes $ 550 $ 550 Fair value of Series A and B convertible promissory notes consists of the following at September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Series A subordinated convertible note at fair value $ 3,136 $ 3,074 Series B subordinated convertible note at fair value 11,848 11,858 Total convertible promissory notes 14,984 14,932 Less: Investor Note offset – Series B Note (5,000 ) (5,000 ) Carrying value of convertible promissory notes at fair value 9,984 9,932 Less: current portion of convertible promissory notes at fair value (9,984 ) (9,932 ) Convertible promissory notes, less current portion $ - $ - In October 2020, the Company entered into a Securities Purchase Agreement (“Purchase Agreement”) with an institutional investor (the “Investor”) for the purchase of a series of two convertible notes with an aggregate principal amount of $11.5 million. Concurrently, the Company consummated the sale to the Investor of a Series A subordinated convertible note (the “Series A Note”) with an initial principal amount of $4.6 million and a Series B senior secured convertible note (the “Series B Note,” and together with the Series A Note, the “Convertible Notes” and, each a “Convertible Note”) with an initial principal amount of $6.9 million in a private placement (the “Private Placement”). The Series A Note was sold with an original issue discount of $0.6 million and the Series B Note was sold with an original issue discount of $0.9 million. The Investor paid for the Series A Note to be issued to the Investor by delivering $4.0 million in cash consideration and paid for the Series B Note to be issued to the Investor by delivering a secured promissory note (the “Investor Note”) with an initial principal amount of $6.0 million. The Company will receive cash in respect of a Series B Note only upon cash repayment of the corresponding Investor Note. In certain circumstances, the Investor Note may be automatically satisfied through netting against the Series B Note, as described more fully below, rather than through the payment of cash. Until an Investor Note is repaid, the original issue discount and the rest of the principal under the corresponding Series B Note is considered to be “restricted.” Upon any repayment of the Investor Note, the principal of the corresponding Series B Note becomes “unrestricted” on dollar-for-dollar basis, along with a proportional amount of the original issue discount. During the year ended December 31, 2020, the Company received $1.0 million from the Investor Note, leaving a remaining balance of $5.0 million of the Investor Note as of December 31, 2020, which is netted against the Series B Note and included in convertible promissory notes in the unaudited condensed consolidated balance sheet. The placement agent received a placement agent fee of $306,000 at the closing of the Private Placement, representing 8% of the gross cash proceeds at the closing. After deducting the placement agent fee, the Company’s estimated expenses associated with the Private Placement and the repayment of the September Note, the Company’s net cash proceeds at the closing were approximately $2,340,000. If the Investor Note is subsequently satisfied in full by payment in cash, the additional financial advisory fee on the cash proceeds received from the Investor Note will be an additional $480,000, and the aggregate net cash proceeds from the Private Placement as a whole will be approximately $8,850,000. In addition, the placement agent received a warrant (the “Warrant”) exercisable for two years for the purchase of an aggregate of up to 242,424 shares of the Company’s common stock, at an exercise price of $1.32 per share. The Warrant may also be exercised by means of a “cashless exercise” or “net exercise.” Upon the achievement of certain milestones, the placement agent is entitled to receive an additional warrant, on the same terms as the Warrant, exercisable for an aggregate of up to 363,636 shares of the Company’s common stock (collectively with the shares underlying the Warrant, the “Warrant Shares”). The Warrant Shares, when issued, will have the same rights, preferences and privileges (including the registration rights described under “Registration Rights Agreement” below) as the shares underlying the Convertible Notes. The Series A Note matures on October 30, 2022 and the Series B Note matured on October 30, 2021 (the “Maturity Date”), subject to extension in certain circumstances, including bankruptcy and outstanding events of default. On January 5, 2022, the Company entered into a Forbearance Agreement (the “Forbearance Agreement”) with the Investor pursuant to which the Investor has agreed not to exercise, with certain exclusions, any of its judicial or administrative enforcement actions to obtain cash or other assets (excluding Common Stock or other assets issuable upon conversion or exchange of the Series B Note in accordance with the terms thereof) from the Company on account of any payment obligations of the Company under the Series B Note or the Event of Default Redemption Notice that exist as of the date of the Forbearance Agreement or that may arise from the date of this Agreement through February 15, 2022. As of September 30, 2022, the Series B Note is in default and as of the date of this Quarterly Report, the Series A Note is in default. No action from the lender has been pursued on either Convertible Note as of the date of this Quarterly Report. On April 12, 2022, the Company filed a civil action in the California Superior Court against the Investor, alleging that the investor entered into the Purchase Agreement as an unregistered securities dealer and unlicensed finance lender in violation of California law. The Company’s complaint seeks rescission of the Purchase Agreement, damages, attorneys’ fees and other relief. The Investor responded to the complaint by filing a demurrer/motion to dismiss and on August 31, 2022, the Company and Investor entered into a stipulation to stay the litigation for 30 days and allow the parties to engage in further settlement discussions. The matter was unable to be resolved within the 30 days, and, pursuant to the Stipulation, the Company refiled its action in New York where a New York court will be required to apply California law to our causes of action for rescission and unfair competition. As of the filing date of this Quarterly Report, the Investor has not filed a response to the complaint. Payment of Amounts Due under the Convertible Notes On the Maturity Date, the Company shall pay to the Investor an amount in cash (other than restricted amounts under a Series B Note) presenting all outstanding principal, Make-Whole Amount (as defined in the Convertible Notes), if any, accrued and unpaid interest and accrued and unpaid Late Charges (as defined in the Convertible Notes) on such principal, except that any restricted amount under the Series B Note will be automatically satisfied on the Maturity Date (in lieu of a cash payment) by Maturity Netting (as defined in the Investor Note described below). The Company may not prepay any amounts due under the Convertible Notes. Interest The Convertible Notes shall bear no interest unless there is an occurrence, and during the continuance, of an Event of Default (as defined in the Convertible Notes). During any such Event of Default, the Convertible Notes will accrue interest at the rate of 18% per annum. See “ —Events of Default Conversion; Alternate Conversion upon Event of Default Each Convertible Note (other than restricted amounts under a Series B Note) is convertible, at the option of the Investor, into shares of Common Stock at a conversion price of $1.32 per share. The conversion price is subject to full ratchet antidilution protection upon any transaction in which the Company is deemed to have granted, issued or sold, any shares of Common Stock. If the Company enters into any agreement to issue any variable rate securities, other than a bona fide at-the-market offering or equity line of credit, the Investor has the additional right to substitute such variable price (or formula) for the conversion price. If an Event of Default has occurred under the Convertible Notes, the Investor may elect to alternatively convert the Convertible Notes at the redemption premium described therein. Conversion Limitation The Investor will not have the right to convert any portion of the Convertible Notes, to the extent that, after giving effect to such conversion, the Investor (and other certain related parties) would beneficially own in excess of 4.99% of the shares of Common Stock outstanding immediately after giving effect to such conversion. This limit may, from time to time, be increased, up to 9.99%, or decreased; provided that any such increase will not be effective until the 61 st Events of Default The Convertible Notes include certain customary and other Events of Default. In connection with an Event of Default, the Investor may require the Company to redeem in cash any or all of the Convertible Notes. The redemption price will be at a premium to the amount due under the Convertible Notes as described therein. Change of Control In connection with a Change of Control (as defined in the Convertible Notes), the Investor may require the Company to redeem all or any portion of the Convertible Notes. The redemption price per share will be at a premium to the amount due under the Convertible Notes as described therein. Covenants The Company will be subject to certain customary affirmative and negative covenants including those regarding the payment of dividends, maintenance of its property, transactions with affiliates, and issue notes and certain securities. Placement Agent Warrants On October 2, 2020 and December 31, 2020, in connection with the Series A Note and Series B Note, respectively, a placement agent received a warrant (the “Warrant”) exercisable for 2 years for the purchase of an aggregate of up to 242,424 and 60,606 shares, respectively, of the Company’s common stock, at an exercise price of $1.32 per share. The Warrant may also be exercised by means of a “cashless exercise” or “net exercise.” Upon the achievement of certain milestones, the placement agent is entitled to receive an additional warrant, on the same terms as the Warrant, exercisable for an aggregate of up to 363,636 shares of the Company’s common stock. Fair Value Option for the Series A and B Notes The Company elected the fair value option under ASC 825, “ Financial Instruments The Company recorded a loss of $0.1 million and $0.6 million relating to the Series A and B Notes, respectively, attributed to the change in fair value of the Series A and B Notes for the nine months ended September 30, 2022 and were recorded in the unaudited condensed consolidated statement of operations. The Company recorded a gain of $1.0 million and a gain of $0.1 million relating to the Series A and B Notes, respectively, attributed to the change if fair value of the Series A and B Notes for the nine months ended September 30, 2021 and were recorded in the unaudited condensed consolidated statement of operations. As of September 30, 2022, the Company has valued the Series A and B notes without consideration of the terms under an existing default. This was evaluated by the Company’s management and their third-party valuation firm. In light of the forbearance agreement, litigation filed by the Company, and communications between the Company and the Investor the likelihood of settlement under the default terms was considered remote. If the Company is required to settle the Series A and B Notes under those terms, the settlement would be either a cash payment of approximately $4.4 million or the issuance of 12,519,597 shares of the Company’s common stock at the option of the Investor.

WARRANT AGREEMENTS

WARRANT AGREEMENTS	9 Months Ended
	Sep. 30, 2022
WARRANT AGREEMENTS
WARRANT AGREEMENTS	NOTE 16 – WARRANT AGREEMENTS During the nine months ended September 30, 2022 and 2021, the Company did not issue any warrants. Warrants that vest at the end of a one-year period are amortized over the vesting period using the straight-line method. The Company’s warrant activity during the periods presented was as follows: Warrants Weighted Average Exercise Price Weighted Average Contractual Remaining Life (years) Outstanding, December 31, 2020 2,479,849 $ 1.86 1.23 Granted - - - Exercised (96,250 ) 1.00 - Forfeited/Expired (818,152 ) 1.58 - Outstanding, December 31, 2021 1,565,447 $ 2.18 0.66 Granted - - - Exercised - - - Forfeited/Expired (949,917 ) 2.31 - Outstanding, September 30, 2022 615,530 $ 1.99 0.75 Exercisable at September 30, 2022 615,530 $ 1.99 0.75 Warrant summary as of September 30, 2022: Range of Exercise Price Number of Warrants Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Number of Warrants Exercisable Weighted Average Exercise Price $ 1.98–$2.00 615,530 0.75 $ 1.99 615,530 $ 1.99 615,530 0.75 $ 1.99 615,530 $ 1.99 Warrant summary as of December 31, 2021: Range of Exercise Price Number of Warrants Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Number of Warrants Exercisable Weighted Average Exercise Price $ 1.98–$2.31 1,565,447 0.66 $ 2.18 1,565,447 $ 2.18 1,565,447 0.66 $ 2.18 1,565,447 $ 2.18 There were no warrants granted during the three and nine months ended September 30, 2022 and 2021. The aggregate intrinsic value of warrants outstanding and exercisable at September 30, 2022 was $0.

