Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jan. 31, 2020 | |
Document And Entity Information | |
Entity Registrant Name | BODY & MIND INC. |
Entity Central Index Key | 0001715611 |
Document Type | S-1/A |
Amendment Flag | true |
Entity Filer Category | Non-accelerated Filer |
Amendment Description | Body and Mind Inc. is filing this Amendment No. 1 to the Registration Statement on Form S-1 (File No. 333-237143), initially filed on March 13, 2020 (the “Registration Statement”), solely for the purposes of: (i) removing 38,912 shares of common stock that were held by one selling securityholder from being offered for resale pursuant to the Registration Statement; (ii) updating the interim financial statements presented in the prospectus included in the Registration Statement to remove the three month period ended October 31, 2019 and to include the three and six month periods ended January 31, 2020; (iii) updating the section entitled “Management’s Discussion And Analysis Of Financial Condition And Results of Operations” in the prospectus included in the Registration Statement to remove the discussion for the three month period ended October, 31, 2019 and include the discussion for the three and six month periods ended January 31, 2020; (iv) updating the section entitled “Selling Securityholders” to remove one selling securityholder and the 38,912 shares that are or were held by such selling securityholder; and (v) to file an updated consent of Dale Matherson Carr-Hilton Labonte LLP, the registrant’s former independent registered public accounting firm. No other changes have been made to Part I or, except as set forth in Item 16 (Exhibits), Part II of the Registration Statement. |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | true |
Condensed Consolidated Interim
Condensed Consolidated Interim Balance Sheets - USD ($) | Jan. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2018 |
Current | |||
Cash and cash equivalents | $ 3,374,079 | $ 9,004,716 | $ 324,837 |
Amounts receivable | 1,094,449 | 939,909 | 632,477 |
Interests receivable (Note 6) | 63,000 | 27,000 | |
Prepaids | 869,614 | 227,843 | 99,014 |
Inventory (Note 5) | 1,522,260 | 1,390,419 | 953,417 |
Total Current Assets | 6,923,402 | 11,589,887 | 2,009,745 |
Convertible Loan Receivable (Note 6) | 948,310 | 52,225 | 0 |
Investment in NMG Ohio LLC (Note 17) | 3,573,314 | 3,465,902 | 77,600 |
Investment in and advances to GLDH (Note 18) | 11,886,379 | 7,373,036 | 0 |
Other investments (Note 19) | 255,980 | ||
Property and equipment (Note 7) | 4,676,499 | 2,694,500 | 2,615,898 |
Brand and Licenses | 8,172,000 | 8,172,000 | 8,172,000 |
Goodwill | 2,635,721 | 2,635,721 | 2,635,721 |
TOTAL ASSETS | 38,815,625 | 36,239,251 | 15,510,964 |
Current | |||
Accounts payables | 941,736 | 979,384 | 447,703 |
Accrued liabilities | 95,070 | 95,234 | 95,481 |
Income taxes | 239,358 | 239,358 | 239,358 |
Due to related parties (Note 8) | 7,680 | 12,952 | 51,081 |
Lease liabilities (Note 20) | 195,983 | ||
Notes payable (Note 9) | 2,175,000 | ||
Total Current Liabilities | 1,479,827 | 1,326,928 | 3,008,623 |
Lease Liabilities (Note 20) | 905,715 | ||
Deferred Tax Liability | 1,716,120 | 1,716,120 | 1,716,120 |
TOTAL LIABILITIES | 4,101,662 | 3,043,048 | 4,724,743 |
STOCKHOLDERS' EQUITY | |||
Capital Stock - Statement 3 (Note 11) Authorized: 900,000,000 Common Shares - Par Value $0.0001 Issued and Outstanding: 101,853,217 (31 July 2019 - 97,279,891 and 31 July 2018 - 47,774,817) CommonShares | 10,185 | 9,728 | 4,778 |
Additional Paid-in Capital | 45,285,374 | 41,765,408 | 16,918,082 |
Shares to be Issued (Notes 10, 11 and 14) | 1,232,548 | 1,118,815 | 103,267 |
Equity Component of Convertible Debenture (Note 10) | 88,797 | ||
Other Comprehensive Income | 843,067 | 827,314 | 532,405 |
Deficit | (12,657,211) | (10,525,062) | (6,772,311) |
TOTAL STOCKHOLDERS' EQUITY | 34,713,963 | 33,196,203 | 10,786,221 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 38,815,625 | $ 36,239,251 | $ 15,510,964 |
Condensed Consolidated Interi_2
Condensed Consolidated Interim Balance Sheets (Parenthetical) - $ / shares | Jan. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2018 |
Statement of Financial Position [Abstract] | |||
Common stock, shares authorized | 900,000,000 | 900,000,000 | 900,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares outstanding | 101,853,217 | 97,279,891 | 47,774,817 |
Common stock, shares issued | 101,853,217 | 97,279,891 | 47,774,817 |
Condensed Consolidated Interi_3
Condensed Consolidated Interim Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jan. 31, 2020 | Jan. 31, 2019 | Jan. 31, 2020 | Jan. 31, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | |
Income Statement [Abstract] | ||||||
Sales | $ 1,572,284 | $ 1,195,745 | $ 3,013,910 | $ 2,521,723 | $ 5,336,557 | $ 2,692,979 |
Sales tax | (356,394) | (115,927) | (554,918) | (247,346) | (724,339) | (279,931) |
Net sales | 4,612,218 | 2,413,048 | ||||
Cost of sales | (686,691) | (575,948) | (1,609,664) | (1,313,569) | (2,831,642) | (1,216,851) |
Total sales | 529,199 | 503,870 | 849,328 | 960,808 | 1,780,576 | 1,196,197 |
General and Administrative Expenses | ||||||
Accounting and legal (Note 8) | 356,491 | 218,899 | 400,684 | 297,280 | 895,263 | 350,502 |
Bad debt expense | 46,931 | 46,931 | ||||
Depreciation | 5,331 | 3,348 | 10,206 | 6,488 | 12,870 | 8,811 |
Insurance | 22,605 | 16,538 | 51,330 | 38,776 | 76,659 | 29,793 |
Interest and accretion expense | 1,242,808 | 277,219 | ||||
Lease expense | 54,926 | 111,630 | ||||
Licenses, utilities and office administration | 239,576 | 325,527 | 544,300 | 410,619 | 931,045 | 281,671 |
Management fees (Note 8) | 55,683 | 114,430 | 185,261 | 167,274 | 420,202 | 219,120 |
Listing fees | 465,481 | |||||
Regulatory, filing and transfer agent fees | 22,598 | 41,853 | 39,334 | 49,049 | 137,117 | 23,641 |
Rent | 8,092 | 18,000 | 20,457 | 36,362 | 119,074 | 51,000 |
Salaries and wages | 453,807 | 188,965 | 937,858 | 383,140 | 926,198 | 380,371 |
Stock-based compensation (Notes 8 and 11) | 369,437 | 870,808 | 659,015 | 870,808 | 880,595 | 789,679 |
Transaction cost | 330,324 | |||||
Travel | 41,436 | 11,703 | 92,337 | 13,726 | 56,214 | 28,237 |
Total | (1,812,866) | (1,917,758) | (3,455,523) | (2,383,809) | (5,865,987) | (3,442,762) |
Loss Before Other Income (Expenses) | (1,283,667) | (1,413,888) | (2,606,195) | (1,423,001) | (4,085,411) | (2,246,565) |
Other Income (Expenses) | ||||||
Foreign exchange, net | 1,914 | (24,393) | (81,006) | (95,949) | (241,862) | (193,959) |
Interest expense | (131,850) | (202,065) | (131,850) | (202,017) | ||
Interest income | 278,688 | 556,688 | 719,865 | 5,615 | ||
Loss on settlement (Note 19) | (239,328) | (239,328) | ||||
Management fee income | 36,000 | 54,000 | 37,000 | |||
Other income | 125,000 | |||||
Write-off of assets | (1,008) | (1,008) | (38,809) | (873) | ||
Write off of deposit | (250,000) | |||||
Equity pickup of investee | 103,899 | (23,939) | 191,550 | (31,559) | 56,466 | |
Early loan repayment penalty | (200,000) | |||||
Net Loss for the Period Before Income Tax | (1,235,352) | (1,664,285) | (2,132,149) | (1,752,526) | (3,752,751) | (2,685,782) |
Income taxes | ||||||
Deferred income tax recovery | 1,144,080 | |||||
Income tax expense | (99,394) | (222,948) | (239,358) | |||
Net Loss for the Period | (1,235,352) | (1,763,679) | (2,132,149) | (1,975,474) | (3,752,751) | (1,781,060) |
Other Comprehensive Income (Loss) | ||||||
Foreign currency translation adjustment | (103,440) | (120,725) | 15,753 | (26,314) | (294,909) | (175,577) |
Comprehensive Loss for the Period | $ (1,338,792) | $ (1,884,404) | $ (2,116,396) | $ (2,001,788) | $ (3,457,842) | $ (1,605,483) |
Loss per Share - Basic and Diluted (in dollars per share) | $ (0.01) | $ (0.03) | $ (0.02) | $ (0.03) | $ (0.05) | $ (0.05) |
Weighted Average Number of Shares Outstanding (shares) | 101,841,511 | 66,697,215 | 101,495,573 | 57,236,016 | 69,548,041 | 38,934,166 |
Condensed Consolidated Interi_4
Condensed Consolidated Interim Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Share Capital Common Shares | Additional paid-in capital | Shares to be issued | Subscriptions receivable | Other comprehensive income | Equity component of convertible debenture | Deficit | Total |
Balance, amount at Jul. 31, 2017 | $ 1,914 | $ 4,954,932 | $ 356,828 | $ (4,991,251) | $ 322,423 | |||
Beginning Balance (in shares) at Jul. 31, 2017 | 19,137,783 | |||||||
Acquisition of Nevada Medical Group LLC (Notes 11 and 14) | $ 1,883 | 6,335,482 | $ 135,202 | 6,472,567 | ||||
Acquisition of Nevada Medical Group LLC (Notes 11 and 14) (in shares) | 18,827,000 | |||||||
Private placement (Note 10) | $ 974 | 5,025,520 | 5,026,494 | |||||
Private placement (Note 10) (in shares) | 9,739,534 | |||||||
Issuance of escrowed shares (Note 10) | $ 7 | 31,928 | (31,935) | |||||
Issuance of escrowed shares (Note 10) (in shares) | 70,500 | |||||||
Share issue costs | (219,459) | (219,459) | ||||||
Stock-based compensation (Notes 11) | 789,679 | 789,679 | ||||||
Foreign currency translation adjustment | 175,577 | 175,577 | ||||||
Loss for the period | (1,781,060) | (1,781,060) | ||||||
Balance, amount at Jul. 31, 2018 | $ 4,778 | 16,918,082 | 103,267 | 532,405 | (6,772,311) | 10,786,221 | ||
Ending Balance (in shares) at Jul. 31, 2018 | 47,774,817 | |||||||
Foreign currency translation adjustment | 94,411 | 94,411 | ||||||
Loss for the period | (211,795) | (211,795) | ||||||
Balance, amount at Oct. 31, 2018 | $ 4,778 | 16,918,082 | 103,267 | 626,816 | (6,984,106) | 10,668,837 | ||
Ending Balance (in shares) at Oct. 31, 2018 | 47,774,817 | |||||||
Balance, amount at Jul. 31, 2018 | $ 4,778 | 16,918,082 | 103,267 | 532,405 | (6,772,311) | 10,786,221 | ||
Beginning Balance (in shares) at Jul. 31, 2018 | 47,774,817 | |||||||
Loss for the period | (1,975,474) | |||||||
Balance, amount at Jan. 31, 2019 | $ 7,263 | 26,779,252 | 75,939 | $ (787,123) | 506,091 | (8,747,785) | 17,833,637 | |
Ending Balance (in shares) at Jan. 31, 2019 | 72,628,084 | |||||||
Balance, amount at Jul. 31, 2018 | $ 4,778 | 16,918,082 | 103,267 | 532,405 | (6,772,311) | 10,786,221 | ||
Beginning Balance (in shares) at Jul. 31, 2018 | 47,774,817 | |||||||
Private placement (Note 10) | $ 2,778 | 15,085,636 | 15,088,414 | |||||
Private placement (Note 10) (in shares) | 27,780,134 | |||||||
Exercise of warrants (Note 11) | $ 1,601 | 5,955,166 | (50,017) | 5,956,767 | ||||
Exercise of warrants (Note 11) (in shares) | 16,007,333 | |||||||
Issuance of escrowed shares (Note 10) | $ 14 | 50,003 | 270,736 | |||||
Issuance of escrowed shares (Note 10) (in shares) | 141,000 | |||||||
Share issue costs | $ 31 | (270,767) | ||||||
Share issue costs (in shares) | 322,581 | |||||||
Finance fee for promissory note (Note 8) | $ 111 | 822,383 | 822,494 | |||||
Finance fee for promissory note (Note 8) (in shares) | 1,105,083 | |||||||
Investment agreement with Australis (Note 15) | $ 177 | 786,946 | 787,123 | |||||
Investment agreement with Australis (Note 15) (in shares) | 1,768,545 | |||||||
Shares to be issued on conversion of debt (Note 10) | 1,065,565 | 1,065,565 | ||||||
Acquisition of NMG Ohio LLC (Note 16) | $ 238 | 1,448,567 | 1,448,805 | |||||
Acquisition of NMG Ohio LLC (Note 16) (in shares) | 2,380,398 | |||||||
Equity component of convertible debenture (Note 9) | $ 88,797 | 88,797 | ||||||
Stock-based compensation (Notes 11) | 880,595 | 880,595 | ||||||
Foreign currency translation adjustment | 294,909 | 294,909 | ||||||
Loss for the period | (3,752,751) | (3,752,751) | ||||||
Balance, amount at Jul. 31, 2019 | $ 9,728 | 41,765,408 | 1,118,815 | 827,314 | 88,797 | (10,525,062) | 33,196,203 | |
Ending Balance (in shares) at Jul. 31, 2019 | 97,279,891 | |||||||
Balance, amount at Oct. 31, 2018 | $ 4,778 | 16,918,082 | 103,267 | 626,816 | (6,984,106) | 10,668,837 | ||
Beginning Balance (in shares) at Oct. 31, 2018 | 47,774,817 | |||||||
Private placement (Note 10) | $ 1,600 | 4,882,240 | 4,883,840 | |||||
Private placement (Note 10) (in shares) | 16,000,000 | |||||||
Exercise of warrants (Note 11) | $ 321 | 1,204,875 | 1,205,196 | |||||
Exercise of warrants (Note 11) (in shares) | 3,206,160 | |||||||
Issuance of escrowed shares (Note 10) | $ 7 | 27,321 | (27,328) | |||||
Issuance of escrowed shares (Note 10) (in shares) | 70,500 | |||||||
Share issue costs | $ 31 | (270,767) | (270,736) | |||||
Share issue costs (in shares) | 322,581 | |||||||
Finance fee for promissory note (Note 8) | $ 111 | 822,383 | 822,494 | |||||
Finance fee for promissory note (Note 8) (in shares) | 1,105,083 | |||||||
Investment agreement with Australis (Note 15) | $ 177 | 786,946 | (787,123) | |||||
Investment agreement with Australis (Note 15) (in shares) | 1,768,545 | |||||||
Acquisition of NMG Ohio LLC (Note 16) | $ 238 | 1,448,567 | 1,448,805 | |||||
Acquisition of NMG Ohio LLC (Note 16) (in shares) | 2,380,398 | |||||||
Equity component of convertible debenture (Note 9) | 88,797 | 88,797 | ||||||
Stock-based compensation (Notes 11) | 870,808 | 870,808 | ||||||
Foreign currency translation adjustment | (120,725) | (120,725) | ||||||
Loss for the period | (1,763,679) | (1,763,679) | ||||||
Balance, amount at Jan. 31, 2019 | $ 7,263 | 26,779,252 | 75,939 | $ (787,123) | 506,091 | (8,747,785) | 17,833,637 | |
Ending Balance (in shares) at Jan. 31, 2019 | 72,628,084 | |||||||
Balance, amount at Jul. 31, 2019 | $ 9,728 | 41,765,408 | 1,118,815 | 827,314 | 88,797 | (10,525,062) | 33,196,203 | |
Beginning Balance (in shares) at Jul. 31, 2019 | 97,279,891 | |||||||
Acquisition of GLDH (Note 18) | $ 434 | 2,752,348 | 2,752,782 | |||||
Acquisition of GLDH (Note 18) (in shares) | 4,337,111 | |||||||
Exercise of warrants (Note 11) | $ 14 | 75,535 | 75,549 | |||||
Exercise of warrants (Note 11) (in shares) | 143,230 | |||||||
Stock-based compensation (Notes 11) | 289,578 | 289,578 | ||||||
Share subscriptions received in advance | 15,291 | 15,291 | ||||||
Foreign currency translation adjustment | 119,193 | 119,193 | ||||||
Loss for the period | (896,797) | (896,797) | ||||||
Balance, amount at Oct. 31, 2019 | $ 10,176 | 44,882,869 | 1,134,106 | 946,507 | (11,421,859) | 35,551,799 | ||
Ending Balance (in shares) at Oct. 31, 2019 | 101,760,232 | |||||||
Balance, amount at Jul. 31, 2019 | $ 9,728 | 41,765,408 | 1,118,815 | 827,314 | $ 88,797 | (10,525,062) | 33,196,203 | |
Beginning Balance (in shares) at Jul. 31, 2019 | 97,279,891 | |||||||
Loss for the period | (2,132,149) | |||||||
Balance, amount at Jan. 31, 2020 | $ 10,185 | 45,285,374 | 1,232,548 | 843,067 | (12,657,211) | 34,713,963 | ||
Ending Balance (in shares) at Jan. 31, 2020 | 101,853,217 | |||||||
Balance, amount at Oct. 31, 2019 | $ 10,176 | 44,882,869 | 1,134,106 | 946,507 | (11,421,859) | 35,551,799 | ||
Beginning Balance (in shares) at Oct. 31, 2019 | 101,760,232 | |||||||
Exercise of warrants (Note 11) | $ 2 | 15,289 | 15,291 | |||||
Exercise of warrants (Note 11) (in shares) | 22,485 | |||||||
Escrow release | $ 7 | 17,779 | (17,786) | |||||
Escrow release (in shares) | 70,500 | |||||||
Stock-based compensation (Notes 11) | 369,437 | 369,437 | ||||||
Share subscriptions received in advance | (15,291) | (15,291) | ||||||
Accretion and interest on convertible debt | 131,519 | 131,519 | ||||||
Foreign currency translation adjustment | (103,440) | (103,440) | ||||||
Loss for the period | (1,235,352) | (1,235,352) | ||||||
Balance, amount at Jan. 31, 2020 | $ 10,185 | $ 45,285,374 | $ 1,232,548 | $ 843,067 | $ (12,657,211) | $ 34,713,963 | ||
Ending Balance (in shares) at Jan. 31, 2020 | 101,853,217 |
Condensed Consolidated Interi_5
Condensed Consolidated Interim Statements of Cash Flows (Unaudited) | 6 Months Ended | 12 Months Ended | ||
Jan. 31, 2020USD ($) | Jan. 31, 2019USD ($) | Jul. 31, 2019USD ($) | Jul. 31, 2018USD ($) | |
Cash Resources Provided By (Used In) Operating Activities | ||||
Loss for the period | $ (2,132,149) | $ (1,975,474) | $ (3,752,751) | $ (1,781,060) |
Items not affecting cash: | ||||
Accrued interest and accretion | 131,850 | 207,222 | 1,242,808 | 277,219 |
Accrued interest income | (520,000) | (693,333) | ||
Accrued management fee income | (54,000) | (37,000) | ||
Depreciation | 157,855 | 141,901 | 289,560 | 8,811 |
Deferred tax recovery | (1,144,080) | |||
Foreign exchange | 35,786 | 2,386 | (59,265) | 204,390 |
Income tax | 222,948 | |||
(Gain) or loss of equity investee | (191,550) | 31,559 | (56,466) | |
Loss on settlement | 239,328 | |||
Stock-based compensation (Note 11), amount | 659,015 | 870,808 | 880,595 | 789,679 |
Transaction cost | 330,324 | |||
Write off of amounts receivable | 1,008 | 38,809 | 873 | |
Prepaids | (128,829) | (26,434) | ||
Amounts receivable and prepaids | (716,996) | (125,748) | (373,241) | (361,854) |
Inventory | (131,841) | (615,174) | (437,002) | (454,737) |
Advance | 103,495 | |||
Trade payables and accrued liabilities | (37,812) | 369,957 | 531,434 | (371,586) |
Due to related parties | (5,272) | (45,489) | (38,129) | 46,276 |
Income Taxes Paid | 239,358 | |||
Net Cash Provided by (Used in) Operating Activities | (2,565,786) | (915,104) | (2,555,810) | (2,139,327) |
Investing Activities | ||||
Business combination, net of cash acquired | (2,048,158) | |||
Repayment by (investment in) NMG Ohio, LLC | 90,969 | (612,619) | (1,854,883) | (77,600) |
Investment in GLDH | (1,285,960) | (5,752,180) | (6,650,641) | |
Other investments | (334,348) | (255,980) | ||
Purchase of property and equipment | (802,471) | (145,760) | (368,162) | (564,305) |
Convertible loan receivable | (842,085) | (52,225) | ||
Net Cash Used In Investing Activities | (3,173,895) | (6,510,559) | (9,181,891) | (2,690,063) |
Financing Activities | ||||
Issuance of shares, net of share issue costs | 90,840 | 5,818,300 | 21,561,568 | 4,806,025 |
Loans obtained | 5,202,579 | 5,217,547 | ||
Loans repaid | (1,175,000) | (6,656,444) | ||
Net Cash Provided by Financing Activities | 90,840 | 9,845,879 | 20,122,671 | 4,806,025 |
Effect of exchange rate changes on cash | 18,204 | (26,314) | 294,909 | (18,382) |
Net Increase (Decrease) in Cash | (5,630,637) | 2,393,902 | 8,679,879 | (41,747) |
Cash- Beginning of Year | 9,004,716 | 324,837 | 324,837 | 366,584 |
Cash- End of Year | $ 3,374,079 | $ 2,718,739 | $ 9,004,716 | $ 324,837 |
Nature and Continuance of Opera
Nature and Continuance of Operations | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Nature and Continuance of Operations | 1. Nature and Continuance of Operations Body and Mind Inc. (the “Company”) was incorporated on 5 November 1998 in the State of Delaware, USA, under the name Concept Development Group, Inc. In May 2004, the Company acquired 100% of Vocalscape, Inc. and changed its name to Vocalscape, Inc. On October 28, 2005, the Company changed our name to Nevstar Precious Metals Inc. On October 23, 2008, the Company changed its name to Deploy Technologies Inc. (“Deploy Tech”) and, on September 15, 2010, the Company incorporated a wholly-owned subsidiary, Deploy Acquisition Corp. (“Deploy”) under the laws of the State of Nevada, USA. On September 17, 2010, the Company merged with and into Deploy under the laws of the State of Nevada. Deploy, as the surviving corporation of the merger, assumed all the assets, obligations and commitments of Deploy Tech, and we were effectively re-domiciled in the State of Nevada. Upon the completion of the merger, Deploy assumed the name “Deploy Technologies Inc.”, and all of the issued and outstanding common stock of Deploy Tech was automatically converted into and became Deploy’s issued and outstanding common stock. On 14 November 2017, the Company acquired Nevada Medical Group, LLC (“NMG”) and changed its name to Body and Mind Inc. The Company is now a supplier and grower of medical and recreational cannabis in the state of Nevada, and has retail operations in California, Ohio and Arkansas. These unaudited condensed consolidated interim financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These unaudited condensed consolidated interim financial statements do not include all information and footnotes required by GAAP for complete financial statements. Except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended 31 July 2019. The unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited financial statements for the year ended 31 July 2019. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the six months ended 31 January 2020 are not necessarily indicative of the results that may be expected for the year ending 31 July 2020. Principles of Consolidation These consolidated financial statements include the financial statements of the Company and its subsidiaries as follows: Name Jurisdiction Ownership Date of acquisition or formation DEP Nevada Inc. (“DEP Nevada”) Nevada, USA 100% 10 August 2017 Nevada Medical Group LLC (“NMG”) Nevada, USA 100% 14 November 2017 NMG Retail LLC Nevada, USA 75% 14 September 2018 NMG Long Beach LLC California, USA 100% 18 December 2018 NMG Cathedral City LLC California, USA 100% 4 January 2019 NMG Chula Vista LLC California, USA 51% 10 January 2019 NMG San Diego LLC California, USA 60% 30 January 2019 All inter-company transactions and balances are eliminated upon consolidation. These consolidated financial statements include the following investments accounted for using the equity method of accounting: Name Jurisdiction Ownership Date of acquisition or formation NMG Ohio LLC Ohio, USA 30% 27 April 2017 | 1. Nature of Operations Body and Mind Inc. (the “Company”) was incorporated on 5 November 1998 in the State of Delaware, USA, under the name Concept Development Group, Inc. In May 2004, the Company acquired 100% of Kaleidoscope Venture Capital, Inc. (formerly Vocalscape Networks, Inc.) (“Kaleidoscope”) and changed its name to Vocalscape, Inc. In November 2005, the Company changed its name to Nevstar Precious Metals Inc. and in September 2008, the Company changed its name to Deploy Technologies Inc. On 14 November 2017, the Company acquired Nevada Medical Group, LLC (“NMG”) and changed its name to Body and Mind Inc. The Company is now a supplier and grower of medical and recreational cannabis in the state of Nevada, and has retail operations in California, Ohio and Arkansas. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Accounting Policies [Abstract] | ||
Recent Accounting Pronouncements | 2. Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years beginning after 15 December 2019. The Company does not anticipate this amendment to have a significant impact on the financial statements. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework –Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820). ASU 2018-13 adds, modifies, and removes certain fair value measurement disclosure requirements. ASU 2018-13 is effective for annual and interim periods beginning after 15 December 2019. Early adoption is permitted. The Company is currently evaluating the effect of adopting this ASU on the Company’s financial statements. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. | 2. Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 (Topic 842) "Leases." Topic 842 supersedes the lease recognition requirements in Accounting Standards Codification (“ASC”) Topic 840 "Leases." Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. Topic 842 is effective for annual reporting periods and interim periods within those years beginning after 15 December 2018. Early adoption by public entities is permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements, and there are certain optional practical expedients that an entity may elect to apply. Full retrospective application is prohibited. The Company is currently evaluating the impact that this new standard will have on its financial statements. In June 2016, the FASB issued ASU No. 2016-13 "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years beginning after 15 December 2019. The Company does not anticipate this amendment to have a significant impact on the financial statements. In February 2018, the FASB issued ASU No. 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”. The amendments in this ASU address a narrow-scope financial reporting issue related to the tax effects that may become “stranded” in accumulated other comprehensive income (AOCI) as a result of the Tax Cuts and Jobs Act (TCJA). The amendments in ASU 2018-02 are effective for all entities for fiscal years beginning after 15 December 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in ASU 2018-02 should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized. The Company does not anticipate this amendment to have a significant impact on the financial statements. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework –Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820). ASU 2018-13 adds, modifies, and removes certain fair value measurement disclosure requirements. ASU 2018-13 is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the effect of adopting this ASU on the Company’s financial statements. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Accounting Policies [Abstract] | ||
Significant Accounting Policies | 3. Significant Accounting Policies The following is a summary of significant accounting policies used in the preparation of these condensed consolidated interim financial statements. Basis of presentation These condensed consolidated interim financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is 31 July. Cash and cash equivalents Cash and cash equivalents include highly liquid investments with original maturities of three months or less. Amounts receivable Amounts receivable represents amounts owed from customers for sale of medical and recreational cannabis and sales tax recoverable. Amounts are presented net of the allowance for doubtful accounts, which represents the Company’s best estimate of the amount of probable credit losses in the existing accounts receivable balance. The Company determines the allowance for doubtful accounts based on historical experience and current economic conditions. The Company reviews the adequacy of its allowance for doubtful accounts on a quarterly basis. As at 31 January 2020 and 31 July 2019, the Company has no allowance for doubtful accounts. Revenue recognition During the year ended 31 July 2018, the Company recognized revenue in accordance with ASC 605, “Revenue Recognition”. Revenue was considered realized or realizable and earned when all of the following criteria were met: (1) persuasive evidence of an arrangement exists, (2) the sales price is fixed or determinable, (3) collectability is reasonably assured, and (4) products have been shipped and the customer has taken ownership and assumed risk of loss. On 1 August 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” and all of the related amendments, which are also codified into ASC 606. The Company elected to adopt this guidance using the modified retrospective method. The adoption of this guidance did not have a material effect on the Company’s financial position, results of operations or cash flows. Under the new standard, the Company recognizes a sale as follows: The Company recognizes revenue product sales when our customers obtain control of our products. This determination is based on the customer specific terms of the arrangement. Upon transfer of control, the Company has no further performance obligations. Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC 606. The Company’s revenues accounted for under ASC 606, generally, do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The sales prices are generally fixed and all consideration from contracts from contracts is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration. Inventory Inventory consists of raw material, work in progress (live plants and plants in the drying process), finished goods, and consumables. The Company values its raw material, finished goods and consumables at the lower of the actual costs or its current estimated market value less costs to sell. The Company values its work in progress at cost. The Company periodically reviews its inventory for obsolete and potentially impaired items. As at 31 January 2020 and 31 July 2019, the Company has no reserve for inventory. Property and equipment Property and equipment are stated at cost and are amortized over their estimated useful lives on a straight-line basis as follows: Office equipment 7 years Cultivation equipment 7 years Production equipment 7 years Kitchen equipment 7 years Vehicles 7 years Vault equipment 7 years Leasehold improvements shorter of 15 years or the term of the lease Brands and licenses Intangible assets acquired from third parties are measured initially at fair value and either classified as indefinite life or finite life depending on their characteristics. Intangible assets with indefinite lives are tested for impairment at least annually and intangible assets with finite lives are reviewed for indicators of impairment at least annually. The Company’s brands and licenses have indefinite lives; therefore no amortization is recognized. Income taxes Deferred income taxes are reported for timing differences between items of income or expense reported in the consolidated financial statements and those reported for income tax purposes in accordance with ASC 740, “Income Taxes”, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, and for tax losses and credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not. Basic and diluted net loss per share The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive. Comprehensive loss ASC 220, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive income/loss and its components in the condensed consolidated interim financial statements. As at 31 January 2020 and 31 July 2019, the Company reported foreign currency translation adjustments as other comprehensive income or loss and included a schedule of comprehensive income/loss in the consolidated financial statements. Foreign currency translation The Company’s functional currency is the Canadian dollar and its reporting currency is the U.S. dollars. The Company’s subsidiaries have a functional currency of U.S. dollars. The consolidated financial statements of the Company are translated to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”. Exchange gains and losses on inter-company balances that form part of the net investment in foreign operations are included in other comprehensive income. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. Stock-based compensation The Company estimates the fair value of each stock option award at the grant date by using the Black-Scholes Option Pricing Model. The fair value determined represents the cost for the award and is recognized over the required service period, generally defined as the vesting period. The Company’s accounting policy is to recognize forfeitures as they occur. Fair value measurements The Company accounts for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: · Level 1 – inputs are based upon unadjusted quoted prices for identical instruments in active markets. · Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit spreads, foreign exchange rates, and forward and spot prices for currencies. · Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Our Level 3 assets and liabilities include investments in other private entities, and goodwill and intangible assets, when they are recorded at fair value due to an impairment charge. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. The Company measures equity investments without readily determinable fair values on a nonrecurring basis. The fair values of these investments are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections. Other current financial assets and current financial liabilities have fair values that approximate their carrying values. Use of estimates and assumptions The preparation of condensed consolidated interim financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from these estimates. Lease accounting Under ASC 842, leases are separated into two classifications: operating leases and financial leases. Lease classification under ASC 842 is relatively similar to ASC 840. For a lease to be classified as a finance lease, it must meet one of the five finance lease criteria: (1) transference of title/ownership to the lessee, (2) purchase option, (3) lease term for major part of the remaining economic life of the asset, (4) present value represents substantially all of the fair value of the asset, and (5) asset specialization. Any lease that do not meet these criteria is classified as an operating lease. ASC 842 requires all leases to be recognized on the Company’s balance sheet. Specifically, for operating leases, the Company recognize a right-of-use asset and a corresponding lease liability upon lease commitment. Comparative figures Certain comparative figures have been adjusted to conform to the current year’s presentation. | 3. Significant Accounting Policies The following is a summary of significant accounting policies used in the preparation of these consolidated financial statements. Basis of presentation These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is 31 July. Principles of consolidation These consolidated financial statements include the financial statements of the Company and its subsidiaries as follows: Name Jurisdiction Ownership Date of acquisition or formation DEP Nevada, Inc. (“Dep Nevada”) Nevada, USA 100 % 10 August 2017 Nevada Medical Group, LLC (“NMG”) Nevada, USA 100 % 14 November 2017 NMG Retail, LLC Nevada, USA 75 % 14 September 2018 NMG Long Beach, LLC California, USA 100 % 18 December 2018 NMG Cathedral City, LLC California, USA 100 % 4 January 2019 NMG Chula Vista, LLC California, USA 51 % 10 January 2019 NMG San Diego, LLC California, USA 60 % 30 January 2019 All inter-company transactions and balances are eliminated upon consolidation. These consolidated financial statements include the following investments accounted for using the equity method of accounting: Name Jurisdiction Ownership Date of acquisition or formation NMG Ohio, LLC Ohio, USA 30 % 27 April 2017 Cash and cash equivalents Cash and cash equivalents include highly liquid investments with original maturities of three months or less. Amounts receivable Amounts receivable represents amounts owed from customers for sale of medical and recreational cannabis and sales tax recoverable. Amounts are presented net of the allowance for doubtful accounts, which represents the Company’s best estimate of the amount of probable credit losses in the existing accounts receivable balance. The Company determines the allowance for doubtful accounts based on historical experience and current economic conditions. The Company reviews the adequacy of its allowance for doubtful accounts on a quarterly basis. As at 31 July 2019 and 2018, the Company has no allowance for doubtful accounts. Revenue recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The standard is based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Since its initial release, the FASB has issued several amendments to the standard, which include clarification of accounting guidance related to identification of performance obligations and principal versus agent considerations. Topic 606 became effective for the Company in the first quarter of the 2019 fiscal year. The adoption of this guidance had no impact on the Company’s financial statements. The Company derives revenue primarily from the sale of medical and recreational cannabis. In accordance with ASC 606, revenue is recognized when persuasive evidence of an arrangement exists, the services have been rendered and the goods have been delivered, the amount is fixed and determinable, and collection is reasonably assured. The Company does not have standard terms that permit return of product; however, in certain markets where returns occur management estimates the amount of returns as variable consideration based on historical return experience and adjust revenue accordingly. Products that do not meet the Company’s high-quality standards are returned by the customer or recalled and destroyed and are recorded as a reduction of revenue. The reversal of revenue is recorded upon determination that the product will be recalled and destroyed. Management estimates the costs required to facilitate product returns and records them in cost of goods sold as required. Inventory Inventory consists of raw material, work in progress (live plants and plants in the drying process), finished goods, and consumables. The Company values its raw material, finished goods and consumables at the lower of the actual costs or its current estimated market value less costs to sell. The Company values its work in progress at cost. The Company periodically reviews its inventory for obsolete and potentially impaired items. Property and equipment Property and equipment are stated at cost and are amortized over their estimated useful lives on a straight-line basis as follows: Office equipment 7 years Cultivation equipment 7 years Production equipment 7 years Kitchen equipment 7 years Vehicles 7 years Vault equipment 7 years Leasehold improvements shorter of 15 years or the term of the lease Brands and licenses Intangible assets acquired from third parties are measured initially at fair value and either classified as indefinite life or finite life depending on their characteristics. Intangible assets with indefinite lives are tested for impairment at least annually and intangible assets with finite lives are reviewed for indicators of impairment at least annually. The Company’s brands and licenses have indefinite lives; therefore no amortization is recognized. Income taxes Deferred income taxes are reported for timing differences between items of income or expense reported in the consolidated financial statements and those reported for income tax purposes in accordance with ASC 740, “Income Taxes”, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, and for tax losses and credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not. Basic and diluted net loss per share The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive. Segments of an enterprise and related information ASC 280, “Segment Reporting” establishes guidance for the way that public companies report information about operating segments in annual consolidated financial statements and requires reporting of selected information about operating segments in interim consolidated financial statements issued to the public. It also establishes standards for disclosures regarding products and services, geographic areas and major customers. ASC 280 defines operating segments as components of a company about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company has evaluated this Codification and does not believe it is applicable at this time. Comprehensive loss ASC 220, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive income/loss and its components in the consolidated financial statements. As at 31 July 2019, the Company reported foreign currency translation adjustments as other comprehensive income or loss and included a schedule of comprehensive income/loss in the consolidated financial statements. Foreign currency translation The Company’s functional currency is the Canadian dollar and its reporting currency is the U.S. dollars. The Company’s subsidiaries have a functional currency of U.S. dollars. The consolidated financial statements of the Company are translated to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”. Exchange gains and losses on inter-company balances that form part of the net investment in foreign operations are included in other comprehensive income. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. Stock-based compensation The Company accounts for stock-based compensation issued to those other than employees in accordance with ASC 505-50. Equity instruments issued to those other than employees are valued at the earlier of a commitment date or upon completion of the services, based on the fair value of the equity instruments and is recognized as expense over the service period. The Company estimates the fair value of share-based payments using the Black-Scholes Option Pricing Model for common stock options and the closing price of the Company’s common stock for common share issuances. Fair Value Measurements The Company accounts for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: · Level 1 – inputs are based upon unadjusted quoted prices for identical instruments in active markets. · Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit spreads, foreign exchange rates, and forward and spot prices for currencies. · Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Our Level 3 assets and liabilities include investments in other private entities, and goodwill and intangible assets, when they are recorded at fair value due to an impairment charge. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. The Company measures equity investments without readily determinable fair values on a nonrecurring basis. The fair values of these investments are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections. Other current financial assets and current financial liabilities have fair values that approximate their carrying values. Use of estimates and assumptions The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from these estimates. Comparative figures Certain comparative figures have been adjusted to conform to the current year’s presentation. |
Financial Instruments
Financial Instruments | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Investments, All Other Investments [Abstract] | ||
Financial Instruments | 4. Financial Instruments The following table represents the Company’s assets that are measured at fair value as of 31 January 2020 and 31 July 2019: As at 31 January 2020 As at 31 July 2019 Financial assets at fair value Cash $ 3,374,079 $ 9,004,716 Convertible loan receivable 948,310 52,225 Total financial assets at fair value $ 4,322,389 $ 9,056,941 Management of financial risks The financial risk arising from the Company’s operations include credit risk, liquidity risk, interest rate risk and currency risk. These risks arise from the normal course of operations and all transactions undertaken are to support the Company’s ability to continue as a going concern. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. Management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner. Credit risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company is not exposed to credit risk related to cash and cash equivalents as it does not hold cash in excess of federally insured limits, with major financial institutions. Credit risk associated with the convertible loans receivable (including the investment in and advances to Green Light District Holdings, Inc.) arises from the possibility that the principal and/or interest due may become uncollectible. The Company mitigates this risk by managing and monitoring the underlying business relationship. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company ensures, as far as reasonably possible, that it will have sufficient capital in order to meet short-term business requirements, after taking into account cash flows from operations and the Company’s holdings of cash. The Company has an accumulated deficit of $12,657,211, recurring losses of $2,132,149 and negative cash flows from operations of $ for the six months ended 31 January 2020, and had a working capital of $5,443,575 as at 31 January 2020. There can be no assurance that the Company will be successful with generating and maintaining profitable operations or will be able to secure future debt or equity financing for its working capital and expansion activities. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to interest rate risk as it does not hold financial instruments that will fluctuate in value due to changes in interest rates. Currency risk Currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. The Company is exposed to currency risk by incurring expenditures and holding assets denominated in currencies other than its functional currency. Assuming all other variables remain constant, a 1% change in the Canadian dollar against the US dollar would not result in a significant change to the Company’s consolidated statement of operations. | 4. Financial Instruments The following table represents the Company’s assets that are measured at fair value as of 31 July 2019 and 2018: As at 31 July 2019 As at 31 July 2018 Financial assets at fair value Cash $ 9,004,716 $ 324,837 Convertible loan receivable 52,225 — Total financial assets at fair value $ 9,056,941 $ 324,837 Management of financial risks The financial risk arising from the Company’s operations include credit risk, liquidity risk, interest rate risk and currency risk. These risks arise from the normal course of operations and all transactions undertaken are to support the Company’s ability to continue as a going concern. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. Management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner. Credit risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company is not exposed to credit risk related to cash and cash equivalents as it does not hold cash in excess of federally insured limits, with major financial institutions. Credit risk associated with the convertible loans receivable (including the investment in and advances to GLDH) arises from the possibility that the principal and/or interest due may become uncollectible. The Company mitigates this risk by managing and monitoring the underlying business relationship. The Company is not currently exposed to any significant credit risk associated with its trade receivable. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company had a working capital of $10,262,959 as at July 31, 2019 and accordingly is not currently exposed to any liquidity risk. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to interest rate risk as it does not hold financial instruments that will fluctuate in value due to changes in interest rates. Currency risk Currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. The Company is exposed to currency risk by incurring expenditures and holding assets denominated in currencies other than its functional currency. Assuming all other variables remain constant, a 1% change in the Canadian dollar against the US dollar would not result in a significant change to the Company’s consolidated statement of operations. Other risks The Company is not exposed to other risks unless otherwise noted. |
Inventory
Inventory | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Inventory Disclosure [Abstract] | ||
Inventory | 5. Inventory 31 January 2020 31 July 2019 Work in progress $ 233,818 $ 208,417 Finished goods 652,121 615,108 Consumables 636,321 566,894 Total $ 1,522,260 $ 1,390,419 | 5. Inventory 31 July 2019 31 July 2018 Raw materials $ — $ 9,705 Work in progress 208,417 151,039 Finished goods 615,108 567,563 Consumables 566,894 225,110 Total $ 1,390,419 $ 953,417 |
Convertible loan receivable
Convertible loan receivable | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Notes to Financial Statements | ||
Convertible loan receivable | 6 . Convertible loan receivable Effective March 15, 2019, the Company, through its wholly owned subsidiaries, DEP Nevada and NMG, entered into a convertible loan agreement and a management agreement with Comprehensive Care Group LLC (“CCG”), an Arkansas limited liability company, with respect to the development of a medical cannabis dispensary facility in West Memphis, Arkansas. Pursuant to the management agreement, NMG will provide operations and management services, including management, staffing, operations, administration, oversight, and other related services. Under the management agreement, NMG will be required to obtain approval from CCG for any key decisions as defined in the agreement and accordingly the Company does not control CCG. NMG will be paid a monthly management fee equal to 66.67% $6,000 The convertible loan agreement is for an amount up to $1,250,000 $6,000 40% The Company evaluated the convertible loan receivable’s settlement provisions and elected the fair value option in accordance with ASC 825 “Financial Instruments”, to value this instrument. Under such election, the loan receivable is measured initially and subsequently at fair value, with any changes in the fair value of the instrument being recorded in the consolidated financial statements as a change in fair value of the financial instruments. The Company estimates the fair value of this instrument by first estimating the fair value of the straight debt portion, excluding the embedded conversion option, using a discounted cash flow model. The Company then estimates the fair value of the embedded conversion option using the Black-Scholes Option Pricing Model. The sum of these two valuations is the fair value of the loan receivable. Management believes that the accretion of the straight debt portion and embedded derivative related to the conversion option are not material. As at 31 January 2020, the Company had advanced $948,310 $52,225) $18,000 (2019 - $ Nil) | 6. Convertible loan receivable Effective March 15, 2019, the Company, through its wholly owned subsidiaries, DEP Nevada and NMG, entered into a convertible loan agreement and a management agreement with Comprehensive Care Group LLC (“CCG”), an Arkansas limited liability company, with respect to the development of a medical cannabis dispensary facility in West Memphis, Arkansas. Pursuant to the management agreement, NMG will provide operations and management services, including management, staffing, operations, administration, oversight, and other related services. Under the management agreement, NMG will be required to obtain approval from CCG for any key decisions as defined in the agreement and accordingly the Company does not control CCG. NMG will be paid a monthly management fee equal to 66.67% of the monthly net profits of CCG, subject to conversion of the convertible loan as discussed below upon which the monthly management fee shall be $6,000 per month, unless otherwise agreed by the parties in writing. The convertible loan agreement is for an amount up to $1,250,000 from DEP to CCG with proceeds to be used to fund construction of a facility, working capital and initial operating expenses. The loan bears interest at a fixed rate of $6,000 per month until the parties mutually agree to increase the interest. Upon the latter of one year of granting of a medical cannabis dispensary license by the appropriate authorities or one year after entering into the convertible loan agreement, DEP may elect to convert the loan into preferred units of CCG equal to 40% of all outstanding units of CCG, subject to approval of the Arkansas Medical Marijuana Commission. The Company evaluated the convertible loan receivable’s settlement provisions and elected the fair value option in accordance with ASC 825 “Financial Instruments”, to value this instrument. Under such election, the loan receivable is measured initially and subsequently at fair value, with any changes in the fair value of the instrument being recorded in the consolidated financial statements as a change in fair value of the financial instruments. The Company estimates the fair value of this instrument by first estimating the fair value of the straight debt portion, excluding the embedded conversion option, using a discounted cash flow model. The Company then estimates the fair value of the embedded conversion option using the Black-Scholes Option Pricing Model. The sum of these two valuations is the fair value of the loan receivable. Management believes that the accretion of the straight debt portion and embedded derivative related to the conversion option are not material. As at July 31, 2019, the Company had advanced $52,225 (2018 - $Nil) and accrued interest income of $27,000 (2018 - $Nil). |
Property and Equipment
Property and Equipment | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Notes to Financial Statements | ||
Property and Equipment | 7 . Property and Equipment Office Equipment Cultivation Equipment Production Equipment Kitchen Equipment Vehicles Vault Equipment Leasehold Improvements Right-of-use Assets Total Cost: Balance, 31 July 2018 $ 24,586 $ 435,109 $ 261,957 $ 27,694 $ 38,717 $ 1,644 $ 1,993,928 $ — $ 2,783,635 Additions 7,491 28,647 36,004 23,414 — 528 272,078 — 368,162 Balance, 31 July 2019 32,077 463,756 297,961 51,108 38,717 2,172 2,266,006 — 3,151,797 Additions 40,869 — 247,762 9,022 — — 740,503 — 1,038,156 ASC 842 adoption (Notes 13 and 20) — — — — — — — 1,187,116 1,187,116 Balance, 31 January 2020 72,946 463,756 545,723 60,130 38,717 2,172 3,006,509 1,187,116 5,377,069 Accumulated Depreciation: Balance, 31 July 2018 3,177 41,169 25,446 2,554 5,500 228 89,663 — 167,737 Depreciation 5,119 73,597 44,547 4,546 7,751 358 153,642 — 289,560 Balance, 31 July 2019 8,296 114,766 69,993 7,100 13,251 586 243,305 — 457,297 Depreciation 4,276 38,132 24,188 4,253 3,907 200 82,899 — 157,855 Asset lease expense (Note 20) — — — — — — — 85,418 85,418 Balance, 31 January 2020 12,572 152,898 94,181 11,353 17,158 786 326,204 85,418 700,570 Net Book Value: As at 31 July 2018 21,409 393,940 236,511 25,140 33,217 1,416 1,904,265 — 2,615,898 As at 31 July 2019 23,781 348,990 227,968 44,008 25,466 1,586 2,022,701 — 2,694,500 As at 31 January 2020 $ 60,374 $ 310,858 $ 451,542 $ 48,777 $ 21,559 $ 1,386 $ 2,680,305 $ 1,101,698 $ 4,676,499 | 7. Property and Equipment Office Equipment Cultivation Equipment Production Equipment Kitchen Equipment Vehicles Vault Equipment Leasehold Improvements Total Cost: Balance, 31 July 2017 $ — $ — $ — $ — $ — $ — $ — $ — Acquired assets (Note 14) 23,105 245,659 176,354 15,809 38,717 1,644 1,455,649 1,956,937 Additions 1,481 189,450 85,603 11,885 — — 538,279 826,698 Balance, 31 July 2018 24,586 435,109 261,957 27,694 38,717 1,644 1,993,928 2,783,635 Additions 7,491 28,647 36,004 23,414 — 528 272,078 368,162 Balance, 31 July 2019 32,077 463,756 297,961 51,108 38,717 2,172 2,266,006 3,151,797 Accumulated Depreciation: Balance, 31 July 2017 — — — — — — — — Depreciation 3,177 41,169 25,446 2,554 5,500 228 89,663 167,737 Balance, 31 July 2018 3,177 41,169 25,446 2,554 5,500 228 89,663 167,737 Depreciation 5,119 73,597 44,547 4,546 7,751 358 153,642 289,560 Balance, 31 July 2019 8,296 114,766 69,993 7,100 13,251 586 243,305 457,297 Net Book Value: As at 31 July 2018 21,409 393,940 236,511 25,140 33,217 1,416 1,904,265 2,615,898 As at 31 July 2019 $ 23,781 $ 348,990 $ 227,968 $ 44,008 $ 25,466 $ 1,586 $ 2,022,701 $ 2,694,500 |
Related Party Balances and Tran
Related Party Balances and Transactions | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Related Party Transactions [Abstract] | ||
Related Party Balances and Transactions | 8 . Related Party Balances and Transactions In addition to those disclosed elsewhere in these condensed consolidated interim financial statements, related party transactions paid/accrued for the three and six months ended 31 January 2020 and 2019 are as follows: For the three months ended 31 January 2020 For the three months ended 31 January 2019 For the six months ended 31 January 2020 For the six months ended 31 January 2019 A company controlled by the President and Interim Chief Executive Officer Management fees $ 37,511 $ — $ 79,378 $ — A company controlled by the Chief Financial Officer and a director Management fees Accounting fees 25,232 — — 11,611 47,900 — — 18,519 A company controlled by a former director and former President of NMG Management fees 8,333 66,992 16,666 100,646 A company controlled by the Corporate Secretary Management fees Consulting fees 25,322 1,552 7,476 — 30,989 3,103 18,990 — A company controlled by the former Chief Executive Officer and a former director Management fees — — 9,401 — $ 97,950 $ 86,079 $ 187,437 $ 138,155 Amounts owing to related parties as at 31 January 2020 and 31 July 2019 are as follows: a) As at 31 January 2020, the Company owed $7,680 (31 July 2019 - $7,825) to the Interim Chief Executive Officer of the Company and a company controlled by him. b) As at 31 January 2020, the Company owed $Nil(31 July 2019 - $5,127) to the Chief Financial Officer of the Company The above amounts owing to related parties are unsecured, non-interest bearing and are due on demand. | 8. Related Party Balances and Transactions In addition to those disclosed elsewhere in these consolidated financial statements, related party transactions for the years ended 31 July 2019 and 2018 are as follows: a) During the year ended 31 July 2019, management fees of $50,072 (2018 - $Nil) were paid/accrued to a company controlled by the Interim Chief Executive Officer of the Company. b) During the year ended 31 July 2019, accounting fees of $37,791 (2018 - $29,531) and management fees of $Nil (2018 - $9,425) were paid/accrued to a company controlled by the Chief Financial Officer and a director of the Company. c) During the year ended 31 July 2019, management fees of $90,696 (2018 - $66,759) were paid/accrued to companies related to the former Chief Executive Officer and a former director of the Company. d) During the year ended 31 July 2019, management fees of $225,992 (2018 - $144,528) were paid/accrued to a company controlled by a director of the Company. e) During the year ended 31 July 2019, management fees of $62,353 (2018 - $47,124) were paid/accrued to a company controlled by the former Chief Financial Officer of the Company. f) During the year ended 31 July 2019, consulting fees of $90,000 (2018 - $Nil) were paid/accrued to the Chief Operating Officer of the Company. g) During the year ended 31 July 2019, management fees of $Nil (2018 - $2,712) were paid/accrued to a former Chief Executive Officer of the Company. h) As at 31 July 2019, the Company owed $7,825 (31 July 2018 - $Nil) to the Interim Chief Executive Officer of the Company and a company controlled by him. i) As at 31 July 2019, the Company owed $5,127 (31 July 2018 - $1,210) to the Chief Financial Officer and a director of the Company and a company controlled by him. j) As at 31 July 2019, the Company owed $Nil (31 July 2018 - $17,028) to a former Chief Executive Officer and a former director of the Company and a company controlled by him. k) As at 31 July 2019, the Company owed $Nil (31 July 2018 - $28,810) to a director of the Company and a company controlled by him. l) As at 31 July 2019, the Company owed $Nil (31 July 2018 - $4,033) to the former Chief Financial Officer of the Company. The above amounts owing to related parties are unsecured, non-interest bearing and are due on demand. Included in stock-based compensation for the year ended 31 July 2019 is $579,904 (2018 - $377,443) related to stock options issued to directors and officers of the Company. During the year ended 31 July 2019, the Company entered into an agreement to purchase the remaining 70% of NMG Ohio for total cash payments of $1,575,000 and issuance of 3,173,864 common shares of the Company (Note 17), of which cash of $461,251 and 929,488 common shares are payable to directors of the Company. |
Notes Payable
Notes Payable | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Notes to Financial Statements | ||
