Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2020 | Feb. 16, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | Stem Holdings, Inc. | |
Entity Central Index Key | 0001697834 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 175,710,922 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 | |
Current assets | |||
Cash and cash equivalents | $ 3,847 | $ 2,129 | [1] |
Accounts receivable, net of allowance for doubtful accounts | 602 | 455 | [1] |
Note receivable | 533 | 434 | [1] |
Inventory | 2,205 | 1,795 | [1] |
Prepaid expenses and other current assets | 472 | 452 | [1] |
Total current assets | 7,659 | 5,265 | [1] |
Property and equipment, net | 16,104 | 16,354 | [1] |
Investment in equity method investees | 767 | 767 | [1] |
Investments in affiliates | 1,718 | 1,718 | [1] |
Deposits and other assets | 179 | 13 | [1] |
Note receivable, long term | 355 | 355 | [1] |
Right of use asset | 3,305 | [1] | |
Intangible assets, net | 61,225 | 13,269 | [1] |
Goodwill | 20,937 | 7,221 | [1] |
Due from related party | 28 | 55 | [1] |
Total assets | 112,277 | 45,017 | [1] |
Current liabilities | |||
Accounts payable and accrued expenses | 9,319 | 2,983 | [1] |
Convertible notes, net | 6,795 | 5,306 | [1] |
Convertible notes, net related party | 805 | [1] | |
Short term notes and advances | 1,929 | 3,425 | [1] |
Settlement payable | 250 | [1] | |
Acquisition notes payable | 2,666 | 665 | [1] |
Contingent acquisition liability | 1,072 | 1,072 | [1] |
Due to related party | 107 | 200 | [1] |
Derivative liability | 384 | 592 | [1] |
Lease liability | 1,040 | [1] | |
Warrant liability | 9,178 | 257 | [1] |
Total current liabilities | 33,545 | 14,500 | [1] |
Lease liability - long term | 2,265 | [1] | |
Acquisition payable - long term | 516 | [1] | |
Long-term debt, mortgages | 4,785 | 3,685 | [1] |
Total liabilities | 41,111 | 18,185 | [1] |
Commitments and contingencies (Note 17) | [1] | ||
Shareholders' equity | |||
Common stock, $0.001 par value; 300,000,000 shares authorized; 180,475,239 and 68,258,745 shares issued, issuable and outstanding as of December 31, 2020 and September 30, 2020, respectively | 180 | 68 | [1] |
Additional paid-in capital | 124,546 | 76,310 | [1] |
Stock subscription receivable | (735) | [1] | |
Accumulated deficit | (54,574) | (51,386) | [1] |
Total Stem Holdings stockholder's equity | 69,417 | 24,992 | [1] |
Noncontrolling interest | 1,749 | 1,840 | [1] |
Total shareholders' equity | 71,166 | 26,832 | |
Total liabilities and shareholders' equity | 112,277 | 45,017 | [1] |
Series A Preferred Stock [Member] | |||
Shareholders' equity | |||
Preferred stock, Value | [1] | ||
Series B Preferred Stock [Member] | |||
Shareholders' equity | |||
Preferred stock, Value | [1] | ||
[1] | Derived from audited information |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Sep. 30, 2020 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 180,475,239 | 68,258,745 |
Common stock, shares outstanding | 180,475,239 | 68,258,745 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares outstanding | ||
Series B Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares outstanding |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 5,460 | $ 1,321 |
Cost of goods sold | 3,473 | 1,069 |
Gross Profit | 1,987 | 252 |
Operating expenses: | ||
Consulting fees | 744 | 509 |
Professional fees | 922 | 639 |
General and administration | 3,344 | 1,990 |
Total operating expenses | 5,010 | 3,138 |
Loss from operations | (3,023) | (2,886) |
Other income (expenses), net | ||
Interest expense | (711) | (408) |
Change in fair value of derivative liability | 208 | 21 |
Change in fair value of warrant liability | 90 | 39 |
Foreign currency exchange loss | (43) | (69) |
Other income | 200 | |
Total other income (expense) | (256) | (417) |
Loss from equity method investees | (91) | (235) |
Net loss | (3,279) | (3,312) |
Net loss attributable to non-controlling interest | (91) | (235) |
Net loss attributable to Stem Holdings | $ (3,188) | $ (3,077) |
Net loss per share, basic and diluted | $ (0.05) | $ (0.06) |
Weighted-average shares outstanding, basic and diluted | 69,680,137 | 52,402,300 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Subscription Receivable [Member] | Accumulated Deficit [Member] | Total Stem Holdings Shareholders' Equity [Member] | Non-Controlling Interest [Member] | Total |
Balance at Sep. 30, 2019 | $ 52 | $ 61,202 | $ (40,384) | $ 20,870 | $ 2,724 | $ 23,594 | |
Balance, shares at Sep. 30, 2019 | 52,254,941 | ||||||
Issuance of common stock in connection with consulting agreement | 4 | 4 | 4 | ||||
Issuance of common stock in connection with consulting agreement, shares | 5,000 | ||||||
Issuance of common stock in connection with asset acquisitions | 394 | 394 | 394 | ||||
Issuance of common stock in connection with asset acquisitions, shares | 394,270 | ||||||
Stock based compensation | $ 1 | 497 | 498 | 498 | |||
Stock based compensation, shares | 100,000 | ||||||
Issuance of common stock related to rent and interest expense | (37) | ||||||
Net loss | (3,077) | (3,077) | (235) | (3,312) | |||
Balance at Dec. 31, 2019 | $ 53 | 62,097 | (43,461) | 18,689 | 2,489 | 21,178 | |
Balance, shares at Dec. 31, 2019 | 52,754,211 | ||||||
Balance at Sep. 30, 2020 | $ 68 | 76,310 | (51,386) | 24,992 | 1,840 | 26,832 | |
Balance, shares at Sep. 30, 2020 | 68,258,745 | ||||||
Issuance of common stock in connection with consulting agreement | $ 2 | 587 | 589 | 589 | |||
Issuance of common stock in connection with consulting agreement, shares | 1,569,570 | ||||||
Issuance of common stock in connection with asset acquisitions | 9,934 | ||||||
Stock based compensation | $ 2 | 560 | 562 | 562 | |||
Stock based compensation, shares | 1,868,750 | ||||||
Common stock to be issuable from public offering | $ 7 | 2,863 | 2,870 | 2,870 | |||
Common stock to be issuable from public offering, shares | 6,833,069 | ||||||
Cancellation of common stock related to convertible notes | $ (1) | 1 | |||||
Cancellation of common stock related to convertible notes, shares | (525,400) | ||||||
Issuance of common stock related to rent and interest expense | $ 1 | 208 | 209 | (209) | |||
Issuance of common stock related to rent and interest expense, shares | 501,561 | ||||||
Issuance of subscription receivable | 600 | (600) | |||||
Issuance of warrants in connection with employment agreement | 132 | 132 | 132 | ||||
Issuance of options in connection with employment agreement | 61 | 61 | 61 | ||||
Acquisition of Driven Deliveries, Inc. | $ 101 | 43,224 | (135) | 43,190 | $ 43,190 | ||
Acquisition of Driven Deliveries, Inc., shares | 101,968,944 | 101,968,994 | |||||
Net loss | (3,188) | (3,188) | (91) | $ (3,279) | |||
Balance at Dec. 31, 2020 | $ 180 | $ 124,546 | $ (735) | $ (54,574) | $ 69,417 | $ 1,749 | $ 71,166 |
Balance, shares at Dec. 31, 2020 | 180,475,239 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | ||
Net loss | $ (3,279,000) | $ (3,312,000) |
Equity method investee losses | 91,000 | 235,000 |
Net loss before equity method investment | (3,188,000) | (3,077,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 756,000 | 497,000 |
Issuance of common stock in connection with consulting agreements | 589,000 | 4,000 |
Depreciation and amortization | 488,000 | 379,000 |
Amortization of intangible assets | 245,000 | 121,000 |
Issuance of common stock related to rent and interest expense | 209,000 | 37,000 |
Amortization of debt discount | 464,000 | 253,000 |
Loss on equity method investments | 9,000 | |
Gain on sale of equity method investments | (200,000) | |
Change in fair value of derivative liability | (208,000) | (21,000) |
Change in fair value of warrant liability | (79,000) | (39,000) |
Foreign currency translation adjustment | (24,000) | 69,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net of allowance for doubtful accounts | (65,000) | 7,000 |
Prepaid expenses and other current assets | 17,000 | 69,000 |
Inventory | (192,000) | |
Other assets | 61,000 | (96,000) |
Accounts payable and accrued expenses | 138,000 | 162,000 |
Note payable | 106,000 | |
Net cash used in operating activities | (989,000) | (1,520,000) |
Cash flows from investing activities | ||
Proceeds related to sale of SOK Management, LLC | 200,000 | |
Purchase of property and equipment | (165,000) | (321,000) |
Investment in equity method investees | (91,000) | (235,000) |
Advances to related entities | (462,000) | |
Investments | (100,000) | |
Net cash used in investing activities | (156,000) | (1,018,000) |
Cash flows from financing activities | ||
Proceeds from the issuance of common stock | 2,869,000 | |
Repayments of notes payable | (6,000) | (130,000) |
Net cash provided by (used in) financing activities | 2,863,000 | (130,000) |
Net (decrease) increase in cash and cash equivalents | 1,718,000 | (2,668,000) |
Cash and cash equivalents at the beginning of the period | 2,129,000 | 3,339,000 |
Cash and cash equivalents at the end of the period | 3,847,000 | 671,000 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 655,000 | 69,000 |
Cash paid for taxes | ||
Supplemental disclosure of noncash activities: | ||
Financed Insurance | 17,000 | |
Consolidation of Driven Deliveries | 43,325,000 | |
Building acquired from related party with equity, net of lien acquired | 394,000 | |
Refinancing of mortgage | $ 1,100,000 |
Incorporation and Operations an
Incorporation and Operations and Going Concern | 3 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Incorporation and Operations and Going Concern | 1. Incorporation and Operations and Going Concern Stem Holdings, Inc. (“Stem” or the “Company”) is a Nevada corporation incorporated on June 7, 2016. The Company is a multi-state, vertically integrated, cannabis company that purchases, improves, leases, operates and invests in properties for use in the production, distribution and sales of cannabis and cannabis-infused products licensed under the laws of the states of Oregon, Nevada, California, Massachusetts, and Oklahoma. As of December 31, 2020, Stem had ownership interests in 23 state issued cannabis licenses including nine (9) licenses for cannabis cultivation, five (5) licenses for cannabis processing, one (1) license for cannabis wholesale distribution, one (1) license for hemp production, (2) adult-use medical retailers (non storefront), and five (5) cannabis dispensary licenses. Stem’s consumer brands are award-winning and nationally known, and include cultivators, TJ’s Gardens™, Travis X James™, and Yerba Buena; retail brands, Stem, Rebelle, and TJ’s; infused product manufacturers Cannavore; and a CBD company, Dose-ology. As of December 31, 2020, the Company has acquired nine commercial properties and leased a tenth property, located in Oregon and Nevada, and has entered leases to related entities for these properties (see Note 17). As of December 31, 2020, the buildout of these properties to support cannabis related operations was either complete or near completion. The Company has incorporated nine wholly-owned subsidiaries –Stem Holdings Oregon, Inc., Stem Holdings IP, Inc., Opco, LLC, Stem Holdings Agri, Inc., Stem Group Oklahoma, Inc., Opco Holdings, Inc., 7LV USA Corporation, Driven Deliveries, Inc., and Consolidated Ventures of Oregon, Inc. With the acquisition of Driven, the Company becomes an omni-channel retailer, utilizing Driven’s proprietary logistics and experience/customer experience (“ UX/CX The Company’s stock is publicly traded and is listed on the Canadian Securities Exchange under the symbol “STEM” and the OTCQX exchange under the symbol “STMH”. Going Concern At December 31, 2020, the Company had approximate balances of cash and cash equivalents of $3.8 million, negative working capital of approximately $25.9 million, and an accumulated deficit of $54.6 million. These unaudited consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. While the recreational use of cannabis is legal under the laws of certain States, where the Company has and is working towards further finalizing the acquisition of entities or investment in entities that directly produce or sell cannabis, the use and possession of cannabis is illegal under United States Federal Law for any purpose, by way of Title II of the Comprehensive Drug Abuse Prevention and Control Act of 1970, otherwise known as the Controlled Substances Act of 1970 (the “ACT”). Cannabis is currently included under Schedule 1 of the Act, making it illegal to cultivate, sell or otherwise possess in the United States. On January 4, 2018, the office of the Attorney General published a memo regarding cannabis enforcement that rescinds directives promulgated under former President Obama that eased federal enforcement. In a January 8, 2018 memo, Jefferson B. Sessions, then Attorney General of the United States, indicated enforcement decisions will be left up to the U.S. Attorney’s in their respective states clearly indicating that the burden is with “federal prosecutors deciding which cases to prosecute by weighing all relevant considerations, including federal law enforcement priorities set by the Attorney General, the seriousness of the crime, the deterrent effect of federal prosecution, and the cumulative impact of particular crimes on the community.” Subsequently, in April 2018, President Trump promised to In December 2019, an outbreak of a novel strain of coronavirus (COVID-19) originated in Wuhan, China, and has since spread to several other countries, including the United States. On June 11, 2020, the World Health Organization characterized COVID-19 as a pandemic. In addition, as of the time of the filing of this Quarterly Report on Form 10-Q, several states in the United States have declared states of emergency, and several countries around the world, including the United States, have taken steps to restrict travel. The existence of a worldwide pandemic, the fear associated with COVID-19, or any, pandemic, and the reactions of governments in response to COVID-19, or any, pandemic, to regulate the flow of labor and products and impede the travel of personnel, may impact our ability to conduct normal business operations, which could adversely affect our results of operations and liquidity. Disruptions to our supply chain and business operations disruptions to our retail operations and our ability to collect rent from the properties which we own, personnel absences, or restrictions on the shipment of our or our suppliers’ or customers’ products, any of which could have adverse ripple effects throughout our business. If we need to close any of our facilities or a critical number of our employees become too ill to work, our production ability could be materially adversely affected in a rapid manner. Similarly, if our customers experience adverse consequences due to COVID-19, or any other, pandemic, demand for our products could also be materially adversely affected in a rapid manner. Global health concerns, such as COVID-19, could also result in social, economic, and labor instability in the markets in which we operate. Any of these uncertainties could have a material adverse effect on our business, financial condition or results of operations. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. Should the United States Federal Government choose to begin enforcement of the provisions under the Act, the Company through its wholly owned subsidiaries could be prosecuted under the Act and the Company may have to immediately cease operations and/or be liquidated upon its closing of the acquisition or investment in entities that engage directly in the production and or sale of cannabis. Management believes that the Company has access to capital resources through potential public or private issuances of debt or equity securities. However, if the Company is unable to raise additional capital, it may be required to curtail operations and take additional measures to reduce costs, including reducing its workforce, eliminating outside consultants, and reducing legal fees to conserve its cash in amounts sufficient to sustain operations and meet its obligations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might become necessary should the Company be unable to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The unaudited condensed financial statements included herein are unaudited. Such financial statements, in the opinion of management, contain all adjustments necessary to present fairly the financial position and results of operations as of and for the periods indicated. All such adjustments are of a normal recurring nature. These interim results are not necessarily indicative of the results to be expected for the year ending September 30, 2021 or for any other period. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, and because of this, for further information, readers should refer to the financial statements and footnotes included in its amended Form 10-K for the fiscal year ended September 30, 2020 filed on December 28, 2020. The Company believes that the disclosures are adequate to make the interim information presented not misleading. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The most significant estimates included in these condensed consolidated financial statements are those associated with the assumptions used to value equity instruments, valuation of its long live assets for impairment testing, valuation of intangible assets, and the valuation of inventory. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable given the circumstances that exist at the time the financial statements are prepared. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. Reclassifications Certain amounts in the Company’s condensed consolidated financial statements for prior periods have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. Principles of Consolidation The Company’s policy is to consolidate all entities that it controls by ownership of a majority of the outstanding voting stock. In addition, the Company consolidates entities that meet the definition of a variable interest entity (“VIE”) for which it is the primary beneficiary. The primary beneficiary is the party who has the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and who has an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity. For consolidated entities that are less than wholly owned, the third party’s holding of equity interest is presented as noncontrolling interests in the Company’s Consolidated Balance Sheets and Consolidated Statements of Changes in Stockholders’ Equity. The portion of net loss attributable to the noncontrolling interests is presented as net loss attributable to noncontrolling interests in the Company’s Consolidated Statements of Operations. In August 2016, the Company and certain shareholders of the Company entered into a “Multi Party” Agreement, in which the Company became obligated to lease or acquire three separate real estate assets, and separately, if certain events occur, additional real estate assets held by entities related to those shareholders. The Agreement also gives the Company the right of first refusal in regard to certain properties owned by the persons and entities affiliated with the parties of the Agreement so long as certain targets are met. In the quarter ended June 30, 2019, the Company issued 12,500,000 shares of its common stock for the acquisition of Consolidated Ventures of Oregon, LLC (“CVO”) and Opco Holdings, LLC (“Opco”) which comprise the entities within the Multi Party Agreement. On September 6, 2020, the Company received the regulatory approval to transfer all the licenses held under both CVO and Opco. Subsequently, the Company has completed the acquisition and as a result, the Company is no longer engaged primarily in property rental operations but has taken over the operations of its primary renters, which is the cultivation, production and sale of cannabis and related productions. Since CVO and Opco are related to the Company, the acquisition was not accounted for as a business combination at fair value under the codification sections of ASC 805. The assets and liabilities were transferred to the Company at their historical cost and the Company has included the operations of Opco and CVO for all periods presented for this period ended December 31, 2020. The accompanying condensed consolidated financial statements include the accounts of Stem Holdings, Inc. and its wholly-owned subsidiaries, Stem Holdings Oregon, Inc., Stem Holdings IP, Inc., Opco, LLC, Stem Holdings Agri, Inc., Opco Holdings, Inc., Stem Group Oklahoma, Inc., 7LV USA Corporation, and Consolidated Ventures of Oregon, Inc., and Driven Deliveries, Inc. In addition, the Company has consolidated YMY Ventures, SAV, LLC; WCV, LLC and NVD RE, Inc. under the variable interest requirements. Opco Holdings, Inc. and CVO and its subsidiaries are included in the consolidated financial statements due to its historical related party relationship. All material intercompany accounts, transactions, and profits have been eliminated in consolidation. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company’s cash is primarily maintained in checking accounts. These balances may, at times, exceed the U.S. Federal Deposit Insurance Corporation insurance limits. As of December 31, 2020, and 2019, the Company had no cash equivalents or short-term investments. The Company has not experienced any losses on deposits of cash and cash equivalents. Accounts Receivable Accounts receivable are shown on the face of the consolidated balance sheets, net of an allowance for doubtful accounts. The Company analyzes the aging of accounts receivable, historical bad debts, customer creditworthiness and current economic trends, in determining the allowance for doubtful accounts. The Company does not accrue interest receivable on past due accounts receivable. As of December 31, 2020, the reserve for doubtful accounts was $39 thousand. Inventory Inventory is comprised of raw materials, finished goods and work-in-progress such as pre-harvested cannabis plants and by-products to be extracted. The costs of growing cannabis including but not limited to labor, utilities, nutrition, and irrigation, are capitalized into inventory until the time of harvest. Inventory is stated at the lower of cost or net realizable value, determined using weighted average cost. Cost includes expenditures directly related to manufacturing and distribution of the products. Primary costs include raw materials, packaging, direct labor, overhead, shipping and the depreciation of manufacturing equipment and production facilities determined at normal capacity. Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance, and property taxes. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. At the end of each reporting period, the Company performs an assessment of inventory obsolescence to measure inventory at the lower of cost or net realizable value. Factors considered in the determination of obsolescence include slow-moving or non-marketable items. Prepaid Expenses and Other Current Assets Prepaid expenses consist of various payments that the Company has made in advance for goods or services to be received in the future. These prepaid expenses include consulting, advertising, insurance, and service or other contracts requiring up-front payments. Property and Equipment Property, equipment, and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Repairs and maintenance expenditures that do not extend the useful lives of related assets are expensed as incurred. Expenditures for major renewals and improvements are capitalized, while minor replacements, maintenance, and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. The Company continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, “Property, Plant, and Equipment.” When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. See “Note 3 – Property, Equipment and Leasehold Improvements”. Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided on a straight-line method over the estimated useful lives of the assets. The Company estimates useful lives as follows: Buildings 20 years Leasehold improvements Shorter of term of lease or economic life of improvement Furniture and equipment 5 years Signage 5 years Software and related 5 years Impairment of Long-Lived Assets The Company reviews the carrying value of its long-lived assets, which include property and equipment, for indicators of impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events. The Company does not test for impairment in the year of acquisition of properties, as long as those properties are acquired from unrelated third parties. The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. In cases where estimated future net undiscounted cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of the asset or asset group. Fair value is generally determined using the assets expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated and amortized prospectively over the newly determined remaining estimated useful lives. Equity Method Investments Investments in unconsolidated affiliates are accounted for under the equity method of accounting, as appropriate. The Company accounts for investments in limited partnerships or limited liability corporations, whereby the Company owns a minimum of 5.0% of the investee’s outstanding voting stock, under the equity method of accounting. These investments are recorded at the amount of the Company’s investment and adjusted each period for the Company’s share of the investee’s income or loss, and dividends paid. During the quarter ended December 31, 2020, the Company did not realize any investee losses related to TIL. The Company recognized an investment gain of $200 thousand related to SOK Management (see Note 5). Asset Acquisitions The Company has adopted ASU 2017-01, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as businesses acquisitions. As a result of adopting ASU 2017-01, acquisitions of real estate and cannabis licenses do not meet the definition of a business combination and were deemed asset acquisitions, and the Company therefore capitalized these acquisitions, including its costs associated with these acquisitions. Goodwill and Intangible Assets Goodwill. Intangible Assets An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset that is amortized over the remaining useful life of that asset, if any. Subsequent reversal of impairment losses is not permitted. During the quarter ended December 31, 2020 and 2019, the Company determined that there were not any impairments related to intangible assets. Business Combinations The Company applies the provisions of ASC 805 in the accounting for acquisitions. ASC 805 requires the Company to recognize separately from goodwill the assets acquired, and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions to accurately apply preliminary value to assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments in the current period, rather than a revision to a prior period. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the consolidated statements of operations. Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets, contractual obligations assumed, restructuring liabilities, pre-acquisition contingencies, and contingent consideration, where applicable. Although the Company believes the assumptions and estimates made have been reasonable and appropriate, they are based in part on historical experience and information obtained from management of the acquired companies and are inherently uncertain. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results. Contingent Consideration The Company accounts for “contingent consideration” according to FASB ASC 805, “Business Combinations” (“FASB ASC 805”). Contingent consideration typically represents the acquirer’s obligation to transfer additional assets or equity interests to the former owners of the acquiree if specified future events occur or conditions are met. FASB ASC 805 requires that contingent consideration be recognized at the acquisition-date fair value as part of the consideration transferred in the transaction. FASB ASC 805 uses the fair value definition in Fair Value Measurements, which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As defined in FASB ASC 805, contingent consideration is (i) an obligation of the acquirer to transfer additional assets or equity interests to the former owners of an acquiree as part of the exchange for control of the acquiree, if specified future events occur or conditions are met or (ii) the right of the acquirer to the return of previously transferred consideration if specified conditions are met. Warrant Liability The Company accounts for certain common stock warrants outstanding as a liability at fair value and adjusts the instruments to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s consolidated statements of operations. The fair value of the warrants issued by the Company has been estimated using Monte Carlo simulation model. Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in the statement of operations. If the conversion feature does not require recognition of a bifurcated derivative, the convertible debt instrument is evaluated for consideration of any beneficial conversion feature (“BCF”) requiring separate recognition. When the Company records a BCF, the intrinsic value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument (offset to additional paid-in capital) and amortized to interest expense over the life of the debt. Income Taxes The provision for income taxes is determined in accordance with ASC 740, “Income Taxes”. The Company files a consolidated United States federal income tax return. The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. As of December 31, 2020, and 2019, such net operating losses were offset entirely by a valuation allowance. The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50.0% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations. In December 2017, the Tax Cuts and Jobs Act (TJCA or the Act) was enacted, which significantly changes U.S. tax law. In accordance with ASC 740, “Income Taxes”, the Company is required to account for the new requirements in the period that includes the date of enactment. The Act reduced the overall corporate income tax rate to 21.0%, created a territorial tax system (with a one-time mandatory transition tax on previously deferred foreign earnings), broadened the tax base and allowed for the immediate capital expensing of certain qualified property. In the quarter ended December 31, 2020, the Company issued a significant number of new shares in its acquisition of Driven (see Note 9). The effect of these issuances is most likely, the Company and Driven have experienced the requisite change of control as promulgated under the US Internal Revenue Code section 382. The effect of this will be that going forward, the ability of the Company and Driven to utilize their respective US Federal net operating loss carryforwards from prior to December 29, 2020 will be limited in its usage. In order to determine the specific effect, the Company must perform the computations required under the Internal Revenue Code, which have not yet been performed. The Company expects it will perform the required computations in the coming fiscal year. Revenue Recognition The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (Topic 606), the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Revenue for the Company’s product sales has not been adjusted for the effects of a financing component as the Company expects, at contract inception, that the period between when the Company’s transfers control of the product and when the Company receives payment will be one year or less. Product shipping and handling costs are included in cost of product sales. Effective October 1, 2019, the Company adopted the requirements of ASU 2014-09 (ASC 606) and related amendments, using the modified retrospective method. The adoption of ASC 606 did not have a significant impact on the Company’s revenue recognition policy as revenues related to wholesale and retail revenue are recorded upon transfer of merchandise to the customer, which was the effective policy under ASC 605 previously. The following policies reflect specific criteria for the various revenue streams of the Company: Cannabis Dispensary, Cultivation and Production Revenue is recognized upon transfer of retail merchandise to the customer upon sale transaction, at which time its performance obligation is complete. Revenue is recognized upon delivery of product to the wholesale customer, at which time the Company’s performance obligation is complete. Terms are generally between cash of delivery to 30 days for the Company’s wholesale customers. The Company’s sales environment is somewhat unique, in that once the product is sold to the customer (retail) or delivered (wholesale) there are essentially no returns allowed or warranty available to the customer under the various state laws. Delivery 1) Identify the contract with a customer The Company sells retail products directly to customers. In these sales there is no formal contract with the customer. These sales have commercial substance and there are no issues with collectability as the customer pays the cost of the goods at the time of purchase or delivery. 2) Identify the performance obligations in the contract The Company sells its products directly to consumers. In this case these sales represent a performance obligation with the sales and any necessary deliveries of those products. 3) Determine the transaction price The sales that are done directly to the customer have no variable consideration or financing component. The transaction price is the cost that those goods are being sold for plus any additional delivery costs. 4) Allocate the transaction price to performance obligations in the contract For the goods that the Company sells directly to customers, the transaction price is allocated between the cost of the goods and any delivery fees that may be incurred to deliver to the customer. 5) Recognize revenue when or as the Company satisfies a performance obligation For the sales of the Company’s own goods the performance obligation is complete once the customer has received the product. Leases The Company recognizes rental revenue from tenants, including rental abatements, lease incentives and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related leases when collectability is reasonably assured. The Company makes estimates of the collectability of its tenant receivables related to base rents, straight-line rent, and other revenues. In the current fiscal year, the Company began significant rental operations. The Company considers such things as historical bad debts, tenant creditworthiness, current economic trends, facility operating performance, lease structure, developments relevant to a tenant’s business, and changes in tenants’ payment patterns in its analysis of accounts receivable and its evaluation of the adequacy of the allowance for doubtful accounts. Specifically, for straight-line rent receivables, the Company’s assessment includes an estimation of a tenant’s ability to fulfill its rental obligations over the remaining lease term. On October 1, 2020, the Company adopted ASC 842 and elected to apply the new standard at the adoption date and recognize a cumulative effect as an adjustment to retained earnings. Upon calculation the effect on retained earnings was immaterial and no adjustment was deemed necessary. Leases with an initial term of twelve months or less are not recorded on the balance sheet. For lease agreements entered into or reassessed after the adoption of Topic 842, we combine the lease and non-lease components in determining the lease liabilities and right of use (“ROU”) assets. Our lease agreements generally do not provide an implicit borrowing rate, therefore an internal incremental borrowing rate is determined based on information available at lease commencement date for purposes of determining the present value of lease payments. We used the incremental borrowing rate on December 31, 2020 for all leases that commenced prior to that date. In determining this rate, which is used to determine the present value of future lease payments, we estimate the rate of interest we would pay on a collateralized basis, with similar payment terms as the lease and in a similar economic environment. Under Topic 842, operating lease expense is generally recognized evenly over the term of the lease. Lease costs were $169 for the three months ended December 31, 2020. There was sublease rental income of $4,000 for the three months ended December 31, 2020. The Company has eight operating leases consisting with remaining lease terms ranging from 23 months to 120 months. Lease Costs Three Months Ended December 31, 2020 Components of total lease costs: Operating lease expense $ 169 Total lease costs $ 169 Lease positions as of December 31, 2020 ROU lease assets and lease liabilities for our operating leases were recorded in the consolidated condensed balance sheet as follows: December 31, Assets Right of use asset $ 3,305 Total assets $ 3,305 Liabilities Operating lease liabilities – short term $ 1,040 Operating lease liabilities – long term 2,265 Total lease liability $ 3,305 Lease Terms and Discount Rate Weighted average remaining lease term (in years) – operating lease 5.00 Weighted average discount rate – operating lease 9.72 % Cash Flows Three Months Ended December 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: ROU amortization 169 Cash paydowns of operating liability (169 ) Supplemental non-cash amounts of lease liabilities arising from obtaining: ROU asset (3,305 ) Lease Liability 3,305 The future minimum lease payments under the leases are as follows: 2021 1,077 2022 1,109 2023 541 2024 308 2025 312 Thereafter 818 Total future minimum lease payments 4,165 Less: Lease imputed interest (860 ) Total 3,305 Disaggregation of Revenue In the quarter ended December 31, 2020, revenue reported is primarily from the sale of cannabis and related products accounted for under ASC 606. The following table illustrates our revenue by type related to the quarter ended December 31, 2020 and December 31, 2019, respectively: December 31, 2020 2019 Revenue Wholesale $ 1,120 $ 480 Retail 4,918 1,063 Rental 4 - Delivery Income - - Dispensary Cost Reimbursement - - Product Sales 229 - Other 118 8 Total revenue 6,389 1,551 Discounts and allowances (929 ) (230 ) Net Revenue $ 5,460 $ 1,321 Geographical Concentrations As of December 31, 2020, the Company is primarily engaged in the production and sale of cannabis, which is only legal for recreational use in 15 states and DC, with lesser legalization, such as for medical use in an additional 21 states and DC, as of the time of these consolidated financial statements. In addition, the United States Congress has passed legislation, specifically the Agriculture Improvement Act of 2018 (also known as the “Farm Bill”) that has removed production and consumption of hemp and associated products from Schedule 1 of the Controlled Substances Act. Cost of Goods Sold Cost of sales represents costs directly related to manufacturing and distribution of the Company’s products. Primary costs include raw materials, packaging, direct labor, overhead, shipping and handling and the depreciation of manufacturing equipment and production facilities. Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance, and property taxes. The Company recognizes the cost of sales as the associated revenues are recognized. Fair Value of Financial Instruments As defined in the authoritative guidance, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To estimate fair value, the Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, m |
Property, Plant & Equipment
Property, Plant & Equipment | 3 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant & Equipment | 3. Property, Plant & Equipment Property and equipment consist of the following (in thousands): December 31, September 30, 2020 2020 Land $ 1,451 $ 1,451 Automobiles 136 61 Signage 19 19 Furniture and equipment 2,667 2,485 Leasehold improvements 3,455 3,455 Buildings and property improvements 13,012 12,981 Computer software 59 59 20,799 20,511 Accumulated depreciation (4,695 ) (4,157 ) Property and equipment, net $ 16,104 $ 16,354 Depreciation expense was approximately $0.5 and $0.4 million for the quarters ended December 31, 2020 and 2019, respectively. Depreciation expense is included in general and administrative expense. Purchase of Building with Common Stock On November 1, 2019, the Company received 100.0% interest in Empire Holdings, LLC (“EH”), a related party. The entity has only one asset, a building. The Company treated the acquisition of EH as the purchase of the underlying building. EH leases its facilities to Kind Care, LLC. The Company purchased the property for $500,000 less the lien amount of $105,732 paid in kind and issued 394,270 shares of its common stock in satisfaction of the purchase price. |
Inventory
Inventory | 3 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | 4. Inventory Inventory consists of the following (in thousands): December 31, September 30, 2020 2020 Raw materials $ 415 $ 222 Work-in-progress 199 484 Finished goods 1,591 1,089 Total Inventory $ 2,205 $ 1,795 The Company’s inventory is related to twelve subsidiaries which are 100% owned by the Company and one subsidiary that is 50% owned by the Company. Raw materials and work-in-progress include the costs incurred for cultivation materials and live plants. Finished goods consists of cannabis products sent to retail locations or ready to be sold. No inventory reserve was recorded for the quarters ended December 31, 2020 and 2019 due to management’s assessment of the inventory on hand. |
Equity Method Investments
Equity Method Investments | 3 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | 5. Equity method investments SOK Management, LLC During the quarter ended December 31, 2020, the Company sold its remaining ownership interest in SOK Management in the amount of $200,000 and was recorded as other investment income under other income on the Company’s profit and loss statement. Tilstar Medical, LLC In April 2019, the Company entered into an agreement to acquire 48% of the membership interest of Tilstar Medical, LLC (“TIL”). TIL is a startup operation located in Laurel, Maryland and owns a project management company which assists in procuring licenses for the production and sale of cannabis. The purchase price for the 48% interest was $550,000 to capitalize TIL which under the operating agreement occurs upon the execution of the agreement. As of September 30, 2019, the Company had funded the $550,000 and accounted for its investment using the equity method of accounting. The Company was not made aware at time of its investment in the type and magnitude of expenses that would be funded with its investment capital and is currently in the process of renegotiating the terms of the operating agreement. During the year ended September 30, 2019, Tilstar Medical along with its partner, Stem Holdings, Inc. received a letter from the Maryland Medical Cannabis commission with notification that we received stage one pre-approval for a processor license. The Companies application ranked amongst the top nine highest scoring applications for a medical cannabis processor license. Final awards will be issued during calendar year 2021. As of December 31, 2020, and 2019, the difference between the investment and the percentage of net assets attributable to the Company’s investment was approximately $0.27 and $0.28 million, respectively. During the quarter ended December 31, 2020 the Company did not recognize a loss on investment related to TIL. During the quarter ended December 31, 2019, the Company recognized a loss of $7,000 related to TIL. Community Growth Partners, Inc On January 6, 2020, the Company issued a convertible promissory note to Community Growth Partners Holdings, Inc., (“CGS”) which will act as a line of credit. Subject to the terms and conditions of the note, CGS promises to pay the Company all of the outstanding principal together with interest on the unpaid principal balance upon the date that is twelve months after the effective date and shall be payable as follows: (a)The Company agrees to make several loans to CGS from time to time upon request of CGS in amounts not to exceed the principal sum of $2,000,000, (b) Payment of principal and interest shall be immediately available funds, (c) This note may be prepaid in whole or in part at any time without premium or penalty. Any partial prepayment shall be applied against the principal amount outstanding, (d) The unpaid principal amount outstanding under this note shall bear interest commencing upon the first advance at the rate of 10% per annum through the maturity date, calculated on the basis of a 365-day, until the entire indebtedness is fully paid, (e) Upon the closing of a $2,000,000 financing by the Company, all of the principal and interest shall automatically convert into equity shares of CGS at the price obtained by the qualified financing. A portion of the note has been converted into 7.0 % equity leaving a balance outstanding under the note as of December 31, 2020 of approximately $420,000. |
Note Receivable
Note Receivable | 3 Months Ended |
Dec. 31, 2020 | |
Noncontrolling Interest [Abstract] | |
Note Receivable | 6. Note Receivable On January 4, 2020, the Company issued a $355,000 promissory note to Community Growth Partners Holdings, Inc., (“CGS”). CGS is a cannabis license holder in Massachusetts. Subject to the terms and conditions of the note, CGS promises to pay the Company all of the outstanding balance together with interest the date that is six months after the opening of the Great Barrington Dispensary which was opened September 2020. On October 1, 2020, the Company issued a $100,000 promissory note to Bushman Holdings, Inc., (“BHI”) BHI is a CBD Cannabis holding company in Florida. Subject to the terms and conditions of the note, BHI promises to pay the Company all of the outstanding balance on or before January 1, 2022. |
Consolidated Asset Acquisitions
Consolidated Asset Acquisitions | 3 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Consolidated Asset Acquisitions | 7. Consolidated Asset Acquisitions YMY Ventures LLC In September 2018, the Company entered into an agreement to acquire 50% of the membership interest of YMY Ventures LLC (“YMY”). YMY is a startup operation located near Las Vegas, Nevada and owns licenses for the production and sale of cannabis. The purchase price for the 50% interest was $750,000, with the first $375,000 paid into escrow upon signing, with the final $375,000 due upon closing, which under the agreement occurs when the license is transferred by the Nevada Department of Taxation and receipt of approval in transfer of ownership by the Division of Public and Behavioral Health of the City of North Las Vegas. As of June 30, 2019, the Company had funded the $375,000 into escrow and had provided the joint venture with additional funds primarily in the form of payments for work performed to acquire four licenses from the Nevada Department of Taxation in the amount of approximately $690,238. As of February 28, 2019, the Nevada Department of Taxation approved the change of ownership for four medical and recreational cultivation and production licenses held by YMY Ventures now owned by Stem Holdings, Inc. Pursuant to the agreement, the escrowed amount of $375,000 was released and an additional payment of $67,500 was issued in August 2019. The balance of $307,500 was being held and negotiated with the partners due to the additional funds over and above the original obligation to provide tenant improvements of $650,000. A $ 0.79 million non-controlling interest in connection with this asset acquisition is included in investment in affiliates. As of the date of this filing, the balance has been paid in full including interest and attorney’s fees. NVD RE Corp. In April 2018, the Company received a 37.5% interest in NVD RE Corp. (“NVD”) upon its issuance to NVD of a commitment to contribute $1.275 million to NVD, which included the purchase price of $600,000 and an additional commitment to pay tenant improvement costs of $675,000. As of September 30, 2019, the Company paid $600,000 in cash for the real estate and not only fully funded its commitment but invested an additional $377,000 in capital over and above its original obligation. NVD used the funds provided to date by the Company to construct a cannabis indoor grow building and processing plant located near Las Vegas, Nevada and to continue the buildout of the property. The Company has no further commitment to fund the entity beyond its initial equity purchase commitment. NVD leases its facilities to YMY Ventures, LLC. $1.0 million non-controlling interest in connection with this asset acquisition is included in investment in affiliates. In the fiscal year ended September 30, 2019, NVD obtained $300,000 in proceeds from a mortgage on its property. The funds from this mortgage were advanced to the Company. As of December 31, 2020, this obligation was paid in its entirety, and $400,000 in additional proceeds were received on new mortgage. In May 2020, the Company acquired an additional 12.5% interest in NVD by issuing 386,035 common shares at par value of $0.001. West Coast Ventures On March 29, 2019, the Company entered into a definitive agreement to acquire Western Coast Ventures, Inc. (“WCV”). At the time of acquisition, WCV was a shell with cash of $2,000,000 and a 51% ownership with ILCA Holdings, Inc. (“ILCA”). At the time of acquisition of WCV, ILCA was also a shell with no operations, which has been issued a limited Conditional Use Permit for a Marijuana Production Facility (a “MPF”) by the City of San Diego, California, which will only be granting a total of 40 MPFs. As consideration for the acquisition, the Company issued 2,500,000 shares of its common stock, with a fair value of approximately $4.4 million or $1.47 per share, the Company’s closing stock price on March 29, 2019. The Company recorded $2.0 million of cash acquired and a $2.4 million investment in ILCA. The Company has recorded $3.8 million intangible assets (cannabis licenses) in connection with the acquisition of WCV and a $1.35 million non-controlling interest in connection with this acquisition. Included in Intangible assets, as of December 31, 2020, and 2019, the Company reported $1.35 million related to this acquisition. |
Non-Controlling Interests
Non-Controlling Interests | 3 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Non-Controlling Interests | 8. Non-Controlling Interests Non-controlling interests in consolidated entities are as follows (in thousands): As of September 30, 2020 NCI Equity Share Net Loss Attributable to NCI NCI in Consolidated Entities Non-Controlling Ownership % NVD RE Corp. $ 597 $ (48 ) $ 549 50.0 % ILCA 1,288 (240 ) 1,048 49.0 % YMY Ventures, Inc. 447 (204 ) 243 50.0 % $ 2,332 $ (492 ) $ 1,840 As of December 31, 2020 NCI Equity Share Net Loss Attributable to NCI NCI in Consolidated Entities Non-Controlling Ownership % NVD RE Corp. $ 549 $ (12 ) $ 537 50.0 % ILCA $ 1,048 (48 ) 1,000 49.0 % YMY Ventures, Inc. $ 243 (31 ) 212 50.0 % $ 1,840 $ (91 ) $ 1,749 |
Business Combination
Business Combination | 3 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Business Combination | 9. Business Combination Seven Leaf Ventures Corp. (“7LV”) In March 2020, the Company acquired 100% of the voting interest in Seven Leaf Ventures Corp. (“7LV”), a private Alberta corporation, and its subsidiaries, pursuant to the terms of a share purchase agreement dated March 6, 2020. 7LV owns Foothills Health and Wellness, a medical dispensary, in the greater Sacramento, California area. In connection with the acquisition, the Company issued 12,085,770 shares of common stock to former shareholders of 7LV (“7LV Shares”). The Company also issued a replacement 10% unsecured convertible debentures in the aggregate principal amount of C$3,410 ($2,540 USD) (the “Replacement Debentures”), convertible into shares at a conversion price of C$1.67 per share at any time prior to May 3, 2021, to former holders of unsecured convertible debentures of 7LV. As part of the Acquisition, the Company assumed the obligations of 7LV with respect to the common share purchase warrants of 7LV outstanding on the closing of the acquisition, subject to appropriate adjustments to reflect the exchange ratio. Accordingly, the Company has assumed 1,022,915 common share purchase warrants (the “Warrants”), exercisable into shares at an exercise price of C$2.08 per share at any time prior to May 3, 2021, 299,975 Warrants, exercisable into shares at an exercise price of C$4.17 per share at any time prior to December 31, 2020 and 999,923 Warrants, exercisable into shares at an exercise price of C$0.50 at any time prior to October 10, 2020. Following the completion of the acquisition, 7LV is now a wholly owned subsidiary of the Company. The table below shows the warrant liability and embedded derivative liability recorded in connection with the 7LV convertible notes and the subsequent fair value measurement during the quarter ended December 31, 2020 in USD, ( in thousands Warrant Liability Derivative Liability Balance as of September 30, 2020 $ 60 $ 54 Issuance - - Change in fair value (60 ) (39 ) Balance as of December 31, 2020 $ - $ 15 Purchase Price Allocation As of March 6, 2020, the Company allocated the purchase consideration to the fair value of the assets acquired and liabilities assumed as summarized in the table below ( Consideration Paid (in thousands) Estimated fair value of common stock issued $ 9,552 Estimated fair value of warrants issued 772 Estimated fair value of debt issued 2,540 Estimated fair value of embedded and bifurcated derivatives 244 Forgiveness of working capital advance (150 ) Total consideration paid $ 12,958 Assets acquired: (in thousands) Cash and cash equivalents $ 81 Fixed assets 54 Inventory 133 Goodwill 6,151 Intangible assets 7,684 Total assets acquired $ 14,103 Liabilities assumed: (in thousands) Accrued expenses and other current liabilities 1,145 Total liabilities assumed $ 1,145 Net assets acquired (in thousands) $ 12,958 Pursuant to the Asset Purchase Agreement (“APA”) between 7LV USA Corporation and the Company, upon the one-year anniversary date of the closing the Company shall pay 7LV USA Corporation additional consideration of $1,220,000 less certain adjustments related to revenue targets per the APA less Consultant Compensation paid to the prior owners of 7LV USA Corporation. The goodwill of $5.9 million will not be deductible for income tax purposes. Driven In December 2020, the Company, through an Agreement and Plan of Merger became the parent of an 100% wholly owned subsidiary Driven Deliveries, Inc., (“DRVD”, “Driven” or “Driven Deliveries”), its subsidiaries, a publicly held corporation on December 29, 2020. DRVD is an e-commerce and DaaS (delivery-as-a-service) provider with proprietary logistics and omnichannel UX/CX technology. Driven utilizes its own fulfillment centers, drivers, and proprietary technology. Driven provides two service levels to its customers: (i) an “Express” delivery with a limited product selection that is usually delivered within 90 minutes or less; and (ii) a “Next Day” scheduled delivery from a larger selection of 500+ products from a Driven fulfillment center. In connection with the acquisition, the Company issued 101,968,944 shares of common stock to the existing shareholders of Driven (“DRVD Shares”). As part of the Acquisition, the Company assumed the Driven stock options outstanding on the closing of the acquisition in the amount of 4,530,495. Accordingly, the Company has assumed 30,249,184 common share purchase warrants (the “Warrants”), exercisable into shares at an average exercise price of $.54 per share. Following the completion of the acquisition, Driven is now a wholly owned subsidiary of the Company. The table below shows the warrant liability and embedded derivative liability recorded in connection with the Driven convertible notes and the subsequent fair value measurement during the quarter ended December 31, 2020 in USD, ( in thousands Warrant Liability Derivative Liability Balance as of September 30, 2020 $ - $ - Warrants acquired 9,000 - Change in fair value - - Balance as of December 31, 2020 9,000 $ - The following unaudited proforma condensed consolidated results of operations have been prepared as if the acquisition of Driven had occurred October 1, 2019. Quarter ended Quarter ended December 31, 2020 December 31, 2019 Revenue $ 11,142 $ 3,046 Net loss $ (7,399 ) $ (16,400 ) Purchase Price Allocation As of December 29, 2020, the Company allocated the purchase consideration to the fair value of the assets acquired and liabilities assumed as summarized in the table below ( Consideration Paid (in thousands) Estimated fair value of common stock issued $ 42,825 Estimated fair value of warrants issued 9,000 Estimated fair value of options issued 500 Estimated fair value of debt assumed 4,389 Total consideration paid $ 56,714 Assets acquired: (in thousands) Cash and cash equivalents $ - Fixed assets 47 Other Assets 1,526 Goodwill 13,716 Intangible assets 48,200 Total assets acquired $ 63,489 Liabilities assumed: (in thousands) Accrued expenses and other current liabilities (6,775 ) Total liabilities assumed $ (6,775 ) Net assets acquired (in thousands) $ 56,714 The goodwill of $13.7 million will not be deductible for income tax purposes. |
Intangible Assets, Net