STOCK INCENTIVE PLANS

STOCK INCENTIVE PLANS	9 Months Ended
	Sep. 30, 2022
STOCK INCENTIVE PLANS
STOCK INCENTIVE PLANS	NOTE 17 – STOCK INCENTIVE PLAN On December 29, 2017 (“Effective Date”), the Company adopted the CURE Pharmaceutical Holding Corp. 2017 Equity Incentive Plan (the “2017 Equity Plan” or the “Plan”), pursuant to which an aggregate of 5,000,000 shares of the common stock of the Company are available for grant. On November 28, 2020, the Company registered an additional 5,000,000 shares of common stock of the Company that are available to be granted. The Board of Directors of the Company (the “Board”) has determined that it is in the best interests of the Company and its stockholders to provide additional incentives for certain employees, including executive officers, and non-employee members of the Board by granting to them awards with respect to the common stock of the Company pursuant to the Plan. The Plan seeks to achieve this purpose by providing for awards in the form of options, stock appreciation rights, restricted stock awards, restricted stock units, cash-based awards and other stock-based Awards (“Awards”). The Plan will continue in effect until its termination by the Compensation Committee; provided, however, that all Awards must be granted, if at all, within ten (10) years from the Effective Date. The Company issued 1,351,688 RSUs to board members and 200,000 Nonstatutory Stock Options (“NSOs”) to an employee of the Company and did not issue any incentive stock options (“ISOs”) or restricted common stock (“RCS”) during the nine months ended September 30, 2022. The Company issued 650,801 NSOs to employees of the Company and did not issue any ISOs, RCS or RSUs during the nine months ended September 30, 2021. Vesting periods for awarded RCS, ISOs and NSOs range from immediate to quarterly over a 4-year period. Vesting period for RSUs is the earlier of (i) the day prior to the next annual meeting of stockholders following the date of grant, and (ii) one (1) year from the Date of Grant. For ISOs and NSOs awarded, the term to exercise their ISO or NSO is 10 years. The Company issued 1,518,194 stock options to a consultant that contains performance-based vesting conditions where revenue milestones are to be met over a certain period. Such stock option awards would be valued using a Monte Carlo simulation based on the probability of the performance condition being met and the underlying expense would be recognized as the associated vesting conditions are met. No stock options that contain performance-based vesting conditions vested during the nine months ended September 30, 2022 and it is improbable that the performance-based condition will be met. Stock Options The Company’s stock option activity was as follows: Options Weighted Average Exercise Price Weighted Average Contractual Remaining Life (years) Outstanding, December 31, 2020 6,285,792 $ 1.52 8.86 Granted 1,555,526 0.95 9.25 Exercised - - - Forfeited/Expired (611,250 ) 0.97 - Outstanding, December 31, 2021 7,230,068 $ 1.45 8.27 Granted 200,000 0.34 9.81 Exercised - - - Forfeited/Expired (2,067,519 ) 1.44 - Outstanding, September 30, 2022 5,362,549 $ 1.41 7.62 Exercisable at September 30, 2022 3,173,469 $ 1.55 7.13 Range of Exercise Price Number of Awards Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Number of Awards Exercisable Weighted Average Exercise Price $0.34 - $4.01 5,362,549 7.62 $ 1.41 3,173,469 $ 1.55 5,362,549 7.62 $ 1.41 3,173,469 $ 1.55 The aggregate intrinsic value of options outstanding and exercisable at September 30, 2022 was $0. The aggregate grant date fair value of options granted during the nine months ended September 30, 2022 and 2021 amounted to $0.05 million and $1.1 million, respectively. Compensation expense related to stock options for the three and nine months ended September 30, 2022 was $0.2 million and $0.9 million, respectively. Compensation expense related to stock options was $0.5 million and $1.2 million for the three and nine months ended September 30, 2021, respectively. As of September 30, 2022, the total unrecognized fair value compensation cost related to unvested stock options was $0.6 million, which is to be recognized over a remaining weighted average period of approximately 0.9 years. The weighted-average fair value of options granted during the three months ended September 30, 2022 and 2021, and the weighted-average significant assumptions used to determine those fair values, using a Black-Scholes option pricing model are as follows: September 30, 2022 September 30, 2021 Significant assumptions (weighted-average): Risk-free interest rate at grant date 2.75 % - % Expected stock price volatility 70.0 % - % Expected dividend payout - - Expected option life (in years) 7 - Expected forfeiture rate 0 % - % Restricted Stock Subject to the restrictions set with respect to the particular Award, a recipient of restricted stock generally shall have the rights and privileges of a shareholder, including the right to vote the restricted stock and the right to receive dividends; provided that, any cash dividends and stock dividends with respect to the restricted stock shall be withheld for the recipient’s account, and interest may be credited on the amount of the cash dividends withheld. The cash dividends or stock dividends so withheld and attributable to any particular share of restricted stock (and earnings thereon, if applicable) shall be distributed to the recipient in cash or, at the discretion of the Board or Board Committee, in shares of common stock having a fair market value equal to the amount of such dividends, if applicable, upon the release of restrictions on the restricted stock and, if the restricted stock is forfeited, the recipient shall have no right to the dividends. The Company’s restricted stock activity was as follows: Restricted Stock Shares Weighted Average Grant Date Fair Value Non-vested, December 31, 2020 50,000 $ 1.60 Granted 338,443 1.20 Vested (338,443 ) 1.26 Forfeited/Expired - - Non-vested, December 31, 2021 - - Granted 921,664 0.31 Vested (921,664 ) 0.31 Forfeited/Expired - - Non-vested, September 30, 2022 - $ - Compensation expense related to restricted shares for the three and nine months ended September 30, 2022 was $0.2 million and $0.2 million, respectively. Compensation expense related to restricted shares for the three and nine months ended September 30, 2021 was $0.1 million and $0.4 million, respectively. Restricted Stock Units The terms and conditions of a grant of RSUs shall be determined by the Board or a Board Committee. No shares of common stock shall be issued at the time a RSU is granted. A recipient of RSUs shall have no voting rights with respect to the RSUs. Upon the expiration of the restrictions applicable to a RSU, the Company will either issue to the recipient, without charge, one share of common stock per RSU or cash in an amount equal to the fair market value of one share of common stock. The Company’s restricted stock unit activity was as follows: Restricted Stock Units Weighted Average Grant Date Fair Value Outstanding, December 31, 2020 431,578 $ 1.33 Granted 629,338 0.74 Vested (411,027 ) 1.33 Forfeited/Expired (61,654 ) 1.33 Outstanding, December 31, 2021 588,235 $ 0.70 Granted 1,351,688 0.29 Vested (588,235 ) 0.70 Forfeited/Expired - - Outstanding, September 30, 2022 1,351,688 $ 0.29 At September 30, 2022 and December 31, 2021, the Company had approximately $0.4 million and $0.4 million, respectively, of total unrecognized compensation expense related to restricted stock units. As of September 30, 2022 and December 31, 2021, compensation will be recognized over a weighted-average period of approximately 0.75 years and 0.85 years, respectively. Compensation expense related to restricted stock units for the three and nine months ended September 30, 2022 was $0.1 million and $0.3 million, respectively. Compensation expense related to restricted stock units was $0.2 million and $0.4 million for the three and nine months ended September 30, 2021, respectively. All compensation expense related to restricted stock units were included in selling, general and administrative expenses.

STOCKHOLDERS EQUITY

STOCKHOLDERS EQUITY	9 Months Ended
	Sep. 30, 2022
STOCKHOLDERS EQUITY
STOCKHOLDERS' EQUITY	NOTE 18 – STOCKHOLDERS’ EQUITY Authorized Stock The Company has authorized to issue is 150,000,000 common shares with a par value of $0.001 per share. As of September 30, 2022 and December 31, 2021, there were 71,376,799 and 68,201,900 shares of the Company’s common stock issued and outstanding, respectively. Common Share Issuances From January 1, 2021 to September 30, 2021, the Company issued 872,361 common stock shares, at prices per share ranging from $0.98 to $1.85 in connection to issuances from our 2017 Equity Plan. The total value of these issuances was $0.2 million. From January 1, 2021 to September 30, 2021, the Company issued 646,512 common stock shares, at prices per share ranging from $0.98 to $1.85 in connection to several consulting agreements. The total value of these issuances was $0.7 million. From January 1, 2021 to September 30, 2021, the Company issued 26,936 common stock shares, at a price of $1.30 per share, from a cash-less exercise of certain warrants. Total value of these issuances was $0.03 million. From January 1, 2021 to September 30, 2021, the Company issued an aggregate of 1,439,394 common stock shares at a price per share of $1.32 in connection to conversion of $1.9 million of the Series A Note and 2,597,951 common stock shares at prices per share ranging from $0.43 to $0.64 in connection to the make-whole-amounts totaling $1.3 million per the terms of the Series A Note. From January 1, 2022 to September 30, 2022, the Company issued 1,364,899 common stock shares, at prices per share ranging from $0.31 to $0.70 in connection to issuances from our 2017 Equity Plan. The total value of these issuances was $0.7 million. From January 1, 2022 to September 30, 2022, the Company issued 145,000 common stock shares, at a price per share of $0.29 in connection to several consulting agreements. The total value of these issuances was $0.04 million. Prior to issuance of these shares the Company recorded common stock issuable during 2021 and 2022. From January 1, 2022 to September 30, 2022, the Company issued an aggregate of 1,665,000 common stock shares including 1,192,369 shares at a price per share of $0.19, the Alternative Conversion Price (as defined in the Series B Note), in connection to the conversion of $0.2 million of the Series B Note and 472,631 shares at a price per share of $0.19, in connection to the make-whole-amounts totaling $0.2 million per the terms of the Series B Note. Common Stock Issuable In 2018, the Company entered into an amendment to extend the maturity date of a convertible promissory note. As compensation for extending the note, the Company is to issue 150,000 shares of its common stock at a price of $2.05 per share. As of the filing of this Quarterly Report, the Company has not yet issued these shares and has recorded common stock issuable of $0.3 million.

BUSINESS COMBINATION

BUSINESS COMBINATION	9 Months Ended
	Sep. 30, 2022
BUSINESS COMBINATION
BUSINESS COMBINATION	NOTE 19 – BUSINESS COMBINATION Sera Labs Acquisition In October 2020, the Company acquired all of the issued and outstanding stock of Sera Labs in exchange for consideration of, subject to customary adjustments, an aggregate of approximately (i) $1.0 million in cash and (ii) up to 6,909,091 shares of the Company’s common stock. Pursuant to the Sera Labs Merger Agreement, Sera Labs security holders are also entitled to receive up to 5,988,024 shares of the Company’s common stock (the “Clawback Shares”) based on the achievement of certain sales and gross margin milestones. On August 11, 2022, the Board agreed to extend the period in which the Clawback Shares may be earned to December 31, 2024. The acquisition was accounted for in accordance with ASC 805. The equity consideration to be provided is subject to a variety of earn-out and milestone provisions thus of the 12,897,115 total potential shares to be issued, 5,988,024 shares are considered contingent shares based on the achievement of certain sales and gross margin milestones (“Contingent Shares”). Under ASC 480-10-25, based on the variable number of shares to be issued as part of the acquisition, the fair value of the Contingent Shares of $3.2 million was initially recorded as a liability as contingent stock consideration as of October 2, 2020. The following table presents the change in fair value of contingent stock consideration (in thousands): (Dollars in thousands) Fair Value of Contingent Stock Consideration Fair value at December 31, 2021 $ 1,430 Fair value at September 30, 2022 917 Net change in fair value for the nine months ended September 30, 2022 $ (513 )

INTELLECTUAL PROPERTY AND COLLA

INTELLECTUAL PROPERTY AND COLLABORATIVE AGREEMENTS	9 Months Ended
	Sep. 30, 2022
INTELLECTUAL PROPERTY AND COLLABORATIVE AGREEMENTS
INTELLECTUAL PROPERTY AND COLLABORATIVE AGREEMENTS	NOTE 20 – INTELLECTUAL PROPERTY AND COLLABORATIVE AGREEMENTS In September 2018, the Company entered into a multi-year licensing agreement (the “Licensing Agreement”) with Canopy Growth Corporation, a company that engages in the production and sale of medical cannabis (“Canopy”). In October 2020, the Company filed a demand to commence arbitration against Canopy for Canopy’s failure to perform under the License Agreement. On April 28, 2021 the Company entered into an agreement resolving the dispute between the parties, pursuant to which the parties released their respective claims and obligations, and Canopy agreed to pay a total of $3.9 million, of which $2.3 million was paid to the Company on May 6, 2021, and the balance of $1.6 million was paid to the Company’s attorneys. The Company recognized a settlement income of $2.4 million during 2021 as a result of this agreement. During the three months ended September 30, 2022 and 2021, the Company did not recognize any revenue relating to work completed in regard to the transfer of technology fee as discussed in the License Agreement.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2022
Commitments and contingencies (see Note 21)
COMMITMENTS AND CONTINGENCIES	NOTE 21 – COMMITMENTS AND CONTINGENCIES Litigation From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. On April 12, 2022, the Company filed a civil action in the California Superior Court against the Investor referenced in Note 15, alleging that the Investor entered into the Purchase Agreement as an unregistered securities dealer and unlicensed finance lender in violation of California law. The Company’s complaint seeks rescission of the Purchase Agreement, damages, attorneys’ fees and other relief. The Investor responded to the complaint by filing a demurrer/motion to dismiss and on August 31, 2022, the Company and Investor entered into a stipulation to stay the litigation for 30 days and allow the parties to engage in further settlement discussions. The matter was unable to be resolved within the 30 days, and, pursuant to the Stipulation, the Company refiled its action in New York where a New York court will be required to apply California law to our causes of action for rescission and unfair competition. As of the filing date of this Quarterly Report, the Investor has not filed a response to the complaint. Tax Filings The Company tax filings are subject to audit by taxing authorities in jurisdictions where it conducts business. These audits may result in assessments of additional taxes that are subsequently resolved with the authorities or potentially through the courts. As of September 30, 2022, the Company is not subject to any such these audits. Employment Contracts The Company has entered into employment agreements with two executive officers. Under the provisions of the contracts, the Company may be required to incur severance obligations for matters relating to changes in control, as defined, and certain terminations of executives. As of September 30, 2022, the Company had no such severance obligations, in accordance with the severance benefit provisions of the respective employment agreements. Indemnification In the normal course of business, the Company may provide indemnification of varying scope under the Company’s agreements with other companies or consultants, suppliers and others. Pursuant to these agreements, the Company will generally agree to indemnify, hold harmless, and reimburse the indemnified parties for losses and expenses suffered or incurred by the indemnified parties arising from claims of third parties in connection with the use of the Company’s products. Indemnification provisions could also cover third party infringement claims with respect to patent rights, copyrights, or other intellectual property pertaining to the Company’s products. The Company’s office lease also will generally contain indemnification obligations, including obligations for indemnification of the lessor for environmental law matters and injuries to persons or property of others, arising from the Company’s use or occupancy of the leased property. The term of these indemnification agreements will generally continue in effect after the termination or expiration of the particular services, lease, or license agreement to which they relate. Historically, the Company has not been subject to any claims or demands for indemnification. The Company also maintains various liability insurance policies that limit the Company’s financial exposure. As a result, the Company management believes that the fair value of these indemnification agreements is minimal. Accordingly, the Company has not recorded any liabilities for these agreements as of September 30, 2022 and December 31, 2021. Operating leases The Company currently maintains its corporate offices at 5805 Sepulveda Boulevard, Suite 801, Sherman Oaks, CA 91411 which was previously occupied solely by Sera Labs. The 3,822 square feet of office space was absorbed by the Company in connection with its acquisition of Sera Labs in October 2020. The lease agreement (the “Lease”) which expires on April 30, 2024 contains an option to extend the lease for an additional 36 months and the Company will reassess the lease term of the contract when it has determined it is reasonably certain to exercise the option. The lease provides for the payment of base monthly rent in the amount of $0.01 million during the first 12 months of the term with annual increases, over the base monthly rent then in effect, by 3%. If the Lease is terminated based on the occurrence of an “event of default,” the Company will be obligated to pay the abated rent to the lessor. Following the Asset Sale, the Company vacated its offices and manufacturing facility at 1620 Beacon Place, Oxnard, CA 93033. The month-to-month lease was assumed by the Buyer. Total rent expense was $0.01 million and $0.03 million for the three months ended September 30, 2022 and 2021, respectively. Total rent expense was $0.1 million and $0.1 million for the nine months ended September 30, 2022 and 2021, respectively. The Company classified the Lease as an operating lease in accordance with ASC 842, “Lease Accounting,” and has recognized a right-of-use asset and a lease liability based on the present values of its lease payments over its respective lease term. The Company used the services of a valuation company to compute the incremental borrowing rate (“IBR”) which is necessary to determine the present value of its lease payments since a borrowing rate is not explicitly available on the lease agreement. The concluded IBR is 11.30%. Operating lease payments and lease expense are recognized on a straight-line basis over the lease term. As of September 30, 2022, the current portion and long-term portion of operating lease liability is $0.1 million and $0.1 million, respectively. The future payments due under the operating lease as of September 30, 2022 are as follows (in thousands): Years 2022 (remaining) $ 33 2023 138 2024 46 Undiscounted cash flow 217 Effects of discounting (18 ) Lease liabilities recognized $ 199 Operating leases The following table presents supplemental balance sheet information related to operating and financing leases as of September 30, 2022 and December 31, 2021 (in thousands, except lease term and discount rate): September 30, 2022 December 31, 2021 Operating leases Right-of-use assets, net $ 186 $ 257 Right-of-use lease liabilities, current $ 118 $ 104 Right-of-use lease liabilities, noncurrent 81 174 Total operating lease liabilities $ 199 $ 278 Weighted average remaining lease term Operating leases 1.58 years 2.29 years Weighted average discount rate Operating leases 11.30 % 11.30 %