Notes Payable | 9. Notes Payable In connection with the investment of Green Light District Holdings, Inc. (“GLDH”) on 29 November 2018, the Company issued a promissory note in the amount of $4,000,000 to Australis Capital Inc. (“Australis”) (Notes 15 and 18). The promissory note bears interest at a rate of 15% per annum, is secured by the assets of the Company, matures in two years and requires semi-annual interest payments unless the Company elects to accrue the interest by adding it to the principal amount. The Company issued 1,105,083 common shares of the Company as a finance fee to Australis valued at $822,494 (Note 11). During the year ended 31 July 2019, the Company repaid the note in full. The Company also paid a prepayment penalty of $200,000 for repaying the note prior to the maturity date. During the three and six months ended 31 January 2020, the Company accrued interest and accretion expense of $Nil (2019 - $176,090) and $Nil (2019 - $176,090), respectively. | 9. Notes Payable In connection with the Acquisition of NMG, on 14 November 2017, the Company issued promissory notes totaling $2,175,000 to NMG Members (Note 14). As these promissory notes are non-interest bearing, they were discounted to a present value of $1,887,863 at a rate of 12%. These promissory notes are non-interest bearing, secured by the assets of the Company, and due the earlier of 14 February 2019 or within 30 days from the date of the Company completes a financing of at least $500,000. Any unpaid amounts at maturity will bear interest at a rate of 10% per annum. At 31 July 2018, the promissory notes were accreted to their face value as it was estimated that repayment would occur imminently due to the Company’s fund raising initiatives. On 12 November 2018 the notes were amended such that $1,175,000 was repaid and the balance of $1,000,000 would be due on 14 February 2019. As the balance was not repaid on 14 February 2019, interest commenced accruing at 8% per annum and the principal plus interest is to be repaid on the earlier of i) 12 months from due date or ii) within 10 business days of closing a financing greater than $5,000,000. During the year ended 31 July 2019, because the Company completed a financing of more than $500,000, the Company accrued interest expense of $24,443 (2018 - $277,219) and repaid the note in full. In connection with the investment of Green Light District Holdings, Inc. (“GLDH”) on 29 November 2018, the Company issued a promissory note in the amount of $4,000,000 to Australis Capital Inc. (“Australis”) (Notes 15 and 18). The promissory note bears interest at a rate of 15% per annum, is secured by the assets of the Company, matures in two years and requires semi-annual interest payments unless the Company elects to accrue the interest by adding it to the principal amount. The Company issued 1,105,083 common shares of the Company as a finance fee to Australis valued at $822,494 (Note 11). During the year ended 31 July 2019, the Company accrued interest and accretion expense of $1,118,051 (2018 - $Nil) and repaid the note in full. The Company also paid a prepayment penalty of $200,000 for repaying the note prior to the maturity date. 31 July 2019 31 July 2018 Balance, beginning $ 2,175,000 $ — Issuance of promissory notes 4,000,000 1,887,863 Deferred finance costs (822,494 ) — Repayment of promissory notes (6,695,000 ) — Early repayment penalty 200,000 — Interest and accretion expense 1,142,494 277,219 Foreign exchange adjustment — 9,918 Balance, ending $ — $ 2,175,000 |
Convertible Debenture
Convertible Debenture | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Notes to Financial Statements | ||
Convertible Debenture | 10 . Convertible Debenture In connection with an investment agreement with Australis on 30 October 2018 (Notes 11, 15 and 16), the Company issued an unsecured convertible debenture in the amount of $1,217,547 (CAD $1,600,000) 8% CAD$0.55 At the date of issue, a beneficial conversion feature of $88,797 (CAD$116,714) was recognized and the debt portion of the convertible debentures was recorded at a value of $1,128,750 (CAD$1,483,636). The value of the beneficial conversion feature was recorded in equity as additional paid-in capital. Subsequent to initial recognition, the debt has been amortized over the term of the debt using the effective interest rate method at a rate of 11.3% per annum. During the year ended 31 July 2019, the Company accrued interest and accretion expense of $98,392. $72,623 $88,821 2,909,091 | 10. Convertible Debt In connection with an investment agreement with Australis on 30 October 2018 (Notes 11, 15 and 16), the Company issued an unsecured convertible debenture in the amount of CAD$1,600,000 to Australis. The convertible debenture bears interest at a rate of 8% per annum. Repayment of the outstanding principal amount of the convertible debenture, together with any accrued and unpaid interest, is to be made on or prior to 30 October 2020. The convertible debenture is convertible at the option of Australis into common shares of the Company at a conversion price of CAD$0.55 per common share, subject to adjustment and acceleration in certain circumstances. At the date of issue, a beneficial conversion feature of $88,797 (CAD$116,714) was recognized and the debt portion of the convertible debentures was recorded at a value of $1,128,750 (CAD$1,483,636). The value of the beneficial conversion feature was recorded in equity as additional paid-in capital. Subsequent to initial recognition, the debt has been amortized over the term of the debt using the effective interest rate method at a rate of 11.3% per annum. During the year ended 31 July 2019, the Company accrued interest and accretion expense of $98,392 (2018 - $ Nil Nil 31 July 2019 31 July 2018 Balance, beginning $ — $ — Issuance of convertible debenture 1,128,750 — Interest and accretion expense 98,392 — Interest paid (72,623 ) Interest advanced (88,821 ) Foreign exchange adjustment (133 ) — Balance, ending $ 1,065,565 $ — |
Capital Stock
Capital Stock | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Notes to Financial Statements | ||
Capital Stock | 11 . Capital Stock The Company’s authorized share capital comprises 900,000,000 Common Shares, with a $0.0001 par value per share. On 2 November 2018, the Company closed a non-brokered private placement of 16,000,000 units at a price of $0.30 (CAD$0.40) per unit for aggregate gross proceeds of $4,883,840 (CAD$6,400,000) (Note 10, 15 and 16). Each unit consists of one common share and one share purchase warrant. Each warrant entitles the holder to purchase one additional common share of the Company at a price of CAD$0.50 per warrant for a period of two years. The Company paid cash of $152,720 and issued 322,581 common shares valued at $221,691 as finders’ fees in relation to this private placement. On 29 November 2018, the Company issued 1,105,083 common shares as a finance fee to Australis valued at $822,494 (Note 9). On 30 November 2018, the Company issued 3,206,160 common shares upon exercise of 3,206,160 warrants by Australis at a price of CAD$0.50 per common share for aggregate proceeds of $1,205,196 (CAD$1,603,080). On 31 January 2019, the Company issued 1,768,545 common shares to Australis for proceeds of $787,123 pursuant to the Investment Agreement (Note 16). On 31 January 2019, the Company issued 2,380,398 common shares valued at $1,448,805 in relation to acquiring the remaining 70% of NMG Ohio LLC (Note 17). On 14 May 2019, the Company issued 70,500 previously escrowed shares with a fair value of $22,689 to Toro Pacific Management Inc. in connection with the acquisition of NMG (Note 14). On 17 May 2019, the Company closed a private placement of 11,780,904 units at a price of $0.93 (CAD$1.25) per unit for aggregate gross proceeds of $10,956,241 (CAD$14,726,130). Each unit is comprised of one common share and one common share purchase warrant. Each warrant entitles the holder to acquire one common share of the Company at an exercise price of CAD$1.50 for a period of 48 months following the closing date, subject to adjustment in certain events. The agents received a cash commission of $589,499 (CAD$793,938). The agents also received as additional consideration 635,150 non-transferable broker warrants. Each broker warrant entitles the holder to acquire one unit at an exercise price of CAD$1.25 per unit for a period of 48 months following the closing date. A corporate finance fee of $63,774 (CAD $84,750) was also paid. On 28 May 2019, the Company issued 12,793,840 common shares upon exercise of 12,793,840 warrants by Australis at a price of CAD$0.50 per common share for aggregate proceeds of $4,746,515 (CAD$6,396,920). The proceeds were used, in part, to fully repay the outstanding senior secured note in the amount of $4,495,890 owing to Australis by the Company (Note 9). On 16 July 2019, the Company issued 7,333 common shares upon exercise of 7,333 warrants at a price of CAD$0.90 per common share for aggregate proceeds of $5,057 (CAD$6,600). On 12 August 2019, the Company issued a total of 4,337,111 common shares of the Company in connection with the Purchase Agreement, NMG SD Settlement Agreement and the Lease Assignment Agreement (Notes 13 and 18). On 12 August 2019, the Company issued 81,591 common shares upon exercise of 81,591 warrants at a price of CAD$0.66 per common share for aggregate proceeds of $40,765 (CAD$53,850). On 12 September 2019, the Company issued 38,912 common shares upon exercise of 38,912 warrants at a price of CAD$0.66 per common share for aggregate proceeds of $19,450 (CAD$25,682). On 4 October 2019, the Company issued 22,727 common shares upon exercise of 22,727 warrants at a price of CAD$0.90 per common share for aggregate proceeds of $15,360 (CAD$20,454). On 14 November 2019, the Company issued 22,485 common shares upon exercise of 22,485 warrants at a price of CAD$0.90 per common share for aggregate proceeds of $15,291 (CAD$20,236). Stock options The Company previously approved an incentive stock option plan, pursuant to which the Company may grant stock options up to an aggregate of 10% of the issued and outstanding common shares in the capital of the Company from time to time. On 11 December 2018, the Company issued 2,050,000 stock options in accordance with the Company’s stock option plan at an exercise price of CAD$0.57 per share for a five year term expiring 10 December 2023. The options were granted to current directors, officers, employees and consultants of the Company. The fair value of the stock options was calculated to be $881,644 (CAD$1,165,117) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 5 years Expected volatility 265 % Expected dividend yield 0 % Risk-free interest rate 2.03 % On 21 August 2019, the Company issued 2,850,000 stock options with an exercise price of CAD$0.88 per share for a term of five years expiring on 21 August 2024. The options are subject to vesting provisions such that 25% of the options vest six months from the date of grant, 25% of the options vest twelve months from the date of grant, 25% of the options vest eighteen months from the date of grant and 25% of the options vest twenty-four months from the date of grant. Prior to vesting, on 16 October 2019, the Company cancelled 400,000 stock options previously granted to a director due to forfeiture, which had not vested and on 23 January 2020, the Company cancelled 200,000 stock options previously granted to a director due to forfeiture, which had not vested The total fair value of the stock options granted was calculated to be $1,373,856 (CAD$1,818,232) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 5 years Expected volatility 140 % Expected dividend yield 0 % Risk-free interest rate 1.28 % During the three and six months ended 31 January 2020, the Company recorded a stock-based compensation of $327,879 (CAD$431,619) and $604,866 (CAD$798,398) related to these options, respectively. On 1 October 2019, the Company issued 250,000 stock options with an exercise price of CAD$0.93 per share for a term of five years expiring on 1 October 2024. The options are subject to vesting provisions such that 25% of the options vest six months from the date of grant, 25% of the options vest twelve months from the date of grant, 25% of the options vest eighteen months from the date of grant and 25% of the options vest twenty-four months from the date of grant. The total fair value of the stock options granted was calculated to be $145,045 (CAD$191,960) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 5 years Expected volatility 140 % Expected dividend yield 0 % Risk-free interest rate 1.37 % During the three and six months ended 31 January 2020, the Company recorded a stock-based compensation of $39,668 (CAD$52,316) and $52,259 (CAD$68,979) related to these options, respectively. On 23 January 2020, the Company issued 200,000 stock options with an exercise price of CAD$0.88 per share for a term of five years expiring on 23 January 2025. The options are subject to vesting provisions such that 25% of the options vest six months from the date of grant, 25% of the options vest twelve months from the date of grant, 25% of the options vest eighteen months from the date of grant and 25% of the options vest twenty-four months from the date of grant. The total fair value of the stock options granted was calculated to be $68,645 (CAD$90,608) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 5 years Expected volatility 140 % Expected dividend yield 0 % Risk-free interest rate 1.43 % During the three and six months ended 31 January 2020, the Company recorded a stock-based compensation of $1,890 (CAD$2,495) related to these options. Number of options Weighted average exercise price Weighted average contractual term remaining (in years) Aggregate intrinsic value Outstanding at 31 July 2018 4,025,000 CAD$0.65 4.34 CAD$ — Granted 2,050,000 CAD$0.57 Outstanding at 31 July 2019 6,075,000 CAD$0.62 3.69 CAD$1,675,750 Granted 3,300,000 CAD$0.88 Cancelled (600,000) CAD$0.88 Outstanding at 31 January 2020 8,775,000 CAD$0.70 3.624 CAD$ 1,750 Vested and fully exercisable at 31 January 2020 6,075,000 CAD$0.62 3.18 CAD$ 1,750 Share purchase warrants and brokers’ warrants Number of warrants Weighted average exercise price Outstanding at 31 July 2018 10,106,820 CAD$0.89 Issued 28,415,284 CAD$0.93 Exercised (16,007,333 ) CAD$0.50 Outstanding at 31 July 2019 22,514,771 CAD$1.22 Exercised (165,715 ) CAD$0.73 Expired (9,933,772 ) CAD$0.89 Outstanding at 31 January 2020 12,415,284 CAD$1.49 As at 31 January 2020, the following warrants are outstanding: Number of warrants outstanding and exercisable Exercise price Expiry dates 11,780,134 CAD$1.50 17 May 2023 635,150 CAD$1.25 16 May 2023 12,415,284 | 11. Capital Stock The Company’s authorized share capital comprises 900,000,000 Common Shares, with a $0.0001 par value per share. On 15 August 2017 and 16 August 2017, the Company closed the first two of four tranches of a non-brokered private placement and issued 8,276,294 Subscription Receipts (defined below) at a price of $0.52 (CAD$0.66) per Subscription Receipt for aggregate gross proceeds of $4,270,017 (CAD$5,462,354). On 31 October 2017, the Company closed a third tranche of a non-brokered private placement and issued 757,666 Subscription Receipts at a price of $0.52 (CAD$0.66) per Subscription Receipt for aggregate gross proceeds of $390,822 (CAD$500,060) (Note 14). On 1 November 2017, the Company closed a fourth and final tranche of a non-brokered private placement and issued 68,181 Subscription Receipts at a price of $0.52 (CAD$0.66) per Subscription Receipt for aggregate gross proceeds of $35,169 (CAD$45,000) (Note 14). On 14 November 2017, the Company issued a total of 18,827,000 common shares valued at $6,337,365 in connection with the Acquisition of NMG (Note 14). The Company is obligated to issue 423,000 common shares, which have a fair value of $135,202 (Note 14). On 14 November 2017, a total of 9,102,141 Subscription Receipts converted to 9,102,141 common shares and 9,102,141 share purchase warrants exercisable at CAD $0.66 or CAD$0.90 for a period of 24 months pursuant to the closing of the Acquisition of NMG (Note 14). The Company issued a total of 367,286 brokers’ warrants with a fair value of $62,357 (CAD$78,122) in connection with these financings. The brokers’ warrants are exercisable at CAD$0.90 for a period of 24 months. The Company incurred other share issuance costs of $219,459 (CAD$279,352) in relation to this private placement. On 1 December 2017, the Company closed a non-brokered private placement of 637,393 units at a price of $0.52 (CAD$0.66) per unit for aggregate gross proceeds of $330,486 (CAD$420,680). Each unit consists of one common share and one share purchase warrant. Each warrant entitles the holder to purchase one additional common share of the Company at a price of CAD$0.90 per warrant for a period of 24 months from the closing. On 16 May 2018, the Company issued 70,500 previously escrowed shares with a fair value of $27,328 to Toro Pacific Management Inc. in connection with the acquisition of NMG (Note 14). On 2 November 2018, the Company closed a non-brokered private placement of 16,000,000 units at a price of $0.30 (CAD$0.40) per unit for aggregate gross proceeds of $4,883,840 (CAD$6,400,000) (Note 10, 15 and 16). Each unit consists of one common share and one share purchase warrant. Each warrant entitles the holder to purchase one additional common share of the Company at a price of CAD$0.50 per warrant for a period of two years. The Company paid cash of $152,720 and issued 322,581 common shares valued at $221,691 as finders’ fees in relation to this private placement. On 29 November 2018, the Company issued 1,105,083 common shares as a finance fee to Australis valued at $822,494 (Note 9). On 30 November 2018, the Company issued 3,206,160 common shares upon exercise of 3,206,160 warrants by Australis at a price of CAD$0.50 per common share for aggregate proceeds of $1,205,196 (CAD$1,603,080). On 31 January 2019, the Company issued 1,768,545 common shares to Australis for proceeds of $787,123 pursuant to the Investment Agreement (Note 16). On 31 January 2019, the Company issued 2,380,398 common shares valued at $1,448,805 in relation to acquiring the remaining 70% of NMG Ohio LLC (Note 17). On 14 May 2019, the Company issued 70,500 previously escrowed shares with a fair value of $22,689 to Toro Pacific Management Inc. in connection with the acquisition of NMG (Note 14). On 17 May 2019, the Company closed a private placement of 11,780,134 units at a price of $0.93 (CAD$1.25) per unit for aggregate gross proceeds of $10,204,574 (CAD$14,726,130). Each unit is comprised of one common share and one common share purchase warrant. Each warrant entitles the holder to acquire one common share of the Company at an exercise price of CAD$1.50 for a period of 48 months following the closing date, subject to adjustment in certain events. The agents received a cash commission of $589,499 (CAD$793,938). The agents also received as additional consideration 635,150 non-transferable broker warrants. Each broker warrant entitles the holder to acquire one unit at an exercise price of CAD$1.25 per unit for a period of 48 months following the closing date. A corporate finance fee of $63,774 (CAD $84,750) was also paid. On 28 May 2019, the Company issued 12,793,840 common shares upon exercise of 12,793,840 warrants by Australis at a price of CAD$0.50 per common share for aggregate proceeds of $4,746,515 (CAD$6,396,920). The proceeds were used, in part, to fully repay the outstanding senior secured note in the amount of $4,495,890 owing to Australis by the Company (Note 9). On 16 July 2019, the Company issued 7,333 common shares upon exercise of 7,333 warrants at a price of CAD$0.90 per common share for aggregate proceeds of $5,057 (CAD$6,600). Stock options The Company previously approved an incentive stock option plan, pursuant to which the Company may grant stock options up to an aggregate of 10% of the issued and outstanding common shares in the capital of the Company from time to time. On 24 November 2017, the Company issued an aggregate of 3,850,000 stock options in accordance with the Company’s stock option plan at an exercise price of CAD$0.66 per share for a five year term expiring 24 November 2022. The options were granted to officers, directors and consultants of the Company. The fair value of the stock options was calculated to be $726,578 (CAD$922,403) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 5 years Expected volatility 198 % Expected dividend yield 0 % Risk-free interest rate 1.63 % On 6 June 2018, the Company issued 175,000 stock options in accordance with the Company’s stock option plan at an exercise price of CAD$0.47 per share for a five year term expiring 6 June 2023. The options were granted to a consultant of the Company. The fair value of the stock options was calculated to be $63,101 (CAD$81,129) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 5 years Expected volatility 262 % Expected dividend yield 0 % Risk-free interest rate 2.16 % On 11 December 2018, the Company issued 2,050,000 stock options in accordance with the Company’s stock option plan at an exercise price of CAD$0.57 per share for a five year term expiring 10 December 2023. The options were granted to current directors, officers, employees and consultants of the Company. The fair value of the stock options was calculated to be $880,595 (CAD$1,165,117) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 5 years Expected volatility 265 % Expected dividend yield 0 % Risk-free interest rate 2.03 % 31 July 2019 31 July 2018 Number of options Exercise Price Number of options Exercise Price Opening balance 4,025,000 CAD$0.65 — — Options granted 2,050,000 CAD$0.57 4,025,000 CAD$0.65 Closing balance 6,075,000 CAD$0.62 4,025,000 CAD$0.65 Share purchase warrants and brokers’ warrants 31 July 2019 31 July 2018 Number of warrants Exercise Price Number of warrants Exercise Price Opening balance 10,106,820 CAD$0.89 — — Warrants issued 28,415,284 CAD$0.93 10,106,820 CAD$0.89 Warrants exercised (16,007,333 ) CAD$0.50 — — Closing balance 22,514,771 CAD$1.22 10,106,820 CAD$0.89 As at 31 July 2019, the following warrants are outstanding: Number of warrants outstanding and exercisable Exercise price Expiry dates 248,350 CAD$0.66 15 August 2019 58,324 CAD$0.66 16 August 2019 60,612 CAD$0.66 3 November 2019 9,094,808 CAD$0.90 14 November 2019 637,393 CAD$0.90 1 December 2019 11,780,134 CAD$1.50 17 May 2023 635,150 CAD$1.25 17 May 2023 22,514,771 |
Segmented Information and Major
Segmented Information and Major Customers | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Segment Reporting [Abstract] | ||
Segmented Information and Major Customers | 12. Segmented Information and Major Customers The Company’s activities are all in the one industry segment of medical and recreational cannabis. All of the Company’s revenue generating activities and capital assets relate to this segment and are located in the USA. During the six months ended 31 January 2020, the Company relied on one major customer for 10% of its revenues (31 January 2019 – no major customer over 10%) and as at 31 January 2020, the total amount due from this major customer is $123,667. | 12. Segmented Information and Major Customers The Company’s activities are all in the one industry segment of medical and recreational cannabis. All of the Company’s revenue generating activities and capital assets relate to this segment and are located in the USA. During the year ended 31 July 2019, the Company relied on one major customer for 12% of its revenues (31 July 2018 – three major customers for 37% of revenues). |
Supplemental Disclosures with R
Supplemental Disclosures with Respect to Cash Flows | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Notes to Financial Statements | ||
Supplemental Disclosures with Respect to Cash Flows | 13 . Supplemental Disclosures with Respect to Cash Flows Three Month Period Ended 31 January Six Month Period Ended 31 January 2020 2019 2020 2019 Cash paid during the period for interest $ — $ — $ — $ — Cash paid during the period for income taxes $ — $ — $ — $ — On 30 November 2019, the Company entered into a Settlement Agreement with SD whereby the Company settled an aggregate receivable amount of $590,328 in exchange for $90,315 accounts receivable from future sale of Inventory, $25,000 future credit towards the Contribution Fee, and a production equipment valued at $235,685, resulting in a loss of $239,328 (Note 19). On 12 August 2019, the Company issued a total of 4,337,111 common shares of the Company in connection with the Purchase Agreement, NMG SD Settlement Agreement and the Lease Assignment Agreement valued at $2,752,782 (Notes 11 and 18). On adoption of ASC 842, Lease Accounting, the Company recognized right-of-use assets (Notes 7 and 20), and a corresponding increase in lease liabilities, in the amount of $1,187,116 which represented the present value of future lease payments using a discount rate of 12% per annum. In connection with the closing of the business combination transaction to acquire all of the issued and outstanding securities of NMG, the net proceeds of the Company’s private placements of certain subscription receipts was released to the Company from escrow in the amount of $17,786 (Note 14). | 13. Supplemental Disclosures with Respect to Cash Flows Year Ended 31 July 2019 2018 Cash paid during the period for interest $ 392,623 $ — Cash paid during the period for income taxes $ — $ — |
Business Acquisition
Business Acquisition | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Business Combinations [Abstract] | ||
Business Acquisition | 14 . Business Acquisition On 15 May 2017, the Company entered into an assignment and novation agreement (the “Assignment Agreement”) with Toro Pacific Management Inc. (the “Transferor”) pursuant to which the Transferor assigned a letter of intent (the “LOI”) effective 12 May 2017 to the Company in accordance with its terms. The Assignment Agreement and the LOI contemplated a business combination transaction (the “Acquisition”) to acquire all of the issued and outstanding securities of NMG, an arm’s length Nevada-based licensed producer of medical cannabis. As consideration for the Assignment Agreement, the Company will issue to the Transferor 1,000,000 common shares of the Company. On 13 November 2017, the Assignment Agreement was amended, whereby the Company would issue the 1,000,000 common shares as follows: a. 470,000 common shares to Benjamin Rutledge upon closing of the Acquisition (issued); b. 60,000 common shares to Chris Hunt upon closing of the Acquisition (issued); c. 470,000 common shares to the Transferor according to the following schedule: · 1/10 of the Transferor’s shares upon closing of the Acquisition (issued); . 1/6 of the remaining Transferor’s shares 6 months after closing the Acquisition (issued); . 1/5 of the remaining Transferor’s shares 12 months after closing the Acquisition (issued); . 1/4 of the remaining Transferor’s shares 18 months after closing the Acquisition (issued); . 1/3 of the remaining Transferor’s shares 24 months after closing the Acquisition (issued); . 1/2 of the remaining Transferor’s shares 30 months after closing the Acquisition (issued); and . the remaining Transferor’s shares 36 months after closing the Acquisition. The remaining 423,000 135,202 Intangible assets acquired from third parties are measured initially at fair value and either classified as indefinite life or finite life depending on their characteristics. The Company’s brands and licenses have indefinite lives as long as the Company is in business. There are no indications of impairment as at 31 January 2020. | 14. Business Acquisition On 15 May 2017, the Company entered into an assignment and novation agreement (the “Assignment Agreement”) with Toro Pacific Management Inc. (the “Transferor”) pursuant to which the Transferor assigned a letter of intent (the “LOI”) effective 12 May 2017 to the Company in accordance with its terms. The Assignment Agreement and the LOI contemplated a business combination transaction (the “Acquisition”) to acquire all of the issued and outstanding securities of NMG, an arm’s length Nevada-based licensed producer of medical cannabis. As consideration for the Assignment Agreement, the Company will issue to the Transferor 1,000,000 common shares of the Company. On 13 November 2017, the Assignment Agreement was amended, whereby the Company would issue the 1,000,000 common shares as follows: a. 470,000 common shares to Benjamin Rutledge upon closing of the Acquisition (issued); b. 60,000 common shares to Chris Hunt upon closing of the Acquisition (issued); c. 470,000 common shares to the Transferor according to the following schedule: · 1/10 of the Transferor’s shares upon closing of the Acquisition (issued); · 1/6 of the remaining Transferor’s shares 6 months after closing the Acquisition (issued); · 1/5 of the remaining Transferor’s shares 12 months after closing the Acquisition (issued); · 1/4 of the remaining Transferor’s shares 18 months after closing the Acquisition (issued); · 1/3 of the remaining Transferor’s shares 24 months after closing the Acquisition; · 1/2 of the remaining Transferor’s shares 30 months after closing the Acquisition; and · the remaining Transferor’s shares 36 months after closing the Acquisition. The remaining 423,000 shares to be issued to the Transferor over the 36 month period are included in equity as shares to be issued with a total fair value of $135,202 as at 13 November 2017 (Note 11). On 14 September 2017, the Company and Dep Nevada entered into a definitive agreement (the “Share Exchange Agreement”) with NMG. Pursuant to the Share Exchange Agreement, Dep Nevada acquired all of the issued and outstanding securities of NMG in exchange for the issuance of the Company’s common shares and certain cash and other non-cash consideration (the “Acquisition”). The Company completed a concurrent financing consisting of 9,102,141 subscription receipts of the Company (the “Subscription Receipts”), at an issue price of CAD$0.66 per Subscription Receipt, with each Subscription Receipt being automatically converted, at no additional cost to the subscriber, upon the completion of the Acquisition for one common share and one share purchase warrant exercisable at a price of CAD$0.90 for a period of 24 months from the date of issuance. Each warrant is subject to acceleration provisions following the six-month anniversary of the date of closing, if the closing trading price of the common shares is equal to or greater than CAD$1.20 for seven consecutive trading days, at which time the Company may accelerate the expiry date of the warrants by issuing a press release announcing the reduced warrant term whereupon the warrant will expire 21 calendar days after the date of such press release. These Subscription Receipts were recognized as liability on initial receipt. During the year ended 31 July 2018, the Acquisition closed and the shares were issued; therefore the Subscription Receipts were reclassified from liability to equity on conversion to common shares. On 14 November 2017, the Company closed the Acquisition, and acquired all of the issued and outstanding membership units of NMG (the “Units”). In consideration for the Units, the Company issued to the NMG Members an aggregate of 16,000,000 common shares with a fair value of $5,386,155 as well as a cash payment of $2,309,000 pro rata amongst the NMG members and promissory notes to the NMG members in the aggregate amount of $2,175,000. The Company also issued 2,037,879 common shares to TI Nevada with a fair value of $685,788, 212,121 common shares to Charles Fox with a fair value of $71,383, 47,000 common shares to Toro Pacific Management Inc. with a fair value of $15,816, 60,000 common shares to Chris Hunt with a fair value of $20,192, and 470,000 common shares to Benjamin Rutledge with a fair value of $159,114 in connection with the Acquisition. The Company has an obligation to issue a further 423,000 common shares to Toro Pacific Management Inc., which had a fair value of $135,202 on the date of acquisition. The Company recognized $330,324 in transaction costs in connection with the shares issued to non-NMG members. The promissory notes totalling $2,175,000 were discounted to a present value of $1,887,863 (Note 9). In connection with the closing of the Acquisition, the net proceeds of the Company’s private placements of Subscription Receipts in support of the Acquisition was released to the Company from escrow. Immediately prior to closing of the Acquisition, the Company completed a consolidation of its common shares on the basis of three (3) pre-consolidation common shares to one (1) post-consolidation common share, as well a name change, changing the name of the Company from Deploy Technologies, Inc. to Body and Mind Inc. The Company eliminated its authorized Class A Preferred shares (Note 11). As a result of the acquisition of NMG, the Company changed its business focus to growing and supplying medical and recreational cannabis in the state of Nevada. The acquisition of NMG was accounted for as a business combination, in which the assets acquired and the liabilities assumed are recorded at their estimated fair values. The allocation of the purchase consideration is as follows: Purchase consideration Share considerations, net of transaction costs $ 6,143,326 Cash considerations 2,309,000 Promissory notes issued 1,887,277 TOTAL $ 10,339,603 Assets acquired: Cash $ 260,842 Amounts receivable 253,697 Prepaid expenses 44,552 Inventory 498,680 Property and equipment 1,951,696 Brand 247,000 Licenses 7,925,000 Liabilities assumed: Trade payable and accrued liabilities (367,385 ) Loans payable (250,000 ) Deferred tax liability (2,860,200 ) Net identifiable assets acquired 7,703,882 Goodwill 2,635,721 TOTAL $ 10,339,603 Goodwill recognized comprises the assembled workforce and their knowledge with respect to NMG, regulatory affairs and the cannabis industry; and expected revenue growth and future market development with legalization of recreational cannabis in Nevada. |