Intangible Assets, Net | 3 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, net | 10. Intangible Assets, net Intangible assets as of December 31, 2020 and September 2020 (in thousands): Estimated Useful Life Cannabis Licenses Tradename Customer Relationship Non-compete Technology Accumulated Amortization Net Carrying Amount Balance as September 30, 2020 $ 12,679 $ 458 $ 643 $ 220 $ - $ (730 ) $ 13,270 YMY Ventures 15 - - - - - (13 ) (13 ) Western Coast Ventures, Inc. 15 - - - - - (41 ) (41 ) Yerba Buena 3-15 years - - - - - (43 ) (43 ) Foothill (7LV) 15 - - - - - (130 ) (130 ) Driven Deliveries 10-15 years 44,000 1,800 600 - 1,800 (18 ) 48,182 Other 5 - - - - - - - Balance as December 31, 2020 $ 56,679 $ 2,258 $ 1,243 $ 220 $ 1,800 $ (975 ) $ 61,225 Actual amortization expense to be reported in future periods could differ from these estimates as a result of new intangible asset acquisitions, changes in useful lives or other relevant factors or changes. Amortization was recorded for the quarter ended December 31, 2020 of $245,000 and $121,000 for the quarter ended December 31, 2019. The following table is a runoff of expected amortization in the following 5-year period as of December 31: 2021 $ 4,147 2022 4,147 2023 4,147 2024 4,147 2025 4,147 Thereafter 40,490 $ 61,225 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | 11. Accounts payable and accrued expenses Accounts payable and accrued expenses consist of the following (in thousands): December 31, 2020 September 30, 2020 Accounts payable 5,640 $ 1,784 Accrued credit cards 43 41 Accrued interest 186 134 Accrued payroll 616 616 Other 2,834 408 Total Accounts Payable and Accrued Expenses $ 9,319 $ 2,983 |
Notes Payable and Advances
Notes Payable and Advances | 3 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable and Advances | 12. Notes Payable and Advances The following table summarizes the Company’s short-term notes and advances, acquisition note payable, due to related party loans, and long-term debt, mortgages as of the quarter ended December 31, 2020 and year ended September 30, 2020: December 31, September 30, 2020 2020 Equipment financing $ 24 $ 27 Insurance financing 90 177 Mortgages payable - 923 Promissory note 1,815 2,298 Settlement payable 250 - Due to related party 107 200 $ 2,286 $ 3,625 Acquisition notes payable 2,666 665 Total notes payable and advances $ 4,952 $ 4,290 Acquisition payable - long term 516 - Long-term mortgages 4,785 3,685 Total long term debt $ 5,301 $ 3,685 Equipment financing In Effective April 29, 2018, the Company entered into a 36-month premium finance agreement in consideration for a John Deere Gator Tractor in the principal amount of $15,710. The note bears no annual interest rate and requires the Company to make thirty-six monthly payments of $442 over the term of the note. As of December 31, 2020, the obligation outstanding is $1,770. No amount was recorded for the premium for the non-interest-bearing feature of the note as it was immaterial. The note is secured by the equipment financed. November 2017, the Company entered into a promissory note in the amount of $21,749 from a vendor of the Company to finance the acquisition of a security electronics system in one of its properties. The promissory note bears an interest rate of 18% per annum and contains a 10% servicing fee. The note matures 24 months after issuance and is secured by certain security electronics purchased with proceeds of the note. This vendor is now out of business. The obligation remains outstanding at $14,950 as of December 31, 2020 and will be written off. Pursuant to the Company’s acquisition of Yerba Buena the Company assumed a note payable obligation dated July 2017 related to a tractor which had a 60-month premium finance agreement. The principal amount was $28,905. The note bears no annual interest rate and requires the Company to make sixty monthly payments of $482 over the term of the note. As of December 31, 2020, the obligation outstanding is $8,167. No amount was recorded for the premium for the non-interest-bearing feature of the note as it was immaterial. The note is secured by the equipment financed. Insurance financing Effective February 7, 2020, the Company entered into a 12-month premium finance agreement in partial consideration for an insurance policy in the principal amount of $300,150. The note bears an annual interest rate of 7.46%. The Company paid $60,255 as a down payment on February 7, 2020, the note requires the Company to make 9 monthly payments of $22,718 over the remaining term of the note. As of December 31, 2020, the obligation outstanding is $22,718. Effective July 31, 2020, the Company entered into a 10-month premium finance agreement in partial consideration for an insurance policy in the principal amount of $53,325. The note bears an annual interest rate of 7.5%. The Company paid $15,602 as a down payment on July 31, 2020, the note requires the Company to make 10 monthly payments of $3,772 over the remaining term of the note. As of December 31, 2020, the obligation outstanding is $18,861. Effective July 31, 2020, the Company entered into a 10-month premium finance agreement in partial consideration for an insurance policy in the principal amount of $78,056. The note bears an annual interest rate of 7.5%. The Company paid $22,984 as a down payment on July 31, 2020, the note requires the Company to make 10 monthly payments of $5,507 over the remaining term of the note. As of December 31, 2020, the obligation outstanding is $27,536. Effective May 24, 2020, the Company entered into a 9-month premium finance agreement in partial consideration for an insurance policy in the principal amount of $16,777. The note bears an annual interest rate of 8.7%. The Company paid $3,485 as a down payment on May 24, 2020, the note requires the Company to make 9 monthly payments of $1,339 over the remaining term of the note. As of December 31, 2020, the obligation outstanding is $4,618. Effective July 16, 2020, the Company entered into a 9-month premium finance agreement in partial consideration for an insurance policy in the principal amount of $10,629. The note bears an annual interest rate of 11%. The Company paid $4,009 as a down payment on July 16, 2020, the note requires the Company to make 9 monthly payments of $736 over the remaining term of the note. As of December 31, 2020, the obligation outstanding is $2,942. Effective September 30, 2020, the Company entered into a 10-month premium finance agreement in partial consideration for an insurance policy in the principal amount of $2,611. The note bears an annual interest rate of 7.0%. The Company paid $1,043 as a down payment on September 30, 2020, the note requires the Company to make 10 monthly payments of $157 over the remaining term of the note. As of December 31, 2020, the obligation outstanding is $1,098. Effective November 7, 2020, the Company entered into a 10-month premium finance agreement in partial consideration for an insurance policy in the principal amount of $6,675. The note bears an annual interest rate of 11.4%. The Company paid $1,371 as a down payment on November 7, 2020, the note requires the Company to make 10 monthly payments of $530 over the remaining term of the note. As of December 31, 2020, the obligation outstanding is $4,243. Effective December 4, 2020, the Company entered into a 10-month premium finance agreement in partial consideration for an insurance policy in the principal amount of $9,920. The note bears an annual interest rate of 12.8%. The Company paid $2,383 as a down payment on December 4, 2020, the note requires the Company to make 10 monthly payments of $754 over the remaining term of the note. As of December 31, 2020, the obligation outstanding is $7,537. Short-term mortgages payable On January 16, 2018, the Company consummated a “Contract for Sale” for a Farm Property in Mulino Oregon (the “Mulino Property”). The purchase price was $1,700,000 which was reduced by a rental credit of approximately $135,000 which is equivalent to nine months’ rent at $15,000 a month and an additional credit of $9,500 for additional work done on the property. In connection with the purchase of the property, the Company made a cash payment as down payment plus payment of closing costs in the amount of $370,637 and issued a promissory note in the amount of $1,200,000 with a maturity of January 2020. The Company will pay monthly installments of principal and interest (at a rate of 2% per annum) in the amount of $13,500, commencing in July 2018 through the maturity date (January 2020), at which time the entire unpaid principal balance and any remaining accrued interest shall be due and payable in full. No amount was recorded for the premium for the below market rate feature of the note as it was immaterial. The note is secured by a deed of trust on the property. The Company performed an analysis and determined that the rate obtained was below market, however, no premium was recorded as the Company determined it was immaterial. As of December 31, 2020, the balance due of $922,500 including interest and fees in the amount of $144,486 was satisfied in full through the Company obtaining a new mortgage on the property (see Long-term mortgages below). Promissory note In January 2020, the Company issued two promissory notes with a principal balance of $500,000 to accredited investors (the “Note Holders”). The notes mature in July 2020 and has an annual rate of interest of 12%. In connection with the issuance of the promissory notes, the Company issued the Note Holders 100,000 common stock purchase warrants with a five-year term from the issuance date, $0.85 per share. As of July 2020, in consideration of the warrants being amended to $0.45 per share with an extended the term from five to a ten-year term, the maturity date has been extended to December 13, 2020. In May 2020, the Company made a principal payment of $20,000. As of December 31, 2020, the obligation outstanding is $480,000 and $474,949 net of debt discount. The noteholders have agreed to have these notes converted during the second quarter ended March 31, 2021. In January 2020, the Company issued two promissory notes with a principal balance of $500,000 to accredited investors (the “Note Holders”). The note matures in October 2020 and has an annual rate of interest of 12%. In connection with the issuance of the promissory note, the Company issued the Note Holders 100,000 common stock purchase warrants with a five-year term from the issuance date, $0.85 per. As of July 2020, in consideration of the warrants being amended to $0.45 per share with an extended the term from five to a ten-year term, the maturity date has been extended to December 13, 2020 As of December 31, 2020, the obligation outstanding is $500,000 and $449,449 net of debt discount. The Company was notified that the maturity dates on these notes have been extended for the near-term. The below Promissory Notes evidencing the PPP Loans are entered into subject to guidelines applicable to the program and contains customary representations, warranties, and covenants for this type of transaction, including customary events of default relating to, among other things, payment defaults and breaches of representations and warranties or other provisions of the Promissory Notes. The occurrence of an event of default may result in, among other things, the Company becoming obligated to repay all amounts outstanding. We continue to evaluate and may still apply for additional programs under the CARES Act, there is no guarantee that we will meet any eligibility requirements to participate in such programs or, even if we are able to participate, that such programs will provide meaningful benefit to our business. The Company plans to use the PPP funds received in a manner to obtain debt forgiveness. The Company will use the funds for payroll, rent, and utilities. In July 2020, the Company’s wholly owned subsidiary in Oregon received loan proceeds of $220,564 pursuant to the Paycheck Protection Program under the CARES Act. The Loan, which was in the form of a promissory note, dated July 09, 2020, between the Company and Cross River Bank as the lender, matures on July 09, 2022 and bears interest at a fixed rate of 1% per annum, payable monthly commencing in six months. Under the terms of the PPP, the principal may be forgiven if the Loan proceeds are used for qualifying expenses as described in the CARES Act, such as payroll costs, benefits mortgage interest, rent, and utilities. No assurance can be provided that the Company will obtain forgiveness of the Loan in whole or in part. In addition, details of the PPP continue to evolve regarding which companies are qualified to receive loans pursuant to the PPP and on what terms, and the Company may be required to repay some or all of the Loan due to these changes or different interpretations of the PPP requirements. As of December 31, 2020, the obligation outstanding is $220,565. In January 2020, the Company received notification for complete forgiveness related to this obligation. The Company received loan proceeds of $266,820 pursuant to the Paycheck Protection Program under the CARES Act. The Loan, which was in the form of a promissory note, dated May 01, 2020, between the Company and Transportation Alliance Bank as the lender, matures on May 01, 2022 and bears interest at a fixed rate of 1% per annum, payable monthly commencing in six months. Under the terms of the PPP, the principal may be forgiven if the Loan proceeds are used for qualifying expenses as described in the CARES Act, such as payroll costs, benefits mortgage interest, rent, and utilities. No assurance can be provided that the Company will obtain forgiveness of the Loan in whole or in part. In addition, details of the PPP continue to evolve regarding which companies are qualified to receive loans pursuant to the PPP and on what terms, and the Company may be required to repay some or all of the Loan due to these changes or different interpretations of the PPP requirements. As of December 31, 2020, the obligation outstanding is $266,820. In January 2020, the Company received notification for complete forgiveness related to this obligation. The Company’s related entity received loan proceeds of $245,400 pursuant to the Paycheck Protection Program under the CARES Act. The Loan, which was in the form of a promissory note, dated June 03, 2020, between the Company and Coastal States Bank as the lender, matures on June 03, 2022 and bears interest at a fixed rate of 1% per annum, payable monthly commencing in six months. Under the terms of the PPP, the principal may be forgiven if the Loan proceeds are used for qualifying expenses as described in the CARES Act, such as payroll costs, benefits mortgage interest, rent, and utilities. No assurance can be provided that the Company will obtain forgiveness of the Loan in whole or in part. In addition, details of the PPP continue to evolve regarding which companies are qualified to receive loans pursuant to the PPP and on what terms, and the Company may be required to repay some or all of the Loan due to these changes or different interpretations of the PPP requirements. As of December 31, 2020, the obligation outstanding is $245,400. The Company’s subsidiary received loan proceeds of $62,500 pursuant to the Paycheck Protection Program under the CARES Act. The Loan, which was in the form of a promissory note, dated June 25, 2020, between the Company and First Home Bank as the lender, matures on June 25, 2022 and bears interest at a fixed rate of 1% per annum, payable monthly commencing in six months. Under the terms of the PPP, the principal may be forgiven if the Loan proceeds are used for qualifying expenses as described in the CARES Act, such as payroll costs, benefits mortgage interest, rent, and utilities. No assurance can be provided that the Company will obtain forgiveness of the Loan in whole or in part. In addition, details of the PPP continue to evolve regarding which companies are qualified to receive loans pursuant to the PPP and on what terms, and the Company may be required to repay some or all of the Loan due to these changes or different interpretations of the PPP requirements. As of December 31, 2020, the obligation outstanding is $62,500. The Company’s subsidiary received loan proceeds of $140,407 pursuant to the Paycheck Protection Program under the CARES Act. The Loan, which was in the form of a promissory note, dated July 15, 2020, between the Company and Cross River Bank as the lender, matures on December 30, 2020 and bears interest at a fixed rate of 1% per annum, payable monthly commencing in six months. Under the terms of the PPP, the principal may be forgiven if the Loan proceeds are used for qualifying expenses as described in the CARES Act, such as payroll costs, benefits mortgage interest, rent, and utilities. No assurance can be provided that the Company will obtain forgiveness of the Loan in whole or in part. In addition, details of the PPP continue to evolve regarding which companies are qualified to receive loans pursuant to the PPP and on what terms, and the Company may be required to repay some or all of the Loan due to these changes or different interpretations of the PPP requirements. As of December 31, 2020, the obligation outstanding is $140,407. In January 2020, the Company received notification for complete forgiveness related to this obligation. Settlement payable As part of the Agreement and Plan of Merger with Driven Deliveries the Company assumed a settlement payable related to an employment claim where Driven shall pay certain employees a total of $250,451. This settlement is payable in equal bi-monthly payments over a period of seventeen (17) Months (36 pay periods), beginning in February 2021. As of December 31, 2020, the settlement payable is presented on the balance sheet in the amount of $250,451. Due to related parties During November 2017, one of the Company’s controlled subsidiaries entered into a Promissory Note with a face value of $80,000 with a corporate entity that has shareholders, officers and directors in common with the Company. The Note bears interest at a rate of 6% per annuum and was due one year from the date of issue. The note currently in default is due on demand. As of December 31, 2020, the obligation outstanding is $80,000. As of December 31, 2020, the Company had a related party loan payable of $26,769 payable to the Company’s officer. Acquisition notes payable In April 2019, the Company entered into promissory note with a principal balance of $400,000 related to its acquisition of Yerba Buena, Oregon LLC. The note was issued on April 8, 2019 and is due on April 8, 2021. The note has a coupon interest rate of 8%. The note required 12 monthly payments of $2,667, then an additional 12 monthly payments of $16,667 and then a final balloon payment of the remaining principal and accrued interest. As of December 31, 2020, the Company has made payments of $42,281 leaving a balance of $357,719 in Short-term liabilities. The note holder has called the note in default, however, has not as of the date of these financial statements, required performance of any of the default remediation as required under the note. In September 2018, the Company entered into an agreement to acquire 50% of the membership interest of YMY. The purchase price for the 50% interest was approximately $0.8 million. In connection with this agreement, as of September 30, 2019, the Company has paid approximately $500,000 and recorded a note payable of $307,500. As of December 31, 2020, the Company has not made any payments related to this note. As part of the Agreement and Plan of Merger with Driven Deliveries the Company assumed a acquisition liabilities totaling $2,000,418. These liabilities related to a California’s Private Attorney General Act (“PAGA”) labor claims, liabilities related to a Purchase Agreement for certain assets, and a settlement related to a prior acquisition. As of December 31, 2020, the total of the assumed liabilities is $2,516,832, the current portion of this note is $2,000,418. Long-term debt, mortgages In January 2020, the Company refinanced a mortgage payable on property located in Oregon to acquire additional funds. The mortgage bears interest at 15% per annum. Monthly interest only payments began February 1, 2020 and continue each month thereafter until paid. The entire unpaid balance is due on January 31, 2022, the maturity date of the mortgage, and is secured by the underlying property. The mortgage terms do not allow participation by the lender in either the appreciation in the fair value of the mortgaged real estate project or the results of operations of the mortgaged real estate project. The note has been cross guaranteed by the CEO and Director of the Company. As of December 31, 2020, the obligation outstanding is $400,000. In March 2020, the Company executed a $1,585,000 mortgage payable on property located in Oregon to acquire additional funds. The mortgage bears interest at 11.55% per annum. Monthly interest only payments began April 1, 2020 and continue each month thereafter until paid. The entire unpaid balance is due on April 1, 2023, the maturity date of the mortgage, and is secured by the underlying property. The Company paid costs of approximately $120,000 to close on the mortgage. The mortgage terms do not allow participation by the lender in either the appreciation in the fair value of the mortgaged real estate project or the results of operations of the mortgaged real estate project. The note has been cross guaranteed by the CEO and Director of the Company. As of December 31, 2020, the obligation outstanding is $1,585,000. In March 2020, the Company executed a $400,000 mortgage payable on property located in Oregon to acquire additional funds. The mortgage bears interest at 11.55% per annum. Monthly interest only payments began May 1, 2020 and continue each month thereafter until paid. The entire unpaid balance is due on April 1, 2022, the maturity date of the mortgage, and is secured by the underlying property. The Company paid costs of approximately $38,000 to close on the mortgage. The mortgage terms do not allow participation by the lender in either the appreciation in the fair value of the mortgaged real estate project or the results of operations of the mortgaged real estate project. The note has been cross guaranteed by the CEO and Director of the Company. As of December 31, 2020, the obligation outstanding is $400,000. In March 2020, the Company refinanced a mortgage payable on property located in Oregon to acquire additional funds. The mortgage bears interest at 15% per annum. Monthly interest only payments began April 1, 2020 and continue each month thereafter until paid. The entire unpaid balance is due on March 31, 2022, the maturity date of the mortgage, and is secured by the underlying property. The mortgage terms do not allow participation by the lender in either the appreciation in the fair value of the mortgaged real estate project or the results of operations of the mortgaged real estate project. The note has been cross guaranteed by the CEO and Director of the Company. As of December 31, 2020, the obligation outstanding is $700,000. In July 2020, the Company executed a mortgage payable on property located in Oregon to acquire additional funds. The mortgage bears interest at 14% per annum. Monthly interest only payments began August 1, 2020 and continue each month thereafter until paid. The entire unpaid balance is due on July 31, 2023, the maturity date of the mortgage, and is secured by the underlying property. The mortgage terms do not allow participation by the lender in either the appreciation in the fair value of the mortgaged real estate project or the results of operations of the mortgaged real estate project. The note has been cross guaranteed by the CEO and Director of the Company. As of December 31, 2020, the obligation outstanding is $200,000. In April 2018, the Company received a 37.5% interest in NVD RE Corp. (“NVD”) upon its issuance to NVD of a commitment to contribute $1.275 million to NVD which included the purchase price of $600,000 and an additional commitment to pay tenant improvement costs of $675,000. In the year ended September 30, 2019, NVD obtained $300,000 in proceeds from a mortgage on its property. The funds from this mortgage were advanced to the Company. The advance is undocumented, non-interest bearing and due on demand. As of September 30, 2019, the balance due totals $300,000. In August 2020, the Company refinanced this obligation and paid the $300,000 balance. The refinanced mortgage term is 36 months and includes and interest rate of 14% and monthly interest only payments of $4,666,67. As of December 31, 2020, the balance due totals $400,000. In November 2020, the Company executed a mortgage payable on property located in Mulino, Oregon to acquire additional funds. The mortgage bears interest at 15% per annum. Monthly interest only payments began December 1, 2020 and continue each month thereafter until paid. The entire unpaid balance is due on November 2022, the maturity date of the mortgage, and is secured by the underlying property. The mortgage terms do not allow participation by the lender in either the appreciation in the fair value of the mortgaged real estate project or the results of operations of the mortgaged real estate project. The note has been cross guaranteed by the CEO and Director of the Company. As of December 31, 2020, the obligation outstanding is $1,100,000. The following is a table of the 5-year runoff of our long-term debt as of December 31: 2021 $ - 2022 2,600 2023 2,185 2024 - 2025 - Thereafter - $ 4,785 |
Convertible Debt