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2022
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	NOTE 22 – SUBSEQUENT EVENTS The Company has evaluated subsequent events were evaluated through the filing date of this Quarterly Report, November 21, 2022, and there are no subsequent events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The summary of significant accounting policies presented below is designed to assist in understanding the Company’s financial statements. Such financial statements and accompanying notes are the representations of Company’s management, who is responsible for their integrity and objectivity. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2022, and the results of operations and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2022 and 2021, are not necessarily indicative of the operating results for the full fiscal year or any future period, given the recent completion of the Asset Sale. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on April 1, 2022 (our “2021 Annual Report”).
Principles of Consolidation	The unaudited condensed consolidated financial statements include the accounts of CURE and its wholly-owned subsidiaries, collectively referred to as (“we”, “us”, “our” or the “Company”). All significant inter-company balances and transactions have been eliminated in consolidation. The development and production of the Company’s branded health, wellness, and beauty products in both the wellness industry represents the principal operations of the Company. Business acquisitions are included in the unaudited condensed consolidated financial statements from the date of the acquisition.
Going Concern and Management's Liquidity Plans	In accordance with the Financial Accounting Standards Board’s (“FASB”) standard on going concern, Accounting Standard Update, or ASU No. 2014-15, the Company assesses going concern uncertainty in its condensed consolidated financial statements to determine if it has sufficient cash, cash equivalents and working capital on hand, including marketable equity securities, and any available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued, which is referred to as the “look-forward period” as defined by ASU No. 2014-15. As part of this assessment, based on conditions that are known and reasonably knowable to the Company, it will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, and its ability to delay or curtail expenditures or programs, if necessary, among other factors. Based on this assessment, as necessary or applicable, the Company makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent the Company deems probable those implementations can be achieved and it has the proper authority to execute them within the look-forward period in accordance with ASU No. 2014-15. The accompanying unaudited condensed consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern. As of September 30, 2022, the Company had approximately $4.4 million of cash on hand, had an accumulated deficit of approximately $112.8 million and a working capital deficit of approximately $6.6 million. Our operating activities consume a portion of our cash resources. We anticipate that we will continue to incur operating losses and negative cash flows from operations as we execute our commercialization and development plans and strategic and business development initiatives. On July 22, 2022, CURE completed the sale of certain pharmaceutical assets pursuant to the asset purchase agreement, see Note 6 Discontinued Operations, for total consideration received at closing in the amount of $20.0 million, which consisted of (i) the cancellation of indebtedness owed by CURE to the Buyer in the amount of $4.15 million, (ii) a $2.0 million one-year note payable in the form of a secured promissory note, and (iii) the remainder in cash. The completion of the Asset Sale has had a positive impact on the Company’s liquidity position. However, the Company may need to complete additional equity or debt financings to fully execute its business plans and strategies. We have previously funded our operating losses primarily through the issuance of common stock and/or promissory notes and cash generated from our product sales. We anticipate that we will incur decreased operating losses and negative cash flows from operations as we execute on our commercialization and development plans and strategic and business development initiatives and with the elimination of overhead and operating expenses related to the Company’s pharmaceutical business segment that have been discontinued in connection with the Asset Sale. There can be no assurance however that the Company will be able to raise additional capital when needed, or at terms deemed acceptable, if at all.
Reclassifications	Certain reclassifications have been made to prior year’s consolidated financial statements to enhance comparability with the current year’s consolidated financial statements. These reclassifications had no effect on the previously reported net loss.
Use of Estimates	The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Management bases these estimates and assumptions upon historical experience, existing and known circumstances, authoritative accounting pronouncements, and other factors that management believes to be reasonable. In addition, the Company has considered the potential impact of the COVID-19 pandemic, as well as certain macroeconomic factors, including inflation, rising interest rates, and recessionary pressures, on its business and operations. Although the full impact of these factors are unknown and cannot be reasonably estimated, the Company believes it has made appropriate accounting estimates and assumptions based on the facts and circumstances available as of the reporting date. Significant areas requiring the use of management estimates include, but are not limited to, revenue recognition, the allowance for doubtful accounts, valuation of intangible assets and goodwill, depreciative and amortization useful lives, assumptions used to calculate the fair value of the contingent share consideration, stock based compensation, beneficial conversion features, warrant values, deferred taxes and the assumptions used to calculate derivative liabilities and fair values of the purchase price allocations and convertible promissory notes. Actual results could differ materially from such estimates under different assumptions or circumstances.
Cash and Cash Equivalents	The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. As of September 30, 2022 and December 31, 2021, the Company had no cash equivalents. The Company maintains its cash and cash equivalents in banks insured by the Federal Deposit Insurance Corporation in accounts that at times may be in excess of the federally insured limit of $250,000 per bank. The Company minimizes this risk by placing its cash deposits with major financial institutions. At September 30, 2022, the Company had $4.0 million in cash in excess of the federal insurance limit.
Investment in Associates	The Company follows Accounting Standards Codification (“ASC”) 325-20, “Cost Method Investments”
Accounts Receivable	Accounts receivable are generally unsecured. The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management’s evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote. Any future recoveries are applied against the allowance for doubtful accounts. At September 30, 2022 and December 31, 2021 management determined that an allowance of $0 and $0.1 million, respectively, were necessary.
Inventory	Inventory is stated at the lower of cost or net realizable value (“NRV”). NRV is the amount by which the estimated selling price of the product exceeds the sum of any additional costs expected to be incurred on the sale of such product in the ordinary course of business. The Company determines the cost of its inventory on a first-in, first-out basis. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period. In order to state the inventory at the lower of cost or NRV, we maintain reserves against individual stocking units. Inventory reserves, once established, are not reversed until the related inventories have been sold or scrapped. If future demand or market conditions are less favorable than our projections, a write-down of inventory may be required, and would be reflected in the cost of product sold in the period the revision is made.
Goodwill and intangible assets	Goodwill represents the excess of the purchase price over the fair value of net identifiable assets and liabilities. Goodwill is not amortized but is tested for impairment at least annually, or if circumstances indicate its value may no longer be recoverable. Qualitative factors considered in this assessment include industry and market conditions, overall financial performance, and other relevant events and factors affecting the Company’s business. Based on the qualitative assessment, if it is determined that the fair value of goodwill is more likely than not to be less than its carrying amount, the fair value of a reporting unit will be calculated and compared with its carrying amount and an impairment charge will be recognized for the amount that the carrying value exceeds the fair value The Company does not have intangible assets with indefinite useful lives other than goodwill and trademark. Impairment loss on goodwill included in the loss from disposal group amounted to $2.0 million and $4.7 million for the three and nine months ended September 30, 2022, respectively, and $0 for the three and nine months ended September 30 2021, respectively.
Business combinations	The results of businesses acquired in a business combination are included in the unaudited condensed consolidated financial statements from the date of acquisition. Purchase accounting results in assets and liabilities of an acquired business being recorded at their estimated fair values on the acquisition date. Any excess consideration over the value of the assets acquired and liabilities assumed is recognized as goodwill.
Impairment of Long-Lived Assets	Long-lived assets include equipment and intangible assets other than those with indefinite lives. We assess the carrying value of our long-lived asset groups when indicators of impairment exist and recognize an impairment loss when the carrying amount of a long-lived asset is not recoverable when compared to undiscounted cash flows expected to result from the use and eventual disposition of the asset. Indicators of impairment include significant underperformance relative to historical or projected future operating results, significant changes in our use of the assets or in our business strategy, loss of or changes in customer relationships and significant negative industry or economic trends. When indications of impairment arise for a particular asset or group of assets, we assess the future recoverability of the carrying value of the asset (or asset group) based on an undiscounted cash flow analysis. If carrying value exceeds projected, net, undiscounted cash flows, an additional analysis is performed to determine the fair value of the asset (or asset group), typically a discounted cashflow analysis, and an impairment charge is recorded for the excess of carrying value over fair value. Impairment loss on other intangibles amounted to $0 and $4.6 million for the three and nine months ended September 30, 2022, respectively, and $0 for the three and nine months ended September 30, 2021, respectively.
Contingent consideration liabilities	Certain of the Company’s business acquisitions involve the potential for future payment of consideration to former selling stockholders in amounts determined upon the attainment of revenue and gross margin milestones from product sales. The fair value of such liabilities is determined using unobservable inputs. These inputs include the estimated amount and timing of projected cash flows and the risk-adjusted discount rate used to present value the cash flows. These obligations are referred to as contingent consideration. ASC 805, “Business Combinations,” requires that contingent consideration be estimated and recorded at fair value as of the acquisition date as part of the total consideration transferred. Contingent consideration is an obligation of the acquirer to transfer additional assets or equity interests to the selling stockholders in the future if certain future events occur or conditions are met, such as: (i) the attainment of product development milestones; and/or (ii) the achievement of components of earnings, such as “earn-out” provisions or percentage of future revenue. The fair value of contingent consideration after the acquisition date is reassessed by the Company as changes in circumstances and conditions occur, with the subsequent change in fair value recorded in the consolidated statements of operations. Changes in key assumptions can materially affect the estimated fair value of contingent consideration liabilities and, accordingly, the resulting gain or loss is recorded in its unaudited condensed consolidated financial statements. See Note 19 – Business Combination for additional information.
Related Party	Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.
Revenue Recognition	The Company recognizes revenue in accordance with ASC 606, “Revenue Recognition.” Revenue under Topic 606 are required to be recognized either at a “point in time” or “over time,” depending on the facts and circumstances of the arrangement, and are evaluated using a five-step model. To achieve the core principle of Topic 606, we perform the following steps: · identify the contract(s) with customer; · identify the performance obligations in the contract; · determine the transactions price; · allocate the transactions price to the performance obligations in the contract; and · recognize revenue when (or as) we satisfy a performance obligation. Under Topic 606, the Company recognizes revenue as, or when, we satisfy performance obligations under a contract. We account for a contract when the parties approved the contract and are committed to perform on it, the rights of each party and the payment terms are identified, the contract has commercial substance and it is probable that we will collect substantially all of the consideration. A performance obligation is a promise in a contract to transfer a distinct good or service, or a series of distinct goods or services, to a customer. The transaction price of a contract must be allocated to each performance obligation and recognized as the performance obligation is satisfied. In essence, we recognize revenue when or as control of the promised goods or services transfer to the customer.
Sera Labs Revenue	Sera Labs recognizes revenue as, or when, we satisfy performance obligations under a contract. We account for a contract when the parties approved the contract and are committed to perform on it, the rights of each party and the payment terms are identified, the contract has commercial substance and it is probable that we will collect substantially all of the consideration. A performance obligation is a promise in a contract to transfer a distinct good or service, or a series of distinct goods or services, to a customer. The transaction price of a contract must be allocated to each performance obligation and recognized as the performance obligation is satisfied. In essence, we recognize revenue when or as control of the promised goods or services transfer to the customer. Revenue from eCommerce sales, including DTC sales, are recognized upon delivery of merchandise to the customer. We also elected to adopt the practical expedient related to shipping and handling fees which allows us to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as performance obligations. Therefore, shipping and handling activities are considered part of the Company’s obligation to transfer the products and therefore are recorded as direct selling expenses, as incurred. Shipping revenue is recorded upon delivery to the customer.
Practical Expedients and Exemptions	The Company has elected certain practical expedients and policy elections as permitted under ASC Topic 606 as follows: · the Company adopted the practical expedient related to not adjusting the promised amount of consideration for the effects of a significant financing component if the period between transfer of product and customer payment is expected to be less than one year at the time of contract inception; · the Company made the accounting policy election to exclude any sales and similar taxes from the transaction price; and · the Company adopted the practical expedient not to disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.
Sales Tax	The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods or services to a customer, excluding sales taxes. The net amount of sales tax payable to the taxation authority is included sales tax payable in the unaudited condensed consolidated balance sheets.
Sales Returns, Discounts and Warranties	Sales returns, discount and warranties are considered variable consideration under ASC 606. The Company reduces revenue for estimated future returns, discounts and warranties which may occur with distributors and retailers. When evaluating the adequacy of sales returns, discounts and warranties, the Company analyzes the following: historical credit allowances, current sell-through of inventory of the Company’s products, current trends in retail industry, changes in customer demand, acceptance of products, and other related factors.
Cost to Obtain a Contract	The Company pays sales commission to its employees and outside sales representatives for contracts that they obtain relating to the wholesale sales of our products. The Company applies the optional practical expedient to immediately expense costs to obtain a contract if the amortization period of the asset that would have been recognized is one year or less. As such, sales commissions are immediately recognized as an expense and included as part of sales and marketing expenses.
Contract Liabilities	Advance payments and billings in excess of revenue recognized represent contract liabilities and are recorded as deferred revenue when customers remit contractual cash payments in advance before satisfying performance obligations under contractual arrangements. Contract liabilities are derecognized when revenue is recognized, and the performance obligation is satisfied. Advance payments and billings in excess of revenue recognized are included in deferred revenue, which is classified as current or noncurrent based on the timing of when the Company expects to recognize revenue. At September 30, 2022 and December 31, 2021, we had contract liabilities of $0.4 million and $0.3 million, respectively. Contract liabilities is made up of the following as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Customer deposits for commercial products $ 388 $ 293 The following table summarizes the changes in contract liabilities during the nine months ended September 30, 2022 and year ended December 31, 2021 (in thousands): Balance at December 31, 2020 $ 994 Additions 435 Customer deposits returned (713 ) Transfers to revenue (208 ) Contract liabilities held for sale (215 ) Balance at December 31, 2021 293 Additions 26 Customer deposits returned (45 ) Transfers to revenue (84 ) Contract liabilities held for sale but not assumed 198 Balance at September 30, 2022 $ 388
Cost of Revenues	Cost of revenue primarily consists of costs for our products incurred to third-party manufacturers.
Advertising Expense	The Company expenses marketing, promotions and advertising costs as incurred. Such costs are included in general and administrative expense in the accompanying unaudited condensed consolidated statements of operations. The Company recorded advertising costs of $0.7 million and $1.4 million for the three and nine months ended September 30, 2022, respectively. The Company recorded advertising costs of $0.7 million and $2.2 million for the three and nine months ended September 30, 2021, respectively.
Research and Development	Costs incurred in connection with the development of new products and processes are charged to research and development expenses as incurred. The Company recorded research and development expenses of $0.03 million and $0.5 million for the three and nine months ended September 30, 2022, respectively. The Company recorded research and development expenses of $0.6 million and $1.9 million for the three and nine months ended September 30, 2021, respectively. Research and development expenses for 2022 and 2021 are presented as part of the loss from disposal group on the unaudited condensed consolidated statements of operations.
Income Taxes	The Company utilizes FASB ASC 740, “ Income Taxes The Company generated a deferred tax asset through net operating loss carry-forward. However, a valuation allowance of 100% has been established due to the uncertainty of the Company’s realization of the net operating loss carry forward prior to its expiration. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in response to the outbreak of a novel strain of the coronavirus, COVID-19. The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”). Under the CARES Act, net operating losses (“NOLs”) arising in tax years beginning after December 31, 2017, and before January 1, 2021 may be carried back to each of the five tax years preceding the tax year of such loss. Moreover, under the 2017 Tax Act as modified by the CARES Act, federal NOLs of our corporate subsidiaries generated in tax years ending after December 31, 2017 may be carried forward indefinitely, but the deductibility of federal NOLs, particularly for tax years beginning on or after January 1, 2021, may be limited. The accounting for the material income tax impacts has been reflected in the year ended December 31, 2021 financial statements. It is uncertain if and to what extent various states will conform to the 2017 Tax Act or the CARES Act. The Company is currently assessing the impact the CARES Act will have on the unaudited condensed consolidated financial statements.
Stock-Based Compensation	Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718, “Stock Compensation,” which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC 2018-07 (Topic 718) for share-based payments to employees, consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the grant date. For awards of restricted stock, the Company determines grant date fair value based on the closing price of the Company’s common stock on the grant date as reported on the over-the-counter market (the “OTC Market”). For awards of stock options, the Company uses the Black-Scholes option valuation model to estimate grant date fair value. Compensation expense is recognized for the portion of the award that is ultimately expected to vest over the period during which the recipient renders the required services to the Company generally using the straight-line single option method. See Note 17 – Stock Incentive Plans for additional information.
Fair Value Measurements	The Company follows FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements and establishes a framework for measuring fair value and expands disclosure about such fair value measurements. ASC 820 establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and expands on required disclosures about fair value measurement. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. ASC 820 describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following: · Level 1 – Quoted prices in active markets for identical assets and liabilities. · Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted market prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. When a part of the purchase consideration consists of shares of the Company common stock, the Company calculates the purchase price attributable to those shares, a Level 1 security, by determining the fair value of those shares quoted on the OTC Market as of the acquisition date. The Company recognizes estimated fair values of the tangible assets and identifiable intangible assets acquired, including in-process research and development, and liabilities assumed, including any contingent consideration, as of the acquisition date. Goodwill is recognized as any amount of the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed in excess of the consideration transferred. ASC 805 precludes the recognition of an assembled workforce as an asset, effectively subsuming any assembled workforce value into goodwill. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, and also considers counterparty credit risk in its assessment of fair value. At September 30, 2022 and December, 31, 2021, the Company had no financial assets or liabilities recorded at fair value on a recurring basis, except for the Series A and B Notes, for which we elected the fair value option, and the contingent stock consideration. These liabilities are measured at fair value using the period-end quoted market prices of the Company’s common stock as a Level 3 input. The Company also has certain derivative liabilities and contingent consideration liabilities which are carried at fair value based on Level 3 inputs. The carrying amounts of cash equivalents, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate fair values because of the short-term nature of these items. The fair value of contingent stock consideration is evaluated each reporting period using projected financial information, discount rates, and key inputs. Projected contingent payment amounts are discounted back to the current period using a discount rate. Financial information is based on the Company’s most recent internal forecasts. Changes in projected financial information, the Company’s stock price, discount rate and time for settlement of milestones and earnouts may result in higher or lower fair value measurements. Increases (decreases) in any of those inputs in isolation may result in a significantly lower (higher) fair value measurement. For the period from the date of acquisition to September 30, 2022, the Company’s stock price, volatility percentage and the weighted average present value probability of each the various estimates of milestones, earn-out amounts and achievements being accomplished resulted in a decrease of the fair value of the contingent stock consideration. For the period from the December 31, 2021 to September 30, 2022, the Company’s stock price, volatility percentage and the weighted average present value probability of each the various estimates of milestones, earn-out amounts and achievements being accomplished resulted in a decrease of the fair value of the contingent stock consideration. In determining the fair value, the Company evaluated each of the target threshold scenarios as to the potential earn-out payment at each level based on the estimated net sales and gross profit. If the expected gross profit considered in the scenario with the lowest gross profit is less than $6.0 million during the Clawback Period, the value of the stock earn-out payment would be $0. However, if the expected gross profit during the Clawback Period was at least $8.0 million (and the net sales target is achieved), the value of the stock earn-out payment would be approximately $2.8 million. The Company has elected the fair value option to account for the Series A and B Notes that were issued on October 30, 2020 and records this at fair value with changes in fair value recorded in the condensed consolidated statements of operations. As a result of applying the fair value option, direct costs and fees related to the Series A and B Notes are recognized in earnings as incurred and not deferred. As of September 30, 2022, the Company has valued the Series A and B notes without consideration of the terms under an existing default. This was evaluated by the Company’s management and their third-party valuation firm. In light of the forbearance agreement, litigation filed by the Company, and communications between the Company and the Investor the likelihood of settlement under those terms was considered remote. The following table summarizes fair value measurements by level at September 30, 2022 for assets and liabilities measured at fair value on a recurring basis (in thousands): Total Level 1 Level 2 Level 3 Fair value of contingent stock consideration $ 917 $ - $ - $ 917 Fair value of Series A Note $ 3,136 $ - $ - $ 3,136 Fair value of Series B Note $ 6,848 $ - $ - $ 6,848 The following table summarizes fair value measurements by level at December 31, 2021 for assets and liabilities measured at fair value on a recurring basis (in thousands): Total Level 1 Level 2 Level 3 Fair value of contingent stock consideration $ 1,430 $ - $ - $ 1,430 Fair value of Series A Note $ 3,075 $ - $ - $ 3,075 Fair value of Series B Note $ 6,857 $ - $ - $ 6,857 The following table summarizes the changes in Level 3 financial instruments during the nine months ended September 30, 2022 (in thousands): Fair value at December 31, 2021 $ 9,932 Change in fair value of Series A Note 61 Change in fair value of Series B Note 657 Conversion of Series B Note (666 ) Fair value of Series A and B Notes at September 30, 2022 $ 9,984 Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Series A and B Notes are measured at fair value using the Monte Carlo simulation valuation methodology. A summary of the weighted average (in aggregate) significant unobservable inputs used in measuring the Series A and B Notes that are categorized within Level 3 of the fair value hierarchy is as follows: Date of valuation September 30, 2022 December 31, 2021 Stock price $ 0.26 $ 0.36 Conversion price $ 1.32 $ 1.32 Term (in years) – Series A Note 0.08 0.83 Term (in years) – Series B Note 0.08 0.13 Volatility – Series A Note 70 % 85 % Volatility – Series B Note 70 % 65 % Risk-free interest rate – Series A Note 2.75 % 0.32 % Risk-free interest rate – Series B Note 2.75 % 0.06 % Interest rate 18 % 18 % The Company recorded a loss of $0.4 million and $0.7 million due to the change in fair value of Series A and B Notes for the three and nine months ended September 30, 2022 and a gain of $0.8 million and $1.1 million due to the change in fair value of Series A and B convertible notes for the three and nine months ended September 30, 2021.
Series A and B Notes	The Company has elected the fair value option to record its Series A and B Notes, which were issued in October 2020. The fair value of the Series A and B Notes is classified within Level 3 of the fair value hierarchy because the fair values were estimated utilizing a Monte Carlo simulation model. Accordingly, the Series A and B Notes are marked-to-market at each reporting date with the change in fair value reported as a gain (loss) in the unaudited condensed consolidated statement of operations. All issuance costs related to the notes were expensed as incurred in the unaudited condensed consolidated statement of operations. See Note 15 – Convertible Promissory Notes and Fair Value of Convertible Promissory Notes for additional information.
Contingencies	We are exposed to claims and litigation arising in the ordinary course of business and use various methods to resolve these matters in a manner that we believe serves the best interest of our stockholders and other constituents. When a loss is probable, we record an accrual based on the reasonably estimable loss or range of loss. When no point of loss is more likely than another, we record the lowest amount in the estimated range of loss and, if material, disclose the estimated range of loss. We do not record liabilities for reasonably possible loss contingencies, but do disclose a range of reasonably possible losses if they are material and we are able to estimate such a range. If we cannot provide a range of reasonably possible losses, we explain the factors that prevent us from determining such a range. Historically, adjustments to our estimates have not been material. We believe the recorded reserves in our unaudited condensed consolidated financial statements are adequate in light of the probable and estimable liabilities. We do not believe that any of these identified claims or litigation will be material to our results of operations, cash flows, or financial condition. Gain contingencies are recorded when the ultimate resolution of the contingency is resolved.
Net Loss per Common Share	Basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period, excluding any unvested restricted stock awards. Diluted net loss per share is computed by dividing net loss by the weighted average common shares outstanding during the period plus dilutive securities or other contracts to issue common stock as if these securities were exercised or converted to common stock. Diluted net loss per share includes the effect of common stock equivalents (stock options, unvested restricted stock, and warrants) when, under either the treasury or if-converted method, such inclusion in the computation would be dilutive. Net loss is adjusted for the dilutive effect of the change in fair value liability for price adjustable warrants, if applicable. The following table sets forth the computation of basic and diluted net loss per share for the three and nine months ended (in thousands, except per share data): For the Three Months Ended For the Nine Months Ended (Dollars in thousands) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Loss from continuing operations $ (2,909 ) $ (3,307 ) $ (11,396 ) $ (6,152 ) Loss from disposal group (684 ) (1,036 ) (6,967 ) (2,683 ) Net loss $ (3,593 ) $ (4,343 ) $ (18,363 ) $ (8,835 ) Weighted average outstanding shares of common stock 70,686,677 62,174,822 69,808,785 49,294,190 Common stock and common stock equivalents 70,686,677 62,174,822 69,808,785 49,294,190 Basic and diluted loss per share: Continuing operations $ (0.04 ) $ (0.05 ) $ (0.16 ) $ (0.12 ) Disposal group $ (0.01 ) $ (0.02 ) $ (0.10 ) $ (0.05 ) The following number of shares have been excluded from diluted net income (loss) since such inclusion would be anti-dilutive: Nine months ended September 30, 2022 2021 Vested stock options from the Company’s 2017 Equity Incentive Plan 3,173,469 3,845,124 Warrants 615,530 1,565,447 Shares to be issued upon conversion of convertible payable 115,047 115,047 Total 3,904,046 5,525,618 In connection with the Sera Labs Merger, Sera Labs security holders are also entitled to receive up to 5,988,024 shares of the Company’s common stock (the “Clawback Shares”) based on the achievement of certain sales and gross margin milestones. Due to the uncertainty of the number of Clawback Shares to be issued, these Clawback Shares were not included in the table above. The Series A and B Notes (other than restricted amounts under a Series B Note) are convertible, at the option of the Investor, into shares of Common Stock at a conversion price of $1.32 per share. The conversion price is subject to full ratchet antidilution protection upon any transaction in which the Company is deemed to have granted, issued or sold, any shares of Common Stock. If the Company enters into any agreement to issue any variable rate securities, other than a bona fide at-the-market offering or equity line of credit, the Investor has the additional right to substitute such variable price (or formula) for the conversion price. If an Event of Default has occurred under the Convertible Notes, the Investor may elect to alternatively convert the Convertible Notes at the redemption premium described therein. Due to the uncertainty of the number of shares to be issued, the shares to be issued from the conversion of the Series A and B Notes were also not included in the table above.
Segment Reporting	The Company uses the “management approach” to identify its reportable segments. The management approach designates the internal organization used by management for making operating decisions and assessing performance as the basis for identifying the Company’s reportable segments. Using the management approach, the Company determined that it does not have reportable segments.
Recent Accounting Pronouncements Not Yet Adopted	ASU 2022-02 In March 2022, the FASB issued ASU 2022-02, “Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures” (“ASU 2022-02”). These amendments eliminate the TDR recognition and measurement guidance and enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU 2022-02 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we do not expect ASU 2022-02 to have an impact to our unaudited condensed consolidated financial statements. ASU 2022-01 In March 2022, the FASB issued ASU 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging-Portfolio Layer Method” (“ASU 2022-01”). ASU 2022-01 expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method and will become effective for us in the first quarter of fiscal year 2023 and early adoption is permitted. As of September 30, 2022, we do not expect ASU 2022-01 to have an impact to our unaudited condensed consolidated financial statements. Other accounting standard updates effective for interim and annual periods beginning after December 31, 2021 are not expected to have a material impact on the Company’s financial condition, results of operations or cash flows. There are various other updates recently issued, however, they are not expected to a have a material impact on the Company’s unaudited condensed consolidated financial position, results of operations or cash flows.