Commitments
Commitments | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments | 15 . Commitments a) In connection with the strategic investment agreement with Australis dated 30 October 2018 (the “Investment Agreement”) (Notes 10, 11 and 16), the Company agreed to pay a monthly service fee of $10,000 to Australis. In connection with the Company’s investment in GLDH and the promissory note provided by Australis (Note 9), the Company agreed to increase the monthly services fee to Australis to $16,500 per month for 5 years unless ownership held by Australis drops below 10% in which the fee will cease. Following the repayment of the promissory note, the monthly service fee to Australis was reduced to $12,000 commencing June 2019. b) On 25 October 2017, NMG Ohio entered into a five-year lease agreement for the property located at 709 Sugar Lane, Elyria, Ohio, containing approximately 4,100 square feet. The monthly rent is $4,200. c) On 13 June 2019, the five-year lease agreement dated 1 December 2018 for the property located at 7625 Carroll Road, San Diego, California, containing approximately 4,600 square feet was assigned to NMG San Diego. Under the terms of the assignment and first amendment to the original lease agreement dated 13 June 2019, the Company has three options to extend the lease and each option is for five years. The monthly base rent is currently $15,000. The guaranteed monthly rent is subject to a 1—6% increase on each anniversary date of the lease, based on increases in the Consumer Price Index for San Diego County. d) On 8 March 2019, the five-year lease agreement dated 10 January 2017, as amended on 7 September 2018, for the property located at 3411 E. Anaheim St., Long Beach, California, containing approximately 1,856 square feet was assigned to NMG Long Beach. Under the terms of the amended lease agreement, the Company has one option to extend the lease for five years. The monthly base rent is $6,636.40 plus common area expenses, totaling $8,000 every month. The guaranteed minimum monthly rent is subject to a 5% increase on each anniversary date of the lease. e) On 21 August 2019, the Company entered into new and updated management and consulting agreements with the following individuals: • President and the Interim Chief Executive Officer – $12,500 per month; • Chief Financial Officer – CAD$10,000 per month; • Chief Operating Officer – $15,000 per month; • Corporate Secretary – CAD$7,500 per month; • President of NMG and a director – $16,666 per month • Former Chief Executive Officer and an advisor - $12,500 per month. | 15. Commitments a) On 10 November 2017, NMG entered into a revised five-year lease agreement for the property located at 3375 Pepper Lane, Las Vegas, NV, containing approximately 18,000 square feet. The Company has four options to extend the lease and each option is for five years. The monthly rent was $12,500 plus common area expenses, which increased to $12,875 plus common area expenses on 1 January 2019. The guaranteed minimum monthly rent is subject to a 2% increase on each anniversary date of the lease. b) On 14 November 2017, the Company entered into the following consulting agreements: i. $16,667 per month to TI Nevada, which is controlled by an officer of the Company, for a term of three years; and ii. CAD$10,000 per month to Toro Pacific Management Inc., which is controlled by an officer of the Company. c) In connection with the strategic investment agreement with Australis dated 30 October 2018 (the “Investment Agreement”) (Notes 10, 11 and 16), the Company agreed to pay a monthly service fee of $10,000 to Australis. In connection with the Company’s investment in GLDH and the promissory note provided by Australis (Note 9), the Company agreed to increase the monthly services fee to Australis to $16,500 per month for 5 years unless ownership held by Australis drops below 10% in which the fee will cease. Following the repayment of the promissory note, the monthly service fee to Australis was reduced to $12,000 commencing June 2019. d) On 9 April 92019, NMG entered into a three-year lease agreement for the property located at 6420 Sunset Corporate Drive, Las Vegas, NV, containing approximately 7,700 square feet. The Company has one option to extend the lease for an additional three-year term and an option to purchase the property at any point during the initial term. The monthly rent is $6,026 plus $1,129 in common area expenses, totaling $7,156 every month. e) On 25 October 2017, NMG Ohio entered into a five-year lease agreement for the property located at 709 Sugar Lane, Elyria, Ohio, containing approximately 4,100 square feet. The monthly rent is $4,200. f) On 13 June 2019, the five-year lease agreement dated 1 December 2018 for the property located at 7625 Carroll Road, San Diego, California, containing approximately 4,600 square feet was assigned to NMG San Diego. Under the terms of the assignment and first amendment to the original lease agreement dated 13 June 2019, the Company has three options to extend the lease and each option is for five years. The monthly base rent is currently $15,000. The guaranteed monthly rent is subject to a 1-6% increase on each anniversary date of the lease, based on increases in the Consumer Price Index for San Diego County. g) On 8 March 2019, the five-year lease agreement dated 10 January 2017, as amended on 7 September 2018, for the property located at 3411 E. Anaheim St., Long Beach, California, containing approximately 1,856 square feet was assigned to NMG Long Beach. Under the terms of the amended lease agreement, the Company has one option to extend the lease for five years. The monthly base rent is $6,636.40 plus common area expenses, totaling $8,000 every month. The guaranteed minimum monthly rent is subject to a 5% increase on each anniversary date of the lease. |
Investment Agreement
Investment Agreement | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Notes to Financial Statements | ||
Investment Agreement | 16 . Investment Agreement On 30 October 2018, the Company entered into the Investment Agreement with Australis. Pursuant to the terms of the Investment Agreement, Australis will acquire (i) 16,000,000 units of the Company (Note 11), and (ii) CAD$1,600,000 principal amount 8% unsecured convertible debentures (Note 10). Under the terms of the Investment Agreement, the parties agreed to negotiate in good faith a license agreement pursuant to which the Company will grant Australis an exclusive and assignable license to use the Body and Mind brand outside of the United States of America on commercially reasonable terms. In addition, the Company will enter into a commercial advisory agreement with Australis Capital (Nevada) Inc. (“Australis Nevada”), a wholly-owned subsidiary of Australis, pursuant to which Australis Nevada will provide advisory and consulting services to the Company at $10,000 per month for a term ending on the date that is the earlier of: (i) five years following the closing of the transactions contemplated by the Investment Agreement, and (ii) the date Australis no longer holds 10% or more of the issued and outstanding Common Shares (Note 15). Subject to certain exceptions, Australis will be entitled to maintain its’ pro rata interest in the Company until such time as it no longer holds 10% or more of the issued and outstanding Common Shares. Subject to applicable laws and the rules of the Canadian Securities Exchange (the “CSE”), for as long as Australis owns at least 10% of the issued and outstanding common shares, Australis will be entitled to nominate one director for election to the Board of Directors of the Company (the “Board”). If Australis exercises all of the warrants and converts all of the debentures purchased, Australis will be entitled to nominate a second director for election to the Board. On 2 November 2018, the Company executed the Investment Agreement and completed the sale of securities pursuant to the Investment Agreement. On 31 January 2019, the Company issued 1,768,545 common shares to Australis for proceeds of $787,123 pursuant to the Investment Agreement whereby the Company granted Australis anti-dilution participation rights to allow Australis to maintain a 35.783% ownership interest in the Company (Note 11). During the three and six months ended 31 January 2020, the Company paid an advisory fee of $36,000 (2019 - $43,000) and $72,000 (2019 - $43,000), respectively. | 16. Investment Agreement On 30 October 2018, the Company entered into the Investment Agreement with Australis. Pursuant to the terms of the Investment Agreement, Australis will acquire (i) 16,000,000 units of the Company (Note 11), and (ii) CAD$1,600,000 principal amount 8% unsecured convertible debentures (Note 10). Under the terms of the Investment Agreement, the parties agreed to negotiate in good faith a license agreement pursuant to which the Company will grant Australis an exclusive and assignable license to use the Body and Mind brand outside of the United States of America on commercially reasonable terms. In addition, the Company will enter into a commercial advisory agreement with Australis Capital (Nevada) Inc. (“Australis Nevada”), a wholly-owned subsidiary of Australis, pursuant to which Australis Nevada will provide advisory and consulting services to the Company at $10,000 per month for a term ending on the date that is the earlier of: (i) five years following the closing of the transactions contemplated by the Investment Agreement, and (ii) the date Australis no longer holds 10% or more of the issued and outstanding Common Shares (Note 15). Subject to certain exceptions, Australis will be entitled to maintain its’ pro rata interest in the Company until such time as it no longer holds 10% or more of the issued and outstanding Common Shares. Subject to applicable laws and the rules of the Canadian Securities Exchange (the “CSE”), for as long as Australis owns at least 10% of the issued and outstanding common shares, Australis will be entitled to nominate one director for election to the Board of Directors of the Company (the “Board”). If Australis exercises all of the warrants and converts all of the debentures purchased, Australis will be entitled to nominate a second director for election to the Board. On 2 November 2018, the Company executed the Investment Agreement and completed the sale of securities pursuant to the Investment Agreement. On 31 January 2019, the Company issued 1,768,545 common shares to Australis for proceeds of $787,123 pursuant to the Investment Agreement whereby the Company granted Australis anti-dilution participation rights to allow Australis to maintain a 35.783% ownership interest in the Company (Note 11). |
Investment in NMG Ohio LLC
Investment in NMG Ohio LLC | 6 Months Ended |
Jan. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in NMG Ohio LLC | 17. Investment in NMG Ohio LLC On 31 January 2019, the Company entered into a definitive agreement (“Definitive Agreement”) to acquire 100% ownership of NMG Ohio. The Company will purchase the remaining 70% interest for total cash payments of $1,575,000 and issuance of 3,173,864 common shares of the Company). As at 31 July 2019 the Company had issued 2,380,398 of the 3,173,864 common shares with a fair value of $1,448,805. During the year ended 31 July 2019, the Company made cash payments of $1,181,250. At 31 January 2020, the Definitive Agreement had not closed. The remaining cash payments totaling $393,750 and the remaining issuance of 793,466 common shares are expected to be paid and issued upon completion of the remaining Definitive Agreement closing items. Until such time as the Definitive Agreement closes, the Company will continue to account for its 30% ownership interest in NMG Ohio as an investment using the equity method of accounting. During the six months ended 31 January 2020, NMG Ohio recorded net revenues of $2,095,008, expenses of $1,456,508 and a net income of $638,500. The Company recorded an equity in earnings of $191,550 relating to its 30% pro rata share of net income which was included in other items on the statement of operations. 31 January 2020 31 July 2019 Opening balance $ 3,465,902 $ 77,600 Acquisition costs: Common shares issued to vendors at fair value — 1,448,805 Acquisition costs: Cash payments to vendors — 1,181,250 Dispensary build-out related costs 20,429 573,633 License fees — 100,000 Funds transferred 12,500 — Funds repaid (107,429 ) — Equity pickup 191,550 56,466 Foreign exchange (9,638 ) 28,148 Total $ 3,573,314 $ 3,465,902 Summarized financial information for NMG Ohio is as follows: 31 January 2020 Current assets $ 862,653 Non-current assets 877,993 Total assets 1,740,646 Current liabilities 921,657 Non-current liabilities — Total liabilities 921,657 Revenues 2,095,008 Gross profit 910,349 Net income 638,500 Net income attributable to the Company $ 191,550 |
Investment in and advances to G
Investment in and advances to GLDH | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Other Investments | ||
Investment in and advances to GLDH | 18 Investment in and advances to GLDH Interim Agreement – 28 November 2018 On 28 November 2018, the Company entered into a binding interim agreement (the “Interim Agreement”) with GLDH, a private company incorporated under the laws of Delaware, and David Barakett (“Barakett”) whereby the Company agreed to acquire 100% of the issued and outstanding common shares of GLDH in connection with the issuance of convertible notes (the “Transaction”). GLDH holds a number of assets relating to the production and sale of cannabis products in the United States of America. The Transaction will be contingent upon the Company completing its due diligence. The terms of the Interim Agreement include the following: The Company shall issue to Barakett common shares of the Company (the “Earn Out Shares”) based on the CSE listed 5-day VWAP of the common shares of the Company and at the USD/CAD exchange rate at the close of market on 27 November 2018. The common shares of the Company had a 5-day VWAP of CAD$0.7439 at a USD/CAD exchange rate of 1.3296 and as a result the Company agreed to issue up to a maximum of 11,255,899 common shares with a maximum consideration of US$6,297,580 or CAD$8,373,263. Barakett will be eligible to receive Earn Out Shares for a period of 12 months on the following basis: 1. upon GLDH obtaining all of (i) the Long Beach Recreational License; (ii) the San Diego Medical License; (iii) the San Diego Recreational License; and (iv) the San Diego State License (“Milestone I”), the issuance of Earn Out Shares to Barakett totalling 5,627,950 shares (50% of the total Earn Out Shares); 2. upon GLDH achieving total attributable revenues of at least US$3,300,000 over a period of three consecutive months from each of the Long Beach dispensary, the San Diego dispensary and Las Vegas ShowGrow (“Milestone II”), the issuance of Earn Out Shares to Barakeet totalling 4,502,360 (40% of the total Earn Out Shares); and 3. prior to the completion of Milestone I and Milestone II, and upon completion of a certain audit of GLDH showing no taxes outstanding or any unknown material liabilities for GLDH, the issuance of Earn Out Shares to Barakett totalling 1,125,589 shares (10% of the total Earn Out Shares). Additionally, the Company made an investment into GLDH by way of a US$5,200,000 senior secured convertible note (the “Note”) bearing interest at a rate of 20% per annum to be repaid to the Company on 28 November 2020 unless converted by the Company in accordance with the agreement. The Note is secured by a general security agreement and a UCC-1 financing statement in all U.S. states where GLDH has assets. Barakett provided a personal guarantee to the Company for the Note. In order for the Company to fund the Note: 1. the Company entered into a loan agreement with Australis, whereby Australis provided the Company a two-year US$4,000,000 loan (Note 9); and 2. Australis exercised 3,206,160 warrants at a price of CAD$0.50 per common share for aggregate proceeds of approximately US$1,200,000 converted using an exchange rate of 0.7518 (Note 11). Definitive Agreement (Superseding Interim Agreement) On 3 July 2019, the Company entered into the following agreements with GLDH and other third parties: 1. a definitive asset purchase agreement (the “Purchase Agreement”) between the Company’s wholly owned subsidiary, NMG Long Beach, LLC (“NMG LB”), GLDH and Airport Collective, Inc. to acquire 100% ownership interest in GLDH’s Long Beach, California dispensary; 2. a settlement agreement (“NMG SD Settlement Agreement”) between the Company and its subsidiaries, and GLDH and its subsidiaries, to acquire a 60% ownership interest in GLDH’s San Diego, California dispensary; and 3. a lease assignment (the “Lease Assignment Agreement”) on the San Diego operation between the Company’s 60%-owned subsidiary, NMG San Diego, LLC (“NMG SD”), Green Road, LLC, Show Grow San Diego, LLC (“SGSD”), and SJJR LLC. The Purchase Agreement, NMG SD Settlement Agreement and Lease Assignment agreement supersede the Interim Agreement and are subject to certain closing conditions including receipt of applicable licences. 1. The Purchase Agreement was executed under the following terms: The purchase price is USD$6,700,000 (the “Purchase Price”). The consideration under the Purchase Agreement includes the following on closing: i The USD$5,200,000 Note is to be applied towards the Purchase Price; and ii. USD$1,500,000 to be paid in common shares of the Company at a price of CAD$0.7439 per common share to a maximum of 2,681,006 common shares (the “Share Payment”) (issued) (Note 11) upon NMG LB receiving the transfer of all licenses, permits and BCC authorizations for NMG LB to conduct medical and adult-use commercial cannabis retail operations. The Share Payment is subject to reduction in the event there are undisclosed liabilities by GLDH and Airport Collective. 2. The NMG SD Settlement Agreement’s consideration includes the following on closing: i. USD$500,000 to be paid in common shares (624,380 common shares issued ) (Note 11) to SGSD at a share price equal to the maximum allowable discount pursuant to Canadian Securities Exchange policies, upon execution of the settlement agreement; ii. USD$750,000 to be paid in common shares to Barakett at a price of CAD$0.7439 per common share to a maximum of 1,340,502 Common Shares (the “DB Share Payment”) upon NMG SD receiving all licenses, permits and authorizations for NMG SD to conduct medical commercial cannabis retail operations. The DB Share Payment is subject to reduction whereby the reduction is tied to Barakett agreeing to pay the Company 40% of the NMG SD start-up costs; and iii. USD$750,000 to be paid in common shares to Barakett at a price of CAD$0.7439 per common share to a maximum of 1,340,502 common shares (the “DB Additional Shares Payment”) upon NMG SD receiving all licenses, permits and authorizations for NMG SD to conduct adult-use commercial cannabis retail operations. The DB Additional Shares Payment is subject reduction whereby the reduction is tied to Barakett agreeing to pay the Company 40% of the NMG SD start-up costs. 3. The Lease Assignment Agreement was executed under the following terms: The Company is required to issue cash and share payments totaling USD$2,283,765 to the landlord as follows: i. USD$750,000, payable in common shares (1,031,725 common shares issued) (Note 11) at a share price equal to the maximum allowable discount pursuant to Canadian Securities Exchange policies, upon execution of the assignment agreement; ii. USD$783,765, payable in cash, within 5 business days following execution of the assignment agreement (paid); and iii. USD$750,000, payable in cash, including interest at 5% per annum, upon receipt of the San Diego Conditional Use Permit allowing adult-use commercial cannabis retail operations. Additionally: 1. The Company is to provide a loan to GLDH in the amount of USD$200,000 at an interest rate of 12% per annum, accrued and compounded quarterly and due within 3 years (provided); 2. The Company is to enter into a consulting agreement with Barakett through NMG LB to provide certain consulting and advisory services to NMG LB, agreeing to pay Barakett a total of USD$200,000 ($50,000 paid in fiscal 2019 and additional $90,000 paid during the period); 3. The Company will forgive approximately USD$800,000 for prior operating loans advanced by the Company to GLDH; and; 4. The Company licenses certain intellectual property from Green Light District Management, LLC and GLDH (collectively referred to as “Licensor”). The Licensor grants the Company a perpetual license to utilize its operational intellectual property consisting of customer data, sales data, customer outreach strategies standard operating procedures, and other proprietary operational intellectual property. Licensor grants the Company a license for 2 years to utilize intellectual property such as trademarks and branding (the “Branding IP”). As consideration for the licenses, the Company has agreed to utilize the Branding IP until 19 June 2021 at the Company’s premises and at the San Diego retail locations for a period of 2 years from operations commencing at that location. Additionally, the Company agreed to pay the Licensor 3% of gross receipts from sales at the Company’s premises. The total investment in GLDH at 31 January 2020 and 31 July 2019 is as follows 31 January 2020 31 July 2019 Opening balance $ 7,373,036 $ — Note receivable — 5,200,000 Share issuances 2,750,000 — Interest income accrued on the Note 520,000 693,333 Advances for working capital 1,285,960 666,876 Lease Assignment Agreement payment — 783,765 Foreign exchange (42,617 ) 29,062 Ending balance $ 11,886,379 $ 7,373,036 | 18. Investment in and advances to GLDH Interim Agreement – 28 November 2018 On 28 November 2018, the Company entered into a binding interim agreement (the “Interim Agreement”) with GLDH, a private company incorporated under the laws of Delaware, and David Barakett (“Barakett”) whereby the Company agreed to acquire 100% of the issued and outstanding common shares of GLDH in connection with the issuance of convertible notes (the “Transaction”). GLDH holds a number of assets relating to the production and sale of cannabis products in the United States of America. The Transaction will be contingent upon the Company completing its due diligence. The terms of the Interim Agreement include the following: The Company shall issue to Barakett common shares of the Company (the “Earn Out Shares”) based on the CSE listed 5-day VWAP of the common shares of the Company and at the USD/CAD exchange rate at the close of market on 27 November 2018. The common shares of the Company had a 5-day VWAP of CAD$0.7439 at a USD/CAD exchange rate of 1.3296 and as a result the Company agreed to issue up to a maximum of 11,255,899 common shares with a maximum consideration of US$6,297,580 or CAD$8,373,263. Barakett will be eligible to receive Earn Out Shares for a period of 12 months on the following basis: 1. upon GLDH obtaining all of (i) the Long Beach Recreational License; (ii) the San Diego Medical License; (iii) the San Diego Recreational License; and (iv) the San Diego State License (“Milestone I”), the issuance of Earn Out Shares to Barakett totalling 5,627,950 shares (50% of the total Earn Out Shares); 2. upon GLDH achieving total attributable revenues of at least US$3,300,000 over a period of three consecutive months from each of the Long Beach dispensary, the San Diego dispensary and Las Vegas ShowGrow (“Milestone II”), the issuance of Earn Out Shares to Barakeet totalling 4,502,360 (40% of the total Earn Out Shares); and 3. prior to the completion of Milestone I and Milestone II, and upon completion of a certain audit of GLDH showing no taxes outstanding or any unknown material liabilities for GLDH, the issuance of Earn Out Shares to Barakett totalling 1,125,589 shares (10% of the total Earn Out Shares). Additionally, the Company made an investment into GLDH by way of a US$5,200,000 senior secured convertible note (the “Note”) bearing interest at a rate of 20% per annum to be repaid to the Company on 28 November 2020 unless converted by the Company in accordance with the agreement. The Note is secured by a general security agreement and a UCC-1 financing statement in all U.S. states where GLDH has assets. Barakett provided a personal guarantee to the Company for the Note. In order for the Company to fund the Note: 1. the Company entered into a loan agreement with Australis, whereby Australis provided the Company a two-year US$4,000,000 loan (Note 9); and 2. Australis exercised 3,206,160 common shares upon exercise of 3,206,160 warrants at a price of CAD$0.50 per common share for aggregate proceeds of approximately US$1,200,000 (Note 11). Definitive Agreement (Superseding Interim Agreement) On 3 July 2019, the Company entered into the following agreements with GLDH and other third parties: 1. a definitive asset purchase agreement (the “Purchase Agreement”) between the Company’s wholly owned subsidiary, NMG Long Beach, LLC (“NMG LB”), GLDH and Airport Collective, Inc. to acquire 100% ownership interest in GLDH’s Long Beach, California dispensary; 2. a settlement agreement (“NMG SD Settlement Agreement”) between the Company and its subsidiaries, and GLDH and its subsidiaries, to acquire a 60% ownership interest in GLDH’s San Diego, California dispensary; and 3. a lease assignment (the “Lease Assignment Agreement”) on the San Diego operation between the Company’s 60%-owned subsidiary, NMG San Diego, LLC (“NMG SD”), Green Road, LLC, Show Grow San Diego, LLC (“SGSD”), and SJJR LLC. The Purchase Agreement, NMG SD Settlement Agreement and Lease Assignment agreement supersede the Interim Agreement and are subject to certain closing conditions including receipt of applicable licences. 