Convertible Debt | 3 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Debt | 13. Convertible debt Canaccord On December 27, 2018, the Company entered into an Agency Agreement (the “Agency Agreement”) for a private offering of up to 10,000 convertible debenture special warrants of the Company (the “CD Special Warrants”) for aggregate gross proceeds of up to CDN$10,000,000 (the “Offering”). The net proceeds of the Offering were used for expansion initiatives and general corporate purposes. The Company’s functional currency is U.S. dollars. In December 2018 and January 2019, the Company issued 3,121 CD Special Warrants in the first closing of the Offering, at a price of CDN $1,000 per CD Special Warrant, and received aggregate gross proceeds of CDN $3.1 million or $2.3 million USD. In connection with this offering, the Company issued the agents in such offering 52,430 convertible debenture special warrants (the “Broker CD Special Warrants”) as partial satisfaction of a selling commission. On March 14, 2019, the Company issued 962 CD Special Warrants in the second and final closing of the Offering, at a price of CDN $1,000 per CD Special Warrant, and received aggregate gross proceeds of CDN $1.0 million or $0.7 million USD. In connection with this offering, the Company issued the agents in such offering 5,600 convertible debenture special warrants (the “Broker CD Special Warrants”) as partial satisfaction of a selling commission. The total aggregate proceeds of the Offering totaled $4.1 million CDN or $3.1 million USD. Each CD Special Warrant will be exchanged (with no further action on the part of the holder thereof and for no further consideration) for one convertible debenture unit of the Company (a “Convertible Debenture Unit”), on the earlier of: (i) the third business day after the date on which both (A) a receipt (the “Receipt”) for a (final) document (the “Qualification Document”) qualifying the distribution of the Convertible Debentures (as defined below) and Warrants (as defined below) issuable upon exercise of the CD Special Warrants has been issued by the applicable securities regulatory authorities in the Canadian jurisdictions in which purchasers of the CD Special Warrants are resident (the “Canadian Jurisdictions”), and (B) a registration statement (the “Registration Statement”) registering the resale of the common shares underlying the Convertible Debentures and Warrants has been declared effective by the U.S. Securities and Exchange Commission (the “Registration”); and (ii) the date that is six months following the closing of the Offering. The Company has also provided certain registration rights to purchasers of the CD Special Warrants. The CD Special Warrants were exchanged for Convertible Debenture Units after six months as U.S. and Canadian registrations were not effective at that time. Each Convertible Debenture Unit is comprised of CDN $1,000 principal amount 8.0% senior unsecured convertible debenture (each, a “Convertible Debenture”) of the Company and 167 common share purchase warrants of the Company (each, a “Warrant”). Each Warrant entitles the holder to purchase one common share of the Company (each, a “Warrant Share”) at an exercise price of CDN $3.90 per Warrant Share for a period of 24 months following the closing of the Offering. The Company has agreed to use its best efforts to obtain the Receipt and Registration within six months following the closing of the Offering. If the Receipt and Registration have not been obtained on or before 5:00 p.m. (PST) on the date that is 120 days following the closing of the Offering, each unexercised CD Special Warrant will thereafter entitle the holder thereof to receive, upon the exercise thereof and at no additional cost, 1.05 Convertible Debenture Units per CD Special Warrant (instead of 1.0 Convertible Debenture Unit per CD Special Warrant). Until the Receipt and Registration have been obtained, securities issued in connection with the Offering (including any underlying securities issued upon conversion or exercise thereof) will be subject to a 6-month hold period from the date of issue. Since the CD Special Warrants were exchanged for Convertible Debenture Units after 6 months as U.S. and Canadian registrations were not effective at that time, the holders received 1.05 Convertible Debenture Units per CD Special Warrant. The brokered portion of the Offering (CDN $2.5 million, $1.9 million USD) was completed by a syndicate of agents (collectively, the “Agents”). The Company paid the Agents a cash commission equal to 7.0% of the gross proceeds raised in the brokered portion of the Offering. As additional consideration, the Company issued the Agents such number of non-transferable broker convertible debenture special warrants (the “Broker CD Special Warrants”) as is equal to 7.0% of the number of CD Special Warrants sold under the brokered portion of the Offering. Each Broker CD Special Warrant shall be exchanged, on the same terms as the CD Special Warrants, into broker warrants of the Company (the “Broker Warrants”). Each Broker Warrant entitles the holder to acquire one Convertible Debenture Unit at an exercise price of CDN $1,000, until the date that is 24 months from the closing date of the Offering. The distribution of the Broker Warrants issuable upon the exchange of the Broker CD Special Warrants shall also be qualified under the Qualification Document and the resale of the common shares underlying the Broker Warrants will be registered under the Registration Statement. The Company also paid the lead agent a commission noted above of CDN$157,290, corporate finance fee equal to CDN $50,000 in cash and as to $50,000 in common shares of the Company at a price per share of CDN $3.00 plus additional expenses of CDN$20,000. In addition, the Company paid the trustees legal fees of CDN$181,365. In total the Company approx. USD $0.32 million in fees and expenses associated with the offering. The issuance of the securities was made in reliance on the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), for the offer and sale of securities not involving a public offering, Regulation D promulgated under the Securities Act, Regulation S, in Canada to “accredited investors” within the meaning of National Instrument 45106 and other exempt purchasers in each province of Canada, except Quebec, and/or outside Canada and the United States on a basis which does not require the qualification or registration. The securities being offered have not been registered under the Securities Act and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. The Convertible Debenture features contain the following embedded derivatives: ● Conversion Option - The Convertible Debentures provide the holder the right to convert all or any portion of the outstanding principal into common shares of the Company at a conversion price of C$3.00 such that 333.33 common shares are issued for each C$1,000 of principal of Convertible Debentures converted. ● Contingent Put - Upon an Event of Default, the Convertible Debentures settle for cash at the outstanding principal and interest amount (at discretion of the Indenture Trustee or upon request of Holders of 25% or more of principal of the Convertible Debentures). ● Contingent Put - Upon a Change in Control, the Convertible Debentures settle for cash at the outstanding amount and principal and interest * 105% (where Holder accepts a Change of Control Offer). The conversion option, the contingent put feature upon an Event of Default, and the contingent put feature upon a Change in Control should be bifurcated and recognized collectively as a compound embedded derivative at fair value at inception and at each quarterly reporting period. A five percent penalty assessed for failure to timely file a registration statement to register the stock underlying the CD special warrants. The Company valued the warrants granted using the Black-Scholes pricing model and determined that the value at grant date was approximately $424,000 USD (this includes the warrants issued as part of the penalty for failure to timely file the required registration statement under the indenture agreement). The significant assumptions used in the valuation are as follows: Fair value of underlying common shares $ 1.78 to 2.10 Exercise price (converted to USD) $ 2.93 Dividend yield - Historical volatility 85 % Risk free interest rate 1.4% to 1.9 % The warrants are not indexed to the Company’s own stock under ASC 815, Derivatives and Hedging. As such, the warrants do not meet the scope exception in ASC 815-10-15-74(a) to derivative accounting and therefore were accounted for as a liability in accordance with the guidance in ASC 815. The warrant liability was recorded at the date of grant at fair value with subsequent changes in fair value recognized in earnings each reporting period. In April 2020, the Company received approval of the holders Warrant holders of the warrants and the holders debenture holders of the Convertible Debentures to reprice the convertible securities issued in connection with the Company’s special warrant financing, which closed on December 27, 2018 and June 14, 2019. The share purchase warrants of the Company issued in connection with the financing will be repriced to C$1.50 per Common Share and the convertible debentures of the Company issued in connection with the financing will be repriced to C$1.15 per common share. Additionally, the Debenture holders have approved the following amendments to the terms of the convertible debentures: (i) an extension to the maturity date of the convertible debentures to three years from the date of issuance; and (ii) an amendment to permit the Company to force the conversion of the principal amount of the then outstanding convertible debentures and any accrued and unpaid interest thereof at the new conversion price on not less than June days’ prior written notice if the closing trading price of the shares of common stock of the Company’s common shares exceeds C$1.90 for a period of 10 consecutive trading days on the CSE. The Warrant holders have also approved the inclusion of an early acceleration feature in accordance with the policies of the Canadian Securities Exchange, permitting the Company to accelerate the expiry date of the warrants should the closing trading price of the Common Shares exceed C$1.87 for a period of 10 consecutive trading days on the CSE. The table below shows the warrant liability and embedded derivative liability recorded in connection with the Canaccord convertible notes and the subsequent fair value measurement during the quarter ended December 31, 2020 in USD, ( in thousands Warrant Liability Derivative Liability Balance at September 30, 2020 $ 67 $ 592 Change in fair value (20 ) (223 ) Balance at December 31, 2020 $ 47 $ 369 As part of the Agreement and Plan of Merger with Driven Deliveries the Company assumed a convertible promissory note with a principal of $1,050,000. The note accrues interest at a rate of 8% per annum. The note converts to the Company’s common stock at a rate of $0.50 per share. This note has an original issuance discount of $50,000. The proceeds of the note were paid out in two tranches, the first for $787,500 upon the execution of the note and the second for $262,500 30 days after the original funding. Each tranche will be due 12 months from the date of the funding. The Company can prepay the note as follows: if the note is outstanding for less than 90 days than 105% of the principal will be paid, at 91-120 day 110% of the principal will be paid, at 121-180 days 115% of the principal will be paid, and at 181-365 days 120% of the principal will be paid. So long as this note is outstanding, upon any issuance by the Company or any of its subsidiaries of any convertible debt security (whether such debt begins with a convertible feature or such feature is added at a later date) with any term more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly provided to the holder in this Note, then the Company shall notify the holder of such additional or more favorable term and such term, at the holder’s option, shall become a part of this note and its supporting documentation. The types of terms contained in the other security that may be more favorable to the holder of such security include, but are not limited to, terms addressing conversion discounts, terms addressing maturity, conversion look back periods, interest rates, original issue discount percentages and warrant coverage. The Company notes the agreement included certain make-whole provisions related to the issuance of these shares which resulted in a liability. The Company did not record the liability as it was determined to be trivial. As of December 31, 2020, the outstanding balance on this obligation is $1,017,110, net of the debt discount of $23,390. As part of the Agreement and Plan of Merger with Driven Deliveries the Company assumed a convertible promissory note with a principal of $50,000. The note accrues interest at a rate of 10% per annum. The note converts to the Company’s common stock at a rate of $0.50 per share. The interest on the promissory note is to be paid quarterly in arrears on the fifth day of each calendar quarter. The principal amount of the note is due on the maturity date of June 30, 2021. As of December 31, 2020, the outstanding balance on this obligation is $50,000. The table below shows the net amount of convertible notes as of December 31, 2020 in USD ( in thousands December 31, 2020 Principal value of 8%, convertible at $0.90 at December 31, 2020, due December 27, 2021 including penalty provision of $155,239 $ 3,123 Principal value of 10%, convertible at $1.31 at December 31, 2020, due May 30, 2021 (see Note 9) 2,754 Principal value of various convertible notes, convertible at $0.50 at December 31, 2020, due June – August, 2021 1,067 Debt discount (125 ) Cumulative foreign currency impact (24 ) Carrying value of convertible notes $ 6,795 Additionally, as part of the Agreement and Plan of Merger with Driven Deliveries the Company assumed a convertible promissory note with a principal of $805,000 payable to a related party. The note accrues interest at a rate of 10% per annum. The note converts to the Company’s common stock at a rate of $0.50 per share. Beginning January 1, 2021, $15,000 of principal is payable per month in addition to 50% of owed interest. Beginning April 1, 2021, 10% of the Company’s monthly cash flow, as defined will also be paid and applied to the principal of the note. The principal amount of the note along with accrued interest is due on the maturity date of June 1, 2025. As of December 31, 2020, the outstanding balance on this obligation is $805,000. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 14. Fair Value Measurements In accordance with ASC 820 (Fair Value Measurements and Disclosures), the Company uses various inputs to measure the outstanding warrants and certain embedded conversion feature associated with convertible debt on a recurring basis to determine the fair value of the liability. ASC 820 also establishes a hierarchy categorizing inputs into three levels used to measure and disclose fair value. The hierarchy gives the highest priority to quoted prices available in active markets and the lowest priority to unobservable inputs. An explanation of each level in the hierarchy is described below: Level 1 – Unadjusted quoted prices in active markets for identical instruments that are accessible by the Company on the measurement date Level 2 – Quoted prices in markets that are not active or inputs which are either directly or indirectly observable Level 3 – Unobservable inputs for the instrument requiring the development of assumptions by the Company The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of December 31, 2020 (in thousands): Fair value measured at December 31, 2020 Quoted Significant Significant prices in active markets other observable inputs unobservable inputs Fair value (Level 1) (Level 2) (Level 3) Warrant liability $ 9,178 $ - $ - $ 9,178 Embedded derivative liability 384 - - 384 Total fair value $ 9,562 $ - $ - $ 9,562 There were no transfers between Level 1, 2 or 3 during the quarter ended December 31, 2020. The following table presents changes in Level 3 liabilities measured at fair value for the quarter ended December 31, 2020. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities) inputs (in thousands). Embedded Warrant Liability Derivative Liability Total Balance – September 30, 2020 $ 257 $ 592 $ 849 Warrants granted for services 11 - 11 Warrants issued pursuant to acquisition (see Note 9) 9,000 - 9,000 Change in fair value (90 ) (208 ) (298 ) Balance – December 31, 2020 $ 9,178 $ 384 $ 9,562 A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liabilities and embedded conversion feature that are categorized within Level 3 of the fair value hierarchy as of December 31, 2020 and September 30, 2020 is as follows: Warrant Liability As of As of December 31, 2020 September 30, 2020 Strike price $ 0.58 $ 0.36 to 2.96 Contractual term (years) 2.85 1 to 3 Volatility (annual) 124 % 100 % Risk-free rate 0.67 % 0.28 % Dividend yield (per share) 0 % 0 % Embedded Derivative Liability As of As of Strike price $ 1.08 $ 1.12 Contractual term (years) .99 1.5 Volatility (annual) 112 % 101 % Risk-free rate 0.10 % 0.25 % Dividend yield (per share) 0.00 % 0.00 % Credit spread 14% to 16 % 11.21 % The Company used a lattice based trinomial model developed by Tsiveriotis, K. and Fernades in which the three lattices incorporate (1) the Company’s underlying common stock price; (2) the value of the debt components of the convertible notes; and (3) the value of the equity component of the convertible notes. The main drivers of sensitivity for the model are volatility and the credit spread. The model used will vary by approximately 1.5% for a 4% change in volatility and will vary by less than 1% for each 1% change in credit spread. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | 15. Shareholders’ Equity In 2016, the Company adopted a plan to allow the Company to compensate prospective and current employees, directors, and consultants through the issuance of equity instruments of the Company. The plan has an effective life of 10 years. The plan is administered by the board of directors of the Company until such time as the board transfers responsibility to a committee of the board. The plan is limited to issuing common shares of the Company up to 15% of the total shares then outstanding. No limitations exist on any other instruments issuable under the plan. In the event of a change in control of the Company, all unvested instruments issued under the plan become immediately vested. Preferred shares The Company had two series of preferred shares designated with no preferred shares issued and outstanding as of December 31, 2020 and September 30, 2020. Common shares During the three months ended December 31, 2019, the Company issued 394,270 shares of its common stock in connection with a Membership Interest Purchase Agreement for real property located in Eugene, Oregon. The agreed upon purchase price was $500,000 less the lien of $105,732. The Company acquired the property from a related party and recorded the building at its carrying value of approximately $500,000. In connection with this transaction the Company issued 394,270 common shares at $1.00 per share. During the three months ended December 31, 2019, the Company issued 5,000 shares of its common stock related to a consulting agreement for a fair value of approximately $4,000 or $0.89 per share. During the quarter ended December 31, 2020, the Company issued 1,868,750 shares of its common stock valued at $561,000 as stock-based compensation. During the quarter ended December 31, 2020, the Company issued 1,569,570 shares of its common stock related to various consulting agreements for a fair value of approximately $589,000 or $0.38 per share. During the quarter ended December 31, 2020, the Company cancelled 525,400 common shares related convertible notes. During the quarter ended December 31, 2020, the Company converted $91,459 of its accrued interest related to convertible debt in exchange for 207,861 shares of the company’s common stock. The Company also issued 293,700 common shares in satisfaction of rent payments owed of $117,480. As part of the Agreement and Plan of Merger with Driven Deliveries the Company issued 101,968,994 common shares. Pursuant to the effectiveness of the Company’s S-1 registration statement the Company has received offers and has been tendered $2.87 million and will issue 6,833,069 common shares. |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Dec. 31, 2020 | |
Compensation Related Costs [Abstract] | |
Stock Based Compensation | 16. Stock Based Compensation Stock Options The fair value of the Company’s common stock was based upon the publicly quoted price on the date that the final approval of the awards was obtained. The Company does not expect to pay dividends in the foreseeable future so therefore the expected dividend yield is 0%. The expected term for stock options granted with service conditions represents the average period the stock options are expected to remain outstanding and is based on the expected term calculated using the approach prescribed by the Securities and Exchange Commission’s Staff Accounting Bulletin for “plain vanilla” options for options granted in 2019. The expected term for stock options granted with performance and/or market conditions represents the period estimated by management by which the performance conditions will be met. The Company obtained the risk-free interest rate from publicly available data published by the Federal Reserve. The Company uses a methodology in estimating its volatility percentage from a computation that was based on a comparison of average volatility rates of similar companies to a computation based on the standard deviation of the Company’s own underlying stock price’s daily logarithmic returns. During the quarter ended December 31, 2020, pursuant to an employment agreement the Company issued 100,000 stock options. The fair value of options granted during the quarters ended December 31, 2020 and 2019 were estimated using the following weighted-average assumptions: Options: For the Three Months Ended December 31, 2020 December 31, 2019 Exercise price $ .40 $ 0.89 - $1.25 Expected term (years) 2.8 2.0 - 4.0 Expected stock price volatility 103.86% - 127.35 % 105.8% - 115.9 % Risk-free rate of interest 1.88% - 2.79 % 2 % Expected dividend rate 0 % 0 % A summary of option activity under the Company’s stock option plan for the three months ended December 31, 2020 is presented below: Number of Shares Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life (in years) Outstanding as of October 1, 2019 3,210,416 $ 2.45 $ - 2.1 Granted 2,362,500 0.33 - 2.89 Outstanding as of September 30, 2020 5,572,916 $ 1.77 $ - 1.4 Granted 100,000 $ 0.40 $ - 2.8 Outstanding as of December 31, 2020 5,672,916 $ 1.73 $ - 1.2 Estimated future stock-based compensation expense relating to unvested stock options was nominal as of December 31, 2020 and 2019. Weighted average remaining contractual life of the options is 1.2 years. Stock-based Compensation Expense Stock-based compensation expense for the three months ended December 31, 2020 and 2019 was comprised of the following (in thousands): Three months ended December 31, 2020 2019 Stock grants $ 1,151 $ 82 Stock options 61 415 Warrants 132 - Total stock-based compensation $ 1,344 $ 497 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 17. Commitments and contingencies As noted earlier in Note 1, the Company, engages in a business that constitutes an illegal act under the laws of the United States Federal Government. This raises several possible issues which may impact the Company’s overall operations, not the least of which are related to traditional banking and other key operational risks. Since cannabis remains illegal on the federal level, and most traditional banks are federally insured, those financial institutions will not service cannabis businesses. In states where medical or recreational marijuana is legal, dispensary owners, manufacturers, and anybody who “touches the plant,” continue to face a host of operational hurdles. While local, state-chartered banks and credit unions now accept cannabis commerce, there remains a reluctance by traditional banks to do business with them. Aside from a huge inconvenience and the need to find creative ways to manage financial flow, payroll logistics, and payment of taxes, his also poses tremendous risks to controls as a result of operating a lucrative business in cash. This lack of access to traditional banking may inhibit industry growth. In the period ended December 31, 2020, the Company’s accounts with a major money center bank were closed as the bank would not allow the Company to continue to use its banking network. The Company is in the process of creating a banking relationship with another institution. Despite the uncertainties surrounding the Federal government’s position on legalized marijuana, the Company does not believe these risks will have a substantive impact on its planned operations in the near term. In July 2016, the Company entered into a 10-year lease for a commercial building from an unrelated third party in Springfield, Oregon. The lease requires the Company to pay a starting base rental fee of $7,033 plus an additional estimated $315 per month in real estate taxes in which the base rental fee escalates each year by approximately 2%. All taxes (including reconciling real estate taxes), maintenance and utilities are included at the end of each year as a one-time payment. In addition, the Company also remitted $14,000 for a security deposit to the landlord. No amounts have been recorded for deferred rent in these financial statements as the amount was deemed immaterial by the Company. The Company has subleased this space pursuant to a 10-year lease. On February 22, 2018, both parties executed a lease addendum that adds contiguous property for 12,322 square feet. The term commences November 1, 2017 and continues through November 31, 2026 at a starting rate of $3,525 a month that escalates after the first year. The Company subleases this property to a related party (see disclosures below under “Springfield Suites”). As of December 31, 2020, Company eliminates this rental income in consolidation. In March 2018, the Company entered into a 3-year lease for the occupancy of the Company’s corporate office located in Boca Raton, Florida. The lease requires the Company to pay a base rental fee of $3,024 per month with yearly increases thereafter. All taxes, maintenance and utilities are billed separately. This space is currently being sub-leased for the reminder, which terminates in February 2021. In September 2019, the Company entered into a 4-year lease for the occupancy of the Company’s new corporate office located in Boca Raton, Florida. The lease requires the Company to pay a starting base rental fee of $4,285 per month with yearly increases thereafter. In January 2019, the Company entered into a 5-year lease for the occupancy of real estate and a building located in Hillsboro, Oregon. The lease requires the Company to pay a starting base rental fee of $9,696 per month with yearly increases thereafter. As of December 31, 2020, the Company has acquired interests in several entities more fully described in Note 5 and Note 7. As part of those interests, the Company has commitments to fund the acquisition of licenses and permits to allow for the cultivation and sale of cannabis and related products in the United States. As of December 31, 2020, Company estimates that its investees will need up to approximately $2 million to complete the acquisition of licenses and permits, to fund the buildout or expansion of facilities to fully operate in their respective cannabis markets, which will encompass several years of development. In December 2020, the Company filed a preliminary short form document with the securities regulatory authorities in each of the provinces of British Columbia, Alberta and Ontario in connection with a marketed public offering of units of the Company. The Offering is being led by Canaccord Genuity Corp. Each Unit shall be comprised of one common share in the capital of the Company and one common share purchase warrant of the Company Each Warrant is exercisable into one common share at an exercise price to be determined in the context of the market. The final pricing of each Unit, the exercise price of each Warrant, and the term of each Warrant will be determined in the context of the market prior to the filing of the final short form document in respect of the Offering. The net proceeds raised under the Offering will be used for working capital and general corporate purposes. The Company, as of December 31, 2020 executed an Agency Agreement and in consideration of the services rendered by the Agent and in connection with the Offering, the Company has agreed to pay the Agent, on the Closing Date a commission equal to 7% of the gross proceeds of the Offering (including in respect of any exercise of the Over-Allotment Option, if any) payable in cash (the “ Agent’s Commission President’s List Broker Warrants Broker Share Corporate Finance Fee Corporate Finance Fee Shares Over-Allotment Option Additional Units Legal Proceedings D.H. Flamingo, Inc. v. Department of Taxation, et. al. On February 27, 2020, a subsidiary of the Company (YMY Ventures, LLC) was served with a Summons and Second Amended Complaint in a matter pending in the District Court of Clark County Nevada (Case # A-19-787004-B) which is styled “D.H. Flamingo, Inc. v. Department of Taxation, et. al. Chord Advisors, LLC v. Stem Holdings, Inc., et. al. On June 5, 2020 Chord Advisors, LLC (“Chord”) filed a Complaint in the Circuit Court of the Fifteenth Judicial District in and for Palm Beach County, Florida (Case # 502020CA006097) alleging that Stem Holdings, Inc. owes Chord approximately $260,000 on account of fees for accounting services accrued pursuant to a Letter of Agreement dated October 2019. On July 6, 2020, the Company filed an Answer and Affirmative Defenses to the Complaint. This matter is in its early stages and, while the Company believes that it has meritorious defenses to the matters detailed in the Complaint, it is impossible to predict the outcome of the matter. Lili Enterprises, LLC adv. YMY Ventures and OPCO, LLC In July 2020, a dispute arose with the Company’s joint venture partner in connection with the Company’s operations in the State of Nevada. In this regard, the Company’s joint venture partner claims that it is owed certain amounts totaling approximately $307,500 pursuant to the joint venture Operating Agreement. On the other hand, the Company claims that the joint venture partner is in breach of its agreements with the Company and that the Company has heretofore advanced over $1 million in excess of its commitments under the Operating Agreement. The operative agreements require the disputes to be arbitrated. The parties have engaged an arbitrator and the matters are set for an arbitration hearing in February 2021. The Company has now settled with its joint venture partner with respect to the operating agreement, however, the Company is now in negotiating with its partner on recovering the amount of money spent in excess of its obligation for over funding the operation for tenant improvements. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. Subsequent events Stem is conducting the U.S. Offering under the terms of registration statements on Form S-1 filed with the SEC under the U.S. Securities Act on June 17, 2020, October 21, 2020, January 5, 2021 and February 12,2021. Pursuant to the U.S. Offering, the Company is offering for sale up to $418,000 of U.S. Offering Units, each comprised of one share of common stock and one share purchase warrant of the Company, at the Offering Price. The U.S. Offering Units will not be offered or sold in Canada and are not being qualified for distribution under this Prospectus. The Agent will not be acting as agent in respect of the U.S. Offering and will not be paid a fee in respect thereof. Subsequent to December 31, 2020, the Company tendered its obligation in the amount of $307,500 related to the YMY acquisition note payable. The total amount paid of $361,361 included interest and legal fees. Subsequent to December 31, 2020, the Company received notification for complete forgiveness related to three obligations totaling $627,792 as of December 31, 2020 (see Note12). Subsequent to December 31, 2020, pursuant to certain employment and consulting agreements the Company issued 1,150,000 common shares. Subsequent to December 31, 2020, the Company has raised an additional $6.8 million in funds that are presently held in escrow which will be released upon the registration of the securities becoming effective. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The unaudited condensed financial statements included herein are unaudited. Such financial statements, in the opinion of management, contain all adjustments necessary to present fairly the financial position and results of operations as of and for the periods indicated. All such adjustments are of a normal recurring nature. These interim results are not necessarily indicative of the results to be expected for the year ending September 30, 2021 or for any other period. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, and because of this, for further information, readers should refer to the financial statements and footnotes included in its amended Form 10-K for the fiscal year ended September 30, 2020 filed on December 28, 2020. The Company believes that the disclosures are adequate to make the interim information presented not misleading. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The most significant estimates included in these condensed consolidated financial statements are those associated with the assumptions used to value equity instruments, valuation of its long live assets for impairment testing, valuation of intangible assets, and the valuation of inventory. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable given the circumstances that exist at the time the financial statements are prepared. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. |