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	Sep. 30, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Schedule of contract liabilities	September 30, 2022 December 31, 2021 Customer deposits for commercial products $ 388 $ 293
Summary of changes in contract liabilities	Balance at December 31, 2020 $ 994 Additions 435 Customer deposits returned (713 ) Transfers to revenue (208 ) Contract liabilities held for sale (215 ) Balance at December 31, 2021 293 Additions 26 Customer deposits returned (45 ) Transfers to revenue (84 ) Contract liabilities held for sale but not assumed 198 Balance at September 30, 2022 $ 388
Summary of fair value measurements of assets and liabilities	Total Level 1 Level 2 Level 3 Fair value of contingent stock consideration $ 917 $ - $ - $ 917 Fair value of Series A Note $ 3,136 $ - $ - $ 3,136 Fair value of Series B Note $ 6,848 $ - $ - $ 6,848 Total Level 1 Level 2 Level 3 Fair value of contingent stock consideration $ 1,430 $ - $ - $ 1,430 Fair value of Series A Note $ 3,075 $ - $ - $ 3,075 Fair value of Series B Note $ 6,857 $ - $ - $ 6,857
Schedule of asets and liabilities measured at fair value	Fair value at December 31, 2021 $ 9,932 Change in fair value of Series A Note 61 Change in fair value of Series B Note 657 Conversion of Series B Note (666 ) Fair value of Series A and B Notes at September 30, 2022 $ 9,984
Schedule of financial instruments	Date of valuation September 30, 2022 December 31, 2021 Stock price $ 0.26 $ 0.36 Conversion price $ 1.32 $ 1.32 Term (in years) – Series A Note 0.08 0.83 Term (in years) – Series B Note 0.08 0.13 Volatility – Series A Note 70 % 85 % Volatility – Series B Note 70 % 65 % Risk-free interest rate – Series A Note 2.75 % 0.32 % Risk-free interest rate – Series B Note 2.75 % 0.06 % Interest rate 18 % 18 %
Schedule of basic and diluted loss per share	For the Three Months Ended For the Nine Months Ended (Dollars in thousands) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Loss from continuing operations $ (2,909 ) $ (3,307 ) $ (11,396 ) $ (6,152 ) Loss from disposal group (684 ) (1,036 ) (6,967 ) (2,683 ) Net loss $ (3,593 ) $ (4,343 ) $ (18,363 ) $ (8,835 ) Weighted average outstanding shares of common stock 70,686,677 62,174,822 69,808,785 49,294,190 Common stock and common stock equivalents 70,686,677 62,174,822 69,808,785 49,294,190 Basic and diluted loss per share: Continuing operations $ (0.04 ) $ (0.05 ) $ (0.16 ) $ (0.12 ) Disposal group $ (0.01 ) $ (0.02 ) $ (0.10 ) $ (0.05 )
Schedule of asets and liabilities measured at fair value	Nine months ended September 30, 2022 2021 Vested stock options from the Company’s 2017 Equity Incentive Plan 3,173,469 3,845,124 Warrants 615,530 1,565,447 Shares to be issued upon conversion of convertible payable 115,047 115,047 Total 3,904,046 5,525,618