1. The Purchase Agreement was executed under the following terms: The purchase price is USD$6,700,000 (the “Purchase Price”). The consideration under the Purchase Agreement includes the following on closing: i. The USD$5,200,000 Note is to be applied towards the Purchase Price; and ii. USD$1,500,000 to be paid in common shares of the Company at a price of CAD$0.7439 per common share to a maximum of 2,681,006 common shares (the “Share Payment”) (issued subsequent to year end) (Note 21) upon NMG LB receiving the transfer of all licenses, permits and BCC authorizations for NMG LB to conduct medical and adult-use commercial cannabis retail operations. The Share Payment is subject to reduction in the event there are undisclosed liabilities by GLDH and Airport Collective. 2. The NMG SD Settlement Agreement’s consideration includes the following on closing: i. USD$500,000 to be paid in common shares (issued subsequent to year end) (Note 21) to SGSD at a share price equal to the maximum allowable discount pursuant to Canadian Securities Exchange policies, upon execution of the settlement agreement; ii. USD$750,000 to be paid in common shares to Barakett at a price of CAD$0.7439 per common share to a maximum of 1,340,502 Common Shares (the “DB Share Payment”) upon NMG SD receiving all licenses, permits and authorizations for NMG SD to conduct medical commercial cannabis retail operations. The DB Share Payment is subject to reduction whereby the reduction is tied to Barakett agreeing to pay the Company 40% of the NMG SD start-up costs; and iii. USD$750,000 to be paid in common shares to Barakett at a price of CAD$0.7439 per common share to a maximum of 1,340,502 common shares (the “DB Additional Shares Payment”) upon NMG SD receiving all licenses, permits and authorizations for NMG SD to conduct adult-use commercial cannabis retail operations. The DB Additional Shares Payment is subject reduction whereby the reduction is tied to Barakett agreeing to pay the Company 40% of the NMG SD start-up costs. 3. The Lease Assignment Agreement was executed under the following terms: The Company is required to issue cash and share payments totaling USD$2,283,765 to the landlord as follows: i. USD$750,000, payable in common shares (issued subsequent to year end) (Note 21) at a share price equal to the maximum allowable discount pursuant to Canadian Securities Exchange policies, upon execution of the assignment agreement; ii. USD$783,765, payable in cash, within 5 business days following execution of the assignment agreement (paid); and iii. USD$750,000, payable in cash, including interest at 5% per annum, upon receipt of the San Diego Conditional Use Permit allowing adult-use commercial cannabis retail operations. Additionally: 1. The Company is to provide a loan to GLDH in the amount of USD$200,000 at an interest rate of 12% per annum, accrued and compounded quarterly and due within 3 years (provided subsequent to year end); 2. The Company is to enter into a consulting agreement with Barakett through NMG LB to provide certain consulting and advisory services to NMG LB, agreeing to pay Barakett a total of USD$200,000 ($50,000 paid in fiscal 2019 and additional $90,000 paid subsequent to year end); 3. The Company will forgive approximately USD$800,000 for prior operating loans advanced by the Company to GLDH; and; 4. The Company licenses certain intellectual property from Green Light District Management, LLC and GLDH (collectively referred to as “Licensor”). The Licensor grants the Company a perpetual license to utilize its operational intellectual property consisting of customer data, sales data, customer outreach strategies standard operating procedures, and other proprietary operational intellectual property. Licensor grants the Company a license for 2 years to utilize intellectual property such as trademarks and branding (the “Branding IP”). As consideration for the licenses, the Company has agreed to utilize the Branding IP until 19 June 2021 at the Company’s premises and at the San Diego retail locations for a period of 2 years from operations commencing at that location. Additionally, the Company agreed to pay the Licensor 3% of gross receipts from sales at the Company’s Long Beach location premises on a monthly basis for only the first twelve months of the term of the license agreement. The total investment in GLDH at 31 July 2019 is as follows: 31 July 2019 Note receivable $ 5,200,000 Interest income accrued on the Note 693,333 Advances for working capital 666,876 Lease Assignment Agreement payment 783,765 Foreign exchange 29,062 Total $ 7,373,036 |
Other Agreements
Other Agreements | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Other Agreement [Abstract] | ||
Other Agreements | 19. Other Agreements The Company and NMG Cathedral City (“NMG CC”) entered into a management and administrative services agreement (the “Management Agreement”) with Satellites Dip, LLC, (“SD”), a licensed cannabis business conducting commercial cannabis activity within the state of California. The one year Management Agreement commenced on 6 June 2019 and encompassed the following: a. Management Fee: NMG CC will be paid a management fee of 30% of Net Profits or $10,000 per month, whichever is greater; b. Brand Licensing: NMG CC shall work to broker commercial arrangements between SD and third-party cannabis brand owners whereby SD licenses commercial cannabis brands from third parties in connection with SD’s commercial cannabis activity in exchange for a license fee; c. Equipment and Capital: NMG CC shall furnish all equipment and machinery necessary for SD’s manufacturing of the Branded Products. Any equipment provided by NMG CC to SD shall be owned by NMG CC in its entirety and, subject to SD’s approval of the terms, leased to SD pursuant to an Equipment Lease Agreement entered into between NMG CC and SD, dated 6 June 2019; and d. Loan: The Parties have entered into a certain secured loan agreement dated 6 June 2019 whereby NMG CC has loaned SD $250,000 (the “Loan”) to be used solely in connection with SD’s commercial cannabis activity. The Loan shall be due and payable on 6 June 2020 (the “Maturity Date”) and shall bear interest at a rate of 12% per annum which shall be accrued, compounded quarterly and payable on the Maturity Date. The Loan is secured by a security interest in and to all of SD’s assets. On 30 November 2019, NMG CC entered into a settlement and release agreement (the “Settlement Agreement”) with SD whereby NMG CC and SD agreed to terminate the Management Agreement and to enter into a mutual release of any and all claims related to the Management Agreement, subject to the terms of the Settlement Agreement. As of 30 November 2019, SD owed NMG CC management fees (the “Monies Owed”) under the Management Agreement. In consideration of NMG CC’s discharge of the Monies Owed, SD has agreed to pay NMG CC one-hundred percent (100%) of all proceeds received from the sale of all or any part of its inventory (the “Inventory”) as of 1 November 2019. Pursuant to the Settlement Agreement, SD shall provide monthly updates of the remaining Inventory until the Inventory has been fully exhausted. NMG CC will determine the sale price for any item in Inventory subject to the Settlement Agreement. Brand Director Agreement On 30 November 2019, NMG CC entered into a brand director agreement (the “Brand Director Agreement”) with SD. Pursuant to the Brand Director Agreement, SD has engaged NMG CC to provide certain advisory and brand director services in connection with SD’s manufacture of Company-branded products, as well as certain other products (the “Managed Products”) as agreed to by NMGCC (the “Brand Director Services”). The initial term of the Brand Director Agreement is six months and the parties may renew the Brand Director Agreement for successive three-month renewal periods. The Brand Director Services include: (a) managing SD’s production of the Managed Products; (b) payment of a reimbursement fee to SD equal to the amount of direct costs and direct taxes applicable to the Managed Products; (c) managing inventory of the Managed Products; and (d) directing SD to enter into distribution agreements and sale agreements with third-party commercial cannabis licensees for the distribution and sale of the Managed Products in accordance with applicable law. Pursuant to the Brand Director Agreement, NMG CC will pay a monthly fee (the “Contribution Fee”) of $5,000 to SD. In connection with the Brand Director Agreement, as partial repayment for the principal and interest accrued under a certain loan agreement (the “Loan Agreement”) between NMG CC and SD dated 6 June 2019, SD waives payment of the Contribution Fee for the first five (5) months of the Brand Direction Agreement. In consideration for the Brand Director Services, SD (as the “Licensee”) has agreed to pay NMG CC (in its capacity as the “Brand Director”) a brand director fee for each calendar month during the term of the Brand Director Agreement, whereby Licensee shall pay to Brand Director a fee to be calculated as follows: (x) net revenue for a single calendar month, multiplied by, (y) seventy-five percent (75%); (z) plus any fees to be paid to NMG CC in connection with the equipment lease agreement (the “Equipment Lease Agreement”) dated 6 June 2019 (the “Equipment Lease Fee”) added to the product of (x) and (y), the (q) total amount shall be the fee paid to NMG CC. If the net revenue, minus the product of (x) and (y) is less than the Equipment Lease Fee in any given month, the difference shall carry over to the subsequent month, to be added to that month’s Equipment Lease Fee, or the difference may be paid by Licensee at its sole option. Brand License Agreement On 30 November 2019, DEP entered into a brand license agreement (the “License Agreement”) with SD. Pursuant to the License Agreement, DEP granted SD a non-exclusive, non-transferable, and non-sub-licensable right (the “License”) to use certain licensed marks in connection with or on licensed products, solely in connection with SD’s commercial cannabis activity in California. In consideration for the License, SD will pay DEP a monthly fee equal to $100, payable on a quarterly basis. During the term of the License Agreement, SD must remain in compliance with all state and local cannabis rules and regulations in California, and maintain valid commercial cannabis licenses. SD will follow the guidance of DEP and only utilize packaging and labelling materials purchased from (or at the direction of) DEP. The License Agreement will be in full force and effect for the duration of the Brand Director Agreement. Equipment Purchase Agreement On 30 November 2019, NMG CC and SD entered into an equipment purchase agreement (the “Equipment Purchase Agreement”) pursuant to which NMG CC agreed to purchase certain equipment (the “Equipment”) from SD. The aggregate purchase price for the Equipment is $235,685 and will be applied to the outstanding balance under the Loan Agreement. First Amendment to the Equipment Lease Agreement On 30 November 2019, NMG CC and SD entered into an amendment (the “First Amendment”) to the Equipment Lease Agreement. Pursuant to the First Amendment, NMG CC and SD amended (i) the term of the Equipment Lease Agreement to be coterminous with the Brand Director Agreement; and (ii) to update the equipment being leased pursuant to the Equipment Lease Agreement and to update the monthly rental rate for the equipment being leased. Release & Satisfaction of Loan Agreement On 30 November 2019, NMG CC and SD entered into a release and satisfaction of loan agreement (the “Release Agreement”). Pursuant to the Release Agreement, NMG CC agreed that all indebtedness of SD to NMG CC arising from the Loan Agreement (and promissory note issued in connection with the Loan Agreement) is hereby satisfied and discharged in full. The release is granted based on SD’s obligations and duties pursuant to the Equipment Purchase Agreement and its five (5) month waiver of the Contribution Fee under the Brand Director Agreement. The Company recorded a loss of $239,328 related to the Settlement Agreement with SD. | 19. Other Investments The Company and NMG Cathedral City (“NMG CC”) entered into a management and administrative services agreement (the "Management Agreement") with Satellites Dip, LLC, ("SD"), a licensed cannabis business conducting commercial cannabis activity within the state of California. The one year Management Agreement commenced on June 6, 2019 and encompasses the following: a. Management Fee: NMG CC will be paid a management fee of 30% of Net Profits or $10,000 per month, whichever is greater; b. Brand Licensing: NMG CC shall work to broker commercial arrangements between SD and third-party cannabis brand owners whereby SD licenses commercial cannabis brands from third parties in connection with SD's commercial cannabis activity in exchange for a license fee; c. Equipment and Capital: NMG CC shall furnish all equipment and machinery necessary for SD's manufacturing of the Branded Products. Any equipment provided by NMG CC to SD shall be owned by NMG CC in its entirety and, subject to SD's approval of the terms, leased to SD pursuant to an Equipment Lease Agreement entered into between NMG CC and SD, dated June 6, 2019; and d. Loan: The Parties have entered into a certain secured loan agreement dated June 6, 2019 whereby NMG CC has loaned SD $250,000 (the "Loan") to be used solely in connection with SD's commercial cannabis activity. The Loan shall be due and payable on June 6, 2020 (the "Maturity Date") and shall bear interest at a rate of 12% per annum which shall be accrued, compounded quarterly and payable on the Maturity Date. The Loan will be secured by a security interest in and to all of SD's assets. |
Income Taxes
Income Taxes | 12 Months Ended |
Jul. 31, 2019 | |
Income Taxes | |
Income Taxes | 20. Income Taxes A reconciliation of income taxes at statutory rates with the reported taxes for the years ended July 31, 2019 and 2018 is as follows: 2019 2018 Net loss for the period $ (3,752,751 ) $ (2,685,782 ) Federal and state income tax rates 21.00 % 26.45 % Expected income tax recovery (788,078 ) (710,389 ) Permanent differences 1,342,979 528,510 Change in estimates and others 120,554 225,902 Change in tax rates 178,289 (725,324 ) Change in benefit not recognized (853,744 ) (223,421 ) Total income tax recovery $ — $ (904,722 ) The significant components of the Company's deferred income tax assets and liabilities are as follows: As at 31 July 2019 As at 31 July 2018 Deferred income tax asset Net income tax operating loss carry forward $ 150,000 $ 985,290 Deferred tax allowance (150,000 ) (985,290 ) Deferred income tax liability Brand and License 1,716,120 1,716,120 Net deferred income tax liability $ 1,716,120 $ 1,716,120 |
Lease Liabilities
Lease Liabilities | 6 Months Ended |
Jan. 31, 2020 | |
Leases [Abstract] | |
Lease Liabilities | 20. Lease Liabilities a) On 10 November 2017, NMG entered into a revised five-year lease agreement for the property located at 3375 Pepper Lane, Las Vegas, NV, containing approximately 18,000 square feet. The Company has four options to extend the lease and each option is for five years. The monthly rent was $12,500 plus common area expenses, which increased to $12,875 plus common area expenses on 1 January 2019. The guaranteed minimum monthly rent is subject to a 2% increase on each anniversary date of the lease. b) On 9 April 2019, NMG entered into a three-year lease agreement for the property located at 6420 Sunset Corporate Drive, Las Vegas, NV, containing approximately 7,700 square feet. The Company has one option to extend the lease for an additional three-year term and an option to purchase the property at any point during the initial term. The monthly rent is $6,026 plus $1,129 in common area expenses, totaling $7,156 every month. On adoption of ASC 842, Lease Accounting, the Company recognized right-of-use assets (Notes 7 and 13), and a corresponding increase in lease liabilities, in the amount of $1,187,116 which represented the present value of future lease payments using a discount rate of 12% per annum. The Company adopted the modified retrospective approach on adopting ASC 842 and accordingly the adoption was made effective 1 August 2019, with no restatement of the prior year comparatives. During the six months ended 31 January 2020, the Company recorded a lease expense of $100,871 related to the accretion of lease liabilities and the depreciation of right-of-use assets. Supplemental cash flow information related to leases was as follows: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 100,871 Right-of-use assets obtaining in exchange for lease obligations: Operating leases $ 1,187,116 Weighted-average remaining lease term – operating leases 7.19 years Weighted-average discount rate – operating leases 12 % Maturities of lease liabilities were as follows: Year Ending 31 July Operating Leases 2020 $ 109,631 2021 223,398 2022 240,530 2023 248,403 2024 254,438 2025 257,827 2026 176,312 2027 179,838 2028 60,340 Total lease payments $ 1,750,717 Less imputed interest (649,019 ) Total $ 1,101,698 Less current portion (195,983 ) Long term portion 905,715 |
Subsequent Events
Subsequent Events | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Subsequent Events [Abstract] | ||
Subsequent Events | 21. Subsequent Events | 21. Subsequent Events i. On 12 August 2019, the Company issued a total of 4,337,111 common shares of the Company in connection with the Purchase Agreement, NMG SD Settlement Agreement and the Lease Assignment Agreement (Note 18). ii. On 12 August 2019, the Company issued 81,591 common shares upon exercise of 81,591 warrants at a price of CAD$0.66 per common share for aggregate proceeds of $40,765 (CAD$53,850). iii. On 21 August 2019, the Company granted an aggregate of 2,850,000 stock options with an exercise price of CAD$0.88 per share for a term of five years expiring on 21 August 2024. The options are subject to vesting provisions such that 25% of the options vest six months from the date of grant, 25% of the options vest twelve months from the date of grant, 25% of the options vest eighteen months from the date of grant and 25% of the options vest twenty-four months from the date of grant. iv. On 12 September 2019, the Company issued 38,912 common shares upon exercise of 38,912 warrants at a price of CAD$0.66 per common share for aggregate proceeds of $19,449 (CAD$25,682). v. On 1 October 2019, the Company granted 250,000 stock options to a director with an exercise price of CAD$0.93 per share for a term of five years expiring on 1 October 2024. The options are subject to vesting provisions such that 25% of the options vest six months from the date of grant, 25% of the options vest 12 months from the date of grant, 25% of the options vest eighteen months from the date of grant and 25% of the options vest twenty-four months from the date of grant. vi. On 4 October 2019, the Company issued 22,727 common shares upon exercise of 22,727 warrants at a price of CAD$0.90 per common share for aggregate proceeds of $15,359 (CAD$20,454). vii. On 16 October 2019, the Company cancelled 400,000 stock options previously granted to a director on 21 August 2019 with an exercise price of CAD$0.88 per share. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Accounting Policies [Abstract] | ||
Basis of presentation | Basis of presentation These condensed consolidated interim financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is 31 July. | Basis of presentation These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is 31 July. |
Principles of consolidation | Principles of consolidation These consolidated financial statements include the financial statements of the Company and its subsidiaries as follows: Name Jurisdiction Ownership Date of acquisition or formation DEP Nevada, Inc. (“Dep Nevada”) Nevada, USA 100 % 10 August 2017 Nevada Medical Group, LLC (“NMG”) Nevada, USA 100 % 14 November 2017 NMG Retail, LLC Nevada, USA 75 % 14 September 2018 NMG Long Beach, LLC California, USA 100 % 18 December 2018 NMG Cathedral City, LLC California, USA 100 % 4 January 2019 NMG Chula Vista, LLC California, USA 51 % 10 January 2019 NMG San Diego, LLC California, USA 60 % 30 January 2019 All inter-company transactions and balances are eliminated upon consolidation. These consolidated financial statements include the following investments accounted for using the equity method of accounting: Name Jurisdiction Ownership Date of acquisition or formation NMG Ohio, LLC Ohio, USA 30 % 27 April 2017 | |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents include highly liquid investments with original maturities of three months or less. | Cash and cash equivalents Cash and cash equivalents include highly liquid investments with original maturities of three months or less. |
Amounts receivable | Amounts receivable Amounts receivable represents amounts owed from customers for sale of medical and recreational cannabis and sales tax recoverable. Amounts are presented net of the allowance for doubtful accounts, which represents the Company’s best estimate of the amount of probable credit losses in the existing accounts receivable balance. The Company determines the allowance for doubtful accounts based on historical experience and current economic conditions. The Company reviews the adequacy of its allowance for doubtful accounts on a quarterly basis. As at 31 January 2020 and 31 July 2019, the Company has no allowance for doubtful accounts. | Amounts receivable Amounts receivable represents amounts owed from customers for sale of medical and recreational cannabis and sales tax recoverable. Amounts are presented net of the allowance for doubtful accounts, which represents the Company’s best estimate of the amount of probable credit losses in the existing accounts receivable balance. The Company determines the allowance for doubtful accounts based on historical experience and current economic conditions. The Company reviews the adequacy of its allowance for doubtful accounts on a quarterly basis. As at 31 July 2019 and 2018, the Company has no allowance for doubtful accounts. |
Revenue recognition | Revenue recognition During the year ended 31 July 2018, the Company recognized revenue in accordance with ASC 605, “Revenue Recognition”. Revenue was considered realized or realizable and earned when all of the following criteria were met: (1) persuasive evidence of an arrangement exists, (2) the sales price is fixed or determinable, (3) collectability is reasonably assured, and (4) products have been shipped and the customer has taken ownership and assumed risk of loss. On 1 August 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” and all of the related amendments, which are also codified into ASC 606. The Company elected to adopt this guidance using the modified retrospective method. The adoption of this guidance did not have a material effect on the Company’s financial position, results of operations or cash flows. Under the new standard, the Company recognizes a sale as follows: The Company recognizes revenue product sales when our customers obtain control of our products. This determination is based on the customer specific terms of the arrangement. Upon transfer of control, the Company has no further performance obligations. Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC 606. The Company’s revenues accounted for under ASC 606, generally, do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The sales prices are generally fixed and all consideration from contracts from contracts is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration. | Revenue recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The standard is based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Since its initial release, the FASB has issued several amendments to the standard, which include clarification of accounting guidance related to identification of performance obligations and principal versus agent considerations. Topic 606 became effective for the Company in the first quarter of the 2019 fiscal year. The adoption of this guidance had no impact on the Company’s financial statements. The Company derives revenue primarily from the sale of medical and recreational cannabis. In accordance with ASC 606, revenue is recognized when persuasive evidence of an arrangement exists, the services have been rendered and the goods have been delivered, the amount is fixed and determinable, and collection is reasonably assured. The Company does not have standard terms that permit return of product; however, in certain markets where returns occur management estimates the amount of returns as variable consideration based on historical return experience and adjust revenue accordingly. Products that do not meet the Company’s high-quality standards are returned by the customer or recalled and destroyed and are recorded as a reduction of revenue. The reversal of revenue is recorded upon determination that the product will be recalled and destroyed. Management estimates the costs required to facilitate product returns and records them in cost of goods sold as required. |
Inventory | Inventory Inventory consists of raw material, work in progress (live plants and plants in the drying process), finished goods, and consumables. The Company values its raw material, finished goods and consumables at the lower of the actual costs or its current estimated market value less costs to sell. The Company values its work in progress at cost. The Company periodically reviews its inventory for obsolete and potentially impaired items. As at 31 January 2020 and 31 July 2019, the Company has no reserve for inventory. | Inventory Inventory consists of raw material, work in progress (live plants and plants in the drying process), finished goods, and consumables. The Company values its raw material, finished goods and consumables at the lower of the actual costs or its current estimated market value less costs to sell. The Company values its work in progress at cost. The Company periodically reviews its inventory for obsolete and potentially impaired items. |
Property and equipment | Property and equipment Property and equipment are stated at cost and are amortized over their estimated useful lives on a straight-line basis as follows: Office equipment 7 years Cultivation equipment 7 years Production equipment 7 years Kitchen equipment 7 years Vehicles 7 years Vault equipment 7 years Leasehold improvements shorter of 15 years or the term of the lease | Property and equipment Property and equipment are stated at cost and are amortized over their estimated useful lives on a straight-line basis as follows: Office equipment 7 years Cultivation equipment 7 years Production equipment 7 years Kitchen equipment 7 years Vehicles 7 years Vault equipment 7 years Leasehold improvements shorter of 15 years or the term of the lease |
Brands and licenses | Brands and licenses Intangible assets acquired from third parties are measured initially at fair value and either classified as indefinite life or finite life depending on their characteristics. Intangible assets with indefinite lives are tested for impairment at least annually and intangible assets with finite lives are reviewed for indicators of impairment at least annually. The Company’s brands and licenses have indefinite lives; therefore no amortization is recognized. | Brands and licenses Intangible assets acquired from third parties are measured initially at fair value and either classified as indefinite life or finite life depending on their characteristics. Intangible assets with indefinite lives are tested for impairment at least annually and intangible assets with finite lives are reviewed for indicators of impairment at least annually. The Company’s brands and licenses have indefinite lives; therefore no amortization is recognized. |
Income taxes | Income taxes Deferred income taxes are reported for timing differences between items of income or expense reported in the consolidated financial statements and those reported for income tax purposes in accordance with ASC 740, “Income Taxes”, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, and for tax losses and credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not. | Income taxes Deferred income taxes are reported for timing differences between items of income or expense reported in the consolidated financial statements and those reported for income tax purposes in accordance with ASC 740, “Income Taxes”, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, and for tax losses and credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not. |
Basic and diluted net loss per share | Basic and diluted net loss per share The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive. | Basic and diluted net loss per share The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive. |
Segments of an enterprise and related information | Segments of an enterprise and related information ASC 280, “Segment Reporting” establishes guidance for the way that public companies report information about operating segments in annual consolidated financial statements and requires reporting of selected information about operating segments in interim consolidated financial statements issued to the public. It also establishes standards for disclosures regarding products and services, geographic areas and major customers. ASC 280 defines operating segments as components of a company about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company has evaluated this Codification and does not believe it is applicable at this time. | |