Reclassifications | Reclassifications Certain amounts in the Company’s condensed consolidated financial statements for prior periods have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. |
Principles of Consolidation | Principles of Consolidation The Company’s policy is to consolidate all entities that it controls by ownership of a majority of the outstanding voting stock. In addition, the Company consolidates entities that meet the definition of a variable interest entity (“VIE”) for which it is the primary beneficiary. The primary beneficiary is the party who has the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and who has an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity. For consolidated entities that are less than wholly owned, the third party’s holding of equity interest is presented as noncontrolling interests in the Company’s Consolidated Balance Sheets and Consolidated Statements of Changes in Stockholders’ Equity. The portion of net loss attributable to the noncontrolling interests is presented as net loss attributable to noncontrolling interests in the Company’s Consolidated Statements of Operations. In August 2016, the Company and certain shareholders of the Company entered into a “Multi Party” Agreement, in which the Company became obligated to lease or acquire three separate real estate assets, and separately, if certain events occur, additional real estate assets held by entities related to those shareholders. The Agreement also gives the Company the right of first refusal in regard to certain properties owned by the persons and entities affiliated with the parties of the Agreement so long as certain targets are met. In the quarter ended June 30, 2019, the Company issued 12,500,000 shares of its common stock for the acquisition of Consolidated Ventures of Oregon, LLC (“CVO”) and Opco Holdings, LLC (“Opco”) which comprise the entities within the Multi Party Agreement. On September 6, 2020, the Company received the regulatory approval to transfer all the licenses held under both CVO and Opco. Subsequently, the Company has completed the acquisition and as a result, the Company is no longer engaged primarily in property rental operations but has taken over the operations of its primary renters, which is the cultivation, production and sale of cannabis and related productions. Since CVO and Opco are related to the Company, the acquisition was not accounted for as a business combination at fair value under the codification sections of ASC 805. The assets and liabilities were transferred to the Company at their historical cost and the Company has included the operations of Opco and CVO for all periods presented for this period ended December 31, 2020. The accompanying condensed consolidated financial statements include the accounts of Stem Holdings, Inc. and its wholly-owned subsidiaries, Stem Holdings Oregon, Inc., Stem Holdings IP, Inc., Opco, LLC, Stem Holdings Agri, Inc., Opco Holdings, Inc., Stem Group Oklahoma, Inc., 7LV USA Corporation, and Consolidated Ventures of Oregon, Inc., and Driven Deliveries, Inc. In addition, the Company has consolidated YMY Ventures, SAV, LLC; WCV, LLC and NVD RE, Inc. under the variable interest requirements. Opco Holdings, Inc. and CVO and its subsidiaries are included in the consolidated financial statements due to its historical related party relationship. All material intercompany accounts, transactions, and profits have been eliminated in consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company’s cash is primarily maintained in checking accounts. These balances may, at times, exceed the U.S. Federal Deposit Insurance Corporation insurance limits. As of December 31, 2020, and 2019, the Company had no cash equivalents or short-term investments. The Company has not experienced any losses on deposits of cash and cash equivalents. |
Accounts Receivable | Accounts Receivable Accounts receivable are shown on the face of the consolidated balance sheets, net of an allowance for doubtful accounts. The Company analyzes the aging of accounts receivable, historical bad debts, customer creditworthiness and current economic trends, in determining the allowance for doubtful accounts. The Company does not accrue interest receivable on past due accounts receivable. As of December 31, 2020, the reserve for doubtful accounts was $39 thousand. |
Inventory | Inventory Inventory is comprised of raw materials, finished goods and work-in-progress such as pre-harvested cannabis plants and by-products to be extracted. The costs of growing cannabis including but not limited to labor, utilities, nutrition, and irrigation, are capitalized into inventory until the time of harvest. Inventory is stated at the lower of cost or net realizable value, determined using weighted average cost. Cost includes expenditures directly related to manufacturing and distribution of the products. Primary costs include raw materials, packaging, direct labor, overhead, shipping and the depreciation of manufacturing equipment and production facilities determined at normal capacity. Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance, and property taxes. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. At the end of each reporting period, the Company performs an assessment of inventory obsolescence to measure inventory at the lower of cost or net realizable value. Factors considered in the determination of obsolescence include slow-moving or non-marketable items. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses consist of various payments that the Company has made in advance for goods or services to be received in the future. These prepaid expenses include consulting, advertising, insurance, and service or other contracts requiring up-front payments. |
Property and Equipment | Property and Equipment Property, equipment, and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Repairs and maintenance expenditures that do not extend the useful lives of related assets are expensed as incurred. Expenditures for major renewals and improvements are capitalized, while minor replacements, maintenance, and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. The Company continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, “Property, Plant, and Equipment.” When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. See “Note 3 – Property, Equipment and Leasehold Improvements”. Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided on a straight-line method over the estimated useful lives of the assets. The Company estimates useful lives as follows: Buildings 20 years Leasehold improvements Shorter of term of lease or economic life of improvement Furniture and equipment 5 years Signage 5 years Software and related 5 years |
Impairment of Long-lived Assets | Impairment of Long-Lived Assets The Company reviews the carrying value of its long-lived assets, which include property and equipment, for indicators of impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events. The Company does not test for impairment in the year of acquisition of properties, as long as those properties are acquired from unrelated third parties. The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. In cases where estimated future net undiscounted cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of the asset or asset group. Fair value is generally determined using the assets expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated and amortized prospectively over the newly determined remaining estimated useful lives. |
Equity Method Investments | Equity Method Investments Investments in unconsolidated affiliates are accounted for under the equity method of accounting, as appropriate. The Company accounts for investments in limited partnerships or limited liability corporations, whereby the Company owns a minimum of 5.0% of the investee’s outstanding voting stock, under the equity method of accounting. These investments are recorded at the amount of the Company’s investment and adjusted each period for the Company’s share of the investee’s income or loss, and dividends paid. During the quarter ended December 31, 2020, the Company did not realize any investee losses related to TIL. The Company recognized an investment gain of $200 thousand related to SOK Management (see Note 5). |
Asset Acquisitions | Asset Acquisitions The Company has adopted ASU 2017-01, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as businesses acquisitions. As a result of adopting ASU 2017-01, acquisitions of real estate and cannabis licenses do not meet the definition of a business combination and were deemed asset acquisitions, and the Company therefore capitalized these acquisitions, including its costs associated with these acquisitions. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill. Intangible Assets An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset that is amortized over the remaining useful life of that asset, if any. Subsequent reversal of impairment losses is not permitted. During the quarter ended December 31, 2020 and 2019, the Company determined that there were not any impairments related to intangible assets. |
Business Combinations | Business Combinations The Company applies the provisions of ASC 805 in the accounting for acquisitions. ASC 805 requires the Company to recognize separately from goodwill the assets acquired, and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions to accurately apply preliminary value to assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments in the current period, rather than a revision to a prior period. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the consolidated statements of operations. Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets, contractual obligations assumed, restructuring liabilities, pre-acquisition contingencies, and contingent consideration, where applicable. Although the Company believes the assumptions and estimates made have been reasonable and appropriate, they are based in part on historical experience and information obtained from management of the acquired companies and are inherently uncertain. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results. |
Contingent Consideration | Contingent Consideration The Company accounts for “contingent consideration” according to FASB ASC 805, “Business Combinations” (“FASB ASC 805”). Contingent consideration typically represents the acquirer’s obligation to transfer additional assets or equity interests to the former owners of the acquiree if specified future events occur or conditions are met. FASB ASC 805 requires that contingent consideration be recognized at the acquisition-date fair value as part of the consideration transferred in the transaction. FASB ASC 805 uses the fair value definition in Fair Value Measurements, which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As defined in FASB ASC 805, contingent consideration is (i) an obligation of the acquirer to transfer additional assets or equity interests to the former owners of an acquiree as part of the exchange for control of the acquiree, if specified future events occur or conditions are met or (ii) the right of the acquirer to the return of previously transferred consideration if specified conditions are met. |
Warrant Liability | Warrant Liability The Company accounts for certain common stock warrants outstanding as a liability at fair value and adjusts the instruments to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s consolidated statements of operations. The fair value of the warrants issued by the Company has been estimated using Monte Carlo simulation model. |
Embedded Conversion Features | Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in the statement of operations. If the conversion feature does not require recognition of a bifurcated derivative, the convertible debt instrument is evaluated for consideration of any beneficial conversion feature (“BCF”) requiring separate recognition. When the Company records a BCF, the intrinsic value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument (offset to additional paid-in capital) and amortized to interest expense over the life of the debt. |
Income Taxes | Income Taxes The provision for income taxes is determined in accordance with ASC 740, “Income Taxes”. The Company files a consolidated United States federal income tax return. The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. As of December 31, 2020, and 2019, such net operating losses were offset entirely by a valuation allowance. The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50.0% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations. In December 2017, the Tax Cuts and Jobs Act (TJCA or the Act) was enacted, which significantly changes U.S. tax law. In accordance with ASC 740, “Income Taxes”, the Company is required to account for the new requirements in the period that includes the date of enactment. The Act reduced the overall corporate income tax rate to 21.0%, created a territorial tax system (with a one-time mandatory transition tax on previously deferred foreign earnings), broadened the tax base and allowed for the immediate capital expensing of certain qualified property. In the quarter ended December 31, 2020, the Company issued a significant number of new shares in its acquisition of Driven (see Note 9). The effect of these issuances is most likely, the Company and Driven have experienced the requisite change of control as promulgated under the US Internal Revenue Code section 382. The effect of this will be that going forward, the ability of the Company and Driven to utilize their respective US Federal net operating loss carryforwards from prior to December 29, 2020 will be limited in its usage. In order to determine the specific effect, the Company must perform the computations required under the Internal Revenue Code, which have not yet been performed. The Company expects it will perform the required computations in the coming fiscal year. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (Topic 606), the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Revenue for the Company’s product sales has not been adjusted for the effects of a financing component as the Company expects, at contract inception, that the period between when the Company’s transfers control of the product and when the Company receives payment will be one year or less. Product shipping and handling costs are included in cost of product sales. Effective October 1, 2019, the Company adopted the requirements of ASU 2014-09 (ASC 606) and related amendments, using the modified retrospective method. The adoption of ASC 606 did not have a significant impact on the Company’s revenue recognition policy as revenues related to wholesale and retail revenue are recorded upon transfer of merchandise to the customer, which was the effective policy under ASC 605 previously. The following policies reflect specific criteria for the various revenue streams of the Company: Cannabis Dispensary, Cultivation and Production Revenue is recognized upon transfer of retail merchandise to the customer upon sale transaction, at which time its performance obligation is complete. Revenue is recognized upon delivery of product to the wholesale customer, at which time the Company’s performance obligation is complete. Terms are generally between cash of delivery to 30 days for the Company’s wholesale customers. The Company’s sales environment is somewhat unique, in that once the product is sold to the customer (retail) or delivered (wholesale) there are essentially no returns allowed or warranty available to the customer under the various state laws. Delivery 1) Identify the contract with a customer The Company sells retail products directly to customers. In these sales there is no formal contract with the customer. These sales have commercial substance and there are no issues with collectability as the customer pays the cost of the goods at the time of purchase or delivery. 2) Identify the performance obligations in the contract The Company sells its products directly to consumers. In this case these sales represent a performance obligation with the sales and any necessary deliveries of those products. 3) Determine the transaction price The sales that are done directly to the customer have no variable consideration or financing component. The transaction price is the cost that those goods are being sold for plus any additional delivery costs. 4) Allocate the transaction price to performance obligations in the contract For the goods that the Company sells directly to customers, the transaction price is allocated between the cost of the goods and any delivery fees that may be incurred to deliver to the customer. 5) Recognize revenue when or as the Company satisfies a performance obligation For the sales of the Company’s own goods the performance obligation is complete once the customer has received the product. |
Leases | Leases The Company recognizes rental revenue from tenants, including rental abatements, lease incentives and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related leases when collectability is reasonably assured. The Company makes estimates of the collectability of its tenant receivables related to base rents, straight-line rent, and other revenues. In the current fiscal year, the Company began significant rental operations. The Company considers such things as historical bad debts, tenant creditworthiness, current economic trends, facility operating performance, lease structure, developments relevant to a tenant’s business, and changes in tenants’ payment patterns in its analysis of accounts receivable and its evaluation of the adequacy of the allowance for doubtful accounts. Specifically, for straight-line rent receivables, the Company’s assessment includes an estimation of a tenant’s ability to fulfill its rental obligations over the remaining lease term. On October 1, 2020, the Company adopted ASC 842 and elected to apply the new standard at the adoption date and recognize a cumulative effect as an adjustment to retained earnings. Upon calculation the effect on retained earnings was immaterial and no adjustment was deemed necessary. Leases with an initial term of twelve months or less are not recorded on the balance sheet. For lease agreements entered into or reassessed after the adoption of Topic 842, we combine the lease and non-lease components in determining the lease liabilities and right of use (“ROU”) assets. Our lease agreements generally do not provide an implicit borrowing rate, therefore an internal incremental borrowing rate is determined based on information available at lease commencement date for purposes of determining the present value of lease payments. We used the incremental borrowing rate on December 31, 2020 for all leases that commenced prior to that date. In determining this rate, which is used to determine the present value of future lease payments, we estimate the rate of interest we would pay on a collateralized basis, with similar payment terms as the lease and in a similar economic environment. Under Topic 842, operating lease expense is generally recognized evenly over the term of the lease. Lease costs were $169 for the three months ended December 31, 2020. There was sublease rental income of $4,000 for the three months ended December 31, 2020. The Company has eight operating leases consisting with remaining lease terms ranging from 23 months to 120 months. Lease Costs Three Months Ended December 31, 2020 Components of total lease costs: Operating lease expense $ 169 Total lease costs $ 169 Lease positions as of December 31, 2020 ROU lease assets and lease liabilities for our operating leases were recorded in the consolidated condensed balance sheet as follows: December 31, Assets Right of use asset $ 3,305 Total assets $ 3,305 Liabilities Operating lease liabilities – short term $ 1,040 Operating lease liabilities – long term 2,265 Total lease liability $ 3,305 Lease Terms and Discount Rate Weighted average remaining lease term (in years) – operating lease 5.00 Weighted average discount rate – operating lease 9.72 % Cash Flows Three Months Ended December 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: ROU amortization 169 Cash paydowns of operating liability (169 ) Supplemental non-cash amounts of lease liabilities arising from obtaining: ROU asset (3,305 ) Lease Liability 3,305 The future minimum lease payments under the leases are as follows: 2021 1,077 2022 1,109 2023 541 2024 308 2025 312 Thereafter 818 Total future minimum lease payments 4,165 Less: Lease imputed interest (860 ) Total 3,305 |
Disaggregation of Revenue | Disaggregation of Revenue In the quarter ended December 31, 2020, revenue reported is primarily from the sale of cannabis and related products accounted for under ASC 606. The following table illustrates our revenue by type related to the quarter ended December 31, 2020 and December 31, 2019, respectively: December 31, 2020 2019 Revenue Wholesale $ 1,120 $ 480 Retail 4,918 1,063 Rental 4 - Delivery Income - - Dispensary Cost Reimbursement - - Product Sales 229 - Other 118 8 Total revenue 6,389 1,551 Discounts and allowances (929 ) (230 ) Net Revenue $ 5,460 $ 1,321 |
Geographical Concentration | Geographical Concentrations As of December 31, 2020, the Company is primarily engaged in the production and sale of cannabis, which is only legal for recreational use in 15 states and DC, with lesser legalization, such as for medical use in an additional 21 states and DC, as of the time of these consolidated financial statements. In addition, the United States Congress has passed legislation, specifically the Agriculture Improvement Act of 2018 (also known as the “Farm Bill”) that has removed production and consumption of hemp and associated products from Schedule 1 of the Controlled Substances Act. |
Cost of Goods Sold | Cost of Goods Sold Cost of sales represents costs directly related to manufacturing and distribution of the Company’s products. Primary costs include raw materials, packaging, direct labor, overhead, shipping and handling and the depreciation of manufacturing equipment and production facilities. Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance, and property taxes. The Company recognizes the cost of sales as the associated revenues are recognized. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments As defined in the authoritative guidance, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To estimate fair value, the Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. The authoritative guidance establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (“Level 1” measurements) and the lowest priority to unobservable inputs (“Level 3” measurements). The three levels of the fair value hierarchy are as follows: Level 1 — Observable inputs such as quoted prices in active markets at the measurement date for identical, unrestricted assets or liabilities. Level 2 — Other inputs that are observable, directly, or indirectly, such as quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 — Unobservable inputs for which there is little or no market data and which the Company makes its own assumptions about how market participants would price the assets and liabilities. In instances in which multiple levels of inputs are used to measure fair value, hierarchy classification is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. |
Stock-based Compensation | Stock-based Compensation The Company accounts for share-based payment awards exchanged for services at the estimated grant date fair value of the award. Stock options issued under the Company’s long-term incentive plans are granted with an exercise price equal to no less than the market price of the Company’s stock at the date of grant and expire up to ten years from the date of grant. These options generally vest on the grant date or over a one- year period. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. Expected Term Expected Volatility Risk-Free Interest Rate Expected Dividend Effective January 1, 2017, the Company elected to account for forfeited awards as they occur, as permitted by Accounting Standards Update (“ASU”) 2016-09. Ultimately, the actual expenses recognized over the vesting period will be for those shares that vested. Prior to making this election, the Company estimated a forfeiture rate for awards at 0%, as the Company did not have a significant history of forfeitures. |
Loss Per Share | Loss per Share ASC 260, Earnings Per Share, requires dual presentation of basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Basic net loss per share of common stock excludes dilution and is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share of common stock reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity unless inclusion of such shares would be anti-dilutive. Since the Company has only incurred losses, basic and diluted net loss per share is the same. Securities that could potentially dilute loss per share in the future that were not included in the computation of diluted loss per share as of December 31, 2020 and 2019 are as follows: Net loss per share at December 31, 2020 Convertible notes 8,978,574 Options to purchase common stock 10,003,411 Unvested restricted stock awards 4,857,403 Warrants to purchase common stock 34,184,093 58,023,481 |
Advertising Costs | Advertising Costs The Company follows the policy of charging the cost of advertising to expense as incurred. Advertising expense was $54,420 and $4,008 for the quarters ended December 31, 2020 and 2019, respectively. |
Related Parties | Related parties Parties are 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 with 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. |
Segment Reporting | Segment reporting Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision–making group in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision–maker is its chief executive officer. The Company currently operate in one segment. |