ACCOUNTS RECEIVABLE (Tables)

ACCOUNTS RECEIVABLE (Tables)	9 Months Ended
	Sep. 30, 2022
ACCOUNTS RECEIVABLE
Schedule of accounts receivable	September 30, 2022 December 31, 2021 Customer billed $ 460 $ 437 Allowance for doubtful accounts - (80 ) Accounts receivable, net $ 460 $ 357

PREPAID EXPENSES AND OTHER ASSE

PREPAID EXPENSES AND OTHER ASSETS (Tables)	9 Months Ended
	Sep. 30, 2022
PREPAID EXPENSES AND OTHER ASSETS (Tables)
Schedule of prepaid expenses and other assets	September 30, 2022 December 31, 2021 Prepaid insurance $ 91 $ 302 Prepaid deposits for inventory - 89 Prepaid expenses 359 10 Other current assets 58 46 Prepaid expenses and other current assets $ 508 $ 447

INVENTORY (Tables)

INVENTORY (Tables)	9 Months Ended
	Sep. 30, 2022
INVENTORY (Tables)
Schedule of inventory	September 30, 2022 December 31, 2021 Finished Goods $ 750 $ 730 Reserve for obsolescence (110 ) (109 ) Total inventory $ 640 $ 621

DISCOUNTINUED OPERATIONS (Table

DISCOUNTINUED OPERATIONS (Tables)	9 Months Ended
	Sep. 30, 2022
Unaudited Condensed Consolidated Statements of Operations
Schedule of net cash received from the Asset Sale	Sales price $ 20,000 Forgiveness of Buyer advances (4,150 ) Holdback secured by promissory note (2,000 ) Obligations assumed by Buyer (41 ) Buyer expenses paid by seller 82 Net cash received $ 13,891
Schedule of net loss incurred from the Asset Sale	Sales price for assets sold $ 20,000 Net book value of assets sold 20,616 Net book value of liabilities sold (51 ) Net book value of net assets sold 20,565 Loss on sale of net assets $ (565 )
Schedule of aggregate carrying amounts of assets and liabilities held for sale	December 31, 2021 Carrying amounts of assets included as part of assets held for sale: Inventory, net $ 243 Prepaid expenses and other assets 97 Property and equipment, net 1,837 Finance lease right-of-use assets, net 40 Goodwill, net 9,178 Intellectual property and patents, net 14,401 In-process research and development, net 329 Other assets 35 Total assets classified as assets held for sale in the unaudited condensed consolidated balance sheet $ 26,160 Carrying amounts of liabilities included as part of liabilities held for sale: Accrued expenses $ 268 Finance lease payable 40 Contract liabilities 215 Total liabilities classified as liabilities held for sale in the unaudited condensed consolidated balance sheet $ 523
Schedule of financial results of the pharmaceutical segment	For the Three Months Ended For the Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Revenue: Product sales, net of discounts and refunds $ - $ 16 $ 108 $ 151 Consulting research & development income - - 58 52 Shipping and other sales - 18 40 57 Total revenue - 34 206 260 Cost of goods sold: Cost of goods sold - 75 75 256 Gross profit - (41 ) 131 4 Operating expenses: Research and development expenses 28 601 492 1,944 Selling, general and administrative expenses 91 394 1,313 743 Loss on disposition 565 - 565 - Impairment of goodwill - - 4,728 - Total operating expenses 684 995 6,533 2,687 Net loss before income taxes (684 ) (1,036 ) (6,967 ) (2,683 ) Provision for income taxes - - - - Net loss $ (684 ) $ (1,036 ) $ (6,402 ) $ (2,683 )

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)	9 Months Ended
	Sep. 30, 2022
PROPERTY AND EQUIPMENT
Schedule of property and equipment, net	September 30, 2022 December 31, 2021 Computer and other equipment $ 7 $ 7 Less accumulated depreciation (4 ) (3 ) Property and Equipment, net $ 3 $ 4

NOTES RECEIVABLE (Tables)

NOTES RECEIVABLE (Tables)	9 Months Ended
	Sep. 30, 2022
NOTES RECEIVABLE
Schedule of note receivable	September 30, 2022 December 31, 2021 Biopharmaceutical Research Company $ 200 $ 200 TF Tech Ventures, LLC 2,000 - Less: Allowance for doubtful accounts - - Current portion of notes receivable, net (2,200 ) - Notes receivable, net of current portion $ - $ 200

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS (Tables)	9 Months Ended
	Sep. 30, 2022
GOODWILL AND INTANGIBLE ASSETS
Schedule of intangible assets, net	September 30, 2022 December 31, 2021 Goodwill $ 4,690 $ 4,690 Intangible assets subject to amortization: Customer relationships - 7,110 Trade name 2,613 2,610 Non-compete agreements 462 462 3,075 10,182 Accumulated amortization (1,776 ) (2,885 ) Customer relationships, Trade name, Non-compete agreements, net $ 1,299 $ 7,297 Intellectual property and patents $ 316 $ 316 Accumulated amortization (68 ) (55 ) Intellectual property and patents, net $ 248 $ 261
Schedule of future amortization expense	2022 (remaining) $ 169 2023 675 2024 512 2025 23 2026 18 2027 17 Thereafter 133 Total Amortization $ 1,547

INVESTMENT (Tables)

INVESTMENT (Tables)	9 Months Ended
	Sep. 30, 2022
INVESTMENT
Schedule of investment	September 30, 2022 December 31, 2021 Investment in ReLeaf Europe B.V. $ 566 $ 566 Valuation reserve (350 ) (350 ) Investment, net $ 216 $ 216

ACCRUED EXPENSES (Tables)

ACCRUED EXPENSES (Tables)	9 Months Ended
	Sep. 30, 2022
ACCRUED EXPENSES (Tables)
Schedule of accrued expenses	September 30, 2022 December 31, 2021 Accounts payable $ 14 $ 1,722 Refunds and returns liability 5 445 Accrued interest expense 222 390 Accrued payroll - 178 Accrued vacation leave 60 173 Accrued expenses 813 243 Sales tax payable 317 334 Accrued Expenses $ 1,431 $ 3,485

LOANS PAYABLE (Tables)

LOANS PAYABLE (Tables)	9 Months Ended
	Sep. 30, 2022
LOANS PAYABLE
Schedule of loan Payable	September 30, 2022 December 31, 2021 Loan due September 29, 2022, monthly payments including interest at 4.32% per annum; unsecured $ - $ 195 Loan due June 6, 2022, monthly payments including interest at 4.42% per annum; unsecured - 40 Loan due June 6, 2023, monthly payments including interest at 8.07% per annum; unsecured 38 - Current portion of loan payable (38 ) (235 ) Loan payable, less current portion $ - $ -

NOTES PAYABLE (Tables)

NOTES PAYABLE (Tables)	9 Months Ended
	Sep. 30, 2022
PREPAID EXPENSES AND OTHER CURRENT ASSETS
Schedule of notes payable	September 30, 2022 December 31, 2021 Note to an individual, non-interest bearing, unsecured and due on demand $ - $ 50 Secured Promissory note to a company originally due June 30, 2022; interest at 10% per annum payable at maturity - 270 Secured Promissory note to a company originally due May 18, 2021 due June 30, 2022; interest at 10% per annum payable at maturity - 540 Secured Promissory note to a company originally due January 13, 2022 was due June 30, 2022; interest at 10% per annum payable at maturity - 500 Secured promissory notes to a company originally due April 8, 2022 and October 30, 2021 was rolled into a new secured promissory notes now due June 30, 2022; interest at 10% per annum payable at maturity - 502 Secured promissory note to a company due May 31, 2022; interest at 10% per annum payable at maturity - 300 Secured promissory note to a company due May 31, 2022; interest at 10% per annum payable at maturity - 100 Promissory notes to a company, non-interest bearing; due on demand - 415 Secured promissory notes to a company originally due June 30, 2022; interest at 10% per annum payable at maturity - 200 Secured promissory notes to a company originally due June 30, 2022; interest at 10% per annum payable at maturity - Current portion of note payable $ - $ 2,877

CONVERTIBLE PROMISSORY NOTES _2

CONVERTIBLE PROMISSORY NOTES AND FAIR VALUE OF CONVERTIBLE PROMISSORY NOTES (Tables)	9 Months Ended
	Sep. 30, 2022
RELATED PARTY TRANSACTIONS
Schedule of convertible promissory notes	September 30, 2022 December 31, 2021 Convertible promissory notes due January 31, 2019, interest payable at 8% per annum; unsecured; principal and accrued interest convertible into common stock at the lower of $1.32 per share (the price per share of the latest closing of a debt or equity offering by the Company greater than $3.0 million); accrued interest due January 31, 2019 and currently in default. The Company has offered to either repay the notes or convert them into shares of common stock of the Company. The beneficial owners of the notes have not yet communicated their intent to either receive payment or shares. $ 550 $ 550 Current portion of convertible promissory notes $ 550 $ 550
Schedule of Fair value of convertible promissory notes	September 30, 2022 December 31, 2021 Series A subordinated convertible note at fair value $ 3,136 $ 3,074 Series B subordinated convertible note at fair value 11,848 11,858 Total convertible promissory notes 14,984 14,932 Less: Investor Note offset – Series B Note (5,000 ) (5,000 ) Carrying value of convertible promissory notes at fair value 9,984 9,932 Less: current portion of convertible promissory notes at fair value (9,984 ) (9,932 ) Convertible promissory notes, less current portion $ - $ -