Comprehensive loss | Comprehensive loss ASC 220, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive income/loss and its components in the condensed consolidated interim financial statements. As at 31 January 2020 and 31 July 2019, the Company reported foreign currency translation adjustments as other comprehensive income or loss and included a schedule of comprehensive income/loss in the consolidated financial statements. | Comprehensive loss ASC 220, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive income/loss and its components in the consolidated financial statements. As at 31 July 2019, the Company reported foreign currency translation adjustments as other comprehensive income or loss and included a schedule of comprehensive income/loss in the consolidated financial statements. |
Foreign currency translation | Foreign currency translation The Company’s functional currency is the Canadian dollar and its reporting currency is the U.S. dollars. The Company’s subsidiaries have a functional currency of U.S. dollars. The consolidated financial statements of the Company are translated to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”. Exchange gains and losses on inter-company balances that form part of the net investment in foreign operations are included in other comprehensive income. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. | Foreign currency translation The Company’s functional currency is the Canadian dollar and its reporting currency is the U.S. dollars. The Company’s subsidiaries have a functional currency of U.S. dollars. The consolidated financial statements of the Company are translated to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”. Exchange gains and losses on inter-company balances that form part of the net investment in foreign operations are included in other comprehensive income. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. |
Stock-based compensation | Stock-based compensation The Company estimates the fair value of each stock option award at the grant date by using the Black-Scholes Option Pricing Model. The fair value determined represents the cost for the award and is recognized over the required service period, generally defined as the vesting period. The Company’s accounting policy is to recognize forfeitures as they occur. | Stock-based compensation The Company accounts for stock-based compensation issued to those other than employees in accordance with ASC 505-50. Equity instruments issued to those other than employees are valued at the earlier of a commitment date or upon completion of the services, based on the fair value of the equity instruments and is recognized as expense over the service period. The Company estimates the fair value of share-based payments using the Black-Scholes Option Pricing Model for common stock options and the closing price of the Company’s common stock for common share issuances. |
Fair value measurements | Fair value measurements The Company accounts for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: · Level 1 – inputs are based upon unadjusted quoted prices for identical instruments in active markets. · Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit spreads, foreign exchange rates, and forward and spot prices for currencies. · Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Our Level 3 assets and liabilities include investments in other private entities, and goodwill and intangible assets, when they are recorded at fair value due to an impairment charge. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. The Company measures equity investments without readily determinable fair values on a nonrecurring basis. The fair values of these investments are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections. Other current financial assets and current financial liabilities have fair values that approximate their carrying values. | Fair Value Measurements The Company accounts for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: · Level 1 – inputs are based upon unadjusted quoted prices for identical instruments in active markets. · Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit spreads, foreign exchange rates, and forward and spot prices for currencies. · Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Our Level 3 assets and liabilities include investments in other private entities, and goodwill and intangible assets, when they are recorded at fair value due to an impairment charge. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. The Company measures equity investments without readily determinable fair values on a nonrecurring basis. The fair values of these investments are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections. Other current financial assets and current financial liabilities have fair values that approximate their carrying values. |
Use of estimates and assumptions | Use of estimates and assumptions The preparation of condensed consolidated interim financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from these estimates. | Use of estimates and assumptions The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from these estimates. |
Lease accounting | Lease accounting Under ASC 842, leases are separated into two classifications: operating leases and financial leases. Lease classification under ASC 842 is relatively similar to ASC 840. For a lease to be classified as a finance lease, it must meet one of the five finance lease criteria: (1) transference of title/ownership to the lessee, (2) purchase option, (3) lease term for major part of the remaining economic life of the asset, (4) present value represents substantially all of the fair value of the asset, and (5) asset specialization. Any lease that do not meet these criteria is classified as an operating lease. ASC 842 requires all leases to be recognized on the Company’s balance sheet. Specifically, for operating leases, the Company recognize a right-of-use asset and a corresponding lease liability upon lease commitment. | |
Comparative figures | Comparative figures Certain comparative figures have been adjusted to conform to the current year’s presentation. | Comparative figures Certain comparative figures have been adjusted to conform to the current year’s presentation. |
Nature and Continuance of Ope_2
Nature and Continuance of Operations (Tables) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Schedule of consolidation of entities and its ownership interest | Name Jurisdiction Ownership Date of acquisition or formation DEP Nevada Inc. (“DEP Nevada”) Nevada, USA 100% 10 August 2017 Nevada Medical Group LLC (“NMG”) Nevada, USA 100% 14 November 2017 NMG Retail LLC Nevada, USA 75% 14 September 2018 NMG Long Beach LLC California, USA 100% 18 December 2018 NMG Cathedral City LLC California, USA 100% 4 January 2019 NMG Chula Vista LLC California, USA 51% 10 January 2019 NMG San Diego LLC California, USA 60% 30 January 2019 | Name Jurisdiction Ownership Date of acquisition or formation DEP Nevada, Inc. (“Dep Nevada”) Nevada, USA 100 % 10 August 2017 Nevada Medical Group, LLC (“NMG”) Nevada, USA 100 % 14 November 2017 NMG Retail, LLC Nevada, USA 75 % 14 September 2018 NMG Long Beach, LLC California, USA 100 % 18 December 2018 NMG Cathedral City, LLC California, USA 100 % 4 January 2019 NMG Chula Vista, LLC California, USA 51 % 10 January 2019 NMG San Diego, LLC California, USA 60 % 30 January 2019 |
Schedule of ownership interest by equity method investment in consolidation | Name Jurisdiction Ownership Date of acquisition or formation NMG Ohio LLC Ohio, USA 30% 27 April 2017 | Name Jurisdiction Ownership Date of acquisition or formation NMG Ohio, LLC Ohio, USA 30 % 27 April 2017 |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Accounting Policies [Abstract] | ||
Schedule of consolidation of entities and its ownership interest | Name Jurisdiction Ownership Date of acquisition or formation DEP Nevada Inc. (“DEP Nevada”) Nevada, USA 100% 10 August 2017 Nevada Medical Group LLC (“NMG”) Nevada, USA 100% 14 November 2017 NMG Retail LLC Nevada, USA 75% 14 September 2018 NMG Long Beach LLC California, USA 100% 18 December 2018 NMG Cathedral City LLC California, USA 100% 4 January 2019 NMG Chula Vista LLC California, USA 51% 10 January 2019 NMG San Diego LLC California, USA 60% 30 January 2019 | Name Jurisdiction Ownership Date of acquisition or formation DEP Nevada, Inc. (“Dep Nevada”) Nevada, USA 100 % 10 August 2017 Nevada Medical Group, LLC (“NMG”) Nevada, USA 100 % 14 November 2017 NMG Retail, LLC Nevada, USA 75 % 14 September 2018 NMG Long Beach, LLC California, USA 100 % 18 December 2018 NMG Cathedral City, LLC California, USA 100 % 4 January 2019 NMG Chula Vista, LLC California, USA 51 % 10 January 2019 NMG San Diego, LLC California, USA 60 % 30 January 2019 |
Schedule of ownership interest by equity method investment in consolidation | Name Jurisdiction Ownership Date of acquisition or formation NMG Ohio LLC Ohio, USA 30% 27 April 2017 | Name Jurisdiction Ownership Date of acquisition or formation NMG Ohio, LLC Ohio, USA 30 % 27 April 2017 |
Schedule of property and equipment estimated useful lives | Office equipment 7 years Cultivation equipment 7 years Production equipment 7 years Kitchen equipment 7 years Vehicles 7 years Vault equipment 7 years Leasehold improvements shorter of 15 years or the term of the lease | Office equipment 7 years Cultivation equipment 7 years Production equipment 7 years Kitchen equipment 7 years Vehicles 7 years Vault equipment 7 years Leasehold improvements shorter of 15 years or the term of the lease |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Investments, All Other Investments [Abstract] | ||
Schedule of financial assets at fair value | As at 31 January 2020 As at 31 July 2019 Financial assets at fair value Cash $ 3,374,079 $ 9,004,716 Convertible loan receivable 948,310 52,225 Total financial assets at fair value $ 4,322,389 $ 9,056,941 | As at 31 July 2019 As at 31 July 2018 Financial assets at fair value Cash $ 9,004,716 $ 324,837 Convertible loan receivable 52,225 — Total financial assets at fair value $ 9,056,941 $ 324,837 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Inventory Disclosure [Abstract] | ||
Schedule of inventory | 31 January 2020 31 July 2019 Work in progress $ 233,818 $ 208,417 Finished goods 652,121 615,108 Consumables 636,321 566,894 Total $ 1,522,260 $ 1,390,419 | 31 July 2019 31 July 2018 Raw materials $ — $ 9,705 Work in progress 208,417 151,039 Finished goods 615,108 567,563 Consumables 566,894 225,110 Total $ 1,390,419 $ 953,417 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Property And Equipment | ||
Schedule of property and equipment | Office Equipment Cultivation Equipment Production Equipment Kitchen Equipment Vehicles Vault Equipment Leasehold Improvements Right-of-use Assets Total Cost: Balance, 31 July 2018 $ 24,586 $ 435,109 $ 261,957 $ 27,694 $ 38,717 $ 1,644 $ 1,993,928 $ — $ 2,783,635 Additions 7,491 28,647 36,004 23,414 — 528 272,078 — 368,162 Balance, 31 July 2019 32,077 463,756 297,961 51,108 38,717 2,172 2,266,006 — 3,151,797 Additions 40,869 — 247,762 9,022 — — 740,503 — 1,038,156 ASC 842 adoption (Notes 13 and 20) — — — — — — — 1,187,116 1,187,116 Balance, 31 January 2020 72,946 463,756 545,723 60,130 38,717 2,172 3,006,509 1,187,116 5,377,069 Accumulated Depreciation: Balance, 31 July 2018 3,177 41,169 25,446 2,554 5,500 228 89,663 — 167,737 Depreciation 5,119 73,597 44,547 4,546 7,751 358 153,642 — 289,560 Balance, 31 July 2019 8,296 114,766 69,993 7,100 13,251 586 243,305 — 457,297 Depreciation 4,276 38,132 24,188 4,253 3,907 200 82,899 — 157,855 Asset lease expense (Note 20) — — — — — — — 85,418 85,418 Balance, 31 January 2020 12,572 152,898 94,181 11,353 17,158 786 326,204 85,418 700,570 Net Book Value: As at 31 July 2018 21,409 393,940 236,511 25,140 33,217 1,416 1,904,265 — 2,615,898 As at 31 July 2019 23,781 348,990 227,968 44,008 25,466 1,586 2,022,701 — 2,694,500 As at 31 January 2020 $ 60,374 $ 310,858 $ 451,542 $ 48,777 $ 21,559 $ 1,386 $ 2,680,305 $ 1,101,698 $ 4,676,499 | Office Equipment Cultivation Equipment Production Equipment Kitchen Equipment Vehicles Vault Equipment Leasehold Improvements Total Cost: Balance, 31 July 2017 $ — $ — $ — $ — $ — $ — $ — $ — Acquired assets (Note 14) 23,105 245,659 176,354 15,809 38,717 1,644 1,455,649 1,956,937 Additions 1,481 189,450 85,603 11,885 — — 538,279 826,698 Balance, 31 July 2018 24,586 435,109 261,957 27,694 38,717 1,644 1,993,928 2,783,635 Additions 7,491 28,647 36,004 23,414 — 528 272,078 368,162 Balance, 31 July 2019 32,077 463,756 297,961 51,108 38,717 2,172 2,266,006 3,151,797 Accumulated Depreciation: Balance, 31 July 2017 — — — — — — — — Depreciation 3,177 41,169 25,446 2,554 5,500 228 89,663 167,737 Balance, 31 July 2018 3,177 41,169 25,446 2,554 5,500 228 89,663 167,737 Depreciation 5,119 73,597 44,547 4,546 7,751 358 153,642 289,560 Balance, 31 July 2019 8,296 114,766 69,993 7,100 13,251 586 243,305 457,297 Net Book Value: As at 31 July 2018 21,409 393,940 236,511 25,140 33,217 1,416 1,904,265 2,615,898 As at 31 July 2019 $ 23,781 $ 348,990 $ 227,968 $ 44,008 $ 25,466 $ 1,586 $ 2,022,701 $ 2,694,500 |
Related Party Balances and Tr_2
Related Party Balances and Transactions (Tables) | 6 Months Ended |
Jan. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | For the three months ended 31 January 2020 For the three months ended 31 January 2019 For the six months ended 31 January 2020 For the six months ended 31 January 2019 A company controlled by the President and Interim Chief Executive Officer Management fees $ 37,511 $ — $ 79,378 $ — A company controlled by the Chief Financial Officer and a director Management fees Accounting fees 25,232 — — 11,611 47,900 — — 18,519 A company controlled by a former director and former President of NMG Management fees 8,333 66,992 16,666 100,646 A company controlled by the Corporate Secretary Management fees Consulting fees 25,322 1,552 7,476 — 30,989 3,103 18,990 — A company controlled by the former Chief Executive Officer and a former director Management fees — — 9,401 — $ 97,950 $ 86,079 $ 187,437 $ 138,155 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Promissory Notes Tables [Abstract] | |
Schedule of promissory notes tables | 31 July 2019 31 July 2018 Balance, beginning $ 2,175,000 $ — Issuance of promissory notes 4,000,000 1,887,863 Deferred finance costs (822,494 ) — Repayment of promissory notes (6,695,000 ) — Early repayment penalty 200,000 — Interest and accretion expense 1,142,494 277,219 Foreign exchange adjustment — 9,918 Balance, ending $ — $ 2,175,000 |
Convertible debenture (Tables)
Convertible debenture (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Convertible Debenture | |
Schedule of convertible debenture | 31 July 2019 31 July 2018 Balance, beginning $ — $ — Issuance of convertible debenture 1,128,750 — Interest and accretion expense 98,392 — Interest paid (72,623 ) Interest advanced (88,821 ) Foreign exchange adjustment (133 ) — Balance, ending $ 1,065,565 $ — |
Capital Stock (Tables)
Capital Stock (Tables) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Stockholders' Equity Note [Abstract] | ||
Schedule of fair value assumptions for stock options granted | Expected life of the options 5 years Expected volatility 265 % Expected dividend yield 0 % Risk-free interest rate 2.03 % Expected life of the options 5 years Expected volatility 140 % Expected dividend yield 0 % Risk-free interest rate 1.28 % Expected life of the options 5 years Expected volatility 140 % Expected dividend yield 0 % Risk-free interest rate 1.37 % Expected life of the options 5 years Expected volatility 140 % Expected dividend yield 0 % Risk-free interest rate 1.43 % | Expected life of the options 5 years Expected volatility 198 % Expected dividend yield 0 % Risk-free interest rate 1.63 % Expected life of the options 5 years Expected volatility 262 % Expected dividend yield 0 % Risk-free interest rate 2.16 % Expected life of the options 5 years Expected volatility 265 % Expected dividend yield 0 % Risk-free interest rate 2.03 % |
Schedule of stock option activity | Number of options Weighted average exercise price Weighted average contractual term remaining (in years) Aggregate intrinsic value Outstanding at 31 July 2018 4,025,000 CAD$0.65 4.34 CAD$ - Granted 2,050,000 CAD$0.57 Outstanding at 31 July 2019 6,075,000 CAD$0.62 3.69 CAD$1,675,750 Granted 3,300,000 CAD$0.88 Cancelled (400,000) CAD$0.88 Outstanding at 31 January 2020 8,975,000 CAD$0.71 3.64 CAD$ 1,750 Vested and fully exercisable at 31 January 2020 6,075,000 CAD$0.62 3.18 CAD$ 1,750 | 31 July 2019 31 July 2018 Number of options Exercise Price Number of options Exercise Price Opening balance 4,025,000 CAD$0.65 — — Options granted 2,050,000 CAD$0.57 4,025,000 CAD$0.65 Closing balance 6,075,000 CAD$0.62 4,025,000 CAD$0.65 |
Schedule of warrants activity | Number of warrants Weighted average exercise price Outstanding at 31 July 2018 10,106,820 CAD$0.89 Issued 28,415,284 CAD$0.93 Exercised (16,007,333) CAD$0.50 Outstanding at 31 July 2019 22,514,771 CAD$1.22 Exercised (165,715) CAD$0.73 Expired (9,933,772) CAD$0.89 Outstanding at 31 January 2020 12,415,284 CAD$1.49 | 31 July 2019 31 July 2018 Number of warrants Exercise Price Number of warrants Exercise Price Opening balance 10,106,820 CAD$0.89 — — Warrants issued 28,415,284 CAD$0.93 10,106,820 CAD$0.89 Warrants exercised (16,007,333 ) CAD$0.50 — — Closing balance 22,514,771 CAD$1.22 10,106,820 CAD$0.89 |
Schedule of number of warrants outstanding and exercisable | Number of warrants outstanding and exercisable Exercise price Expiry dates 11,780,134 CAD$1.50 17 May 2023 635,150 CAD$1.25 16 May 2023 12,415,284 | Number of warrants outstanding and exercisable Exercise price Expiry dates 248,350 CAD$0.66 15 August 2019 58,324 CAD$0.66 16 August 2019 60,612 CAD$0.66 3 November 2019 9,094,808 CAD$0.90 14 November 2019 637,393 CAD$0.90 1 December 2019 11,780,134 CAD$1.50 17 May 2023 635,150 CAD$1.25 17 May 2023 22,514,771 |
Supplemental Disclosures with_2
Supplemental Disclosures with Respect to Cash Flows (Tables) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Supplemental Disclosures With Respect To Cash Flows | ||
Supplemental disclosures with respect to cash flows | Three Month Period Ended 31 January Six Month Period Ended 31 January 2020 2019 2020 2019 Cash paid during the period for interest $ — $ — $ — $ — Cash paid during the period for income taxes $ — $ — $ — $ — | Year Ended 31 July 2019 2018 Cash paid during the period for interest $ 392,623 $ — Cash paid during the period for income taxes $ — $ — |
Business Acquisition (Tables)
Business Acquisition (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of purchase consideration under business acquisition | Purchase consideration Share considerations, net of transaction costs $ 6,143,326 Cash considerations 2,309,000 Promissory notes issued 1,887,277 TOTAL $ 10,339,603 Assets acquired: Cash $ 260,842 Amounts receivable 253,697 Prepaid expenses 44,552 Inventory 498,680 Property and equipment 1,951,696 Brand 247,000 Licenses 7,925,000 Liabilities assumed: Trade payable and accrued liabilities (367,385 ) Loans payable (250,000 ) Deferred tax liability (2,860,200 ) Net identifiable assets acquired 7,703,882 Goodwill 2,635,721 TOTAL $ 10,339,603 |
Investment in NMG Ohio LLC (Tab
Investment in NMG Ohio LLC (Tables) | 6 Months Ended |
Jan. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of reconciliation and summarized financial information of Investment in NMG Ohio LLC | 31 October 2019 31 July 2019 Opening balance $ 3,465,902 $ 77,600 Acquisition costs: Common shares issued to vendors at fair value — 1,448,805 Acquisition costs: Cash payments to vendors — 1,181,250 Dispensary build-out related costs 16,469 573,633 License fees — 100,000 Equity pickup 87,651 56,466 Foreign exchange (1,377 ) 28,148 Total $ 3,568,645 $ 3,465,902 31 October 2019 Current assets $ 768,603 Non-current assets 853,383 Total assets 1,621,986 Current liabilities 465,933 Non-current liabilities — Total liabilities 465,933 Revenues 961,444 Gross profit 420,904 Net income 292,171 Net income attributable to the Company $ 87,651 |
Investment in and advances to_2
Investment in and advances to GLDH (Tables) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Long-term Investments [Abstract] | ||
Schedule of total investment in GLDH | 31 January 2020 31 July 2019 Opening balance $ 7,373,036 $ — Note receivable — 5,200,000 Share issuances 2,750,000 — Interest income accrued on the Note 520,000 693,333 Advances for working capital 1,285,960 666,876 Lease Assignment Agreement payment — 783,765 Foreign exchange (42,617 ) 29,062 Ending balance $ 11,886,379 $ 7,373,036 | 31 July 2019 Note receivable $ 5,200,000 Interest income accrued on the Note 693,333 Advances for working capital 666,876 Lease Assignment Agreement payment 783,765 Foreign exchange 29,062 Total $ 7,373,036 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Income Taxes | |
SCHEDULE OF INCOME TAXES | 2019 2018 Net loss for the period $ (3,752,751 ) $ (2,685,782 ) Federal and state income tax rates 21.00 % 26.45 % Expected income tax recovery (788,078 ) (710,389 ) Permanent differences 1,342,979 528,510 Change in estimates and others 120,554 225,902 Change in tax rates 178,289 (725,324 ) Change in benefit not recognized (853,744 ) (223,421 ) Total income tax recovery $ — $ (904,722 ) The significant components of the Company's deferred income tax assets and liabilities are as follows: As at 31 July 2019 As at 31 July 2018 Deferred income tax asset Net income tax operating loss carry forward $ 150,000 $ 985,290 Deferred tax allowance (150,000 ) (985,290 ) Deferred income tax liability Brand and License 1,716,120 1,716,120 Net deferred income tax liability $ 1,716,120 $ 1,716,120 |
Lease Liabilities (Tables)
Lease Liabilities (Tables) | 6 Months Ended |
Jan. 31, 2020 | |
Leases [Abstract] | |
Schedule of supplemental cash flow information related to leases | Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 100,871 Right-of-use assets obtaining in exchange for lease obligations: Operating leases $ 1,187,116 Weighted-average remaining lease term – operating leases 7.19 years Weighted-average discount rate – operating leases 12 % |
Schedule of Maturities of lease liabilities | Year Ending 31 July Operating Leases 2020 $ 109,631 2021 223,398 2022 240,530 2023 248,403 2024 254,438 2025 257,827 2026 176,312 2027 179,838 2028 60,340 Total lease payments $ 1,750,717 Less imputed interest (649,019 ) Total $ 1,101,698 Less current portion (195,983 ) Long term portion 905,715 |
Nature and Continuance of Ope_3
Nature and Continuance of Operations (Details) | Jan. 31, 2020 | Jul. 31, 2019 |
DEP Nevada Inc. ("DEP Nevada") | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Ownership | 100.00% | 100.00% |
Nevada Medical Group LLC (NMG) | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Ownership | 100.00% | 100.00% |
NMG Retail LLC | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Ownership | 75.00% | 75.00% |
NMG Long Beach LLC | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Ownership | 100.00% | 100.00% |
NMG Cathedral City LLC | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Ownership | 100.00% | 100.00% |
NMG Chula Vista LLC | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Ownership | 51.00% | 51.00% |
NMG San Diego LLC | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Ownership | 60.00% | 60.00% |
Nature and Continuance of Ope_4
Nature and Continuance of Operations (Details 1) | Jan. 31, 2020 | Jul. 31, 2019 |
NMG Ohio LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 30.00% | 30.00% |
Nature and Continuance of Ope_5
Nature and Continuance of Operations (Details Narrative) | 6 Months Ended | |
Jan. 31, 2020 | May 31, 2004 | |
State of incorporation | Delaware | |
Date of incorporation | Nov. 5, 1998 | |
Kaleidoscope Venture Capital, Inc | ||
Ownership percentage | 100.00% |
Significant Accounting Polici_4
Significant Accounting Policies (Details) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Office Equipment | ||
Estimated useful lives | 7 years | 7 years |
Cultivation Equipment | ||
Estimated useful lives | 7 years | 7 years |
Production Equipment | ||
Estimated useful lives | 7 years | 7 years |
Kitchen Equipment | ||
Estimated useful lives | 7 years | 7 years |
Vehicles | ||
Estimated useful lives | 7 years | 7 years |
Vault Equipment | ||
Estimated useful lives | 7 years | 7 years |
Leasehold Improvements | ||
Estimated useful lives | shorter of 15 years or the term of the lease | shorter of 15 years or the term of the lease |
Significant Accounting Polici_5
Significant Accounting Policies (Details 1) | Jan. 31, 2020 | Jul. 31, 2019 |
DEP Nevada Inc. ("DEP Nevada") | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Ownership percentage | 100.00% | 100.00% |
Nevada Medical Group LLC (NMG) | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Ownership percentage | 100.00% | 100.00% |
NMG Retail LLC | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Ownership percentage | 75.00% | 75.00% |
NMG Long Beach LLC | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Ownership percentage | 100.00% | 100.00% |
NMG Cathedral City LLC | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Ownership percentage | 100.00% | 100.00% |
NMG Chula Vista LLC | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Ownership percentage | 51.00% | 51.00% |
NMG San Diego LLC | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Ownership percentage | 60.00% | 60.00% |
Significant Accounting Polici_6
Significant Accounting Policies (Details 2) | Jan. 31, 2020 | Jul. 31, 2019 |
NMG Ohio LLC | ||
Schedule Of Ownership Interest By Equity Method Investment In Consolidation [Line Items] | ||
Equity method investment, ownership percentage | 30.00% | 30.00% |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) | Jan. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2018 |
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | |||
Cash | $ 3,374,079 | $ 9,004,716 | $ 324,837 |
Convertible loan receivable | 948,310 | 52,225 | 0 |
Total financial assets at fair value | $ 4,322,389 | $ 9,056,941 | $ 324,837 |
Financial Instruments (Details
Financial Instruments (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jan. 31, 2020 | Oct. 31, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jan. 31, 2020 | Jan. 31, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | |
Investments, All Other Investments [Abstract] | ||||||||
Retained Earnings (Accumulated Deficit) | $ (12,657,211) | $ (12,657,211) | $ (10,525,062) | $ (6,772,311) | ||||
Net Income (Loss) Attributable to Parent | (1,235,352) | $ (896,797) | $ (1,763,679) | $ (211,795) | (2,132,149) | $ (1,975,474) | (3,752,751) | (1,781,060) |
Negative cash flows from operations | (2,565,786) | $ (915,104) | (2,555,810) | $ (2,139,327) | ||||
Working capital deficit | $ 5,443,575 | $ 5,443,575 | $ 10,262,959 |
Inventory (Details)
Inventory (Details) - USD ($) | Jan. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2018 |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 0 | $ 9,705 | |
Work in progress | $ 233,818 | 208,417 | 151,039 |
Finished goods | 652,121 | 615,108 | 567,563 |
Consumables | 636,321 | 566,894 | 225,110 |
Total | $ 1,522,260 | $ 1,390,419 | $ 953,417 |
Convertible loan receivable (De
Convertible loan receivable (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jan. 31, 2020 | Jan. 31, 2019 | Jan. 31, 2020 | Jan. 31, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | |
Convertible loan receivable [Line Items] | ||||||
Convertible Loan Receivable (Note 6) | $ 948,310 | $ 948,310 | $ 52,225 | $ 0 | ||
Accrued interest income | 18,000 | 36,000 | 27,000 | $ 0 | ||
Interests receivable | 63,000 | $ 27,000 | 63,000 | $ 27,000 | $ 27,000 | |
NMG | ||||||
Convertible loan receivable [Line Items] | ||||||
Loan bears interest per month | 6,000 | $ 6,000 | ||||
Percentage of monthly management fee | 66.67% | |||||
CCG | Convertible loan agreement | ||||||
Convertible loan receivable [Line Items] | ||||||
Proceeds from fund construction | 1,250,000 | $ 1,250,000 | ||||
Loan bears interest per month | $ 6,000 | $ 6,000 | ||||
Outstanding units percentage | 40.00% | 40.00% |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jan. 31, 2020 | Jan. 31, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | |
Cost: | ||||
Balance | $ 3,151,797 | $ 2,783,635 | $ 2,783,635 | $ 0 |
Acquired assets | 1,956,937 | |||
Additions | 1,038,156 | 368,162 | 826,698 | |
ASC 842 adoption (Note 20) | 1,187,116 | |||
Balance | 5,377,069 | 3,151,797 | 2,783,635 | |
Accumulated Depreciation: | ||||
Balance | 457,297 | 167,737 | 167,737 | 0 |
Depreciation | 157,855 | 141,901 | 289,560 | 8,811 |
Asset lease expense (Note 20) | 85,418 | |||
Balance | 700,570 | 457,297 | 167,737 | |
Net Book Value | ||||
Net Book Value: | 4,676,499 | 2,694,500 | 2,615,898 | |
Office Equipment | ||||
Cost: | ||||
Balance | 32,077 | 24,586 | 24,586 | 0 |
Acquired assets | 23,105 | |||
Additions | 40,869 | 7,491 | 1,481 | |
ASC 842 adoption (Note 20) | 0 | |||
Balance | 72,946 | 32,077 | 24,586 | |
Accumulated Depreciation: | ||||
Balance | 8,296 | 3,177 | 3,177 | 0 |
Depreciation | 4,276 | 5,119 | 3,177 | |
Asset lease expense (Note 20) | 0 | |||
Balance | 12,572 | 8,296 | 3,177 | |
Net Book Value | ||||
Net Book Value: | 60,374 | 23,781 | 21,409 | |
Cultivation Equipment | ||||
Cost: | ||||
Balance | 463,756 | 435,109 | 435,109 | 0 |
Acquired assets | 245,659 | |||
Additions | 0 | 28,647 | 189,450 | |
ASC 842 adoption (Note 20) | 0 | |||
Balance | 463,756 | 463,756 | 435,109 | |
Accumulated Depreciation: | ||||
Balance | 114,766 | 41,169 | 41,169 | 0 |
Depreciation | 38,132 | 73,597 | 41,169 | |
Asset lease expense (Note 20) | 0 | |||
Balance | 152,898 | 114,766 | 41,169 | |
Net Book Value | ||||
Net Book Value: | 310,858 | 348,990 | 393,940 | |