Recent Accounting Guidance | Recent Accounting Guidance In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350)—Simplifying the Test for Goodwill Impairment. ASU 2017-04 simplifies the accounting for goodwill impairments by eliminating the requirement to compare the implied fair value of goodwill with its carrying amount as part of step two of the goodwill impairment test referenced in Accounting Standards Codification (“ASC”) 350, Intangibles - Goodwill and Other (“ASC 350”). As a result, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. However, the impairment loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective for annual reporting periods beginning after December 15, 2019. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures. In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 expands the guidance in Topic 718 to include share-based payments for goods and services to non-employees and generally aligns it with the guidance for share-based payments to employees. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company’s adoption of this standard on October 1, 2019 did not have a material impact on the Company’s condensed consolidated financial condition or results of operations. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 removes, modifies and adds certain disclosure requirements in Topic 820 “Fair Value Measurement”. ASU 2018-13 eliminates certain disclosures related to transfers and the valuations process, modifies disclosures for investments that are valued based on net asset value, clarifies the measurement uncertainty disclosure, and requires additional disclosures for Level 3 fair value measurements. ASU 2018-13 is effective for the Company for annual and interim reporting periods beginning January 1, 2020. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The standard provides companies with a single model for use in accounting for revenue arising from contracts with customers and will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective, including industry-specific revenue guidance. The standard specifically excludes lease contracts. The ASU allows for the use of either the full or modified retrospective transition method and was effective for the Company on October 1, 2019. The Company adopted the updated standard using the modified retrospective approach. The financial information included in the Company’s 2020 Form 10-K was updated for the October 1, 2019 adoption date; this new guidance was reflected for the first time in the Company’s 2020 Form 10-K but effective as of October 1, 2019 in that filing. The guidance allows for the use of one of two retrospective application methods: the full retrospective method or the modified retrospective method. The Company adopted the standard in fiscal year 2020 using the modified retrospective method. The adoption of the standard did not have a material impact on the recognition of revenue. In February 2016, the FASB issued ASU No. 2016-02, Leases. The standard amends the existing lease accounting guidance and requires lessees to recognize a lease liability and a right-of-use asset for all leases (except for short-term leases that have a duration of one year or less) on their balance sheets. Lessees will continue to recognize lease expense in a manner similar to current accounting. For lessors, accounting for leases under the new guidance is substantially the same as in prior periods but eliminates current real estate-specific provisions and changes the treatment of initial direct costs. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparable period presented, with an option to elect certain transition relief. Full retrospective application is prohibited. The standard was adopted as of October 1, 2020. As of December 31, 2020, the Company recognized additional operating liabilities of approximately $3.3 million, with corresponding ROU assets of approximately the same. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 provides guidance for recognizing credit losses on financial instruments based on an estimate of current expected credit losses model. The amendments are effective for fiscal years beginning after December 15, 2019. Recently, the FASB issued the final ASU to delay adoption for smaller reporting companies to calendar year 2023. The Company is currently assessing the impact of the adoption of this ASU on its financial statements. In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivative and Hedging (Topic 815), which clarifies the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities. The guidance clarifies how to account for the transition into and out of the equity method of accounting when considering observable transactions under the measurement alternative. The ASU is effective for annual reporting periods beginning after December 15, 2020, including interim reporting periods within those annual periods, with early adoption permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity, and also improves and amends the related EPS guidance for both Subtopics. The ASU will be effective for annual reporting periods after December 15, 2021 and interim periods within those annual periods and early adoption is permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Life of Assets | Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided on a straight-line method over the estimated useful lives of the assets. The Company estimates useful lives as follows: Buildings 20 years Leasehold improvements Shorter of term of lease or economic life of improvement Furniture and equipment 5 years Signage 5 years Software and related 5 years |
Schedule of Lease Costs | Lease Costs Three Months Ended December 31, 2020 Components of total lease costs: Operating lease expense $ 169 Total lease costs $ 169 |
Schedule of ROU Lease Assets and Lease Liabilities | ROU lease assets and lease liabilities for our operating leases were recorded in the consolidated condensed balance sheet as follows: December 31, Assets Right of use asset $ 3,305 Total assets $ 3,305 Liabilities Operating lease liabilities – short term $ 1,040 Operating lease liabilities – long term 2,265 Total lease liability $ 3,305 |
Schedule of Lease Terms and Discount Rate | Lease Terms and Discount Rate Weighted average remaining lease term (in years) – operating lease 5.00 Weighted average discount rate – operating lease 9.72 % |
Schedule of Cash Flow Related to Lease | Cash Flows Three Months Ended December 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: ROU amortization 169 Cash paydowns of operating liability (169 ) Supplemental non-cash amounts of lease liabilities arising from obtaining: ROU asset (3,305 ) Lease Liability 3,305 |
Schedule of Future Minimum Lease Payments | The future minimum lease payments under the leases are as follows: 2021 1,077 2022 1,109 2023 541 2024 308 2025 312 Thereafter 818 Total future minimum lease payments 4,165 Less: Lease imputed interest (860 ) Total 3,305 |
Schedule of Disaggregation of Revenue | The following table illustrates our revenue by type related to the quarter ended December 31, 2020 and December 31, 2019, respectively: December 31, 2020 2019 Revenue Wholesale $ 1,120 $ 480 Retail 4,918 1,063 Rental 4 - Delivery Income - - Dispensary Cost Reimbursement - - Product Sales 229 - Other 118 8 Total revenue 6,389 1,551 Discounts and allowances (929 ) (230 ) Net Revenue $ 5,460 $ 1,321 |
Schedule of Computation of Diluted Loss | Securities that could potentially dilute loss per share in the future that were not included in the computation of diluted loss per share as of December 31, 2020 and 2019 are as follows: Net loss per share at December 31, 2020 Convertible notes 8,978,574 Options to purchase common stock 10,003,411 Unvested restricted stock awards 4,857,403 Warrants to purchase common stock 34,184,093 58,023,481 |
Property, Plant & Equipment (Ta
Property, Plant & Equipment (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property and equipment consist of the following (in thousands): December 31, September 30, 2020 2020 Land $ 1,451 $ 1,451 Automobiles 136 61 Signage 19 19 Furniture and equipment 2,667 2,485 Leasehold improvements 3,455 3,455 Buildings and property improvements 13,012 12,981 Computer software 59 59 20,799 20,511 Accumulated depreciation (4,695 ) (4,157 ) Property and equipment, net $ 16,104 $ 16,354 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consists of the following (in thousands): December 31, September 30, 2020 2020 Raw materials $ 415 $ 222 Work-in-progress 199 484 Finished goods 1,591 1,089 Total Inventory $ 2,205 $ 1,795 |
Non-Controlling Interests (Tabl
Non-Controlling Interests (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Noncontrolling Interest [Abstract] | |
Schedule of Non-Controlling Interests in Consolidated Entities | Non-controlling interests in consolidated entities are as follows (in thousands): As of September 30, 2020 NCI Equity Share Net Loss Attributable to NCI NCI in Consolidated Entities Non-Controlling Ownership % NVD RE Corp. $ 597 $ (48 ) $ 549 50.0 % ILCA 1,288 (240 ) 1,048 49.0 % YMY Ventures, Inc. 447 (204 ) 243 50.0 % $ 2,332 $ (492 ) $ 1,840 As of December 31, 2020 NCI Equity Share Net Loss Attributable to NCI NCI in Consolidated Entities Non-Controlling Ownership % NVD RE Corp. $ 549 $ (12 ) $ 537 50.0 % ILCA $ 1,048 (48 ) 1,000 49.0 % YMY Ventures, Inc. $ 243 (31 ) 212 50.0 % $ 1,840 $ (91 ) $ 1,749 |
Business Combination (Tables)
Business Combination (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Seven Leaf Ventures Corp [Member] | |
Schedule of Purchasre Consideration to Fair value of assets Aquired and Liabilities Assumed | As of March 6, 2020, the Company allocated the purchase consideration to the fair value of the assets acquired and liabilities assumed as summarized in the table below ( Consideration Paid (in thousands) Estimated fair value of common stock issued $ 9,552 Estimated fair value of warrants issued 772 Estimated fair value of debt issued 2,540 Estimated fair value of embedded and bifurcated derivatives 244 Forgiveness of working capital advance (150 ) Total consideration paid $ 12,958 Assets acquired: (in thousands) Cash and cash equivalents $ 81 Fixed assets 54 Inventory 133 Goodwill 6,151 Intangible assets 7,684 Total assets acquired $ 14,103 Liabilities assumed: (in thousands) Accrued expenses and other current liabilities 1,145 Total liabilities assumed $ 1,145 Net assets acquired (in thousands) $ 12,958 |
Schedule of Level 3 Liabilities Measured at Fair Value | The table below shows the warrant liability and embedded derivative liability recorded in connection with the 7LV convertible notes and the subsequent fair value measurement during the quarter ended December 31, 2020 in USD, ( in thousands Warrant Liability Derivative Liability Balance as of September 30, 2020 $ 60 $ 54 Issuance - - Change in fair value (60 ) (39 ) Balance as of December 31, 2020 $ - $ 15 |
Driven Deliveries, Inc. [Member] | |
Schedule of Purchasre Consideration to Fair value of assets Aquired and Liabilities Assumed | As of December 29, 2020, the Company allocated the purchase consideration to the fair value of the assets acquired and liabilities assumed as summarized in the table below ( Consideration Paid (in thousands) Estimated fair value of common stock issued $ 42,825 Estimated fair value of warrants issued 9,000 Estimated fair value of options issued 500 Estimated fair value of debt assumed 4,389 Total consideration paid $ 56,714 Assets acquired: (in thousands) Cash and cash equivalents $ - Fixed assets 47 Other Assets 1,526 Goodwill 13,716 Intangible assets 48,200 Total assets acquired $ 63,489 Liabilities assumed: (in thousands) Accrued expenses and other current liabilities (6,775 ) Total liabilities assumed $ (6,775 ) Net assets acquired (in thousands) $ 56,714 |
Schedule of Proforma Condensed Consolidated Results of Operations | The following unaudited proforma condensed consolidated results of operations have been prepared as if the acquisition of Driven had occurred October 1, 2019. Quarter ended Quarter ended December 31, 2020 December 31, 2019 Revenue $ 11,142 $ 3,046 Net loss $ (7,399 ) $ (16,400 ) |
Schedule of Level 3 Liabilities Measured at Fair Value | The table below shows the warrant liability and embedded derivative liability recorded in connection with the Driven convertible notes and the subsequent fair value measurement during the quarter ended December 31, 2020 in USD, ( in thousands Warrant Liability Derivative Liability Balance as of September 30, 2020 $ - $ - Warrants acquired 9,000 - Change in fair value - - Balance as of December 31, 2020 9,000 $ - |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets as of December 31, 2020 and September 2020 (in thousands): Estimated Useful Life Cannabis Licenses Tradename Customer Relationship Non-compete Technology Accumulated Amortization Net Carrying Amount Balance as September 30, 2020 $ 12,679 $ 458 $ 643 $ 220 $ - $ (730 ) $ 13,270 YMY Ventures 15 - - - - - (13 ) (13 ) Western Coast Ventures, Inc. 15 - - - - - (41 ) (41 ) Yerba Buena 3-15 years - - - - - (43 ) (43 ) Foothill (7LV) 15 - - - - - (130 ) (130 ) Driven Deliveries 10-15 years 44,000 1,800 600 - 1,800 (18 ) 48,182 Other 5 - - - - - - - Balance as December 31, 2020 $ 56,679 $ 2,258 $ 1,243 $ 220 $ 1,800 $ (975 ) $ 61,225 |
Schedule of Expected Amortization | The following table is a runoff of expected amortization in the following 5-year period as of December 31: 2021 $ 4,147 2022 4,147 2023 4,147 2024 4,147 2025 4,147 Thereafter 40,490 $ 61,225 |
Accounts payable and Accrued _2
Accounts payable and Accrued Expenses (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following (in thousands): December 31, 2020 September 30, 2020 Accounts payable 5,640 $ 1,784 Accrued credit cards 43 41 Accrued interest 186 134 Accrued payroll 616 616 Other 2,834 408 Total Accounts Payable and Accrued Expenses $ 9,319 $ 2,983 |
Notes Payable and Advances (Tab
Notes Payable and Advances (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Notes and Advances | The following table summarizes the Company’s short-term notes and advances, acquisition note payable, due to related party loans, and long-term debt, mortgages as of the quarter ended December 31, 2020 and year ended September 30, 2020: December 31, September 30, 2020 2020 Equipment financing $ 24 $ 27 Insurance financing 90 177 Mortgages payable - 923 Promissory note 1,815 2,298 Settlement payable 250 - Due to related party 107 200 $ 2,286 $ 3,625 Acquisition notes payable 2,666 665 Total notes payable and advances $ 4,952 $ 4,290 Acquisition payable - long term 516 - Long-term mortgages 4,785 3,685 Total long term debt $ 5,301 $ 3,685 |
Schedule of Maturities of Long Term Debt | The following is a table of the 5-year runoff of our long-term debt as of December 31: 2021 $ - 2022 2,600 2023 2,185 2024 - 2025 - Thereafter - $ 4,785 |
Convertible Debt (Tables)
Convertible Debt (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Assumptions Value Warrant Granted | ). The significant assumptions used in the valuation are as follows: Fair value of underlying common shares $ 1.78 to 2.10 Exercise price (converted to USD) $ 2.93 Dividend yield - Historical volatility 85 % Risk free interest rate 1.4% to 1.9 % |
Schedule of Embedded Derivative Liability | The table below shows the warrant liability and embedded derivative liability recorded in connection with the Canaccord convertible notes and the subsequent fair value measurement during the quarter ended December 31, 2020 in USD, ( in thousands Warrant Liability Derivative Liability Balance at September 30, 2020 $ 67 $ 592 Change in fair value (20 ) (223 ) Balance at December 31, 2020 $ 47 $ 369 |
Schedule of Convertible Notes | The table below shows the net amount of convertible notes as of December 31, 2020 in USD ( in thousands December 31, 2020 Principal value of 8%, convertible at $0.90 at December 31, 2020, due December 27, 2021 including penalty provision of $155,239 $ 3,123 Principal value of 10%, convertible at $1.31 at December 31, 2020, due May 30, 2021 (see Note 9) 2,754 Principal value of various convertible notes, convertible at $0.50 at December 31, 2020, due June – August, 2021 1,067 Debt discount (125 ) Cumulative foreign currency impact (24 ) Carrying value of convertible notes $ 6,795 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Liabilities Measured at Fair Value on a Recurring Basis | The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of December 31, 2020 (in thousands): Fair value measured at December 31, 2020 Quoted Significant Significant prices in active markets other observable inputs unobservable inputs Fair value (Level 1) (Level 2) (Level 3) Warrant liability $ 9,178 $ - $ - $ 9,178 Embedded derivative liability 384 - - 384 Total fair value $ 9,562 $ - $ - $ 9,562 |
Schedule of Level 3 Liabilities Measured at Fair Value | The following table presents changes in Level 3 liabilities measured at fair value for the quarter ended December 31, 2020. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities) inputs (in thousands). Embedded Warrant Liability Derivative Liability Total Balance – September 30, 2020 $ 257 $ 592 $ 849 Warrants granted for services 11 - 11 Warrants issued pursuant to acquisition (see Note 9) 9,000 - 9,000 Change in fair value (90 ) (208 ) (298 ) Balance – December 31, 2020 $ 9,178 $ 384 $ 9,562 |
Summary of Weighted Average Significant Unobservable Inputs | A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liabilities and embedded conversion feature that are categorized within Level 3 of the fair value hierarchy as of December 31, 2020 and September 30, 2020 is as follows: Warrant Liability As of As of December 31, 2020 September 30, 2020 Strike price $ 0.58 $ 0.36 to 2.96 Contractual term (years) 2.85 1 to 3 Volatility (annual) 124 % 100 % Risk-free rate 0.67 % 0.28 % Dividend yield (per share) 0 % 0 % Embedded Derivative Liability As of As of Strike price $ 1.08 $ 1.12 Contractual term (years) .99 1.5 Volatility (annual) 112 % 101 % Risk-free rate 0.10 % 0.25 % Dividend yield (per share) 0.00 % 0.00 % Credit spread 14% to 16 % 11.21 % |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Compensation Related Costs [Abstract] | |
Schedule of Fair Value of Options Granted | The fair value of options granted during the quarters ended December 31, 2020 and 2019 were estimated using the following weighted-average assumptions: Options: For the Three Months Ended December 31, 2020 December 31, 2019 Exercise price $ .40 $ 0.89 - $1.25 Expected term (years) 2.8 2.0 - 4.0 Expected stock price volatility 103.86% - 127.35 % 105.8% - 115.9 % Risk-free rate of interest 1.88% - 2.79 % 2 % Expected dividend rate 0 % 0 % |
Summary of Stock Option Activity | A summary of option activity under the Company’s stock option plan for the three months ended December 31, 2020 is presented below: Number of Shares Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life (in years) Outstanding as of October 1, 2019 3,210,416 $ 2.45 $ - 2.1 Granted 2,362,500 0.33 - 2.89 Outstanding as of September 30, 2020 5,572,916 $ 1.77 $ - 1.4 Granted 100,000 $ 0.40 $ - 2.8 Outstanding as of December 31, 2020 5,672,916 $ 1.73 $ - 1.2 |
Schedule of Stock-based Compensation Expenses | Stock-based compensation expense for the three months ended December 31, 2020 and 2019 was comprised of the following (in thousands): Three months ended December 31, 2020 2019 Stock grants $ 1,151 $ 82 Stock options 61 415 Warrants 132 - Total stock-based compensation $ 1,344 $ 497 |
Incorporation and Operations _2
Incorporation and Operations and Going Concern (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 | [1] |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Cash and cash equivalents | $ 3,847 | $ 2,129 | |
Working capital | (25,900) | ||
Accumulated deficit | $ (54,574) | $ (51,386) | |
[1] | Derived from audited information |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) $ in Thousands | 3 Months Ended | ||||
Dec. 31, 2020USD ($)Integer | Dec. 31, 2019USD ($) | Jun. 30, 2019shares | Sep. 30, 2020USD ($) | [1] | |
Stock issued during the period | shares | 12,500,000 | ||||
Accounts receivable, reserve for doubtful accounts | $ 39 | ||||
Property and equipment, useful life | Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. | ||||
Equity method investment, ownership percentage | 5.00% | ||||
Gain from equity method investees | $ (91) | $ (235) | |||
Goodwill and intangible asset impairment | |||||
Corporate income tax rate | 21.00% | ||||
Estimated forfeiture rate for awards | 0.00% | ||||
Lease cost | $ 169 | ||||
Sublease rental income | $ 4,000 | ||||
Remaining lease terms | 5 years | ||||
Advertising expense | $ 54,420 | $ 4,008 | |||
Number of operating segments | Integer | 1 | ||||
Operating lease liabilities | $ 3,305 | ||||
Right of use of asset | 3,305 | ||||
Accounting Standards Update 2016-02 [Member] | |||||
Operating lease liabilities | 3,300 | ||||
Right of use of asset | 3,300 | ||||
Tilstar Medical, LLC [Member] | |||||
Gain from equity method investees | |||||
SOK Management, LLC [Member] | |||||
Gain from equity method investees | $ 200 | ||||
Minimum [Member] | |||||
Remaining lease terms | 23 months | ||||
Maximum [Member] | |||||
Remaining lease terms | 120 months | ||||
[1] | Derived from audited information |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Estimated Useful Life of Assets (Details) | 3 Months Ended |
Dec. 31, 2020 | |
Property and equipment estimated useful life, description | Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. |
Buildings [Member] | |
Property and equipment estimated useful life | 20 years |
Leasehold Improvements [Member] | |
Property and equipment estimated useful life, description | Shorter of term of lease or economic life of improvement |
Furniture and Equipment [Member] | |
Property and equipment estimated useful life | 5 years |
Signage [Member] | |
Property and equipment estimated useful life | 5 years |
Software and Related [Member] | |
Property and equipment estimated useful life | 5 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Lease Costs (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2020USD ($) | |
Accounting Policies [Abstract] | |
Operating lease expense | $ 169 |
Total lease costs | $ 169 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of ROU Lease Assets and Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 | [1] |
Accounting Policies [Abstract] | |||
Right of use asset | $ 3,305 | ||
Operating lease liabilities - short term | 1,040 | ||
Operating lease liabilities - long term | 2,265 | ||
Total lease liability | $ 3,305 | ||
[1] | Derived from audited information |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Lease Terms and Discount Rate (Details) | Dec. 31, 2020 |
Accounting Policies [Abstract] | |
Weighted average remaining lease term (in years) - operating lease | 5 years |
Weighted average discount rate - operating lease | 9.72% |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Schedule of Cash Flow Related to Lease (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2020USD ($) | |
Accounting Policies [Abstract] | |
ROU amortization | $ 169 |
Cash paydowns of operating liability | (169) |
ROU asset | (3,305) |
Lease Liability | $ 3,305 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Schedule of Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Accounting Policies [Abstract] | |
2021 | $ 1,077 |
2022 | 1,109 |
2023 | 541 |
2024 | 308 |
2025 | 312 |
Thereafter | 818 |
Total future minimum lease payments | 4,165 |
Less: Lease imputed interest | (860) |
Total | $ 3,305 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total Revenue | $ 6,389 | $ 1,551 |
Discounts and allowances | (929) | (230) |
Net revenue | 5,460 | 1,321 |
Wholesale [Member] | ||
Total Revenue | 1,120 | 480 |
Retail [Member] | ||
Total Revenue | 4,918 | 1,063 |
Rental [Member] | ||
Total Revenue | 4 | |
Delivery Income [Member] | ||
Total Revenue | ||
Dispensary Cost Reimbursement [Member] | ||
Total Revenue | ||
Product Sales [Member] | ||
Total Revenue | 229 | |
Other [Member] | ||
Total Revenue | $ 118 | $ 8 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Schedule of Computation of Diluted Loss (Details) | 3 Months Ended |
Dec. 31, 2020shares | |
Antidilutive Securities excluded from computation of earnings per share, amount | 58,023,481 |
Convertible Notes [Member] | |
Antidilutive Securities excluded from computation of earnings per share, amount | 8,978,574 |
Options to Purchase Common Stock [Member] | |
Antidilutive Securities excluded from computation of earnings per share, amount | 10,003,411 |
Unvested Restricted Stock Awards [Member] | |
Antidilutive Securities excluded from computation of earnings per share, amount | 4,857,403 |
Warrants to Purchase Common Stock [Member] | |
Antidilutive Securities excluded from computation of earnings per share, amount | 34,184,093 |
Property, Plant & Equipment (De
Property, Plant & Equipment (Details Narrative) - USD ($) | Nov. 01, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 |
Depreciation expense | $ 500,000 | $ 400,000 | ||
Ownership interest | 5.00% | |||
Purchase of property | $ 165,000 | $ 321,000 | ||
Stock issued during the period | 12,500,000 | |||
Empire Holdings LLC [Member] | ||||
Ownership interest | 100.00% | |||
Empire Holdings LLC [Member] | Buildings [Member] | ||||
Purchase of property | $ 500,000 | |||
Lien amount | $ 105,732 | |||
Stock issued during the period | 394,270 |
Property, Plant & Equipment - S
Property, Plant & Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 | |
Property and equipment, gross | $ 20,799 | $ 20,511 | |
Accumulated depreciation | (4,695) | (4,157) | |
Property and equipment, net | 16,104 | 16,354 | [1] |
Land [Member] | |||
Property and equipment, gross | 1,451 | 1,451 | |
Automobiles [Member] | |||
Property and equipment, gross | 136 | 61 | |
Signage [Member] | |||
Property and equipment, gross | 19 | 19 | |
Furniture and Equipment [Member] | |||
Property and equipment, gross | 2,667 | 2,485 | |
Leasehold Improvements [Member] | |||
Property and equipment, gross | 3,455 | 3,455 | |
Buildings and Property Improvements [Member] | |||
Property and equipment, gross | 13,012 | 12,981 | |
Computer Software [Member] | |||
Property and equipment, gross | $ 59 | $ 59 | |
[1] | Derived from audited information |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 |
Equity method investment, ownership percentage | 5.00% | |
Inventory reserve | ||
Twelve Subsidiaries [Member] | ||
Equity method investment, ownership percentage | 100.00% | |
Owned by One Subsidiaries [Member] | ||
Equity method investment, ownership percentage | 50.00% |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 415 | $ 222 | |
Work-in-progress | 199 | 484 | |
Finished goods | 1,591 | 1,089 | |
Total Inventory | $ 2,205 | $ 1,795 | [1] |
[1] | Derived from audited information |
Equity Method Investments (Deta
Equity Method Investments (Details Narrative) - USD ($) $ in Thousands | Jan. 06, 2020 | Apr. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | [1] |
Loss on investments | $ (9) | |||||
Convertible notes, net | 6,795 | $ 5,306 | ||||
SOK Management, LLC [Member] | ||||||
Other investment income | 200 | |||||
Tilstar Medical, LLC [Member] | ||||||
Acquisition, percentage | 48.00% | |||||
Purchase price of business | $ 550 | |||||
Cash | 270 | 280 | ||||
Loss on investments | $ 7 | |||||
Community Growth Partners Holdings, Inc., [Member] | ||||||
Acquisition, percentage | 7.00% | |||||
Debt instrument conversion terms | The Company issued a convertible promissory note to Community Growth Partners Holdings, Inc., ("CGS") which will act as a line of credit. Subject to the terms and conditions of the note, CGS promises to pay the Company all of the outstanding principal together with interest on the unpaid principal balance upon the date that is twelve months after the effective date and shall be payable as follows: (a)The Company agrees to make several loans to CGS from time to time upon request of CGS in amounts not to exceed the principal sum of $2,000,000, (b) Payment of principal and interest shall be immediately available funds, (c) This note may be prepaid in whole or in part at any time without premium or penalty. Any partial prepayment shall be applied against the principal amount outstanding, (d) The unpaid principal amount outstanding under this note shall bear interest commencing upon the first advance at the rate of 10% per annum through the maturity date, calculated on the basis of a 365-day, until the entire indebtedness is fully paid, (e) Upon the closing of a $2,000,000 financing by the Company, all of the principal and interest shall automatically convert into equity shares of CGS at the price obtained by the qualified financing. A portion of the note has been converted into 7.0 % equity leaving a balance outstanding under the note as of December 31, 2020 of approximately $420,000. | |||||
Loans receivable | $ 2,000 | |||||
Debt instrument, interest rate | 10.00% | |||||
Convertible notes, net | $ 420 | |||||
[1] | Derived from audited information |
Notes Receivable (Details Narra
Notes Receivable (Details Narrative) - USD ($) $ in Thousands | Oct. 02, 2020 | Jan. 04, 2020 |
Community Growth Partners Holdings, Inc., [Member] | ||
Promissory note issued, value | $ 355 | |
Bushman Holdings, Inc., [Member] | ||
Promissory note issued, value | $ 100 |
Consolidated Asset Acquisitio_2
Consolidated Asset Acquisitions (Details Narrative) - USD ($) | Mar. 29, 2019 | Feb. 28, 2019 | Apr. 30, 2018 | May 31, 2020 | Sep. 30, 2018 | Apr. 30, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Sep. 30, 2019 | Aug. 31, 2019 |
Shares issued for acquisition, shares | 101,968,994 | ||||||||||
Equity interest percentage | 5.00% | ||||||||||
Stock issued for acquisition, value | $ 43,190,000 | ||||||||||
Definitive Agreement [Member] | |||||||||||
Equity interest percentage | 51.00% | ||||||||||
YMY Ventures LLC [Member] | |||||||||||
Acquisition, percentage | 50.00% | ||||||||||
Purchase price of business | $ 750,000 | ||||||||||