WARRANT AGREEMENTS (Tables)

WARRANT AGREEMENTS (Tables)	9 Months Ended
	Sep. 30, 2022
WARRANT AGREEMENTS
Schedule of change in warrant	Warrants Weighted Average Exercise Price Weighted Average Contractual Remaining Life (years) Outstanding, December 31, 2020 2,479,849 $ 1.86 1.23 Granted - - - Exercised (96,250 ) 1.00 - Forfeited/Expired (818,152 ) 1.58 - Outstanding, December 31, 2021 1,565,447 $ 2.18 0.66 Granted - - - Exercised - - - Forfeited/Expired (949,917 ) 2.31 - Outstanding, September 30, 2022 615,530 $ 1.99 0.75 Exercisable at September 30, 2022 615,530 $ 1.99 0.75
Schedule of warrant summary	Range of Exercise Price Number of Warrants Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Number of Warrants Exercisable Weighted Average Exercise Price $ 1.98–$2.00 615,530 0.75 $ 1.99 615,530 $ 1.99 615,530 0.75 $ 1.99 615,530 $ 1.99 Range of Exercise Price Number of Warrants Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Number of Warrants Exercisable Weighted Average Exercise Price $ 1.98–$2.31 1,565,447 0.66 $ 2.18 1,565,447 $ 2.18 1,565,447 0.66 $ 2.18 1,565,447 $ 2.18

STOCK INCENTIVE PLANS (Tables)

STOCK INCENTIVE PLANS (Tables)	9 Months Ended
	Sep. 30, 2022
STOCK INCENTIVE PLANS
Schedule of stock option activity	Options Weighted Average Exercise Price Weighted Average Contractual Remaining Life (years) Outstanding, December 31, 2020 6,285,792 $ 1.52 8.86 Granted 1,555,526 0.95 9.25 Exercised - - - Forfeited/Expired (611,250 ) 0.97 - Outstanding, December 31, 2021 7,230,068 $ 1.45 8.27 Granted 200,000 0.34 9.81 Exercised - - - Forfeited/Expired (2,067,519 ) 1.44 - Outstanding, September 30, 2022 5,362,549 $ 1.41 7.62 Exercisable at September 30, 2022 3,173,469 $ 1.55 7.13 Range of Exercise Price Number of Awards Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Number of Awards Exercisable Weighted Average Exercise Price $0.34 - $4.01 5,362,549 7.62 $ 1.41 3,173,469 $ 1.55 5,362,549 7.62 $ 1.41 3,173,469 $ 1.55
Weighted-average fair value of options granted	September 30, 2022 September 30, 2021 Significant assumptions (weighted-average): Risk-free interest rate at grant date 2.75 % - % Expected stock price volatility 70.0 % - % Expected dividend payout - - Expected option life (in years) 7 - Expected forfeiture rate 0 % - %
Schedule of non-vested restricted award shares	Restricted Stock Shares Weighted Average Grant Date Fair Value Non-vested, December 31, 2020 50,000 $ 1.60 Granted 338,443 1.20 Vested (338,443 ) 1.26 Forfeited/Expired - - Non-vested, December 31, 2021 - - Granted 921,664 0.31 Vested (921,664 ) 0.31 Forfeited/Expired - - Non-vested, September 30, 2022 - $ -
Schedule of restricted stock unit	Restricted Stock Units Weighted Average Grant Date Fair Value Outstanding, December 31, 2020 431,578 $ 1.33 Granted 629,338 0.74 Vested (411,027 ) 1.33 Forfeited/Expired (61,654 ) 1.33 Outstanding, December 31, 2021 588,235 $ 0.70 Granted 1,351,688 0.29 Vested (588,235 ) 0.70 Forfeited/Expired - - Outstanding, September 30, 2022 1,351,688 $ 0.29

BUSINESS COMBINATION (Tables)

BUSINESS COMBINATION (Tables)	9 Months Ended
	Sep. 30, 2022
BUSINESS COMBINATION
Schedule of Sera labs net contingent share consideration	(Dollars in thousands) Fair Value of Contingent Stock Consideration Fair value at December 31, 2021 $ 1,430 Fair value at September 30, 2022 917 Net change in fair value for the nine months ended September 30, 2022 $ (513 )

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	9 Months Ended
	Sep. 30, 2022
Commitments and contingencies (see Note 21)
Schedule of future lease payments	Years 2022 (remaining) $ 33 2023 138 2024 46 Undiscounted cash flow 217 Effects of discounting (18 ) Lease liabilities recognized $ 199
Schedule of operating and financing leases	September 30, 2022 December 31, 2021 Operating leases Right-of-use assets, net $ 186 $ 257 Right-of-use lease liabilities, current $ 118 $ 104 Right-of-use lease liabilities, noncurrent 81 174 Total operating lease liabilities $ 199 $ 278 Weighted average remaining lease term Operating leases 1.58 years 2.29 years Weighted average discount rate Operating leases 11.30 % 11.30 %

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Customer deposits for commercial products	$ 388	$ 293

SUMMARY OF SIGNIFICANT ACCOUN_5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Contract liabilities beginning balance	$ 293,000	$ 994,000
Additions	26,000	435,000
Customer deposits returned	(45,000)	(713,000)
Transfers to revenue	(84,000)	(208,000)
Contract liabilities held for sale		(215,000)
Contract liabilities held for sale but not assumed	198,000
Contract liabilities ending balance	$ 388,000	$ 293

SUMMARY OF SIGNIFICANT ACCOUN_6

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair value of contingent stock consideration	$ 917	$ 1,430
Fair value of Series A Note	3,136	3,075
Fair value of Series B Note	6,848	6,857
Fair Value, Inputs, Level 3 [Member]
Fair value of contingent stock consideration	917	1,430
Fair value of Series A Note	3,136	3,075
Fair value of Series B Note	6,848	6,857
Fair Value, Inputs, Level 1 [Member]
Fair value of contingent stock consideration	0	0
Fair value of Series A Note	0	0
Fair value of Series B Note	0	0
Fair Value, Inputs, Level 2 [Member]
Fair value of contingent stock consideration	0	0
Fair value of Series A Note	0	0
Fair value of Series B Note	$ 0	$ 0

SUMMARY OF SIGNIFICANT ACCOUN_7

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3)	9 Months Ended
	Sep. 30, 2022 USD ($)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Beginning balance	$ 9,932,000
Change in fair value of Series A Note	61,000
Change in fair value of Series B Notes	657,000
Conversion of Series B Notes	(666,000)
Ending balance	$ 9,984

SUMMARY OF SIGNIFICANT ACCOUN_8

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Stock price	$ 0.26	$ 0.36
Conversion price	$ 1.32	$ 1.32
Interest Rate	18%	18%
Series A Note [Member]
Risk-free interest rate	2.75%	0.32%
Volatility	70%	85%
Term	29 days	9 months 29 days
Series B Note [Member]
Risk-free interest rate	2.75%	0.06%
Volatility	70%	65%
Term	29 days	1 month 17 days

SUMMARY OF SIGNIFICANT ACCOUN_9

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 5) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Loss from continuing operations	$ (2,909)	$ (3,307)	$ (11,396)	$ (6,152)
Loss from disposal group	(684)	(1,036)	(6,967)	(2,683)
Net income (loss) attributable to the Company	$ (3,593)	$ (4,343)	$ (18,363)	$ (8,835)
Weighted average outstanding shares of common stock	70,686,677	62,174,822	69,808,785	49,294,190
Common stock and common stock equivalents	70,686,677	62,174,822	69,808,785	49,294,190
Income (loss) per share:
Continuing operations	$ (0.04)	$ (0.16)	$ (0.05)	$ (0.12)
Disposal group	$ (0.01)	$ (0.10)	$ (0.02)	$ (0.05)

SUMMARY OF SIGNIFICANT ACCOU_10

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 6) - shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Vested stock options from the company's 2017 Equity Incentive plan	3,173,469	3,845,124
Warrants	615,530	1,565,447
Shares to be issued upon conversion of convertible notes	115,047	115,047
Total	3,904,046	5,525,618

SUMMARY OF SIGNIFICANT ACCOU_11

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Jul. 22, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Impairment loss		$ 0	$ 0	$ 4,600,000	$ 0
Clawback expected gross profit				8,000,000
Cash		4,400,000		4,400,000
Goodwill impairment loss		2,000,000	0	4,700,000	0
Accumulated deficit		(112,800,000)		(112,800,000)
Allowance for doubtful accounts		0		0		$ 1,000
Research and development		30,000	600,000	500,000	1,900,000
Contract liabilities		$ 400,000		$ 400,000		$ 300,000
Maximum share receivale upon achievement of certain sales milestones		5,988,024		5,988,024
Common Stock conversion price				$ 1.32
Advertising costs		$ 700,000	700,000	$ 1,400,000	2,200,000
Gain (loss) from change in fair value of Series A and B convertible notes		$ 400,000	800,000	$ 700,000	1,100,000
Valuation allowance percentage		100%		100%
Asset purchase agreement Description	total consideration paid at closing in the amount of $20.0 million, which consisted of (i) the cancellation of indebtedness owed by CURE to the Buyer in the amount of $4.15 million, (ii) a $2.0 million one-year note payable in the form of a secured promissory note, and (iii) the remainder in cash.
Working capital deficit		$ 6,600,000		$ 6,600,000
FDIC insured amount		250,000		250,000
Excess in FDIC insured amount		4,000,000		4,000,000
Gross profit		1,428,000	$ 914,000	3,140,000	$ 3,210,000
Gross profit
Gross profit				6,000,000
Cash [Member]
Cash		$ 50,000		$ 50,000

ACCOUNTS RECEIVABLE (Details)

ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
ACCOUNTS RECEIVABLE (Details)
Customer billed	$ 460	$ 437
Allowance for doubtful accounts	0	(80)
Accounts receivable, net	$ 460	$ 357

PREPAID EXPENSES AND OTHER AS_2

PREPAID EXPENSES AND OTHER ASSETS (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
ACCOUNTS RECEIVABLE (Details)
Prepaid insurance	$ 91	$ 302
Prepaid deposit for inventory	0	89
Prepaid expenses	359	10
Other assets	58	46
Total Prepaid expenses and other assets	$ 508	$ 447

INVENTORY (Details)

INVENTORY (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
INVENTORY (Tables)
Finished Goods	$ 750	$ 730
Reserve for Obsolescence	(110)	(109)
Total inventory	$ 640	$ 621

INVENTORY (Details Narrative)

INVENTORY (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
INVENTORY (Tables)
Inventory reserves	$ 102	$ 173	$ 108	$ 176

DISCONTINUED OPERATIONS (Detail

DISCONTINUED OPERATIONS (Details) $ in Thousands	1 Months Ended
	Jul. 22, 2022 USD ($)
DISCONTINUED OPERATIONS (Details)
Sales price	$ 20,000
Forgiveness of Buyer advances	(4,150)
Holdback secured by promissory note	(2,000)
Obligations assumed by Buyer	(41)
Buyer expenses paid by seller	82
Net cash received	$ 13,891

DISCONTINUED OPERATIONS (Deta_2

DISCONTINUED OPERATIONS (Details 1) $ in Thousands	1 Months Ended
	Jul. 22, 2022 USD ($)
DISCONTINUED OPERATIONS (Details)
Sales price for assets sold	$ 20,000
Net book value of assets sold	20,616
Net book value of liabilities sold	(51)
Loss on sale of net assets	(565)
Net book value of net assets sold	$ 20,565

DISCONTINUED OPERATIONS (Deta_3

DISCONTINUED OPERATIONS (Details 2) $ in Thousands	Dec. 31, 2021 USD ($)
Carrying amounts of assets included as part of assets held for sale
Inventory, net	$ 243
Prepaid expenses and other assets	97
Property and equipment, net	1,837
Finance lease right-of-use assets, net	40
Goodwill, net	9,178
Intellectual property and patents, net	14,401
In-process research and development, net	329
Other assets	35
Total assets classified as assets held for sale in the unaudited condensed consolidated balance sheet	26,160
Carrying amounts of liabilities included as part of liabilities held for sale:
Accrued expenses	268
Finance lease payable	40
Contract liabilities	215
Total liabilities classified as liabilities held for sale in the unaudited condensed consolidated balance sheet	$ 523

DISCONTINUED OPERATIONS (Deta_4

DISCONTINUED OPERATIONS (Details 3) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue:
Product sales, net of discounts and refunds	$ 0	$ 16,000	$ 108,000	$ 151,000
Consulting research & development income	0	0	58,000	52,000
Shipping and other sales	0	18,000	40,000	57,000
Total revenues	0	34,000	206,000	260,000
Cost of goods sold:
Cost of goods sold	0	75,000	75,000	256,000
Gross profit (loss)	0	(41,000)	131,000	4,000
Operating expenses:
Research and development expenses	28,000	601,000	492,000	1,944,000
Selling, general and administrative expenses	91,000	394,000	1,313,000	743,000
Loss on disposition	565	0	565	0
Impairment of goodwill	0	0	4,728,000	0
Total operating expenses	684,000	995,000	6,533,000	2,687,000
Net loss before income taxes	(684,000)	(1,036,000)	(6,967,000)	(2,683,000)
Provision for income taxes	0	0	0	0
Net loss	$ (684,000)	$ (1,036,000)	$ (6,402,000)	$ (2,683,000)