Production Equipment | ||||
Cost: | ||||
Balance | 297,961 | 261,957 | 261,957 | 0 |
Acquired assets | 176,354 | |||
Additions | 247,762 | 36,004 | 85,603 | |
ASC 842 adoption (Note 20) | 0 | |||
Balance | 545,723 | 297,961 | 261,957 | |
Accumulated Depreciation: | ||||
Balance | 69,993 | 25,446 | 25,446 | 0 |
Depreciation | 24,188 | 44,547 | 25,446 | |
Asset lease expense (Note 20) | 0 | |||
Balance | 94,181 | 69,993 | 25,446 | |
Net Book Value | ||||
Net Book Value: | 451,542 | 227,968 | 236,511 | |
Kitchen Equipment | ||||
Cost: | ||||
Balance | 51,108 | 27,694 | 27,694 | 0 |
Acquired assets | 15,809 | |||
Additions | 9,022 | 23,414 | 11,885 | |
ASC 842 adoption (Note 20) | 0 | |||
Balance | 60,130 | 51,108 | 27,694 | |
Accumulated Depreciation: | ||||
Balance | 7,100 | 2,554 | 2,554 | 0 |
Depreciation | 4,253 | 4,546 | 2,554 | |
Asset lease expense (Note 20) | 0 | |||
Balance | 11,353 | 7,100 | 2,554 | |
Net Book Value | ||||
Net Book Value: | 48,777 | 44,008 | 25,140 | |
Vehicles | ||||
Cost: | ||||
Balance | 38,717 | 38,717 | 38,717 | 0 |
Acquired assets | 38,717 | |||
Additions | 0 | 0 | 0 | |
ASC 842 adoption (Note 20) | 0 | |||
Balance | 38,717 | 38,717 | 38,717 | |
Accumulated Depreciation: | ||||
Balance | 13,251 | 5,500 | 5,500 | 0 |
Depreciation | 3,907 | 7,751 | 5,500 | |
Asset lease expense (Note 20) | 0 | |||
Balance | 17,158 | 13,251 | 5,500 | |
Net Book Value | ||||
Net Book Value: | 21,559 | 25,466 | 33,217 | |
Vault Equipment | ||||
Cost: | ||||
Balance | 2,172 | 1,644 | 1,644 | 0 |
Acquired assets | 1,644 | |||
Additions | 0 | 528 | 0 | |
ASC 842 adoption (Note 20) | 0 | |||
Balance | 2,172 | 2,172 | 1,644 | |
Accumulated Depreciation: | ||||
Balance | 586 | 228 | 228 | 0 |
Depreciation | 200 | 358 | 228 | |
Asset lease expense (Note 20) | 0 | |||
Balance | 786 | 586 | 228 | |
Net Book Value | ||||
Net Book Value: | 1,386 | 1,586 | 1,416 | |
Leasehold Improvements | ||||
Cost: | ||||
Balance | 2,266,006 | 1,993,928 | 1,993,928 | 0 |
Acquired assets | 1,455,649 | |||
Additions | 740,503 | 272,078 | 538,279 | |
ASC 842 adoption (Note 20) | 0 | |||
Balance | 3,006,509 | 2,266,006 | 1,993,928 | |
Accumulated Depreciation: | ||||
Balance | 243,305 | 89,663 | 89,663 | 0 |
Depreciation | 82,899 | 153,642 | 89,663 | |
Asset lease expense (Note 20) | 0 | |||
Balance | 326,204 | 243,305 | 89,663 | |
Net Book Value | ||||
Net Book Value: | 2,680,305 | 2,022,701 | 1,904,265 | |
Right of use Assets | ||||
Cost: | ||||
Balance | 0 | 0 | 0 | |
Additions | 0 | 0 | ||
ASC 842 adoption (Note 20) | 1,187,116 | |||
Balance | 1,187,116 | 0 | 0 | |
Accumulated Depreciation: | ||||
Balance | 0 | $ 0 | 0 | |
Depreciation | 0 | 0 | ||
Asset lease expense (Note 20) | 85,418 | |||
Balance | 85,418 | 0 | 0 | |
Net Book Value | ||||
Net Book Value: | $ 1,101,698 | $ 0 | $ 0 |
Related Party Balances and Tr_3
Related Party Balances and Transactions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jan. 31, 2020 | Jan. 31, 2019 | Jan. 31, 2020 | Jan. 31, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | |
Related Party Transaction [Line Items] | ||||||
Management fees | $ 97,950 | $ 86,079 | $ 187,437 | $ 138,155 | ||
Consulting fees | 135,953 | 107,687 | 356,180 | 110,287 | $ 167,942 | $ 206,913 |
President and Interim Chief Executive Officer | ||||||
Related Party Transaction [Line Items] | ||||||
Management fees | 37,511 | 0 | 79,378 | 0 | ||
Chief Financial Officer and a director | ||||||
Related Party Transaction [Line Items] | ||||||
Management fees | 25,232 | 0 | 47,900 | 0 | 9,425 | |
Accounting fees | 0 | 11,611 | 0 | 18,519 | ||
Consulting fees | 37,791 | 29,531 | ||||
Former director and former President | ||||||
Related Party Transaction [Line Items] | ||||||
Management fees | 8,333 | 66,992 | 16,666 | 100,646 | ||
Corporate Secretary | ||||||
Related Party Transaction [Line Items] | ||||||
Management fees | 25,322 | 7,476 | 30,989 | 18,990 | ||
Consulting fees | 1,552 | 0 | 3,103 | 0 | ||
Former Chief Executive Officer and former director | ||||||
Related Party Transaction [Line Items] | ||||||
Management fees | $ 0 | $ 0 | $ 9,401 | $ 0 | $ 90,696 | $ 66,759 |
Related Party Balances and Tr_4
Related Party Balances and Transactions (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jan. 31, 2020 | Jan. 31, 2019 | Jan. 31, 2020 | Jan. 31, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | |
Related Party Transaction [Line Items] | ||||||
Stock-based compensation | $ 369,437 | $ 870,808 | $ 659,015 | $ 870,808 | $ 880,595 | $ 789,679 |
Management fees | 97,950 | 86,079 | 187,437 | 138,155 | ||
Consulting fees | 135,953 | 107,687 | 356,180 | 110,287 | 167,942 | 206,913 |
Due to related party | 7,680 | 7,680 | 12,952 | 51,081 | ||
Interim chief executive officer | ||||||
Related Party Transaction [Line Items] | ||||||
Management fees | 50,072 | |||||
Due to related party | 7,680 | 7,680 | 7,825 | |||
Chief financial officer | ||||||
Related Party Transaction [Line Items] | ||||||
Due to related party | 5,127 | |||||
Chief Financial Officer and director | ||||||
Related Party Transaction [Line Items] | ||||||
Management fees | 25,232 | 0 | 47,900 | 0 | 9,425 | |
Consulting fees | 37,791 | 29,531 | ||||
Due to related party | 5,127 | 1,210 | ||||
Former Chief Executive Officer | ||||||
Related Party Transaction [Line Items] | ||||||
Management fees | 2,712 | |||||
Chief Operating Officer | ||||||
Related Party Transaction [Line Items] | ||||||
Consulting fees | 90,000 | |||||
Former Chief Financial Officer | ||||||
Related Party Transaction [Line Items] | ||||||
Management fees | 62,353 | 47,124 | ||||
Due to related party | 4,033 | |||||
Director one | ||||||
Related Party Transaction [Line Items] | ||||||
Management fees | 225,992 | 144,528 | ||||
Due to related party | 28,810 | |||||
Former Chief Executive Officer and former director | ||||||
Related Party Transaction [Line Items] | ||||||
Management fees | $ 0 | $ 0 | $ 9,401 | $ 0 | 90,696 | 66,759 |
Due to related party | 17,028 | |||||
Related Parties | ||||||
Related Party Transaction [Line Items] | ||||||
Stock-based compensation | $ 579,904 | $ 377,443 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jan. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2018 | |
Promissory Notes Details Abstract | |||
Balance, beginning | $ 0 | $ 2,175,000 | $ 0 |
Issuance of promissory notes | 4,000,000 | 1,887,863 | |
Deferred finance costs | $ 822,494 | (822,494) | 0 |
Repayments of Notes Payable | (6,695,000) | 0 | |
Early Repayment penalty | 200,000 | 0 | |
Interest and accretion expense | 1,242,808 | 277,219 | |
Foreign exchange adjustment | 0 | 9,918 | |
Balance, ending | $ 0 | $ 2,175,000 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Nov. 14, 2017 | Nov. 29, 2018 | Jan. 31, 2020 | Jan. 31, 2019 | Jan. 31, 2020 | Jan. 31, 2019 | Jul. 31, 2019 | Jul. 31, 2018 |
Promissory note | $ 1,000,000 | |||||||
Interest rate | 8.00% | |||||||
Accrued interest expense | $ 131,850 | $ 32,362 | $ 131,850 | $ 32,362 | ||||
Repayment of promissory note | $ 1,175,000 | |||||||
Promissory notes description | On 12 November 2018 the notes were amended such that $1,175,000 was repaid and the balance of $1,000,000 would be due on 14 February 2019. As the balance was not repaid on 14 February 2019, interest commenced accruing at 8% per annum and the principal plus interest is to be repaid on the earlier of i) 12 months from due date or ii) within 10 business days of closing a financing greater than $5,000,000. During the year ended 31 July 2019 | |||||||
Common stock share issued | 101,853,217 | 101,853,217 | 97,279,891 | 47,774,817 | ||||
Deferred finance costs | $ (822,494) | $ 822,494 | $ 0 | |||||
Early Repayment penalty | 200,000 | 0 | ||||||
Accrued interest | 176,090 | |||||||
Accretion expense | $ 176,090 | 98,392 | 0 | |||||
Australis | ||||||||
Promissory note | $ 4,000,000 | |||||||
Interest rate | 15.00% | |||||||
Accrued interest expense | 1,118,051 | |||||||
Maturity terms | 2 years | |||||||
Common stock share issued | 1,105,083 | |||||||
Early Repayment penalty | $ 200,000 | |||||||
Prepayment Penalty | 200,000 | |||||||
Notes payable | ||||||||
Accrued interest expense | $ 24,443 | $ 277,219 | ||||||
TI Nevada | ||||||||
Promissory note | $ 500,000 | |||||||
NMG | ||||||||
Promissory note | $ 2,175,000 | |||||||
Present value factor | 12.00% | |||||||
Present value of promissory note | $ 1,887,863 | |||||||
Debt in default, interest rate description | Any unpaid amounts at maturity will bear interest at a rate of 10% per annum. |
Convertible Debenture (Details)
Convertible Debenture (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jan. 31, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | |
Convertible Debt (Details) | |||
Balance, beginning | $ 0 | $ 0 | |
Issuance of convertible debenture | 1,128,750 | 0 | |
Interest and accretion expense | $ 176,090 | 98,392 | 0 |
Interest paid | (72,623) | ||
Interest advanced | (88,821) | ||
Foreign exchange adjustment | (133) | 0 | |
Balance, ending | $ 1,065,565 | $ 0 |
Convertible Debenture (Details
Convertible Debenture (Details Narrative) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Jan. 31, 2020USD ($) | Jan. 31, 2019USD ($) | Jan. 31, 2020CAD ($)shares | Jan. 31, 2020USD ($)shares | Jan. 31, 2019USD ($) | Jul. 31, 2019CAD ($)shares | Jul. 31, 2019USD ($)shares | Jul. 31, 2018USD ($) | Jan. 31, 2020USD ($) | Jul. 31, 2019USD ($) | Oct. 30, 2018CAD ($)$ / shares | Oct. 30, 2018USD ($) | |
Short-term Debt [Line Items] | ||||||||||||
Beneficial conversion feature | $ 116,714 | $ 88,797 | $ 116,714 | $ 88,797 | ||||||||
Accrued interest expense | 98,392 | |||||||||||
Convertible debentures | $ 1,483,636 | $ 1,483,636 | $ 1,128,750 | $ 1,128,750 | ||||||||
Interest rate | 11.30% | 11.30% | 11.30% | 11.30% | ||||||||
Interest paid | 72,623 | |||||||||||
Interest paid advanced | $ (88,821) | |||||||||||
Conversion shares issued | shares | 2,909,091 | 2,909,091 | 2,909,091 | 2,909,091 | ||||||||
Accrued interest and accretion | $ 131,850 | $ 32,362 | $ 131,850 | $ 32,362 | ||||||||
Australis | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Accrued interest and accretion | $ 1,118,051 | |||||||||||
Australis | Investment Agreement | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Unsecured convertible debenture | $ 1,600,000 | $ 1,217,547 | ||||||||||
Acquired warrant unit price | $ / shares | $ 0.55 | |||||||||||
Interest rate | 8.00% | 8.00% |
Capital Stock (Details)
Capital Stock (Details) | Oct. 01, 2019 | Dec. 11, 2018 | Jun. 06, 2018 | Jan. 23, 2020 | Aug. 21, 2019 | Nov. 24, 2017 |
Stockholders' Equity Note [Abstract] | ||||||
Expected life of the options | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years |
Expected volatility | 265.00% | 262.00% | 198.00% | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% | |||
Risk-free interest rate | 2.03% | 2.16% | 1.63% |
Capital Stock (Details 1)
Capital Stock (Details 1) - Stock option | Oct. 01, 2019$ / sharesshares | Dec. 11, 2018$ / sharesshares | Nov. 24, 2017$ / sharesshares | Jan. 31, 2020CAD ($)$ / sharesshares | Jul. 31, 2019CAD ($)$ / sharesshares | Jul. 31, 2018USD ($)$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Opening balance | shares | 6,075,000 | 4,025,000 | 0 | |||
Number of options, Options granted | shares | 250,000 | 2,050,000 | 3,850,000 | 3,300,000 | 2,050,000 | 4,025,000 |
Option cancelled | shares | (600,000) | |||||
Closing balance | shares | 8,775,000 | 6,075,000 | 4,025,000 | |||
Number of options, Vested and fully exercisable | shares | 6,075,000 | |||||
Weighted average exercise price, opening balance | $ / shares | $ 0.62 | $ 0.65 | $ 0 | |||
Weighted average exercise price, options granted | $ / shares | $ 0.93 | $ 0.57 | $ 0.66 | 0.88 | 0.57 | 0.65 |
Weighted average exercise price, options Cancelled | $ / shares | 0.88 | |||||
Weighted average exercise price, closing balance | $ / shares | 0.70 | $ 0.62 | $ 0.65 | |||
Weighted average exercise price, Vested and fully exercisable | $ / shares | $ 0.62 | |||||
Weighted average contractual term remaining (in years) | 3 years 7 months 14 days | 3 years 8 months 8 days | 4 years 4 months 2 days | |||
Weighted average contractual term remaining (in years), Vested and fully exercisable | 3 years 2 months 4 days | |||||
Aggregate intrinsic value | $ 1,750 | $ 1,675,750 | $ 0 | |||
Aggregate intrinsic value, Vested and fully exercisable | $ | $ 1,750 |
Capital Stock (Details 2)
Capital Stock (Details 2) - $ / shares | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jul. 16, 2019 | Nov. 30, 2018 | Jan. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2018 | Nov. 14, 2019 | Nov. 04, 2019 | Sep. 12, 2019 | Aug. 12, 2019 | |
Opening balance | 22,514,771 | ||||||||
Closing balance | 12,415,284 | 22,514,771 | |||||||
Weighted average exercise price, Issued | $ 0.90 | $ 0.50 | |||||||
Weighted average exercise price, Exercised | $ 0.90 | $ 0.90 | $ 0.66 | $ 0.66 | |||||
Share purchase warrants and brokers' warrants | |||||||||
Opening balance | 22,514,771 | 10,106,820 | 0 | ||||||
Issued | 28,415,284 | 10,106,820 | |||||||
Exercised | (16,007,333) | 0 | |||||||
Closing balance | 12,415,284 | 22,514,771 | 10,106,820 | ||||||
Weighted average exercise price, opening balance | $ 1.22 | $ 0.89 | $ 0 | ||||||
Weighted average exercise price, Issued | 0.93 | 0.89 | |||||||
Weighted average exercise price, Exercised | 0.73 | 0.50 | |||||||
Weighted average exercise price, Expired | 0.89 | 0 | |||||||
Weighted average exercise price, closing balance | $ 1.49 | $ 1.22 | $ 0.89 |
Capital Stock (Details 3)
Capital Stock (Details 3) - $ / shares | 6 Months Ended | 12 Months Ended | ||||
Jan. 31, 2020 | Jul. 31, 2019 | Nov. 14, 2019 | Nov. 04, 2019 | Sep. 12, 2019 | Aug. 12, 2019 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||||
Number of warrants outstanding and exercisable | 12,415,284 | 22,514,771 | ||||
Warrants price per share | $ 0.90 | $ 0.90 | $ 0.66 | $ 0.66 | ||
Exercise price CAD$0.66 | ||||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||||
Number of warrants outstanding and exercisable | 248,350 | |||||
Warrants price per share | $ 0.66 | |||||
Expiry dates | 15 August 2019 | |||||
Exercise price CAD$0.66 | ||||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||||
Number of warrants outstanding and exercisable | 58,324 | |||||
Warrants price per share | $ 0.66 | |||||
Expiry dates | 16 August 2019 | |||||
Exercise price CAD$0.66 | ||||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||||
Number of warrants outstanding and exercisable | 60,612 | |||||
Warrants price per share | $ 0.66 | |||||
Expiry dates | 3 November 2019 | |||||
Exercise price CAD$0.90 | ||||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||||
Number of warrants outstanding and exercisable | 9,094,808 | |||||
Warrants price per share | $ 0.90 | |||||
Expiry dates | 14 November 2019 | |||||
Exercise price CAD$0.90 | ||||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||||
Number of warrants outstanding and exercisable | 637,393 | |||||
Warrants price per share | $ 0.90 | |||||
Expiry dates | 1 December 2019 | |||||
Exercise price CAD$1.50 | ||||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||||
Number of warrants outstanding and exercisable | 11,780,134 | 11,780,134 | ||||
Exercise price | $ 1.50 | |||||
Warrants price per share | $ 1.50 | |||||
Expiry dates | 17 May 2023 | 17 May 2023 | ||||
Exercise price CAD$1.25 | ||||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||||
Number of warrants outstanding and exercisable | 635,150 | 635,150 | ||||
Exercise price | $ 1.25 | |||||
Warrants price per share | $ 1.25 | |||||
Expiry dates | 16 May 2023 | 17 May 2023 |
Capital Stock (Details Narrativ
Capital Stock (Details Narrative) | Nov. 14, 2019CAD ($)$ / sharesshares | Nov. 14, 2019USD ($)shares | Oct. 04, 2019CAD ($)shares | Oct. 04, 2019USD ($)shares | Oct. 01, 2019CAD ($)$ / sharesshares | Oct. 01, 2019USD ($)shares | Sep. 12, 2019CAD ($)$ / sharesshares | Sep. 12, 2019USD ($)shares | Aug. 12, 2019CAD ($)$ / sharesshares | Aug. 12, 2019USD ($)shares | Dec. 11, 2018CAD ($)$ / sharesshares | Dec. 11, 2018USD ($)shares | Nov. 02, 2018CAD ($)$ / sharesshares | Nov. 02, 2018USD ($)$ / sharesshares | Jun. 06, 2018CAD ($)$ / sharesshares | Jun. 06, 2018USD ($)shares | Dec. 01, 2017CAD ($)$ / sharesshares | Dec. 01, 2017USD ($)$ / sharesshares | Nov. 14, 2017CAD ($)$ / sharesshares | Nov. 14, 2017USD ($)$ / sharesshares | Nov. 14, 2017USD ($)shares | Nov. 01, 2017CAD ($)$ / sharesshares | Nov. 01, 2017USD ($)$ / sharesshares | Jan. 23, 2020CAD ($)$ / sharesshares | Jan. 23, 2020USD ($)shares | Aug. 21, 2019CAD ($)$ / sharesshares | Aug. 21, 2019USD ($)shares | Jul. 16, 2019CAD ($)$ / sharesshares | Jul. 16, 2019USD ($)shares | May 28, 2019CAD ($)$ / sharesshares | May 28, 2019USD ($)shares | May 17, 2019CAD ($)$ / sharesshares | May 17, 2019USD ($)$ / sharesshares | Jan. 31, 2019USD ($)shares | Nov. 30, 2018CAD ($)$ / sharesshares | Nov. 30, 2018USD ($)shares | Nov. 29, 2018USD ($)shares | Nov. 24, 2017CAD ($)$ / sharesshares | Nov. 24, 2017USD ($)shares | Oct. 31, 2017CAD ($)$ / sharesshares | Oct. 31, 2017USD ($)$ / sharesshares | Aug. 16, 2017CAD ($)$ / sharesshares | Aug. 16, 2017USD ($)$ / sharesshares | Jan. 31, 2020CAD ($)$ / sharesshares | Jan. 31, 2020USD ($) | Oct. 31, 2019USD ($) | Jan. 31, 2020CAD ($)$ / sharesshares | Jan. 31, 2020USD ($)shares | Jan. 31, 2019USD ($) | Jul. 31, 2019$ / sharesshares | Jul. 31, 2019USD ($)shares | Jul. 31, 2018$ / shares$ / sharesshares | Jul. 31, 2018USD ($)$ / sharesshares | Jan. 31, 2020$ / sharesshares | Nov. 04, 2019$ / shares | Jul. 31, 2019$ / sharesshares | May 14, 2019USD ($)shares | May 16, 2018USD ($)shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital stock, shares authorized | 900,000,000 | 900,000,000 | 900,000,000 | 900,000,000 | 900,000,000 | 900,000,000 | 900,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Value of common shares issued in acquisition | $ | $ 2,752,782 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred stock converted into common shares | 2,909,091 | 2,909,091 | 2,909,091 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock shares issued | 7,333 | 7,333 | 3,206,160 | 3,206,160 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants shares issued | 7,333 | 7,333 | 3,206,160 | 3,206,160 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant exercisable price per share | $ / shares | $ 0.90 | $ 0.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of warrants exercised | 22,727 | 22,727 | 38,912 | 38,912 | 81,591 | 81,591 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ 25,682 | $ 19,450 | $ 6,600 | $ 5,057 | $ 1,603,080 | $ 1,205,196 | $ 90,840 | $ 5,818,300 | $ 21,561,568 | $ 4,806,025 | ||||||||||||||||||||||||||||||||||||||||||||||||
Exercised | $ 20,236 | $ 15,291 | $ 20,454 | $ 15,360 | $ 53,850 | $ 40,765 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock shares issued upon exercise of warrants | 22,485 | 22,485 | 22,727 | 22,727 | 38,912 | 38,912 | 81,591 | 81,591 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants price per share | $ / shares | $ 0.90 | $ 0.66 | $ 0.66 | $ 0.90 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share purchase warrants and brokers' warrants | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant exercisable price per share | $ / shares | $ 0.93 | $ 0.89 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants price per share | $ / shares | $ 0.73 | $ 0.73 | 0.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Broker warrant | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of warrant | $ 78,122,000 | $ 62,357 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants shares issued | 367,286 | 367,286 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options granted | 250,000 | 250,000 | 2,050,000 | 2,050,000 | 3,850,000 | 3,850,000 | 3,300,000 | 3,300,000 | 2,050,000 | 4,025,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Exercise price | $ / shares | $ 0.93 | $ 0.57 | $ 0.66 | $ 0.88 | $ 0.57 | $ 0.65 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Term of options | 5 years | 5 years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expiry period | Nov. 24, 2022 | Nov. 24, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of stock options | $ 191,960 | $ 145,045 | $ 1,818,232 | $ 1,373,856 | $ 922,403 | $ 726,578 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | $ 52,316 | $ 39,668 | $ 68,979 | $ 52,259 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage of issued and outstanding common shares | 10.00% | 10.00% | 10.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase agreement NMG SD settlement agreement and lease assignment agreement | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock shares issued | 4,337,111 | 4,337,111 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee stock option | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options granted | 200,000 | 200,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise price | $ / shares | $ 0.88 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of stock options | $ 90,608 | $ 68,645 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | $ 2,495 | 1,890 | $ 2,495 | 1,890 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Australis | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock shares issued | 1,105,083 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of warrants exercised | 12,793,840 | 12,793,840 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finance fee fair valued | $ | $ 822,494 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercised | $ 6,396,920 | $ 4,746,515 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock shares issued upon exercise of warrants | 12,793,840 | 12,793,840 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants price per share | $ / shares | $ 0.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Australis | Senior secured note | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repayment of senior debt | $ | $ 4,495,890 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Australis | Investment Agreement | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock shares issued | 1,768,545 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock share subscriptions receivable | $ | $ 787,123 | $ 787,123 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consultant | Stock option | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options granted | 175,000 | 175,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise price | $ / shares | $ 0.47 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Term of options | 5 years | 5 years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of stock options | $ 1,165,117 | $ 881,644 | $ 81,129 | $ 63,101 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Toro Pacific Management Inc. [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Escrowed shares issued | 70,500 | 70,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Escrowed shares fair value | $ | $ 22,689 | $ 27,328 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NMG Ohio LLC | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock shares issued | 2,380,398 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock value | $ | $ 1,448,805 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquiring revenue remaining performance obligation | 70.00% | 70.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Director | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options granted | 2,850,000 | 2,850,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise price | $ / shares | $ 0.88 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expired | 200,000 | 200,000 | 400,000 | 400,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | $ 431,619 | $ 327,879 | $ 798,398 | $ 604,866 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
NMG | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Value of common shares issued in acquisition | $ | $ 6,337,365 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business acquisition shares issued or issuable | 423,000 | 423,000 | 423,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business acquisition, fair value of shares issued or issuable | $ | $ 135,202 | $ 135,202 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock shares issued | 18,827,000 | 18,827,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of warrants purchase exercisable shares | 9,102,141 | 9,102,141 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant exercisable price per share | $ / shares | $ 0.66 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share issuance costs | $ (279,352) | $ (219,459) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options vest six months from the date of grant | Stock option | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options vest six months from the date of grant | Employee stock option | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options vest six months from the date of grant | Director | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options vest twelve months from the date of grant | Stock option | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options vest twelve months from the date of grant | Employee stock option | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options vest twelve months from the date of grant | Director | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options vest eighteen months from the date of grant | Stock option | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options vest eighteen months from the date of grant | Employee stock option | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options vest eighteen months from the date of grant | Director | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options vest twenty-four months from the date of grant | Stock option | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options vest twenty-four months from the date of grant | Employee stock option | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options vest twenty-four months from the date of grant | Director | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Private placement | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Private placements shares issued | 16,000,000 | 16,000,000 | 637,393 | 637,393 | 68,181 | 68,181 | 757,666 | 757,666 | 8,276,294 | 8,276,294 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subscription receipts per price | (per share) | $ 0.40 | $ 0.30 | $ 0.66 | $ 0.52 | $ 0.66 | $ 0.52 | $ 1.25 | $ 0.93 | $ 0.66 | $ 0.52 | $ 0.66 | $ 0.52 | ||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from issuance of private placement | $ 6,400,000 | $ 4,883,840 | $ 420,680 | $ 330,486 | $ 45,000 | $ 35,169 | $ 14,726,130 | $ 10,956,241 | $ 500,060 | $ 390,822 | $ 5,462,354 | $ 4,270,017 | ||||||||||||||||||||||||||||||||||||||||||||||
Maturity Period | 48 months | 48 months | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash paid for finder fees | $ | $ 152,720 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock shares issued | 322,581 | 322,581 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock value | $ | $ 221,691 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant exercisable price per share | $ / shares | $ 0.50 | $ 0.90 | $ 0.90 | $ 1.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant exercisable period | 24 months | 24 months | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ | $ 152,720 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of units issued under private placement | 11,780,904 | 11,780,904 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description for the units issued under private placement | Each unit is comprised of one common share and one common share purchase warrant. | Each unit is comprised of one common share and one common share purchase warrant. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description for the exercise of warrants | Each warrant entitles the holder to acquire one common share of the Company at an exercise price of CAD$1.50 for a period of 48 months following the closing date, subject to adjustment in certain events. | Each warrant entitles the holder to acquire one common share of the Company at an exercise price of CAD$1.50 for a period of 48 months following the closing date, subject to adjustment in certain events. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commission received by the agent under offering | $ 793,938 | $ 589,499 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Private placement | Broker warrant | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturity Period | 48 months | 48 months | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description for the exercise of warrants | Each broker warrant entitles the holder to acquire one unit at an exercise price of CAD$1.25 per unit for a period of 48 months following the closing date. | Each broker warrant entitles the holder to acquire one unit at an exercise price of CAD$1.25 per unit for a period of 48 months following the closing date. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants issued as additional consideration | 635,150 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants price per share | $ / shares | $ 1.25 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate Finance Fee | $ 84,750 | $ 63,774 |
Segmented Information and Maj_2
Segmented Information and Major Customers (Details Narrative) | 6 Months Ended | 12 Months Ended | |
Jan. 31, 2020USD ($)Customer | Jul. 31, 2019Customer | Jul. 31, 2018Customer | |
Segment Reporting [Abstract] | |||
Number of costumer | Customer | 1 | 1 | 3 |
Percentage of revenues from major customer | over 10% | ||
Percentage of revenues from major customer | 10.00% | 12.00% | 37.00% |
Amount due from major customer | $ | $ 123,667 |