Shares issued escrow amount | $ 375,000 | $ 67,500 | |||||||||
Balance amount of additional funds | 307,500 | ||||||||||
Payments for tenant improvements cost | 650,000 | ||||||||||
Non-controlling interest related to acquisition | $ 790,000 | ||||||||||
YMY Ventures LLC [Member] | First Due [Member] | |||||||||||
Purchase price of business | 375,000 | ||||||||||
YMY Ventures LLC [Member] | Final Due [Member] | |||||||||||
Purchase price of business | $ 375,000 | ||||||||||
YMY Ventures LLC [Member] | Escrow [Member] | |||||||||||
Purchase price of business | $ 375,000 | ||||||||||
Payments to acquire license | $ 690,238 | ||||||||||
NVD RE Corp. [Member] | |||||||||||
Acquisition, percentage | 37.50% | 12.50% | 37.50% | ||||||||
Purchase price of business | $ 600,000 | ||||||||||
Payments for tenant improvements cost | $ 675,000 | $ 675,000 | |||||||||
Non-controlling interest related to acquisition | 1,000,000 | ||||||||||
Payments to acquire equity investment | 1,275,000 | ||||||||||
Additional invested capital over original obligation | $ 377,000 | $ 377,000 | |||||||||
Proceeds from mortgage property | 400,000 | $ 300,000 | |||||||||
Shares issued for acquisition, shares | 386,035 | ||||||||||
Share price per share | $ 0.001 | ||||||||||
Western Coast Ventures, Inc. (WCV) [Member] | Definitive Agreement [Member] | |||||||||||
Shares issued for acquisition, shares | 2,500,000 | ||||||||||
Share price per share | $ 1.47 | ||||||||||
Surplus working capital | $ 2,000,000 | ||||||||||
Stock issued for acquisition, value | 4,400,000 | ||||||||||
Cash acquired amount | 2,000,000 | ||||||||||
Payments to acquired intangible assets | 3,800,000 | $ 1,350,000 | $ 1,350,000 | ||||||||
ILCA Holdings, Inc, [Member] | |||||||||||
Investment | $ 2,400,000 |
Non-Controlling Interests - Sch
Non-Controlling Interests - Schedule of Non-Controlling Interests in Consolidated Entities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
NCI Equity Share | 1,840 | 2,332 | |||
Net Loss Attributable to NCI | $ 91 | $ 235 | $ (492) | ||
NCI in Consolidated Entities | $ 1,749 | $ 1,840 | [1] | ||
NVD RE Corp. [Member] | |||||
NCI Equity Share | 549 | 597 | |||
Net Loss Attributable to NCI | $ (12) | $ (48) | |||
NCI in Consolidated Entities | $ 537 | $ 549 | |||
Non-Controlling Ownership, percentage | 50.00% | 50.00% | |||
ILCA [Member] | |||||
NCI Equity Share | 1,048 | 1,288 | |||
Net Loss Attributable to NCI | $ (48) | $ (240) | |||
NCI in Consolidated Entities | $ 1,000 | $ 1,048 | |||
Non-Controlling Ownership, percentage | 49.00% | 49.00% | |||
YMY Ventures, Inc. [Member] | |||||
NCI Equity Share | 243 | 447 | |||
Net Loss Attributable to NCI | $ (31) | $ (204) | |||
NCI in Consolidated Entities | $ 212 | $ 243 | |||
Non-Controlling Ownership, percentage | 50.00% | 50.00% | |||
[1] | Derived from audited information |
Business Combination (Details N
Business Combination (Details Narrative) - USD ($) | Dec. 29, 2020 | Mar. 06, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 |
Debt instrument, conversion price | $ 0.50 | ||||
Stock options outstanding | 5,672,916 | 5,572,916 | 3,210,416 | ||
Asset Purchase Agreement [Member] | Seven Leaf Ventures Corp [Member] | |||||
Purchase price | $ 1,220,000 | ||||
Seven Leaf Ventures Corp [Member] | |||||
Note payable, interest rate | 10.00% | ||||
Number of shares issued for purchase price | 12,085,770 | ||||
Percentage of voting interest acquired | 100.00% | ||||
Business acquisition, planned restructuring activities, description | The Company assumed the obligations of 7LV with respect to the common share purchase warrants of 7LV outstanding on the closing of the acquisition, subject to appropriate adjustments to reflect the exchange ratio. Accordingly, the Company has assumed 1,022,915 common share purchase warrants (the "Warrants"), exercisable into shares at an exercise price of C$2.08 per share at any time prior to May 3, 2021, 299,975 Warrants, exercisable into shares at an exercise price of C$4.17 per share at any time prior to December 31, 2020 and 999,923 Warrants, exercisable into shares at an exercise price of C$0.50 at any time prior to October 10, 2020. Following the completion of the acquisition, 7LV is now a wholly owned subsidiary of the Company. | ||||
Seven Leaf Ventures Corp [Member] | Unsecured Convertible Debentures [Member] | |||||
Number of warrants to purchase shares | 1,022,915 | ||||
Seven Leaf Ventures Corp [Member] | Unsecured Convertible Debentures [Member] | CAD [Member] | |||||
Warrants exercise price | $ 2.08 | ||||
Seven Leaf Ventures Corp [Member] | Unsecured Convertible Debentures [Member] | |||||
Number of warrants to purchase shares | 299,975 | ||||
Seven Leaf Ventures Corp [Member] | Unsecured Convertible Debentures [Member] | CAD [Member] | |||||
Warrants exercise price | $ 4.17 | ||||
Seven Leaf Ventures Corp [Member] | Unsecured Convertible Debentures [Member] | |||||
Number of warrants to purchase shares | 999,923 | ||||
Seven Leaf Ventures Corp [Member] | Unsecured Convertible Debentures [Member] | CAD [Member] | |||||
Warrants exercise price | $ 0.50 | ||||
Seven Leaf Ventures Corp [Member] | Asset Purchase Agreement [Member] | |||||
Goodwill not be deductible for income tax purposes | $ 5,900,000 | ||||
Driven Deliveries, Inc. [Member] | |||||
Number of shares issued for purchase price | 101,968,944 | ||||
Percentage of voting interest acquired | 100.00% | ||||
Number of warrants to purchase shares | 30,249,184 | ||||
Warrants exercise price | $ 0.54 | ||||
Goodwill not be deductible for income tax purposes | $ 13,700,000 | ||||
Stock options outstanding | 453,495 |
Business Combination - Schedule
Business Combination - Schedule of Purchasre Consideration to Fair value of assets Aquired and Liabilities Assumed (Details) - USD ($) | Dec. 29, 2020 | Mar. 06, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | [1] |
Goodwill | $ 20,937,000 | $ 7,221,000 | |||
Seven Leaf Ventures Corp [Member] | |||||
Intangible assets | $ 7,684,000 | ||||
Goodwill | 6,151,000 | ||||
Inventory | 133,000 | ||||
Property and equipment (Fixed assets) | 54,000 | ||||
Cash and cash equivalents | 81,000 | ||||
Total assets acquired | 14,103,000 | ||||
Accounts payable, accrued expenses and other current liabilities | 1,145,000 | ||||
Total liabilities assumed | 1,145,000 | ||||
Estimated fair value of common stock issued | 9,552,000 | ||||
Estimated fair value of warrants issued | 772,000 | ||||
Estimated fair value of debt issued | 2,540,000 | ||||
Estimated fair value of embedded and bifurcated derivatives | 244,000 | ||||
Forgiveness of working capital advance | (150,000) | ||||
Total consideration paid | 12,958,000 | ||||
Net assets acquired | $ 12,958,000 | ||||
Driven Deliveries, Inc. [Member] | |||||
Intangible assets | $ 48,200,000 | ||||
Goodwill | 13,716,000 | ||||
Property and equipment (Fixed assets) | 47,000 | ||||
Cash and cash equivalents | |||||
Other Assets | 1,526,000 | ||||
Total assets acquired | 63,489,000 | ||||
Accounts payable, accrued expenses and other current liabilities | (6,775,000) | ||||
Total liabilities assumed | (6,775,000) | ||||
Estimated fair value of common stock issued | 42,825,000 | ||||
Estimated fair value of warrants issued | 9,000,000 | ||||
Estimated fair value of options issued | 500,000 | ||||
Estimated fair value of debt assumed | 4,389,000 | ||||
Total consideration paid | 56,714,000 | ||||
Net assets acquired | $ 56,174,000 | ||||
[1] | Derived from audited information |
Business Combination - Schedu_2
Business Combination - Schedule of Level 3 Liabilities Measured at Fair Value (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2020USD ($) | |
Beginning balance | $ 849 |
Change in fair value | (298) |
Ending balance | 9,562 |
Seven Leaf Ventures Corp [Member] | Warrant Liability [Member] | |
Beginning balance | 60 |
Issuance of convertible notes | |
Change in fair value | (60) |
Ending balance | |
Seven Leaf Ventures Corp [Member] | Derivative Liability [Member] | |
Beginning balance | 54 |
Issuance of convertible notes | |
Change in fair value | (39) |
Ending balance | 15 |
Driven Deliveries, Inc. [Member] | Warrant Liability [Member] | |
Beginning balance | |
Warrants acquired | 9,000 |
Change in fair value | |
Ending balance | 9,000 |
Driven Deliveries, Inc. [Member] | Derivative Liability [Member] | |
Beginning balance | |
Warrants acquired | |
Change in fair value | |
Ending balance |
Business Combination - Schedu_3
Business Combination - Schedule of Proforma Condensed Consolidated Results of Operations (Details) - Driven Deliveries, Inc. [Member] $ in Thousands | 3 Months Ended |
Dec. 31, 2020USD ($) | |
Warrant Liability [Member] | |
Revenue | $ 11,142 |
Net loss | (7,399) |
Derivative Liability [Member] | |
Revenue | 3,046 |
Net loss | $ (16,400) |
Intangible Assets, Net (Details
Intangible Assets, Net (Details Narraive) - USD ($) | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 245,000 | $ 121,000 |
Intangible Assets, Net - Schedu
Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Balance, beginning | $ 13,270 | ||
Accumulated Amortization, beginning | (245) | $ (121) | |
Accumulated Amortization, ending balance | (975) | ||
Balance, ending | 61,225 | ||
Driven Deliveries, Inc. [Member] | |||
Balance, beginning | 48,182 | ||
Accumulated Amortization, beginning | (18) | ||
Balance, ending | $ 48,182 | ||
Minimum [Member] | Driven Deliveries, Inc. [Member] | |||
Estimated Useful Life | 10 years | ||
Maximum [Member] | Driven Deliveries, Inc. [Member] | |||
Estimated Useful Life | 15 years | ||
YMY Ventures LLC [Member] | |||
Accumulated Amortization, beginning | $ (13) | ||
Balance, ending | $ (13) | ||
Estimated Useful Life | 15 years | ||
Western Coast Ventures, Inc. (WCV) [Member] | |||
Balance, beginning | [1] | ||
Accumulated Amortization, beginning | (41) | ||
Balance, ending | $ (41) | ||
Estimated Useful Life | 15 years | ||
Yerba Buena, LLC [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | (43) | ||
Balance, ending | $ (43) | ||
Yerba Buena, LLC [Member] | Minimum [Member] | |||
Estimated Useful Life | 3 years | ||
Yerba Buena, LLC [Member] | Maximum [Member] | |||
Estimated Useful Life | 15 years | ||
Foothill [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | (130) | ||
Balance, ending | $ (130) | ||
Estimated Useful Life | 15 years | ||
Other [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Estimated Useful Life | 5 years | ||
Cannabis Licenses [Member] | |||
Balance, beginning | $ 12,679 | ||
Balance, ending | 56,679 | ||
Cannabis Licenses [Member] | Driven Deliveries, Inc. [Member] | |||
Balance, beginning | 44,000 | ||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Estimated Useful Life | |||
Cannabis Licenses [Member] | YMY Ventures LLC [Member] | |||
Balance, beginning | [1] | ||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Cannabis Licenses [Member] | Western Coast Ventures, Inc. (WCV) [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Cannabis Licenses [Member] | Yerba Buena, LLC [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Cannabis Licenses [Member] | Foothill [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Cannabis Licenses [Member] | Other [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Trade Name [Member] | |||
Balance, beginning | 458 | ||
Balance, ending | 2,258 | ||
Trade Name [Member] | Driven Deliveries, Inc. [Member] | |||
Balance, beginning | 1,800 | ||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Estimated Useful Life | |||
Trade Name [Member] | YMY Ventures LLC [Member] | |||
Balance, beginning | [1] | ||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Trade Name [Member] | Western Coast Ventures, Inc. (WCV) [Member] | |||
Balance, beginning | [1] | ||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Trade Name [Member] | Yerba Buena, LLC [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Trade Name [Member] | Foothill [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Trade Name [Member] | Other [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Customer Relationship [Member] | |||
Balance, beginning | 643 | ||
Balance, ending | 1,243 | ||
Customer Relationship [Member] | Driven Deliveries, Inc. [Member] | |||
Balance, beginning | 600 | ||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Estimated Useful Life | |||
Customer Relationship [Member] | YMY Ventures LLC [Member] | |||
Balance, beginning | [1] | ||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Customer Relationship [Member] | Western Coast Ventures, Inc. (WCV) [Member] | |||
Balance, beginning | [1] | ||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Customer Relationship [Member] | Yerba Buena, LLC [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Customer Relationship [Member] | Foothill [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Customer Relationship [Member] | Other [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Non-Compete [Member] | |||
Balance, beginning | 220 | ||
Balance, ending | 220 | ||
Non-Compete [Member] | Driven Deliveries, Inc. [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Estimated Useful Life | |||
Non-Compete [Member] | YMY Ventures LLC [Member] | |||
Balance, beginning | [1] | ||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Non-Compete [Member] | Western Coast Ventures, Inc. (WCV) [Member] | |||
Balance, beginning | [1] | ||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Non-Compete [Member] | Yerba Buena, LLC [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Non-Compete [Member] | Foothill [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Non-Compete [Member] | Other [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Technology [Member] | |||
Balance, beginning | |||
Balance, ending | 1,800 | ||
Technology [Member] | Driven Deliveries, Inc. [Member] | |||
Balance, beginning | 1,800 | ||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Estimated Useful Life | |||
Technology [Member] | YMY Ventures LLC [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Technology [Member] | Western Coast Ventures, Inc. (WCV) [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Technology [Member] | Yerba Buena, LLC [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Technology [Member] | Foothill [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
Technology [Member] | Other [Member] | |||
Balance, beginning | |||
Accumulated Amortization, beginning | |||
Balance, ending | |||
[1] | These represent provisional licenses that the Company acquired during the fiscal years ended September 30, 2019 and 2018. |
Intangible Assets, Net - Sche_2
Intangible Assets, Net - Schedule of Expected Amortization (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 | $ 4,147 |
2022 | 4,147 |
2023 | 4,147 |
2024 | 4,147 |
2025 | 4,147 |
Thereafter | 40,490 |
Intangible assets | $ 61,225 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |||
Accounts payable | $ 5,640 | $ 1,784 | |
Accrued credit cards | 43 | 41 | |
Accrued interest | 186 | 134 | |
Accrued payroll | 616 | 616 | |
Other | 2,834 | 408 | |
Total Accounts Payable and Accrued Expenses | $ 9,319 | $ 2,983 | [1] |
[1] | Derived from audited information |
Notes Payable and Advances (Det
Notes Payable and Advances (Details Narrative) - USD ($) | Dec. 04, 2020 | Nov. 07, 2020 | Sep. 30, 2020 | Jul. 31, 2020 | Jul. 16, 2020 | May 24, 2020 | Feb. 07, 2020 | Apr. 30, 2018 | Apr. 29, 2018 | Jan. 16, 2018 | Jul. 31, 2017 | Nov. 30, 2020 | Aug. 31, 2020 | Jul. 31, 2020 | Mar. 31, 2020 | Jan. 31, 2020 | Sep. 30, 2019 | Apr. 30, 2019 | Sep. 30, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Nov. 30, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 29, 2020 | May 31, 2020 | |
Acquisition of purchase price | $ 165,000 | $ 321,000 | |||||||||||||||||||||||||
Outstanding obligation, net of debt discount | $ 3,685,000 | 5,301,000 | |||||||||||||||||||||||||
Settlement payable | [1] | $ 250,000 | |||||||||||||||||||||||||
Debt instrument, maturity description | June - August, 2021 | ||||||||||||||||||||||||||
Payments of notes payable | $ 6,000 | $ 130,000 | |||||||||||||||||||||||||
Assumed liabilities, current portion | 2,000,418 | ||||||||||||||||||||||||||
Assumed liabilities | 2,516,832 | ||||||||||||||||||||||||||
Due to related party | 200,000 | 107,000 | |||||||||||||||||||||||||
Due to related party | 200,000 | [1] | 107,000 | ||||||||||||||||||||||||
Driven Deliveries, Inc. [Member] | |||||||||||||||||||||||||||
Number of warrants issued to purchase common stock | 30,249,184 | ||||||||||||||||||||||||||
Warrants exercise price | $ 0.54 | ||||||||||||||||||||||||||
Settlement payable | $ 250,451 | ||||||||||||||||||||||||||
Settlement payable description | This settlement is payable in equal bi-monthly payments over a period of seventeen (17) Months (36 pay periods), beginning in February 2021. | ||||||||||||||||||||||||||
Officer [Member] | |||||||||||||||||||||||||||
Related party loans payable | $ 26,769 | ||||||||||||||||||||||||||
NVD RE Corp. [Member] | |||||||||||||||||||||||||||
Debt monthly payments | $ 466,667 | ||||||||||||||||||||||||||
Notes payable | $ 300,000 | $ 300,000 | |||||||||||||||||||||||||
Debt instrument, interest rate | 37.50% | 37.50% | |||||||||||||||||||||||||
Debt instrument, term | 36 months | ||||||||||||||||||||||||||
Mortgage payable, interest rate | 14.00% | ||||||||||||||||||||||||||
Due to related party | $ 1,275,000 | $ 1,275,000 | |||||||||||||||||||||||||
Purchase price | 600,000 | 600,000 | |||||||||||||||||||||||||
Payment of tenant improvement | $ 675,000 | $ 675,000 | |||||||||||||||||||||||||
2017 Tractor [Member] | |||||||||||||||||||||||||||
Notes payable | 8,167 | ||||||||||||||||||||||||||
Notes Payable One [Member] | |||||||||||||||||||||||||||
Notes payable | $ 1,770 | ||||||||||||||||||||||||||
Debt instrument, interest rate | 0.00% | ||||||||||||||||||||||||||
Promissory Note [Member] | |||||||||||||||||||||||||||
Debt instrument face amount | $ 21,749 | ||||||||||||||||||||||||||
Notes payable | $ 14,950 | ||||||||||||||||||||||||||
Debt instrument, interest rate | 18.00% | ||||||||||||||||||||||||||
Servicing fee percentage | 10.00% | ||||||||||||||||||||||||||
Promissory Note [Member] | Yerba Buena, Oregon LLC [Member] | |||||||||||||||||||||||||||
Debt instrument face amount | $ 400,000 | ||||||||||||||||||||||||||
Debt instrument, interest rate | 8.00% | ||||||||||||||||||||||||||
Debt instrument, maturity description | The note was issued on April 8, 2019 and is due on April 8, 2021. | ||||||||||||||||||||||||||
Payments of short term liabilities | 42,281 | ||||||||||||||||||||||||||
Short-term liabilities | 357,719 | ||||||||||||||||||||||||||
Promissory Note [Member] | Shareholders, Officers and Directors [Member] | |||||||||||||||||||||||||||
Debt instrument face amount | $ 80,000 | ||||||||||||||||||||||||||
Notes payable | 80,000 | ||||||||||||||||||||||||||
Debt instrument, interest rate | 6.00% | ||||||||||||||||||||||||||
Debt instrument, term | 1 year | ||||||||||||||||||||||||||
Promissory Note [Member] | 12 Months [Member] | Yerba Buena, Oregon LLC [Member] | |||||||||||||||||||||||||||
Debt monthly payments | $ 2,667 | ||||||||||||||||||||||||||
Promissory Note [Member] | 12 Months [Member] | Yerba Buena, Oregon LLC [Member] | |||||||||||||||||||||||||||
Debt monthly payments | $ 2,667 | ||||||||||||||||||||||||||
Short-Term Mortgages Payable [Member] | |||||||||||||||||||||||||||
Notes payable | 922,500 | ||||||||||||||||||||||||||
Debt instrument, interest rate | 2.00% | ||||||||||||||||||||||||||
Purchase price of premises | $ 1,700,000 | ||||||||||||||||||||||||||
Rental credit | 135,000 | ||||||||||||||||||||||||||
Monthly payments | 15,000 | $ 13,500 | |||||||||||||||||||||||||
Amount granted for improvement of property | 9,500 | ||||||||||||||||||||||||||
Acquisition of purchase price | 370,637 | ||||||||||||||||||||||||||
Promissory note amount | $ 1,200,000 | ||||||||||||||||||||||||||
Debt maturity date | Jan. 31, 2020 | Jan. 31, 2020 | |||||||||||||||||||||||||
Interest and fees | 144,486 | ||||||||||||||||||||||||||
Two Promissory Note [Member] | |||||||||||||||||||||||||||
Notes payable | 480,000 | ||||||||||||||||||||||||||
Warrants exercise price | $ 0.45 | $ 0.45 | |||||||||||||||||||||||||
Warrants description | As of July 2020, in consideration of the warrants being amended to $0.45 per share with an extended the term from five to a ten-year term, the maturity date has been extended to December 13, 2020. | ||||||||||||||||||||||||||
Debt instrument, principal payment | $ 20,000 | ||||||||||||||||||||||||||
Outstanding obligation, net of debt discount | 474,949 | ||||||||||||||||||||||||||
Two Promissory Note [Member] | Minimum [Member] | |||||||||||||||||||||||||||
Warrants term | 5 years | 5 years | |||||||||||||||||||||||||
Two Promissory Note [Member] | Maximum [Member] | |||||||||||||||||||||||||||
Warrants term | 10 years | 10 years | |||||||||||||||||||||||||
Two Promissory Note [Member] | Accredited Investors [Member] | |||||||||||||||||||||||||||
Debt instrument face amount | $ 500,000 | ||||||||||||||||||||||||||
Debt instrument, interest rate | 12.00% | ||||||||||||||||||||||||||
Debt maturity date | Jul. 31, 2020 | ||||||||||||||||||||||||||
Number of warrants issued to purchase common stock | 100,000 | ||||||||||||||||||||||||||
Warrants term | 5 years | ||||||||||||||||||||||||||
Warrants exercise price | $ 0.85 | ||||||||||||||||||||||||||
Two Promissory Note [Member] | |||||||||||||||||||||||||||
Notes payable | 500,000 | ||||||||||||||||||||||||||
Warrants exercise price | $ 0.45 | $ 0.45 | |||||||||||||||||||||||||
Warrants description | As of July 2020, in consideration of the warrants being amended to $0.45 per share with an extended the term from five to a ten-year term, the maturity date has been extended to December 13, 2020 | ||||||||||||||||||||||||||
Outstanding obligation, net of debt discount | 449,449 | ||||||||||||||||||||||||||
Two Promissory Note [Member] | Minimum [Member] | |||||||||||||||||||||||||||
Warrants term | 5 years | 5 years | |||||||||||||||||||||||||
Two Promissory Note [Member] | Maximum [Member] | |||||||||||||||||||||||||||
Warrants term | 10 years | 10 years | |||||||||||||||||||||||||
Two Promissory Note [Member] | Accredited Investors [Member] | |||||||||||||||||||||||||||
Debt instrument face amount | $ 500,000 | ||||||||||||||||||||||||||
Debt instrument, interest rate | 12.00% | ||||||||||||||||||||||||||
Debt maturity date | Oct. 31, 2020 | ||||||||||||||||||||||||||
Number of warrants issued to purchase common stock | 100,000 | ||||||||||||||||||||||||||
Warrants term | 5 years | ||||||||||||||||||||||||||
Warrants exercise price | $ 0.85 | ||||||||||||||||||||||||||
Acquisition Notes Payable [Member] | |||||||||||||||||||||||||||
Notes payable | 307,500 | ||||||||||||||||||||||||||
Acquisition of purchase price | $ 800,000 | ||||||||||||||||||||||||||
Acquisition description | As disclosed in Note 6, in September 2018, the Company entered into an agreement to acquire 50% of the membership interest of YMY. The purchase price for the 50% interest was approximately $0.8 million. In connection with this agreement, as of September 30, 2019, the Company has paid approximately $500,000 and recorded a note payable of $307,500. | ||||||||||||||||||||||||||
Payments of notes payable | $ 500,000 | ||||||||||||||||||||||||||
Long-Term Debt, Mortgages [Member] | |||||||||||||||||||||||||||
Notes payable | 400,000 | ||||||||||||||||||||||||||
Mortgage payable | $ 1,585,000 | ||||||||||||||||||||||||||
Mortgage payable, interest rate | 15.00% | 14.00% | 1.55% | 15.00% | |||||||||||||||||||||||
Mortgage payable final due date | Nov. 30, 2022 | Jul. 31, 2023 | Apr. 1, 2023 | Jan. 31, 2022 | |||||||||||||||||||||||
Value of mortgage paid | $ 120,000 | ||||||||||||||||||||||||||
Description of collateral | The note has been cross guaranteed by the CEO and Director of the Company. | The note has been cross guaranteed by the CEO and Director of the Company. | The note has been cross guaranteed by the CEO and Director of the Company. | The note has been cross guaranteed by the CEO and Director of the Company. | |||||||||||||||||||||||
Long-Term Debt, Mortgages [Member] | |||||||||||||||||||||||||||
Notes payable | 1,585,000 | ||||||||||||||||||||||||||
Mortgage payable | $ 400,000 | ||||||||||||||||||||||||||
Mortgage payable, interest rate | 11.55% | ||||||||||||||||||||||||||
Mortgage payable final due date | Apr. 1, 2022 | ||||||||||||||||||||||||||
Value of mortgage paid | $ 38,000 | ||||||||||||||||||||||||||
Description of collateral | The note has been cross guaranteed by the CEO and Director of the Company. | ||||||||||||||||||||||||||
Long-Term Debt, Mortgages Two [Member] | |||||||||||||||||||||||||||
Notes payable | 400,000 | ||||||||||||||||||||||||||
Mortgage payable, interest rate | 15.00% | ||||||||||||||||||||||||||
Mortgage payable final due date | Mar. 31, 2022 | ||||||||||||||||||||||||||
Description of collateral | The note has been cross guaranteed by the CEO and Director of the Company. | ||||||||||||||||||||||||||
Long-Term Debt, Mortgages Three [Member] | |||||||||||||||||||||||||||
Notes payable | 700,000 | ||||||||||||||||||||||||||
Long-Term Debt, Mortgages Four [Member] | |||||||||||||||||||||||||||
Notes payable | 200,000 | ||||||||||||||||||||||||||
Long-Term Debt [Member] | |||||||||||||||||||||||||||
Notes payable | 400,000 | ||||||||||||||||||||||||||
Long-Term Debt, Mortgages Five [Member] | |||||||||||||||||||||||||||
Notes payable | 1,100,000 | ||||||||||||||||||||||||||
36-Month Premium Finance Agreement [Member] | Notes Payable [Member] | |||||||||||||||||||||||||||
Debt instrument face amount | $ 15,710 | ||||||||||||||||||||||||||
Debt monthly payments | $ 442 | ||||||||||||||||||||||||||
60-Month Premium Finance Agreement [Member] | Notes Payable [Member] | |||||||||||||||||||||||||||
Debt instrument face amount | $ 28,905 | ||||||||||||||||||||||||||
Debt monthly payments | $ 482 | ||||||||||||||||||||||||||
12-Month Premium Finance Agreement [Member] | Notes Payable [Member] | |||||||||||||||||||||||||||
Debt instrument face amount | $ 300,150 | ||||||||||||||||||||||||||
Debt monthly payments | $ 60,255 | ||||||||||||||||||||||||||
Notes payable | 22,718 | ||||||||||||||||||||||||||
Debt instrument, interest rate | 7.46% | ||||||||||||||||||||||||||
12-Month Premium Finance Agreement [Member] | Notes Payable [Member] | Nine Monthly Payments [Member] | |||||||||||||||||||||||||||
Debt monthly payments | $ 22,718 | ||||||||||||||||||||||||||
10-Month Premium Finance Agreement [Member] | Notes Payable [Member] | |||||||||||||||||||||||||||
Debt instrument face amount | $ 53,325 | $ 53,325 | |||||||||||||||||||||||||
Debt monthly payments | $ 15,602 | ||||||||||||||||||||||||||
Notes payable | 1,098 | ||||||||||||||||||||||||||
Debt instrument, interest rate | 7.50% | 7.50% | |||||||||||||||||||||||||
10-Month Premium Finance Agreement [Member] | Notes Payable [Member] | Ten Monthly Payments [Member] | |||||||||||||||||||||||||||
Debt monthly payments | $ 530 | 157 | $ 3,772 | ||||||||||||||||||||||||
10-Month Premium Finance Agreement [Member] | Notes Payable Four [Member] | |||||||||||||||||||||||||||
Notes payable | 18,861 | ||||||||||||||||||||||||||
10-Month Premium Finance Agreement [Member] | Notes Payable Seven [Member] | |||||||||||||||||||||||||||
Notes payable | 4,243 | ||||||||||||||||||||||||||
10-Month Premium Finance Agreement [Member] | Notes Payable Six [Member] | |||||||||||||||||||||||||||
Debt instrument face amount | $ 9,920 | ||||||||||||||||||||||||||
Debt monthly payments | $ 2,383 | ||||||||||||||||||||||||||
Notes payable | 7,537 | ||||||||||||||||||||||||||
Debt instrument, interest rate | 12.80% | ||||||||||||||||||||||||||
10-Month Premium Finance Agreement [Member] | Notes Payable Six [Member] | Ten Monthly Payments [Member] | |||||||||||||||||||||||||||
Debt monthly payments | $ 754 | ||||||||||||||||||||||||||
10-Month Premium Finance Agreement [Member] | Notes Payable [Member] | |||||||||||||||||||||||||||
Debt instrument face amount | 6,675 | 2,611 | |||||||||||||||||||||||||
Debt monthly payments | $ 1,371 | $ 1,043 | |||||||||||||||||||||||||
Debt instrument, interest rate | 11.40% | 7.00% | |||||||||||||||||||||||||
10-Month Premium Finance Agreement [Member] | Notes Payable One [Member] | |||||||||||||||||||||||||||
Debt instrument face amount | 78,056 | $ 78,056 | |||||||||||||||||||||||||
Debt monthly payments | $ 22,984 | ||||||||||||||||||||||||||
Debt instrument, interest rate | 7.50% | 7.50% | |||||||||||||||||||||||||
10-Month Premium Finance Agreement [Member] | Notes Payable One [Member] | Ten Monthly Payments [Member] | |||||||||||||||||||||||||||
Debt monthly payments | $ 5,507 | ||||||||||||||||||||||||||
10-Month Premium Finance Agreement [Member] | Notes Payable Five [Member] | |||||||||||||||||||||||||||
Notes payable | 27,536 | ||||||||||||||||||||||||||