DISCONTINUED OPERATIONS (Deta_5

DISCONTINUED OPERATIONS (Details Narrative)	1 Months Ended	6 Months Ended
	Jul. 22, 2022 USD ($) integer	Jun. 30, 2022 USD ($)
Total consideration paid, Asset Sale	$ 20,000,000
Cancellation of indebtedness owed by the Company to Buyer in amount equal	4,150,000
Cost of assets held for sale		$ 20,600,000
Cash reduced by assumed liabilities	$ 41,000
Retained other patents not included in the Asset Sale | integer	15
Cost of liabilities held for sale		4,000,000
Notes payable included in liabilities held for sale		3,400,000
Consideration to be received from the Buyer		20,000,000
Additional impairment loss		2,000,000
Estimated costs to sell charged to goodwill		$ 100,000
Secured Debt [Member] | One Year Note Payable [Member]
Promissory note	$ 2,000,000

PROPERTY AND EQUIPMENT (Details

PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Less accumulated depreciation	$ (4)	$ (3)
Property and Equipment, net	3	4
Computer and other equipment [Member]
Property and Equipment	$ 7	$ 7

PROPERTY AND EQUIPMENT (Detai_2

PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
PROPERTY AND EQUIPMENT
Depreciation	$ 0	$ 0	$ 1	$ 1

NOTES RECEIVABLE (Details)

NOTES RECEIVABLE (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Less: allowance for doubtful accounts	$ 0	$ 0
Current portion of note receivable, Net	(2,200)	0
Notes receivable, net of current portion	0	200
Biopharmaceutical Research Company [Member]
Note receivable, non-current portion	200	200
Tf Tech Ventures Llc [Member]
Note receivable, non-current portion	$ 2,000	$ 0

NOTES RECEIVABLE (Details Narra

NOTES RECEIVABLE (Details Narrative) - BRC [Member] - USD ($)	Jul. 22, 2022	May 26, 2021
Interest rate	2.63%	6%
Convertible loan		$ 200,000
Loan by the price per share		20,000,000
Aggregate Proceeds		4,000,000
Outstanding shares of common stock of BRC		$ 20,000,000
Price per share paid in percentage		80%
Promissory Notes	$ 2,000,000

GOODWILL AND INTANGIBLE ASSET_2

GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Goodwill	$ 4,690	$ 4,690
Total intangible assets subject to amortization	3,075	10,182
Accumulated amortization	(1,776)	(2,885)
Intellectual property and patents [Member]
Accumulated amortization	(68)	(55)
Customer relationships, Trade name, Non-compete agreements, net	248	261
Total intangible assets not subject to amortization	316	316
Customer Relationships [Member]
Total intangible assets subject to amortization	0	7,110
Customer relationships, Trade name, Non-compete agreements, net	1,299	7,297
Tradename [Member]
Total intangible assets subject to amortization	2,613	2,610
Non-compete agreements [Member]
Total intangible assets subject to amortization	$ 462	$ 462

GOODWILL AND INTANGIBLE ASSET_3

GOODWILL AND INTANGIBLE ASSETS (Details 1) $ in Thousands	Sep. 30, 2022 USD ($)
GOODWILL AND INTANGIBLE ASSETS
2022 (remaining)	$ 169
2023	675
2024	512
2025	23
2026	18
2027	17
Thereafter	133
Total Amortization	$ 1,547

GOODWILL AND INTANGIBLE ASSET_4

GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
GOODWILL AND INTANGIBLE ASSETS
Impairment loss	$ 0	$ 0	$ 4,600,000	$ 0
Amortization expense	$ 200,000	$ 600,000	$ 1,400,000	$ 1,700,000

INVESTMENT (Details)

INVESTMENT (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Valuation reserve	$ (40)	$ (40)
Investment, net	216	216
Investment Member
Investment in Releaf Europe BV	566	566
Valuation reserve	(350)	(350)
Investment, net	$ 216	$ 216

INVESTMENT (Details Narrative)

INVESTMENT (Details Narrative) - USD ($)	4 Months Ended	9 Months Ended	12 Months Ended
	Feb. 28, 2020	Sep. 30, 2022	Dec. 31, 2021
Valuation reserve		$ 40,000	$ 40,000
Interest rate		18%	18%
ReLeaf Europe B.V
Money valuation	$ 1,090
Interest rate	6%
convertible loan	$ 50,000

ACCRUED EXPENSES (Details)

ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
GOODWILL AND INTANGIBLE ASSETS
Accounts payable factoring	$ 14	$ 1,722
Refunds and returns liability	5	445
Accrued interest	222	390
Accrued payroll	0	178
Accrued vacation leave	60	173
Accrued expenses	813	243
Sales tax payable	317	334
Accrued Expenses net	$ 1,431	$ 3,485

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)

1 Months Ended

3 Months Ended

8 Months Ended

9 Months Ended

Jan. 12, 2022

Jan. 10, 2022

Oct. 02, 2020

Jul. 25, 2022

Nov. 16, 2021

Aug. 06, 2021

Jun. 30, 2021

Aug. 06, 2020

Sep. 30, 2022

Sep. 30, 2021

Dec. 28, 2021

Sep. 30, 2022

Sep. 30, 2021

Dec. 31, 2021

Interest Expenses

$ 6,000

$ 178,000

$ 393,000

$ 377,000

Sera Labs [Member] | Second Duitch Note [Member]

Interest rate

10%

Principal amount

$ 40,000

Due date

Apr. 11, 2022

Mr Bell [Member] | Secured Promissory Note [Member]

Interest rate

10%

Principal amount

$ 200,000

Due date

Jun. 30, 2022

Mr Bell [Member] | Secured November Note [Member]

Interest rate

10%

Principal amount

$ 50,000

Due date

Jun. 30, 2022

Mr Bell [Member] | UnSecured Promissory Note [Member]

Interest rate

8%

Principal amount

$ 200,000

Due date

Aug. 06, 2021

Dov Szapiro [Member] | Secured Notes [Member]

Interest rate

10%

10%

Principal amount

$ 200,000

$ 700,000

Due date

Jun. 30, 2022

Jun. 30, 2022

Interest Expenses

100,000

$ 40,000

Accrued Expenses

0

0

$ 100,000

Rob Davidson [Member]

Advisory Compensation

$ 12,000

Description Of Service

The term of the agreement is through July 25, 2023 and requires Mr. Davidson provide approximately 20 to 25 hours of service per week

Consulting Expenses

$ 27,000

$ 27,000

October 2, 2020 [Member] | Sera labs [Member]

Certain liabilities

$ 100,000

Interest rate

8%

10%

Principal amount

$ 1,100,000

$ 1,050,000

Due date

September 30, 2021

April 15, 2022

Upfront payment connection

$ 1,000,000

LOAN PAYABLE (Details)

LOAN PAYABLE (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current portion of loan payable	$ (38)	$ (235)
Loan payable, less current portion	0	0
Current portion of loan payable	38	235
Loans Payable One [Member]
Current portion of loan payable	0	195
Loans Payable Two [Member]
Current portion of loan payable	0	40
Loan Payable Three [Member]
Current portion of loan payable	$ 38	$ 0

LOAN PAYABLE (Details Narrative

LOAN PAYABLE (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
LOANS PAYABLE
Interest expense	$ 3	$ 1	$ 6	$ 3

NOTES PAYABLE (Details)

NOTES PAYABLE (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Notes payable	$ 0	$ 2,877,000
Promissory Note [Member]
Notes payable	0	270,000
Promissory note 1 [Member]
Notes payable	0	540,000
Promissory note 2 [Member]
Notes payable	0	500,000
Promissory note 3 [Member]
Notes payable	0	502,000
Promissory Note 4[Member]
Notes payable	0	300,000
Promissory Note 5[Member]
Notes payable	0	100,000
Promissory Note 6 [Member]
Notes payable	0	415,000
Promissory Note 7 [Member]
Notes payable	0	200,000
Promissory Note 8 [Member]
Notes payable	0	0
Individual [Member]
Notes payable	$ 0	$ 50,000

NOTES PAYABLE (Details Narrativ

NOTES PAYABLE (Details Narrative) - USD ($)

1 Months Ended

2 Months Ended

3 Months Ended

9 Months Ended

12 Months Ended

Jan. 18, 2022

Dec. 31, 2021

Nov. 30, 2021

Oct. 30, 2021

Feb. 28, 2021

Aug. 31, 2020

May 31, 2020

Dec. 15, 2021

Sep. 30, 2022

Sep. 30, 2021

Sep. 30, 2022

Sep. 30, 2021

Dec. 31, 2021

Apr. 30, 2021

Jan. 31, 2021

Interest Expenses

$ 100,000

$ 100,000

$ 200,000

$ 100,000

Interest Rate

18%

18%

Investor [Member]

Interest Rate

10%

10%

10%

10%

Maturity date

June 30, 2022

June 15, 2022

May 31, 2022

May 31, 2022

Principal, amount

$ 200,000

$ 200,000

$ 100,000

$ 300,000

$ 200,000

Proceeds from loans payable

$ 400,000

Promissory Note [Member] | New August And May Notes [Member]

Interest Rate

10%

Maturity date

June 15, 2022

Principal, amount

$ 300,000

$ 500,000

Promissory Note [Member] | New April & September 2021 Notes [Member]

Interest Rate

10%

Maturity date

June 15, 2022

Principal, amount

300,000

300,000

$ 300,000

Promissory notes amount received

500,000

LLC [Member] | Promissory Note [Member]

Interest Rate

10%

10%

Principal, amount

$ 500,000

$ 300,000

$ 300,000

$ 300,000

$ 500,000

Gross proceeds, net

$ 500,000

New January 2021 Note [Member] | Promissory Note [Member]

Interest Rate

10%

Maturity date

June 15, 2022

Principal, amount

$ 500,000

Board Members [Member]

Interest Rate

8%

8%

Unsecured promissory note

$ 500,000

$ 300,000

Maturity date

August 12, 2021

May 18, 2021

CONVERTIBLE PROMISSORY NOTES _3

CONVERTIBLE PROMISSORY NOTES AND FAIR VALUE OF CONVERTIBLE PROMISSORY NOTES (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
PREPAID EXPENSES AND OTHER CURRENT ASSETS
Convertible promissory notes	$ 550	$ 550
Current portion of convertible promissory notes	$ 550	$ 550

CONVERTIBLE PROMISSORY NOTES _4

CONVERTIBLE PROMISSORY NOTES AND FAIR VALUE OF CONVERTIBLE PROMISSORY NOTES (Details 1) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
PREPAID EXPENSES AND OTHER CURRENT ASSETS
Series A subordinated convertible note at fair value	$ 3,136	$ 3,074
Series B subordinated convertible note at fair value	11,848	11,858
Total convertible promissory notes	14,984	14,932
Less: Investor Note offset - Series B Note	(5,000)	(5,000)
Carrying value of convertible promissory notes at fair value	9,984	9,932
Less: current portion of convertible promissory notes at fair value	(9,984)	(9,932)
Convertible promissory notes, less current portion	$ 0	$ 0

CONVERTIBLE PROMISSORY NOTES _5

CONVERTIBLE PROMISSORY NOTES AND FAIR VALUE OF CONVERTIBLE PROMISSORY NOTES (Details Narrative) - USD ($)	1 Months Ended	9 Months Ended		12 Months Ended
	Oct. 30, 2020	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2020
Proceeds from investor note				$ 1,000,000
Remaining balance of investor note				$ 5,000,000
Description Of Settlement		If the Company is required to settle the Series A and B Notes under those terms, the settlement would be either a cash payment of approximately $4.4 million or the issuance of 12,519,597 shares of the Company’s common stock at the option of the Investor
Interest rate		18%		8%
Conversion price description		The Investor will not have the right to convert any portion of the Convertible Notes, to the extent that, after giving effect to such conversion, the Investor (and other certain related parties) would beneficially own in excess of 4.99% of the shares of Common Stock outstanding immediately after giving effect to such conversion. This limit may, from time to time, be increased, up to 9.99%, or decreased
Warrant, exercisable shares		363,636
Private Placement [Member]
Net cash proceeds				$ 2,340,000
Warrant exercisable shares purchase		242,424
Warrant exercise price per share		$ 1.32
Financial advisory fee				480,000
Proceeds from Private Placement				8,850,000
Placement agent fee		$ 306,000		$ 363,636
Series A Note [Member]
Gain (Loss) on issuance of Note		4,400,000
Loss on fair value option		$ 100,000
Gain (Loss) on change in fair value			$ 1,000,000
Maturity Date		October 30, 2022
Series A Subordinated Convertible Note [Member]
Cash consideration	$ 4,000,000
Original issue discount	600,000
Series B Senior Secured Convertible Note [Member]
Original issue discount	900,000
Initial principal amount	6,000,000
Conversion price per share		$ 1.32
Securities Purchase Agreement [Member] | Institutional Investor [Member]
Initial principal amount of series A note	4,600,000
Aggregate principal amount	11,500,000
Initial principal amount series B note	$ 6,900,000
Series B Note [Member]
Gain (Loss) on issuance of Note		$ 5,100,000	100,000
Loss on fair value option		$ 600,000
Maturity Date		October 30, 2021
Gain (Loss) on change in fair value			$ 1,000,000
Placement Agent Warrants [Member] | Series A and Series B Note [Member]
Purchase of warrant description		Series A Note and Series B Note, respectively, a placement agent received a warrant (the “Warrant”) exercisable for 2 years for the purchase of an aggregate of up to 242,424 and 60,606 shares, respectively, of the Company’s common stock, at an exercise price of $1.32 per share. The Warrant may also be exercised by means of a “cashless exercise” or “net exercise

WARRANT AGREEMENTS (Details)