Supplemental Disclosures with_3
Supplemental Disclosures with Respect to Cash Flows (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jan. 31, 2020 | Jan. 31, 2019 | Jan. 31, 2020 | Jan. 31, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | |
Supplemental Disclosures With Respect To Cash Flows Details Abstract | ||||||
Cash paid during the period for interest | $ 0 | $ 0 | $ 0 | $ 0 | $ 392,623 | $ 0 |
Cash paid during the period for income taxes | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Supplemental Disclosures with_4
Supplemental Disclosures with Respect to Cash Flows (Details Narrative) - USD ($) | Aug. 12, 2019 | Nov. 30, 2019 | Jan. 31, 2020 | Oct. 31, 2019 | Jan. 31, 2020 |
Supplemental Disclosures With Respect To Cash Flows [Line Items] | |||||
Loss on settlement | $ (239,328) | $ (239,328) | |||
Amount related to issued common shares | $ 2,752,782 | ||||
Discount rate for present value of future lease payments | 12.00% | 12.00% | |||
NMG Acquisition | |||||
Supplemental Disclosures With Respect To Cash Flows [Line Items] | |||||
Escrow release | $ 17,786 | ||||
Adoption of ASC 842 | |||||
Supplemental Disclosures With Respect To Cash Flows [Line Items] | |||||
Leases liabilities | $ 1,187,116 | $ 1,187,116 | |||
Discount rate for present value of future lease payments | 12.00% | 12.00% | |||
Purchase Agreement, NMG SD Settlement Agreement and the Lease Assignment Agreement | |||||
Supplemental Disclosures With Respect To Cash Flows [Line Items] | |||||
Amount related to issued common shares | $ 2,752,782 | ||||
Number of common shares issued | 4,337,111 | ||||
Purchase Agreement, NMG SD Settlement Agreement and the Lease Assignment Agreement | NMG Acquisition | |||||
Supplemental Disclosures With Respect To Cash Flows [Line Items] | |||||
Settlement of aggregate receivable amount | $ 590,328 | ||||
Accounts receivable from future sale of Inventory | 90,315 | ||||
Future credit towards the contribution fee | 25,000 | ||||
Future credit towards production equipment | 235,685 | ||||
Loss on settlement | $ (239,328) |
Business Acquisition (Details)
Business Acquisition (Details) - USD ($) | Jan. 31, 2020 | Jul. 31, 2019 | Jan. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 |
Purchase consideration | |||||
Cash considerations | $ 3,374,079 | $ 9,004,716 | $ 2,718,739 | $ 324,837 | $ 366,584 |
Promissory notes issued | 0 | 2,175,000 | $ 0 | ||
Goodwill | 2,635,721 | 2,635,721 | 2,635,721 | ||
Liabilities assumed: | |||||
Amounts receivable | 1,094,449 | 939,909 | 632,477 | ||
Inventory (Note 5) | 1,522,260 | 1,390,419 | 953,417 | ||
Property and equipment | $ 4,676,499 | 2,694,500 | $ 2,615,898 | ||
NMG [Member] | |||||
Purchase consideration | |||||
Share considerations, net of transaction costs | 6,143,326 | ||||
Cash considerations | 2,309,000 | ||||
Promissory notes issued | 1,887,277 | ||||
TOTAL | 10,339,603 | ||||
Goodwill | 2,635,721 | ||||
Liabilities assumed: | |||||
Cash | 260,842 | ||||
Amounts receivable | 253,697 | ||||
Prepaid expenses | 44,552 | ||||
Inventory (Note 5) | 498,680 | ||||
Property and equipment | 1,951,696 | ||||
Brand | 247,000 | ||||
Licenses | 7,925,000 | ||||
Trade payable and accrued liabilities | (367,385) | ||||
Loans payable | (250,000) | ||||
Deferred tax liability | (2,860,200) | ||||
Net identifiable assets acquired | 7,703,882 | ||||
TOTAL | $ 10,339,603 |
Business Acquisition (Details N
Business Acquisition (Details Narrative) - USD ($) | Nov. 14, 2017 | Nov. 13, 2017 | Nov. 13, 2017 | Jan. 31, 2019 | Jul. 31, 2019 | Jul. 16, 2019 | Nov. 30, 2018 |
Business Acquisition [Line Items] | |||||||
Description of subscription receipts under concurrent financing | The Company completed a concurrent financing consisting of 9,102,141 subscription receipts of the Company (the “Subscription Receipts”), at an issue price of CAD$0.66 per Subscription Receipt, with each Subscription Receipt being automatically converted, at no additional cost to the subscriber, upon the completion of the Acquisition for one common share and one share purchase warrant exercisable at a price of CAD$0.90 for a period of 24 months from the date of issuance. Each warrant is subject to acceleration provisions following the six-month anniversary of the date of closing, if the closing trading price of the common shares is equal to or greater than CAD$1.20 for seven consecutive trading days, at which time the Company may accelerate the expiry date of the warrants by issuing a press release announcing the reduced warrant term whereupon the warrant will expire 21 calendar days after the date of such press release | ||||||
Repayment of loan | $ 1,175,000 | $ 6,656,444 | |||||
Class of warrants issue price | 7,333 | 3,206,160 | |||||
Assignment Agreement | Toro Pacific Management Inc. [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Description of subscription receipts under concurrent financing | The Assignment Agreement was amended, whereby the Company would issue the 1,000,000 common shares as follows: a. 470,000 common shares to Benjamin Rutledge upon closing of the Acquisition (issued); b. 60,000 common shares to Chris Hunt upon closing of the Acquisition (issued); c. 470,000 common shares to the Transferor according to the following schedule: · 1/10 of the Transferor's shares upon closing of the Acquisition (issued); · 1/6 of the remaining Transferor's shares 6 months after closing the Acquisition (issued); · 1/5 of the remaining Transferor's shares 12 months after closing the Acquisition; · 1/4 of the remaining Transferor's shares 18 months after closing the Acquisition; · 1/3 of the remaining Transferor's shares 24 months after closing the Acquisition; · 1/2 of the remaining Transferor's shares 30 months after closing the Acquisition; and · the remaining Transferor's shares 36 months after closing the Acquisition. | ||||||
Nevada Medical Group LLC (NMG) | |||||||
Business Acquisition [Line Items] | |||||||
Number of shares issued under acquisition | 16,000,000 | ||||||
Fair value of number of shares issued under acquisition | $ 5,386,155 | ||||||
Present value of promissory note | 1,887,863 | ||||||
Promissory note issued gross | 2,175,000 | ||||||
Cash considerations | 2,309,000 | ||||||
Transaction costs | $ 330,324 | ||||||
Nevada Medical Group LLC (NMG) | Assignment Agreement | |||||||
Business Acquisition [Line Items] | |||||||
Number of shares issued under acquisition | 1,000,000 | ||||||
Remaining number of shares issued under acquisition | 423,000 | ||||||
Remaining fair value of number of shares issued under acquisition | $ 135,202 | $ 135,202 | |||||
Nevada Medical Group LLC (NMG) | Benjamin Rutledge | Assignment Agreement | |||||||
Business Acquisition [Line Items] | |||||||
Number of shares issued under acquisition | 470,000 | ||||||
Nevada Medical Group LLC (NMG) | Chris Hunt | |||||||
Business Acquisition [Line Items] | |||||||
Number of shares issued under acquisition | 60,000 | ||||||
Fair value of number of shares issued under acquisition | $ 20,192 | ||||||
Nevada Medical Group LLC (NMG) | Chris Hunt | Assignment Agreement | |||||||
Business Acquisition [Line Items] | |||||||
Number of shares issued under acquisition | 60,000 | ||||||
Nevada Medical Group LLC (NMG) | Toro Pacific Management Inc. [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Number of shares issued under acquisition | 47,000 | ||||||
Fair value of number of shares issued under acquisition | $ 15,816 | ||||||
Nevada Medical Group LLC (NMG) | Toro Pacific Management Inc. [Member] | Assignment Agreement | |||||||
Business Acquisition [Line Items] | |||||||
Number of shares issued under acquisition | 470,000 | ||||||
Nevada Medical Group LLC (NMG) | TI Nevada | |||||||
Business Acquisition [Line Items] | |||||||
Number of shares issued under acquisition | 2,037,879 | ||||||
Fair value of number of shares issued under acquisition | $ 685,788 | ||||||
Nevada Medical Group LLC (NMG) | Charles Fox | |||||||
Business Acquisition [Line Items] | |||||||
Number of shares issued under acquisition | 212,121 | ||||||
Fair value of number of shares issued under acquisition | $ 71,383 | ||||||
NMG Acquisition | Benjamin Rutledge | |||||||
Business Acquisition [Line Items] | |||||||
Number of shares issued under acquisition | 470,000 | ||||||
Fair value of number of shares issued under acquisition | $ 159,114 |
Commitments (Details Narrative)
Commitments (Details Narrative) | Jun. 13, 2019USD ($) | Mar. 08, 2019USD ($) | Nov. 14, 2017CAD ($) | Nov. 10, 2017USD ($) | Oct. 30, 2018USD ($) | Jan. 31, 2020USD ($) | Nov. 25, 2019USD ($) | Aug. 21, 2019CAD ($) | Aug. 21, 2019USD ($) | Apr. 09, 2019USD ($) | Nov. 14, 2017USD ($) | Oct. 25, 2017USD ($) |
NMG [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Description for lease option to extend | The Company has four options to extend the lease and each option is for five years | |||||||||||
Periodic rent payable, amount | $ 12,500 | |||||||||||
Increased periodic rent payable amount | $ 12,875 | |||||||||||
Percentage of increased minimum monthly rent | 2.00% | |||||||||||
Sunset Corporate Drive | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Periodic rent payable, amount | $ 7,156 | |||||||||||
President and the Interim Chief Executive Officer | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Periodic rent payable, amount | $ 12,500 | |||||||||||
Chief Financial Officer | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Periodic rent payable, amount | $ 10,000 | |||||||||||
Chief Operating Officer | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Periodic rent payable, amount | 15,000 | |||||||||||
Corporate Secretary | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Periodic rent payable, amount | $ 7,500 | |||||||||||
President of NMG and director | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Periodic rent payable, amount | $ 25,000 | 16,666 | ||||||||||
Former Chief Executive Officer and an advisor | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Periodic rent payable, amount | $ 12,500 | |||||||||||
Officer | TI Nevada | Consulting agreement | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Periodic consulting fees payable | $ 16,667 | |||||||||||
Term of contract | 3 years | |||||||||||
Frequency of periodic payment | month | |||||||||||
Investment Agreement | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Frequency of periodic payment | monthly | monthly | ||||||||||
Periodic consulting fees payable | $ 10,000 | $ 12,000 | ||||||||||
Increased in periodic payments of consulting fees | $ 16,500 | |||||||||||
Term of contract | 5 years | |||||||||||
Ownership percentage for increased in monthly services fee | 10.00% | |||||||||||
Carroll Road | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Description for lease option to extend | the Company has three options to extend the lease and each option is for five years | |||||||||||
Periodic rent payable, amount | $ 15,000 | |||||||||||
Term of lease | 5 years | |||||||||||
Carroll Road | Minimum | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Percentage of increased minimum monthly rent | 1.00% | |||||||||||
Carroll Road | Maximum | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Percentage of increased minimum monthly rent | 6.00% | |||||||||||
E Anaheim St | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Periodic rent payable, amount | $ 6,636.40 | |||||||||||
Term of lease | 5 years | |||||||||||
Percentage of increased minimum monthly rent | 5.00% | |||||||||||
Monthly rent and common area expenses | $ 8,000 | |||||||||||
NMG Ohio | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Periodic rent payable, amount | $ 4,200 | |||||||||||
Term of lease | 5 years | |||||||||||
Toro Pacific Management Inc. [Member] | Officer | Consulting agreement | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Periodic consulting fees payable | $ 10,000 |
Investment Agreement (Details N
Investment Agreement (Details Narrative) | Sep. 12, 2019CAD ($) | Sep. 12, 2019USD ($) | Jul. 16, 2019CAD ($)shares | Jul. 16, 2019USD ($)shares | Jan. 31, 2019USD ($)shares | Nov. 30, 2018CAD ($)shares | Nov. 30, 2018USD ($)shares | Nov. 29, 2018shares | Oct. 30, 2018CAD ($)shares | Jan. 31, 2020USD ($) | Jan. 31, 2019USD ($) | Jan. 31, 2020USD ($) | Jan. 31, 2019USD ($) | Jul. 31, 2019USD ($) | Jul. 31, 2018USD ($) | Oct. 30, 2018USD ($) |
Schedule of Investments [Line Items] | ||||||||||||||||
Common stock shares issued | shares | 7,333 | 7,333 | 3,206,160 | 3,206,160 | ||||||||||||
Proceeds from issuance of common stock | $ 25,682 | $ 19,450 | $ 6,600 | $ 5,057 | $ 1,603,080 | $ 1,205,196 | $ 90,840 | $ 5,818,300 | $ 21,561,568 | $ 4,806,025 | ||||||
Advisory fee paid | $ | $ 36,000 | $ 43,000 | $ 72,000 | $ 43,000 | ||||||||||||
Australis | ||||||||||||||||
Schedule of Investments [Line Items] | ||||||||||||||||
Common stock shares issued | shares | 1,105,083 | |||||||||||||||
Investment Agreement | Australis | ||||||||||||||||
Schedule of Investments [Line Items] | ||||||||||||||||
Number of units issued for unsecured convertible debentures | shares | 16,000,000 | |||||||||||||||
Unsecured convertible debentures | $ | $ 1,600,000 | |||||||||||||||
Interest rate per annum | 8.00% | 8.00% | ||||||||||||||
Ownership percentage | 35.783% | 35.783% | 35.783% | |||||||||||||
Percentage of issued and outstanding common shares | 10.00% | 10.00% | ||||||||||||||
Common stock shares issued | shares | 1,768,545 | |||||||||||||||
Proceeds from issuance of common stock | $ | $ 787,123 | |||||||||||||||
Commercial advisory agreement | Australis Capital (Nevada) Inc. | ||||||||||||||||
Schedule of Investments [Line Items] | ||||||||||||||||
Periodic consulting fees payable per month | $ | $ 10,000 | |||||||||||||||
Term of contract | 5 years |
Investment in NMG Ohio LLC (Det
Investment in NMG Ohio LLC (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jan. 31, 2020 | Jan. 31, 2019 | Jan. 31, 2020 | Jan. 31, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | ||||||
Opening balance | $ 3,465,902 | $ 77,600 | $ 77,600 | |||
Foreign exchange | $ 1,914 | $ (24,393) | (81,006) | (95,949) | (241,862) | $ (193,959) |
Total | 3,573,314 | 3,573,314 | 3,465,902 | 77,600 | ||
NMG Ohio LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Opening balance | 3,465,902 | $ 77,600 | 77,600 | |||
Acquisition costs: Common shares issued to vendors at fair value | 0 | 1,448,805 | ||||
Acquisition costs: Cash payments to vendors | 0 | 1,181,250 | ||||
Dispensary build-out related costs | 20,429 | 573,633 | ||||
License fees | 0 | 100,000 | ||||
Funds transferred | 12,500 | 0 | ||||
Funds repaid | 107,429 | 0 | ||||
Equity pickup | 191,550 | 56,466 | ||||
Foreign exchange | (9,638) | 28,148 | ||||
Total | $ 3,573,314 | $ 3,573,314 | $ 3,465,902 | $ 77,600 |
Investment in NMG Ohio LLC (D_2
Investment in NMG Ohio LLC (Details 1) - NMG Ohio LLC | 6 Months Ended |
Jan. 31, 2020USD ($) | |
Schedule of Equity Method Investments [Line Items] | |
Current assets | $ 862,653 |
Non-current assets | 877,993 |
Total assets | 1,740,646 |
Current liabilities | 921,657 |
Non-current liabilities | 0 |
Total liabilities | 921,657 |
Revenues | 2,095,008 |
Gross profit | 910,349 |
Net income | 638,500 |
Net income attributable to the Company | $ 191,550 |
Investment in NMG Ohio LLC (D_3
Investment in NMG Ohio LLC (Details Narrative) - NMG Ohio LLC - USD ($) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2020 | Jul. 31, 2019 | |
Percentage of voting interest acquired | 100.00% | |
Purchase of remaining ownership interest percentage | 70.00% | |
Consideration in cash to be paid for the acquisition of remaining interest | $ 1,575,000 | |
Common stock shares issued | 2,380,398 | |
Share issue costs (in shares) | 3,173,864 | |
Common stock shares fair value | $ 1,448,805 | |
Cash payments | $ 1,181,250 | |
Remaining cash payments totaling | $ 393,750 | |
Remaining issuance of common stock shares | 793,466 | |
Ownership percentage | 30.00% | 30.00% |
Revenues | $ 2,095,008 | |
Expenses | 1,456,508 | |
Net income | 638,500 | |
Equity pickup | $ 191,550 |
Investment in and advances to_3
Investment in and advances to GLDH (Details) - USD ($) | Jan. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2018 |
Long Term Investments [Roll Forward] | |||
Note receivable | $ 0 | $ 5,200,000 | |
Share issuances | 2,750,000 | 0 | |
Interest income accrued on the Note | 520,000 | 693,333 | |
Advances for working capital | 1,285,960 | 666,876 | |
Lease Assignment Agreement payment | 0 | 783,765 | |
Foreign exchange | 42,617 | 29,062 | |
Ending balance | $ 11,886,379 | $ 7,373,036 | $ 0 |
Investment in and advances to_4
Investment in and advances to GLDH (Details Narrative) | 1 Months Ended | ||||||||||||
Nov. 28, 2019USD ($)shares | Jul. 16, 2019shares | Nov. 30, 2018shares | Nov. 29, 2018shares | Nov. 28, 2018CAD ($)$ / sharesshares | Nov. 28, 2018USD ($)shares | Nov. 14, 2019$ / shares | Nov. 04, 2019$ / shares | Sep. 12, 2019$ / shares | Aug. 12, 2019$ / shares | Jul. 03, 2019USD ($) | May 28, 2019$ / shares | Nov. 28, 2018USD ($) | |
Schedule of Investments [Line Items] | |||||||||||||
Maximum number of common shares | 7,333 | 3,206,160 | |||||||||||
Warrants price per share | $ / shares | $ 0.90 | $ 0.90 | $ 0.66 | $ 0.66 | |||||||||
GLDH | |||||||||||||
Schedule of Investments [Line Items] | |||||||||||||
Interest rate per annum | 12.00% | ||||||||||||
Loan, face amount | $ | $ 200,000 | ||||||||||||
David Barakett | GLDH | Binding interim agreement | |||||||||||||
Schedule of Investments [Line Items] | |||||||||||||
Percentage of issued and outstanding common shares | 100.00% | ||||||||||||
Common shares of VWAP | $ / shares | $ 0.7439 | ||||||||||||
USD/CAD exchange rate | 1.3296 | ||||||||||||
Maximum number of common shares | 11,255,899 | 11,255,899 | |||||||||||
Maximum consideration | $ 8,373,263 | $ 6,297,580 | |||||||||||
Senior secured convertible note | $ | $ 5,200,000 | ||||||||||||
Interest rate per annum | 20.00% | ||||||||||||
David Barakett | GLDH | Binding interim agreement | Eligibility condition one | |||||||||||||
Schedule of Investments [Line Items] | |||||||||||||
Issuance of Earn Out shares | 5,627,950 | 5,627,950 | |||||||||||
Issuance of Earn Out shares, percentage | 50.00% | 50.00% | |||||||||||
David Barakett | GLDH | Binding interim agreement | Eligibility condition two | |||||||||||||
Schedule of Investments [Line Items] | |||||||||||||
Revenue | $ | $ 3,300,000 | ||||||||||||
Issuance of Earn Out shares | 4,502,360 | 4,502,360 | |||||||||||
Issuance of Earn Out shares, percentage | 40.00% | 40.00% | |||||||||||
David Barakett | GLDH | Binding interim agreement | Eligibility condition three | |||||||||||||
Schedule of Investments [Line Items] | |||||||||||||
Issuance of Earn Out shares | 1,125,589 | 1,125,589 | |||||||||||
Issuance of Earn Out shares, percentage | 10.00% | 10.00% | |||||||||||
Australis | |||||||||||||
Schedule of Investments [Line Items] | |||||||||||||
Maximum number of common shares | 1,105,083 | ||||||||||||
Warrants price per share | $ / shares | $ 0.50 | ||||||||||||
Australis | Loan agreement | |||||||||||||
Schedule of Investments [Line Items] | |||||||||||||
USD/CAD exchange rate | 0.7518 | ||||||||||||
Loan, face amount | $ | $ 4,000,000 | ||||||||||||
Warrants exercised | 3,206,160 | ||||||||||||
Warrants price per share | $ / shares | $ 0.50 | ||||||||||||
Aggregate proceeds of common shares and warrants | $ | $ 1,200,000 |
Investment in and advances to_5
Investment in and advances to GLDH (Details Narrative 1) | Jul. 03, 2019USD ($)shares | Jul. 31, 2019USD ($) | Jul. 03, 2019$ / shares | Jul. 03, 2019USD ($) |
Consulting agreement | David Barakett | ||||
Schedule of Investments [Line Items] | ||||
Payment of consulting and advisory services | $ 200,000 | $ 50,000 | ||
Payment of consulting and advisory services in subsequent to year end | $ 90,000 | |||
GLDH | ||||
Schedule of Investments [Line Items] | ||||
Loan, face amount | $ 200,000 | |||
Interest rate per annum | 12.00% | |||
Forgive operating loan amount | 800,000 | |||
GLDH | Settlement Agreement | GLDH's San Diego, California dispensary | ||||
Schedule of Investments [Line Items] | ||||
Ownership percentage | 60.00% | |||
GLDH | Settlement Agreement | Condition one | ||||
Schedule of Investments [Line Items] | ||||
Amount to be paid in common shares | $ 500,000 | |||
Maximum number of common shares | shares | 624,380 | |||
GLDH | Settlement Agreement | Condition Two | David Barakett | ||||
Schedule of Investments [Line Items] | ||||
Amount to be paid in common shares | $ 750,000 | |||
Share price per share | $ / shares | $ 0.7439 | |||
Maximum number of common shares | shares | 1,340,502 | |||
Start-up costs percentage | 40.00% | |||
GLDH | Settlement Agreement | Condition Three | David Barakett | ||||
Schedule of Investments [Line Items] | ||||
Amount to be paid in common shares | $ 750,000 | |||
Share price per share | $ / shares | 0.7439 | |||
Maximum number of common shares | shares | 1,340,502 | |||
Start-up costs percentage | 40.00% | |||
GLDH | Lease Assignment Agreement | ||||
Schedule of Investments [Line Items] | ||||
Cash and share payments | $ 2,283,765 | |||
Interest rate per annum | 5.00% | |||
GLDH | Lease Assignment Agreement | San Diego operation | ||||
Schedule of Investments [Line Items] | ||||
Ownership percentage | 60.00% | |||
GLDH | Lease Assignment Agreement | Condition one | ||||
Schedule of Investments [Line Items] | ||||
Amount payable in common shares | $ 750,000 | |||
Maximum number of common shares | shares | 1,031,725 | |||
GLDH | Lease Assignment Agreement | Condition Two | ||||
Schedule of Investments [Line Items] | ||||
Amount payable in cash | $ 783,765 | |||
GLDH | Lease Assignment Agreement | Condition Three | ||||
Schedule of Investments [Line Items] | ||||
Amount payable in cash | 750,000 | |||
GLDH | Purchase Agreement | ||||
Schedule of Investments [Line Items] | ||||
Investment purchase price | 6,700,000 | |||
Note to be applied towards the Purchase Price | $ 5,200,000 | |||
GLDH | Purchase Agreement | GLDH's Long Beach, California dispensary | ||||
Schedule of Investments [Line Items] | ||||
Ownership percentage | 100.00% | |||
GLDH | Purchase Agreement | Condition one | ||||
Schedule of Investments [Line Items] | ||||
Amount to be paid in common shares | $ 1,500,000 | |||
Share price per share | $ / shares | $ 0.7439 | |||
Maximum number of common shares | shares | 2,681,006 | |||
Licensor | ||||
Schedule of Investments [Line Items] | ||||
Licensor grants | 2 years | |||
Payment to Licensor of gross receipts from sales | 3.00% |
Other Agreements (Detail Textua
Other Agreements (Detail Textuals) - USD ($) | Jun. 06, 2019 | Nov. 30, 2019 | Jan. 31, 2020 | Jan. 31, 2020 |
Other Agreement [Line Items] | ||||
Loss on settlement | $ (239,328) | $ (239,328) | ||
Management Agreement | Satellites Dip, LLC, ("SD") | ||||
Other Agreement [Line Items] | ||||
Management fee description | NMG CC will be paid a management fee of 30% of Net Profits or $10,000 per month, whichever is greater | |||
Loan, face amount | $ 250,000 | |||
Debt due date | Jun. 6, 2019 | |||
Interest rate per annum | 12.00% | |||
Settlement Agreement | ||||
Other Agreement [Line Items] | ||||
Percentage of proceeds received from the sale of inventory | 100.00% | |||
Brand Director Agreement | ||||
Other Agreement [Line Items] | ||||
Contribution fee | $ 5,000 | |||
License Agreement | ||||
Other Agreement [Line Items] | ||||
Monthly fee payable on a quarterly basis | 100 | |||
Equipment Purchase Agreement | ||||
Other Agreement [Line Items] | ||||
Equipment purchase price | $ 235,685 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jan. 31, 2020 | Jan. 31, 2019 | Jan. 31, 2020 | Jan. 31, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | |
Income Taxes | ||||||
Net loss for the period | $ (1,235,352) | $ (1,664,285) | $ (2,132,149) | $ (1,752,526) | $ (3,752,751) | $ (2,685,782) |
Federal and state income tax rates | 21.00% | 26.45% | ||||
Expected income tax recovery | $ (788,078) | $ (710,389) | ||||
Permanent differences | 1,342,979 | 528,510 | ||||
Change in estimates and others | 120,554 | 225,902 | ||||
Change in tax rates | 178,289 | (725,324) | ||||
Change in benefit not recognized | (853,744) | (223,421) | ||||
Total income tax recovery | $ 0 | $ (904,722) |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Deferred income tax assets | ||
Net income tax operating loss carry forward | $ 150,000 | $ 985,290 |
Deferred tax allowance | (150,000) | $ (985,290) |
Deferred income tax liability | ||
Brand and License | $ 1,716,120 |
Lease Liabilities (Details)
Lease Liabilities (Details) | 6 Months Ended |
Jan. 31, 2020USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 100,871 |
Right-of-use assets obtaining in exchange for lease obligations: | |
Operating leases | $ 1,187,116 |
Weighted-average remaining lease term - operating leases | 7 years 2 months 8 days |
Weighted-average discount rate - operating leases | 12.00% |
Lease Liabilities (Details 1)
Lease Liabilities (Details 1) | 6 Months Ended |
Jan. 31, 2020USD ($) | |
Leases [Abstract] | |
2020 | $ 109,631 |
2021 | 223,398 |
2022 | 240,530 |
2023 | 248,403 |
2024 | 254,438 |
2025 | 257,827 |
2026 | 176,312 |
2027 | 179,838 |
2028 | 60,340 |
Total lease payments | 1,750,717 |
Less imputed interest | (649,019) |
Total | 1,101,698 |
Less current portion | 195,983 |
Long term portion | $ 905,715 |
Lease Liabilities (Details Narr
Lease Liabilities (Details Narrative) - USD ($) | Apr. 09, 2019 | Nov. 10, 2017 | Jan. 31, 2020 |
Lessee, Lease, Description [Line Items] | |||
Operating lease, right-of-use asset and increase in lease liabilities | $ 1,187,116 | ||
Discount rate for present value of future lease payments | 12.00% | ||
Lease expense | $ 100,871 | ||
NMG | |||
Lessee, Lease, Description [Line Items] | |||
Description for lease option to extend | The Company has one option to extend the lease for an additional three-year term | The Company has four options to extend the lease and each option is for five years. | |
Periodic rent payable, amount | $ 6,026 | $ 12,500 | |
Frequency of periodic payment | monthly | monthly | |
Common area expenses | 1,129 | ||
Monthly rent and common area expenses | $ 7,156 | $ 12,875 | |
Percentage of increased minimum monthly rent | 2.00% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Oct. 04, 2019CAD ($)$ / sharesshares | Oct. 04, 2019USD ($) | Oct. 01, 2019$ / sharesshares | Sep. 12, 2019CAD ($)$ / sharesshares | Sep. 12, 2019USD ($) | Aug. 12, 2019CAD ($)$ / sharesshares | Aug. 12, 2019USD ($) | Dec. 11, 2018shares | Mar. 31, 2020$ / sharesshares | Aug. 21, 2019$ / sharesshares | Jul. 16, 2019CAD ($) | Jul. 16, 2019USD ($) | Nov. 30, 2018CAD ($) | Nov. 30, 2018USD ($) | Nov. 24, 2017shares | Jan. 31, 2020USD ($)shares | Jan. 31, 2019USD ($) | Jul. 31, 2019USD ($)shares | Jul. 31, 2018USD ($)shares | Nov. 14, 2019$ / shares | Nov. 04, 2019$ / shares | Oct. 16, 2019$ / shares |
Subsequent Event [Line Items] | ||||||||||||||||||||||
Warrants price per share | $ / shares | $ 0.66 | $ 0.66 | $ 0.90 | $ 0.90 | ||||||||||||||||||
Proceeds from issuance of common stock | $ 25,682 | $ 19,450 | $ 6,600 | $ 5,057 | $ 1,603,080 | $ 1,205,196 | $ 90,840 | $ 5,818,300 | $ 21,561,568 | $ 4,806,025 | ||||||||||||
Common stock share issued | 101,853,217 | 97,279,891 | 47,774,817 | |||||||||||||||||||
Stock option | ||||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||||
Stock options granted | 250,000 | 2,050,000 | 3,850,000 | 3,300,000 | 2,050,000 | 4,025,000 | ||||||||||||||||
Subsequent Events | Stock Options | ||||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||||
Stock options granted | 250,000 | 2,850,000 | ||||||||||||||||||||
Maturity Period | 5 years | 5 years | ||||||||||||||||||||
Warrants price per share | $ / shares | $ 0.93 | $ 0.88 | $ 0.88 | |||||||||||||||||||
Option vesting description | The options are subject to vesting provisions such that 25% of the options vest six months from the date of grant, 25% of the options vest 12 months from the date of grant, 25% of the options vest eighteen months from the date of grant and 25% of the options vest twenty-four months from the date of grant. | The options are subject to vesting provisions such that 25% of the options vest six months from the date of grant, 25% of the options vest twelve months from the date of grant, 25% of the options vest eighteen months from the date of grant and 25% of the options vest twenty-four months from the date of grant. | ||||||||||||||||||||
Expiry date | 1 October 2024 | 21 August 2024 | ||||||||||||||||||||
Subsequent Events | NMG SD Settlement Agreement | ||||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||||
Common stock share issued | 4,337,111 | |||||||||||||||||||||
Subsequent Events | Share purchase warrants and brokers' warrants | ||||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||||
Warrants price per share | $ / shares | $ 0.90 | $ 0.66 | $ 0.66 | |||||||||||||||||||
Proceeds from issuance of common stock | $ 20,454 | $ 15,359 | $ 25,682 | $ 19,449 | $ 53,850 | $ 40,765 | ||||||||||||||||
Common stock share issued | 22,727 | 38,912 | 81,591 | |||||||||||||||||||
Warrant exercised | 38,912 | 81,591 | ||||||||||||||||||||
Subsequent Events | Stock option | ||||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||||
Stock options granted | 250,000 | |||||||||||||||||||||
Warrants price per share | $ / shares | $ 0.405 | |||||||||||||||||||||
Option vesting description | The options are    subject to vesting provisions such that 25% of the options vest six months from the date of grant, 25% of the options vest twelve months from the date of grant, 25% of the options vest eighteen months from the date of grant and 25% of the options vest twenty-four months from the date of grant. |