9-Month Premium Finance Agreement [Member] | Notes Payable [Member] | |||||||||||||||||||||||||||
Debt instrument face amount | $ 10,629 | $ 16,777 | |||||||||||||||||||||||||
Debt monthly payments | $ 4,009 | $ 3,485 | |||||||||||||||||||||||||
Debt instrument, interest rate | 11.00% | 8.70% | |||||||||||||||||||||||||
9-Month Premium Finance Agreement [Member] | Notes Payable [Member] | Nine Monthly Payments [Member] | |||||||||||||||||||||||||||
Debt monthly payments | $ 736 | $ 1,339 | |||||||||||||||||||||||||
9-Month Premium Finance Agreement [Member] | Notes Payable Four [Member] | |||||||||||||||||||||||||||
Notes payable | 2,942 | ||||||||||||||||||||||||||
9-Month Premium Finance Agreement [Member] | Notes Payable Three [Member] | |||||||||||||||||||||||||||
Notes payable | 4,618 | ||||||||||||||||||||||||||
Paycheck Protection Program [Member] | |||||||||||||||||||||||||||
Notes payable | $ 220,564 | $ 220,564 | $ 266,820 | ||||||||||||||||||||||||
Debt instrument, interest rate | 1.00% | 1.00% | 1.00% | ||||||||||||||||||||||||
Debt maturity date | Jul. 9, 2022 | May 1, 2022 | |||||||||||||||||||||||||
Proceeds from loans | $ 220,565 | $ 266,820 | |||||||||||||||||||||||||
Paycheck Protection Program [Member] | |||||||||||||||||||||||||||
Notes payable | $ 245,400 | ||||||||||||||||||||||||||
Debt instrument, interest rate | 1.00% | ||||||||||||||||||||||||||
Debt maturity date | Jun. 3, 2022 | ||||||||||||||||||||||||||
Proceeds from loans | $ 245,400 | ||||||||||||||||||||||||||
Paycheck Protection Program [Member] | |||||||||||||||||||||||||||
Notes payable | $ 62,500 | ||||||||||||||||||||||||||
Debt instrument, interest rate | 1.00% | ||||||||||||||||||||||||||
Debt maturity date | Jun. 25, 2022 | ||||||||||||||||||||||||||
Proceeds from loans | $ 62,500 | ||||||||||||||||||||||||||
Paycheck Protection Program [Member] | |||||||||||||||||||||||||||
Notes payable | $ 140,407 | ||||||||||||||||||||||||||
Debt instrument, interest rate | 1.00% | ||||||||||||||||||||||||||
Debt maturity date | Dec. 30, 2020 | ||||||||||||||||||||||||||
Proceeds from loans | $ 140,407 | ||||||||||||||||||||||||||
[1] | Derived from audited information |
Notes Payable and Advances - Sc
Notes Payable and Advances - Schedule of Short-term Notes and Advances (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |||
Equipment financing | $ 24 | $ 27 | |
Insurance financing | 90 | 177 | |
Mortgages payable | 923 | ||
Promissory note | 1,815 | 2,298 | |
Settlement payable | 250 | [1] | |
Due to related party | 107 | 200 | |
Short-term notes and advances | 2,286 | 3,625 | |
Acquisition notes payable | 2,666 | 665 | [1] |
Total notes payable and advances | 4,952 | 4,290 | |
Acquisition payable - long term | 516 | ||
Long-term mortgages | 4,785 | 3,685 | [1] |
Total long term debt | $ 5,301 | $ 3,685 | |
[1] | Derived from audited information |
Notes Payable and Advances - _2
Notes Payable and Advances - Schedule of Maturities of Long Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 |
Debt Disclosure [Abstract] | ||
2021 | ||
2022 | 2,600 | |
2023 | 2,185 | |
2024 | ||
2025 | ||
Thereafter | ||
Total long term debt | $ 5,301 | $ 3,685 |
Convertible Debt (Details Narra
Convertible Debt (Details Narrative) | Mar. 14, 2019USD ($)$ / sharesshares | Mar. 14, 2019CAD ($)shares | Dec. 27, 2018CAD ($)shares | Dec. 31, 2020USD ($)$ / sharesshares | Jan. 31, 2019USD ($)$ / sharesshares | Jan. 31, 2019CAD ($)shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018CAD ($)shares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2020CAD ($)shares | Dec. 31, 2019USD ($) | Apr. 01, 2021 | Jan. 02, 2021USD ($) | Dec. 31, 2020CAD ($)shares | Dec. 29, 2020$ / sharesshares | Apr. 30, 2020$ / shares |
Conversion price | $ / shares | $ 0.50 | $ 0.50 | ||||||||||||||
Debt discount | $ 464,000 | $ 253,000 | ||||||||||||||
Driven Deliveries, Inc. [Member] | ||||||||||||||||
Number of warrants to purchase shares | shares | 30,249,184 | |||||||||||||||
Warrant exercise price | $ / shares | $ 0.54 | |||||||||||||||
Convertible Promissory Note [Member] | Driven Deliveries, Inc. [Member] | ||||||||||||||||
Debt instrument, interest rate | 8.00% | 8.00% | 8.00% | |||||||||||||
Conversion price | $ / shares | $ 0.50 | $ 0.50 | ||||||||||||||
Debt instrument face amount | $ 1,050,000 | $ 1,050,000 | ||||||||||||||
Original issuance discount | 50,000 | 50,000 | ||||||||||||||
Notes payable | 1,017,110 | $ 1,017,110 | ||||||||||||||
Debt discount | 23,390 | |||||||||||||||
Convertible Promissory Note [Member] | Driven Deliveries, Inc. [Member] | Execution of note [Member] | ||||||||||||||||
Proceeds from note | $ 787,500 | |||||||||||||||
Convertible Promissory Note [Member] | Driven Deliveries, Inc. [Member] | Outstanding Less Than 90 Days [Member] | ||||||||||||||||
Prepayment percentage | 105.00% | |||||||||||||||
Convertible Promissory Note [Member] | Driven Deliveries, Inc. [Member] | Outstanding Between 91 to 120 Days [Member] | ||||||||||||||||
Prepayment percentage | 110.00% | |||||||||||||||
Convertible Promissory Note [Member] | Driven Deliveries, Inc. [Member] | Outstanding Between 121 to 180 Days [Member] | ||||||||||||||||
Prepayment percentage | 115.00% | |||||||||||||||
Convertible Promissory Note [Member] | Driven Deliveries, Inc. [Member] | Outstanding Between 181 to 365 Days [Member] | ||||||||||||||||
Prepayment percentage | 120.00% | |||||||||||||||
Convertible Promissory Note [Member] | Driven Deliveries, Inc. [Member] | ||||||||||||||||
Debt instrument, interest rate | 10.00% | 10.00% | 10.00% | |||||||||||||
Conversion price | $ / shares | $ 0.50 | $ 0.50 | ||||||||||||||
Debt instrument face amount | $ 50,000 | $ 50,000 | ||||||||||||||
Debt maturity date | Jun. 30, 2021 | |||||||||||||||
Notes payable | $ 50,000 | $ 50,000 | ||||||||||||||
Convertible Promissory Note [Member] | Driven Deliveries, Inc. [Member] | 30 Days After Orginial Funding [Member] | ||||||||||||||||
Proceeds from note | $ 262,500 | |||||||||||||||
Convertible Promissory Note [Member] | Driven Deliveries, Inc. [Member] | ||||||||||||||||
Debt instrument, interest rate | 10.00% | 10.00% | 10.00% | |||||||||||||
Conversion price | $ / shares | $ .50 | $ .50 | ||||||||||||||
Debt instrument face amount | $ 805,000 | $ 805,000 | ||||||||||||||
Debt maturity date | Jun. 1, 2025 | |||||||||||||||
Notes payable | $ 805,000 | $ 805,000 | ||||||||||||||
Convertible Promissory Note [Member] | Driven Deliveries, Inc. [Member] | Subsequent Event [Member] | ||||||||||||||||
Debt instrument, interest rate | 10.00% | 50.00% | ||||||||||||||
Notes payable | $ 15,000 | |||||||||||||||
CAD [Member] | Warrant Holders [Member] | ||||||||||||||||
Conversion price | $ / shares | $ 1.90 | |||||||||||||||
Share price per share | $ / shares | 1.87 | |||||||||||||||
CAD [Member] | Convertible Debentures [Member] | Warrant Holders [Member] | ||||||||||||||||
Warrant exercise price | $ / shares | 1.50 | |||||||||||||||
Share price per share | $ / shares | $ 1.15 | |||||||||||||||
Canaccord Genuity Inc., [Member] | ||||||||||||||||
Debt instrument principal and interest percentage | 105.00% | 105.00% | ||||||||||||||
Canaccord Genuity Inc., [Member] | Common Stock [Member] | ||||||||||||||||
Finance fee | $ 50,000 | $ 50,000 | ||||||||||||||
Canaccord Genuity Inc., [Member] | Agents [Member] | ||||||||||||||||
Cash commission percentage | 7.00% | 7.00% | ||||||||||||||
Canaccord Genuity Inc., [Member] | Indenture Trustee [Member] | ||||||||||||||||
Debt instrument principal and interest percentage | 25.00% | 25.00% | ||||||||||||||
Canaccord Genuity Inc., [Member] | 8% Convertible Notes [Member] | ||||||||||||||||
Proceeds from private offerings | $ 3,100,000 | |||||||||||||||
Canaccord Genuity Inc., [Member] | 8.0% Senior Unsecured Convertible Debenture [Member] | ||||||||||||||||
Number of warrants to purchase shares | shares | 167 | 167 | 167 | |||||||||||||
Debt instrument description | Upon the exercise thereof and at no additional cost, 1.05 Convertible Debenture Units per CD Special Warrant (instead of 1.0 Convertible Debenture Unit per CD Special Warrant). Until the Receipt and Registration have been obtained, securities issued in connection with the Offering (including any underlying securities issued upon conversion or exercise thereof) will be subject to a 6-month hold period from the date of issue. Since the CD Special Warrants were exchanged for Convertible Debenture Units after 6 months as U.S. and Canadian registrations were not effective at that time, the holders received 1.05 Convertible Debenture Units per CD Special Warrant. | Upon the exercise thereof and at no additional cost, 1.05 Convertible Debenture Units per CD Special Warrant (instead of 1.0 Convertible Debenture Unit per CD Special Warrant). Until the Receipt and Registration have been obtained, securities issued in connection with the Offering (including any underlying securities issued upon conversion or exercise thereof) will be subject to a 6-month hold period from the date of issue. Since the CD Special Warrants were exchanged for Convertible Debenture Units after 6 months as U.S. and Canadian registrations were not effective at that time, the holders received 1.05 Convertible Debenture Units per CD Special Warrant. | ||||||||||||||
Payment of brokered portion of offering | $ 1,900,000 | $ 1,900,000 | ||||||||||||||
Debt instrument, interest rate | 8.00% | 8.00% | 8.00% | |||||||||||||
Canaccord Genuity Inc., [Member] | CAD [Member] | ||||||||||||||||
Issuance of common stock convertible debentures | $ 1,000 | |||||||||||||||
Conversion price | $ / shares | $ 3 | $ 3 | ||||||||||||||
Debt converted into shares | shares | 333.33 | 333.33 | ||||||||||||||
Fair value of options grant | $ 424,000 | |||||||||||||||
Canaccord Genuity Inc., [Member] | CAD [Member] | Common Stock [Member] | ||||||||||||||||
Finance fee | $ 50,000 | |||||||||||||||
Canaccord Genuity Inc., [Member] | CAD [Member] | 8% Convertible Notes [Member] | ||||||||||||||||
Proceeds from private offerings | $ 4,100,000 | |||||||||||||||
Canaccord Genuity Inc., [Member] | CAD [Member] | 8.0% Senior Unsecured Convertible Debenture [Member] | ||||||||||||||||
Warrant exercise price | $ / shares | $ 3.90 | $ 3.90 | ||||||||||||||
Convertible debenture | $ 1,000 | $ 1,000 | ||||||||||||||
Payment of brokered portion of offering | $ 2,500,000 | |||||||||||||||
Canaccord Genuity Inc., [Member] | Broker CD Special Warrant [Member] | Agents [Member] | ||||||||||||||||
Cash commission percentage | 7.00% | 7.00% | ||||||||||||||
Canaccord Genuity Inc., [Member] | Broker Warrant [Member] | ||||||||||||||||
Offering fee and expenses | $ 320,000 | |||||||||||||||
Canaccord Genuity Inc., [Member] | Broker Warrant [Member] | CAD [Member] | ||||||||||||||||
Warrant exercise price | $ / shares | $ 1,000 | $ 1,000 | ||||||||||||||
Commission fee | $ 157,290 | |||||||||||||||
Commission and finance fee plus additional expenses | 20,000 | |||||||||||||||
Legal fee | $ 181,365 | |||||||||||||||
Private Offering [Member] | Canaccord Genuity Inc., [Member] | CD Special Warrant [Member] | ||||||||||||||||
Issuance of common stock convertible debentures, shares | shares | 10,000 | |||||||||||||||
Number of warrants to purchase shares | shares | 962 | 3,121 | 3,121 | |||||||||||||
Issuance of common stock convertible debentures | $ 700,000 | $ 2,300,000 | $ 2,300,000 | |||||||||||||
Private Offering [Member] | Canaccord Genuity Inc., [Member] | CD Special Warrant [Member] | CAD [Member] | ||||||||||||||||
Proceeds from private offerings | $ 10,000,000 | |||||||||||||||
Warrant exercise price | $ / shares | $ 1,000 | $ 1,000 | $ 1,000 | |||||||||||||
Issuance of common stock convertible debentures | $ 1,000,000 | $ 3,100,000 | $ 3,100,000 | |||||||||||||
Private Offering [Member] | Canaccord Genuity Inc., [Member] | Broker CD Special Warrant [Member] | ||||||||||||||||
Issuance of common stock convertible debentures, shares | shares | 5,600 | 5,600 | 52,430 | 52,430 | 52,430 | 52,430 |
Convertible Debt - Schedule of
Convertible Debt - Schedule of Assumptions Value Warrant Granted (Details) - Warrants Granted [Member] - Convertible Debt [Member] | Dec. 31, 2020Integer$ / shares |
Exercise Price [Member] | |
Fair value of underlying common shares | $ / shares | $ 2.93 |
Dividend Yield [Member] | |
Fair value assumptions measurement input percentages | |
Historical Volatility [Member] | |
Fair value assumptions measurement input percentages | 85 |
Minimum [Member] | |
Fair value of underlying common shares | $ / shares | $ 1.78 |
Minimum [Member] | Risk Free Interest Rate [Member] | |
Fair value assumptions measurement input percentages | 1.4 |
Maximum [Member] | |
Fair value of underlying common shares | $ / shares | $ 2.10 |
Maximum [Member] | Risk Free Interest Rate [Member] | |
Fair value assumptions measurement input percentages | 1.9 |
Convertible Debt - Schedule o_2
Convertible Debt - Schedule of Embedded Derivative Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Change in fair value | $ 208 | $ 21 |
Warrant Liability [Member] | ||
Beginning balance | 67 | |
Change in fair value | (20) | |
Ending balance | 47 | |
Derivative Liability [Member] | ||
Beginning balance | 592 | |
Change in fair value | (223) | |
Ending balance | $ 369 |
Convertible Debt - Schedule o_3
Convertible Debt - Schedule of Convertible Notes (Details) - Convertible Notes [Member] $ in Thousands | Dec. 31, 2020USD ($) |
Principal value of 8%, convertible at $0.90 at December 31, 2020, due December 27, 2021 including penalty provision of $155,239 | $ 3,123 |
Principal value of 10%, convertible at $1.31 at December 31, 2020, due May 30, 2021 (see Note 9) | 2,754 |
Principal value of various convertible notes, convertible at $0.50 at December 31, 2020, due June - August, 2021 | 1,067 |
Debt discount | (125) |
Cumulative foreign currency impact | (24) |
Carrying value of convertible notes | $ 6,795 |
Convertible Debt - Schedule o_4
Convertible Debt - Schedule of Convertible Notes (Details) (Parenthetical) $ / shares in Units, $ in Thousands | 3 Months Ended |
Dec. 31, 2020USD ($)$ / shares | |
Conversion price | $ 0.50 |
Debt instrument, description | June - August, 2021 |
Convertible Notes [Member] | |
Debt instrument, interest rate | 8.00% |
Conversion price | $ 0.90 |
Debt instrument maturity date | Dec. 27, 2021 |
Penalty provision | $ | $ 155,239 |
Convertible Notes One [Member] | |
Debt instrument, interest rate | 10.00% |
Conversion price | $ 1.31 |
Debt instrument maturity date | May 30, 2021 |
Fair Value Measurements (Detail
Fair Value Measurements (Details Narrative) | 3 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Pricing model description | The Company used a lattice based trinomial model developed by Tsiveriotis, K. and Fernades in which the three lattices incorporate (1) the Company's underlying common stock price; (2) the value of the debt components of the convertible notes; and (3) the value of the equity component of the convertible notes. The main drivers of sensitivity for the model are volatility and the credit spread. The model used will vary by approximately 1.5% for a 4% change in volatility and will vary by less than 1% for each 1% change in credit spread. |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 | [1] |
Warrant liability | $ 9,178 | $ 257 | |
Embedded derivative liability | 384 | ||
Total fair value | 9,562 | ||
Level 1 [Member] | |||
Warrant liability | |||
Embedded derivative liability | |||
Total fair value | |||
Level 2 [Member] | |||
Warrant liability | |||
Embedded derivative liability | |||
Total fair value | |||
Level 3 [Member] | |||
Warrant liability | 9,178 | ||
Embedded derivative liability | 384 | ||
Total fair value | $ 9,562 | ||
[1] | Derived from audited information |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Level 3 Liabilities Measured at Fair Value (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2020USD ($) | |
Beginning balance | $ 849 |
Warrants granted for servies | 11 |
Warrants issued pursuant to acquisition (see Note 9) | 9,000 |
Change in fair value | (298) |
Ending balance | 9,562 |
Warrant Liability [Member] | |
Beginning balance | 257 |
Warrants granted for servies | 11 |
Warrants issued pursuant to acquisition (see Note 9) | 9,000 |
Change in fair value | (90) |
Ending balance | 9,178 |
Embedded Derivative Liability [Member] | |
Beginning balance | 592 |
Warrants granted for servies | |
Warrants issued pursuant to acquisition (see Note 9) | |
Change in fair value | (208) |
Ending balance | $ 384 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Weighted Average Significant Unobservable Inputs (Details) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020Integer$ / shares | Sep. 30, 2020Integer$ / shares | |
Warrant Liability [Member] | ||
Warrant Liability Strike price | $ / shares | $ .58 | |
Warrant Liability Contractual term (years) | 2 years 6 months 29 days | |
Warrant Liability [Member] | Volatility (Annual) [Member] | ||
Warrant Liability Measurement input | 124 | 100 |
Warrant Liability [Member] | Risk Free Interest Rate [Member] | ||
Warrant Liability Measurement input | .67 | 0.28 |
Warrant Liability [Member] | Dividend Yield [Member] | ||
Warrant Liability Measurement input | 0 | 0 |
Warrant Liability [Member] | Minimum [Member] | ||
Warrant Liability Strike price | $ / shares | $ 0.36 | |
Warrant Liability Contractual term (years) | 1 year | |
Warrant Liability [Member] | Maximum [Member] | ||
Warrant Liability Strike price | $ / shares | $ 2.96 | |
Warrant Liability Contractual term (years) | 3 years | |
Embedded Derivative Liability [Member] | ||
Embedded Derivative Liability Strike price | $ / shares | $ 1.08 | $ 1.12 |
Embedded Derivative Liability Contractual term (years) | 11 months 26 days | 1 year 6 months |
Embedded Derivative Liability [Member] | Volatility (Annual) [Member] | ||
Embedded Derivative Liability Measurement input | 112 | 101 |
Embedded Derivative Liability [Member] | Risk Free Interest Rate [Member] | ||
Embedded Derivative Liability Measurement input | 0.10 | 0.25 |
Embedded Derivative Liability [Member] | Dividend Yield [Member] | ||
Embedded Derivative Liability Measurement input | 0 | 0 |
Embedded Derivative Liability [Member] | Credit Spread [Member] | ||
Embedded Derivative Liability credit spread | 11.21 | |
Embedded Derivative Liability [Member] | Minimum [Member] | Credit Spread [Member] | ||
Embedded Derivative Liability credit spread | 14 | |
Embedded Derivative Liability [Member] | Maximum [Member] | Credit Spread [Member] | ||
Embedded Derivative Liability credit spread | 16 |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Plan description | The Company adopted a plan to allow the Company to compensate prospective and current employees, directors, and consultants through the issuance of equity instruments of the Company. The plan has an effective life of 10 years. The plan is administered by the board of directors of the Company until such time as the board transfers responsibility to a committee of the board. The plan is limited to issuing common shares of the Company up to 15% of the total shares then outstanding. No limitations exist on any other instruments issuable under the plan. In the event of a change in control of the Company, all unvested instruments issued under the plan become immediately vested. | ||||
Precentge of common shares issuable | 15.00% | ||||
Two series of preferred stock designated, shares issued | |||||
Stock issued during the period | 12,500,000 | ||||
Stock issued during the period, value | $ 2,870,000 | ||||
Debt conversion price | $ 0.50 | ||||
Common stock issued for stock compensation | 1,868,750 | ||||
Common stock issued for stock compensation, value | $ 561,000 | ||||
Acquisition of Driven Deliveries, Inc., shares | 101,968,994 | ||||
Common stock issuable, shares | 2,870,000 | ||||
Common stock issuable | 6,833,069 | ||||
Related To Rent [Member] | |||||
Common stock issued for stock compensation | 293,700 | ||||
Common stock issued for stock compensation, value | $ 117,480 | ||||
Accrued Interest Related to Convertible Notes [Member] | |||||
Common stock issued in connection with conversion of notes payable | $ 91,459 | ||||
Common stock issued in connection with conversion of notes payable, shares | 207,861 | ||||
Membership Interest Purchase Agreement [Member] | |||||
Stock issued during the period | 394,270 | ||||
Shares issued price per share | $ 1 | ||||
Purchase price | $ 500,000 | ||||
Lien in real estate property | 106,000 | ||||
Building, carrying value | $ 500,000 | ||||
Membership Interest Purchase Agreement [Member] | Eugene, Oregon [Member] | |||||
Stock issued during the period | 394,270 | ||||
Consulting Agreements [Member] | |||||
Stock issued during the period | 1,569,570 | ||||
Stock issued during the period, value | $ 589,000 | ||||
Shares issued price per share | $ 0.38 | $ .89 | |||
Common stock issued for stock compensation | 5,000 | ||||
Common stock issued for stock compensation, value | $ 4,000 | ||||
Consulting Agreements [Member] | Convertible Common Stock [Member] | |||||
Number of shares cancelled | 525,400 |
Stock Based Compensation (Detai
Stock Based Compensation (Details Narrative) - shares | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Expected dividend yield | 0.00% | 0.00% |
Stock Options [Member] | ||
Expected dividend yield | 0.00% | |
Weighted average remaining contractual life | 1 year 2 months 12 days | |
Stock Options [Member] | Employment Agreement [Member] | ||
Stock options issued | 100,000 |
Stock Based Compensation - Sche
Stock Based Compensation - Schedule of Fair Value of Options Granted (Details) - $ / shares | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Risk-free rate of interest | 2.00% | |
Expected dividend rate | 0.00% | 0.00% |
Options [Member] | ||
Exercise price | $ .40 | |
Expected term (years) | 2 years 9 months 18 days | |
Options [Member] | Minimum [Member] | ||
Exercise price | $ 0.89 | |
Expected term (years) | 2 years | |
Expected stock price volatility | 103.86% | 105.80% |
Risk-free rate of interest | 1.88% | |
Options [Member] | Maximum [Member] | ||
Exercise price | $ 1.25 | |
Expected term (years) | 4 years | |
Expected stock price volatility | 127.35% | 115.90% |
Risk-free rate of interest | 2.79% |
Stock Based Compensation - Summ
Stock Based Compensation - Summary of Stock Option Activity (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Compensation Related Costs [Abstract] | ||
Number of Options, Outstanding Beginning Balance | 5,572,916 | 3,210,416 |
Number of Options, Granted | 100,000 | 2,362,500 |
Number of Options, Outstanding Ending Balance | 5,672,916 | 5,572,916 |
Weighted Average Exercise Price, Outstanding Beginning Balance | $ 1.77 | $ 2.45 |
Weighted Average Exercise Price, Granted | 0.40 | .33 |
Weighted Average Exercise Price, Outstanding Ending Balance | $ 1.73 | $ 1.77 |
Aggregate Intrinsic Value, Beginning Balance | ||
Aggregate Intrinsic Value, Ending Balance | ||
Aggregate Intrinsic Value, Vested and Exercisable | ||
Weighted Average Remaining Contractual Term, Beginning Balance | 1 year 4 months 24 days | 2 years 1 month 6 days |
Weighted Average Remaining Contractual Term, Granted | 2 years 9 months 18 days | 2 years 10 months 21 days |
Weighted Average Remaining Contractual Term, Ending Balance | 1 year 2 months 12 days | 1 year 4 months 24 days |
Stock Based Compensation - Sc_2
Stock Based Compensation - Schedule of Stock-based Compensation Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total stock-based compensation | $ 1,344 | $ 497 |
Stock Awards [Member] | ||
Total stock-based compensation | 1,151 | 82 |
Stock Options [Member] | ||
Total stock-based compensation | 61 | 415 |
Warrants [Member] | ||
Total stock-based compensation | $ 132 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | Jun. 05, 2020USD ($) | Feb. 22, 2018USD ($)ft² | Jul. 31, 2020USD ($) | Sep. 30, 2019USD ($) | Jan. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2020USD ($)shares | Dec. 31, 2020CAD ($)shares | Dec. 31, 2019USD ($) | Jun. 30, 2019shares | Dec. 31, 2020CAD ($) | Jul. 31, 2016 |
Lease term | 4 years | 5 years | 3 years | 10 years | |||||||||
Base rental fees | $ 4,285 | $ 9,696 | $ 3,024 | $ 7,033 | |||||||||
Real estate taxes | $ 315 | ||||||||||||
Percentage of base rental fees escalation | 2.00% | ||||||||||||
Security deposit to landlord | $ 14,000 | ||||||||||||
Operating lease, description | On February 22, 2018, both parties executed a lease addendum that adds contiguous property for 12,322 square feet. The term commences November 1, 2017 and continues through November 31, 2026 at a starting rate of $3,525 a month that escalates after the first year. | ||||||||||||
Area of land | ft² | 12,322 | ||||||||||||
Starting rate of amount | $ 3,525 | ||||||||||||
Acquisition of licenses and permits | $ 2,000,000 | ||||||||||||
Professional fees | $ 922,000 | $ 639,000 | |||||||||||
Joint venture amount | $ 307,500 | ||||||||||||
Excess of its commitments | $ 1,000,000 | ||||||||||||
Commitments description | The Company has agreed to pay the Agent, on the Closing Date a commission equal to 7% of the gross proceeds of the Offering (including in respect of any exercise of the Over-Allotment Option, if any) payable in cash (the "Agent's Commission"), subject to a reduced fee equal to 1% for Units sold to certain purchasers designated by the Company on a president's list (the "President's List"). In addition the Agent will receive a number of share purchase warrants (the "Broker Warrants") to purchase up to that number of shares of common stock of the Company (each, a "Broker Share") that is equal to 7% of the aggregate number of Units issued under the Offering (including any Additional Units (as hereinafter defined) issued upon exercise of the Over-Allotment Option, if any), subject to a reduced number of Broker Warrants equal to 3.5% of the Units sold to purchasers on the President's List, an exercise price of $0.55 CAD per Broker Share, exercisable for a period of 24 months following the Closing Date. | The Company has agreed to pay the Agent, on the Closing Date a commission equal to 7% of the gross proceeds of the Offering (including in respect of any exercise of the Over-Allotment Option, if any) payable in cash (the "Agent's Commission"), subject to a reduced fee equal to 1% for Units sold to certain purchasers designated by the Company on a president's list (the "President's List"). In addition the Agent will receive a number of share purchase warrants (the "Broker Warrants") to purchase up to that number of shares of common stock of the Company (each, a "Broker Share") that is equal to 7% of the aggregate number of Units issued under the Offering (including any Additional Units (as hereinafter defined) issued upon exercise of the Over-Allotment Option, if any), subject to a reduced number of Broker Warrants equal to 3.5% of the Units sold to purchasers on the President's List, an exercise price of $0.55 CAD per Broker Share, exercisable for a period of 24 months following the Closing Date. | |||||||||||
Stock issued during period, value, new issues | $ 2,870,000 | ||||||||||||
Stock issued during the period | shares | 12,500,000 | ||||||||||||
Chord Advisors LLC [Member] | |||||||||||||
Professional fees | $ 260,000 | ||||||||||||
Agency Agreement [Member] | Over-Allotment Option [Member] | Maximum [Member] | |||||||||||||
Percentage of additional shares percentage | 15.00% | 15.00% | |||||||||||
Additional offering shares | shares | 2,590,909 | 2,590,909 | |||||||||||
Agency Agreement [Member] | CAD [Member] | Over-Allotment Option [Member] | Maximum [Member] | |||||||||||||
Offering price | $ 10,925,000 | ||||||||||||
Agent's commission | 764,750 | ||||||||||||
Net proceeds | $ 10,160,250 | ||||||||||||
Agency Agreement [Member] | CAD [Member] | Over-Allotment Option [Member] | Minimum [Member] | |||||||||||||
Offering price | $ 9,200,000 | ||||||||||||
Agent's commission | 644,000 | ||||||||||||
Net proceeds | 8,556,000 | ||||||||||||
Agency Agreement [Member] | Agent [Member] | |||||||||||||
Stock issued during the period | shares | 90,909 | 90,909 | |||||||||||
Agency Agreement [Member] | Agent [Member] | CAD [Member] | |||||||||||||
Finance fee | $ 100,000 | 100,000 | |||||||||||
Cash | 50,000 | $ 50,000 | |||||||||||
Stock issued during period, value, new issues | 50,000 | ||||||||||||
Estimated offering cost | $ 350,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Feb. 18, 2021 | Feb. 18, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Proceeds from sale of common stock | $ 2,869,000 | |||
Subsequent Event [Member] | ||||
Proceeds from sale of common stock | $ 418,000 | |||
Additional funds raised | $ 6,800,000 | |||
Subsequent Event [Member] | Employeement and Consulting Agreement [Member] | ||||
Stock options issued | 1,150,000 | |||
Subsequent Event [Member] | YMY Ventures LLC [Member] | ||||
Obligation tender amount | 307,500 | $ 307,500 | ||
Interest and legal fees | 361,361 | |||
Debt forgiveness | $ 627,792 |