WARRANT AGREEMENTS (Details) - Warrants [Member] - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Warrants, beginning balance	1,565,447	2,479,849
Warrants granted	$ 0	$ 0
Exercised	0	(96,250)
Forfeited/Expired	(949,917)	(818,152)
Warrants, ending balance	615,530	1,565,447
Exercisable at ending balance	615,530
Weighted average exercise price beginning balance	$ 2.18	$ 1.86
Weighted Average Exercise Price, Granted	0	0
Weighted Average Exercise Price, Exercised	0	1
Weighted Average Exercise Price, Forfeited/Expired	2.31	1.58
Weighted Average Exercise Price, ending balance	1.99	$ 2.18
Weighted Average Exercise Price, Exercisable	$ 1.99
Weighted Average Contractual Remaining Life, beginning	7 months 28 days	1 year 2 months 23 days
Weighted Average Contractual Remaining Life, Ending	9 months	7 months 28 days
Weighted Average Contractual Remaining Life, Exercisable	9 months

WARRANT AGREEMENTS (Details 1)

WARRANT AGREEMENTS (Details 1) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Number of Warrants	615,530	1,565,447
Weighted Average Remaining Contractual Life (years)	7 months 28 days	9 months
Number of warrants exercisable	$ 615,530	$ 1,565,447
Number of Warrants Exercisable, Weighted Average Exercise Price	$ 1.99	$ 2.18
Weighted Average Exercise Price	$ 1.99	$ 2.18
$1.98-$2.00 [Member]
Weighted Average Remaining Contractual Life (years)	7 months 28 days
Number of Warrants Exercisable, Weighted Average Exercise Price	$ 1.99
Weighted Average Exercise Price	$ 1.99
Number of Warrants Exercisable	615,530
Number of Warrants	615,530
$1.98-$2.31 [Member]
Weighted Average Remaining Contractual Life (years)		9 months
Number of Warrants Exercisable, Weighted Average Exercise Price		$ 2.18
Weighted Average Exercise Price		$ 2.18
Number of Warrants Exercisable		1,565,447
Number of Warrants		1,565,447

WARRANT AGREEMENTS (Details Nar

WARRANT AGREEMENTS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
WARRANT AGREEMENTS
Aggregate intrinsic value of warrants outstanding and exercisable	$ 0	$ 0	$ 0	$ 0

STOCK INCENTIVE PLANS (Details)

STOCK INCENTIVE PLANS (Details) - Options [Member] - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Outstanding, beginning balance	7,230,068	6,285,792
Granted	200,000	1,555,526
Exercised	0	0
Forfeited/Expired	(2,067,519)	(611,250)
Outstanding, ending balance	5,362,549	7,230,068
Exercisable, ending balance	3,173,469
Weighted average exercise price beginning balance	$ 1.45	$ 1.52
Weighted Average Exercise Price, Granted	0.34	0.95
Weighted Average Exercise Price, Exercised	0	0
Weighted Average Exercise Price, Forfeited/Expired	1.44	0.97
Weighted Average Exercise Price, ending balance	1.41	$ 1.45
Weighted Average Exercise Price , Exercisable	$ 1.55
Weighted Average Contractual Remaining Life, beginning balance	8 years 3 months 7 days	8 years 10 months 9 days
Weighted Average Contractual Remaining Life, Granted	9 years 9 months 21 days	9 years 2 months 30 days
Weighted Average Contractual Remaining Life, ending balance	7 years 7 months 13 days	7 years 1 month 17 days

STOCK INCENTIVE PLANS (Details

STOCK INCENTIVE PLANS (Details 1)	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Stock Options [Member]
Number of Awards | shares	5,362,549
Weighted Average Remaining Contractual Life (years)	7 years 7 months 13 days
Weighted Average Exercise Price | $ / shares	$ 1.41
Number of Awards Exercisable | shares	3,173,469
Weighted Average Exercise Price, Exercisable | $ / shares	$ 1.55
0.34-$4.01 [Member]
Number of Awards | shares	5,362,549
Weighted Average Remaining Contractual Life (years)	7 years 7 months 13 days
Weighted Average Exercise Price | $ / shares	$ 1.41
Number of Awards Exercisable | shares	3,173,469
Weighted Average Exercise Price, Exercisable | $ / shares	$ 1.55

STOCK INCENTIVE PLANS (Detail_2

STOCK INCENTIVE PLANS (Details 2) - Stock Options [Member] - USD ($)	3 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Risk-free interest rate at grant date	2.75%	0%
Expected stock price volatility	70%	0%
Expected dividend payout	$ 0	$ 0
Expected option life (in years)	7 years
Expected forfeiture rate	0%	0%

STOCK INCENTIVE PLANS (Detail_3

STOCK INCENTIVE PLANS (Details 3) - Stock Options [Member] - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Non-vested, beginning balance	0	50,000
Non-vested, Granted	921,664	338,443
Non-vested, Vested	(921,664)	(338,443)
Non-vested, Forfeited/Expired	0	0
Non-vested, ending balance	0	0
Weighted Average Exercise Price, Non-vested, beginning balance	$ 0	$ 1.60
Weighted Average Exercise Price, Granted	0.31	1.20
Weighted Average Exercise Price, Vested	0.31	1.26
Weighted Average Exercise Price, Forfeited/Expired	0	0
Weighted Average Exercise Price, Non-vested, ending balance	$ 0	$ 0

STOCK INCENTIVE PLANS (Detail_4

STOCK INCENTIVE PLANS (Details 4) - Stock Options [Member] - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2020
Restricted Stock Units, Outstanding beginning balance	588,235	431,578
Restricted Stock Units, Granted	1,351,688	629,338
Restricted Stock Units, Vested	(588,235)	(411,027)
Restricted Stock Units, Forfeited/Expired	0	(61,654)
Restricted Stock Units, Outstanding ending balance	1,351,688	588,235
Restricted Stock Units, Weighted Average Grant Date Fair Value Outstanding, ending balance	$ 0.70	$ 1.33
Restricted Stock Units, Weighted Average Grant Date Fair Value Granted	0.29	0.74
Restricted Stock Units, Weighted Average Grant Date Fair Value Vested	0.70	1.33
Restricted Stock Units, Weighted Average Grant Date Fair Value Forfeited/Expired	0	1.33
Restricted Stock Units, Weighted Average Grant Date Fair Value Outstanding	$ 0.29	$ 0.70

STOCK INCENTIVE PLANS (Detail_5

STOCK INCENTIVE PLANS (Details Narrative) - USD ($)	1 Months Ended		3 Months Ended		9 Months Ended
	Nov. 28, 2020	Dec. 29, 2017	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Compensation expense to restricted shares			$ 200,000	$ 900,000	$ 500,000	$ 1,200,000
Fair value of options granted					0	1,100,000
Aggregate intrinsic value of options outstanding and exercisable			0		$ 0
Consultant [Member]
Stock options issued, shares					1,518,194
Stock Options [Member]
Total unrecognized fair value compensation cost			600,000		$ 600,000
Aggregate intrinsic value of options outstanding			$ 50,000		$ 50,000
Stock options issued, shares					1,351,688
Nonstatutory Stock Options [Member]
Term of exercise period					10 years
Nonstatutory Stock Options to employee			200,000		200,000
Awarded vesting period					4 years
Restricted Stock [Member]
Compensation expense			$ 200,000	100,000	$ 200,000	400,000
Restricted Stock Units [Member]
Stock options issued, shares					650,801
Compensation expense			100,000	$ 200,000	$ 300,000	$ 400,000
Total unrecognized compensation expense			$ 400,000		$ 400,000		$ 400,000
Weighted Average Remaining Contractual Life (years)					9 months	10 months 6 days
Restricted Common Stock [Member]
Weighted Average Remaining Contractual Life (years)					10 months 24 days
Equity Incentive Plan [Member]
Common stock available for grant	5,000,000	5,000,000
Equity incentive plan, description		The Plan will continue in effect until its termination by the Compensation Committee; provided, however, that all Awards must be granted, if at all, within ten (10) years from the Effective Date

STOCKHOLDERS EQUITY (Details Na

STOCKHOLDERS EQUITY (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Common stock, shares authorized	150,000,000		150,000,000
Common stock, shares par value	$ 0.001		$ 0.001
Common stock, shares issued	71,376,799		68,201,900
Common stock, shares outstanding	71,376,799		68,201,900
Series A Note [Member]
Price per share		$ 1.32
Conversion price description	ranging from $0.43 to $0.64
Debt instrument converted into common stock	2,597,951
Series B Note [Member]
Price per share	$ 0.19
Debt instrument converted into common stock	472,631
Debt instrument converted amount, principal	$ 200,000
2018 [Member]
Common stock, shares issued	150,000
Price per share	$ 2.05
Proceed from issuance of common stock	$ 300,000
On October 1, 2021 [Member]
Common stock, shares issued	115,000
From January 1, 2021 to September 30, 2021 [Member]
Conversion price description		ranging from $0.98 to $1.85
Debt instrument converted into common stock		646,512
Debt instrument converted amount, principal		$ 700,000
Two [Member]
Common stock, shares issued	145,000
Price per share	$ 0.29
Conversion price description	price per share of $0.19
Debt instrument converted into common stock	40,000
Debt instrument converted amount, principal		$ 200,000,000
Two [Member] | January 1, 2022 to September 30, 2022 [Member]
Conversion price description	ranging from $0.31 to $0.70
Debt instrument converted into common stock	1,364,899
Debt instrument converted amount, principal	$ 700,000
Two [Member] | January 1, 2021 to September 30, 2021 [Member]
Price per share	$ 1.32
Conversion price description		ranging from $0.43 to $0.64
Debt instrument converted into common stock	1,665,000	1,439,394
Common stock conversion of shares, amount	$ 200,000	$ 1,900,000
Common stock conversion of shares, aggregate amount		$ 1,300,000
Common stock conversion of shares		1,439,394
Debt instrument converted , principal	1,192,369	1,436,394
2017 Equity Plan [Member] | From January 1, 2021 to September 30, 2021 [Member]
Conversion price description	0	ranging from $0.98 to $1.85
Debt instrument converted into common stock		872,361
Debt instrument converted amount, principal		$ 200,000
1[Member] | From January 1, 2021 to September 30, 2021 [Member]
Conversion price description		1.30 per share
Debt instrument converted into common stock		26,936
Debt instrument converted amount, principal		$ 30,000

BUSINESS COMBINATION (Details)

BUSINESS COMBINATION (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Fair Value of the Contingent Share Consideration
Fair value at December 31, 2021	$ 143,000	$ 1,430,000
Fair value at September 30, 2022	917,000
Net change in fair value for the nine months ended September 30, 2022	$ (513,000)

BUSINESS COMBINATION (Details N

BUSINESS COMBINATION (Details Narrative) - USD ($) $ in Millions		9 Months Ended
	Oct. 02, 2020	Sep. 30, 2022
Closing Merger Consideration Shares, shares		6,909,091
Contingent Consideration Shares (Clawback Shares), shares		5,988,024
Upfront payment in cash	$ 1
Potential shares to be issued	5,988,024
Fair value of contingent shares	$ 3.2
CHI [Member]
Total purchase price, shares	12,897,115

INTELLECTUAL PROPERTY AND COL_2

INTELLECTUAL PROPERTY AND COLLABORATIVE AGREEMENTS (Details Narrative) - USD ($) $ in Thousands		9 Months Ended
	May 06, 2021	Sep. 30, 2022	Sep. 30, 2021
Amount payable		$ (1,178)	$ 107
License Agreement [Member]
Settlement payment	$ 3,900
Amount payable	1,600
Paid amount	2,300
Settlement income	$ 2,400

COMMITMENTS AND CONTINGENCIES_2

COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Commitments and contingencies (see Note 21)
2022 (remaining)	$ 33
2023	138
2024	46
Undiscounted cash flow	217
Effect of discounting	(18)
Lease liabilities recognized	$ 199

COMMITMENTS AND CONTINGENCIES_3

COMMITMENTS AND CONTINGENCIES (Details 1) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Operating leases
Right-of-use assets, net	$ 186	$ 257
Right-of-use lease liabilities, current	118	104
Right-of-use lease liabilities, noncurrent	81	174
Total operating lease liabilities	$ 199	$ 278
Weighted average remaining lease term, operating lease	1 year 6 months 29 days	2 years 3 months 14 days
Weighted average discount rate, Operating leases	11.30%	11.30%

COMMITMENTS AND CONTINGENCIES_4

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Weighted average discount rate			11.30%
Current portion of operating lease liability	$ 118,000		$ 118,000		$ 104,000
Lease Agreement [Member]
Monthly Rent	10,000	$ 30,000	$ 100,000	$ 100,000
Description of lease			The lease agreement (the “Lease”) which expires on April 30, 2024 contains an option to extend the lease for an additional 36 months and the Company will reassess the lease term of the contract when it has determined it is reasonably certain to exercise the option. The lease provides for the payment of base monthly rent in the amount of $0.01 million during the first 12 months of the term with annual increases, over the base monthly rent then in effect, by 3%
Lease Agreement [Member] | May 1, 2019 [Member]
Monthly Rent	100,000	$ 100,000	$ 200,000	$ 200,000
Description of lease			The lease agreement (the “Lease”) which expires on April 30, 2024 contains an option to extend the lease for an additional 36 months and the Company will reassess the lease term of the contract when it has determined it is reasonably certain to exercise the option. The lease provides for the payment of base monthly rent in the amount of $0.01 million during the first 12 months of the term with annual increases, over the base monthly rent then in effect, by 3%.
Percent of base monthly rent			3%
Weighted average discount rate			11.30%
Long-term portion of operating lease liability	100,000		$ 100,000
Current portion of operating lease liability	$ 100,000		$ 100,000