Cover
Cover - shares | 6 Months Ended | |
Jan. 31, 2024 | Mar. 25, 2024 | |
Cover [Abstract] | ||
Entity Registrant Name | BODY AND MIND INC. | |
Entity Central Index Key | 0001715611 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --07-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jan. 31, 2024 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2024 | |
Entity Ex Transition Period | true | |
Entity Common Stock Shares Outstanding | 147,686,393 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-55940 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 98-1319227 | |
Entity Address Address Line 1 | 750 – 1095 West Pender Street | |
Entity Address City Or Town | Vancouver | |
Entity Address State Or Province | BC | |
Entity Address Country | CA | |
Entity Address Postal Zip Code | V6E 2M6 | |
City Area Code | 800 | |
Local Phone Number | 361-6312 | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jan. 31, 2024 | Jul. 31, 2023 |
Current | ||
Cash | $ 1,455,250 | $ 1,460,311 |
Accounts receivable, net | 34,205 | 27,234 |
Other amounts receivable (Note 5) | 1,850,000 | 0 |
Interest receivable on convertible loan (Note 8) | 330,000 | 294,000 |
Prepaids | 457,328 | 448,341 |
Inventory (Note 7) | 643,675 | 909,875 |
Assets held for sale - discontinued operations (Note 21) | 1,035,798 | 6,290,210 |
Total Current Assets | 5,806,256 | 9,429,971 |
Deposit (Note 6) | 811,941 | 72,617 |
Convertible loan receivable (Note 8) | 1,909,834 | 1,700,411 |
Property and equipment, net (Note 10) | 1,673,861 | 1,827,215 |
Operating lease right-of-use assets (Note 15) | 4,133,426 | 4,329,634 |
Brand and licenses, net (Note 12) | 3,663,101 | 3,849,932 |
TOTAL ASSETS | 17,998,419 | 21,209,780 |
Current | ||
Bank overdraft | 0 | 509,937 |
Accounts payable | 2,908,512 | 2,499,181 |
Accrued liabilities | 480,015 | 462,025 |
Income taxes payable | 4,710,116 | 1,758,267 |
Due to related parties (Note 13) | 75,662 | 93,481 |
Loans payable (Note 14) | 473,724 | 166,001 |
Current portion of operating lease liabilities (Note 15) | 894,280 | 980,265 |
Liabilities related to assets held for sale - discontinued operations (Note 21) | 2,225,705 | 2,260,953 |
Total Current Liabilities | 11,768,014 | 8,730,110 |
Long-term operating lease liabilities (Note 15) | 6,214,830 | 6,801,711 |
Loans payable (Note 14) | 2,300,000 | 7,779,659 |
Convertible debentures - related parties, net (Note 14) | 2,540,225 | 2,480,522 |
Income taxes payable | 4,945,129 | 4,757,387 |
TOTAL LIABILITIES | 27,768,198 | 30,549,389 |
STOCKHOLDERS' DEFICIT | ||
Capital Stock- Statement 3 (Note 16) Authorized: 900,000,000 Common Shares - Par Value $0.0001 Issued and Outstanding: 4,986,000 (31July2023-146,636,974) Common Shares | 14,498 | 14,663 |
Additional paid-in capital | 55,111,504 | 55,057,531 |
Accumulated other comprehensive income | 1,003,574 | 1,482,567 |
Accumulated Deficit | (66,999,195) | (66,829,507) |
TOTAL STOCKHOLDERS' DEFICIT ATTRIBUTABLE TO BAM STOCKHOLDERS | (10,869,619) | (10,274,746) |
NON-CONTROLLING INTEREST | 1,099,840 | 935,137 |
TOTAL STOCKHOLDERS' DEFICIT | (9,769,779) | (9,339,609) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 17,998,419 | $ 21,209,780 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jan. 31, 2024 | Jul. 31, 2023 |
Condensed Consolidated Balance Sheets | ||
Common stock, shares authorized | 900,000,000 | 900,000,000 |
Common stock, par value per share | $ 0.0001 | $ 0.0001 |
Common stock, shares issued | 4,986,000 | 146,636,974 |
Common Stock, shares outstanding | 4,986,000 | 146,636,974 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | |
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) | ||||
Sales | $ 4,428,660 | $ 4,433,607 | $ 8,986,886 | $ 9,066,119 |
Cost of sales | (2,406,264) | (2,662,797) | (4,896,651) | (5,566,615) |
Gross profit | 2,022,396 | 1,770,810 | 4,090,235 | 3,499,504 |
Operating Expenses | ||||
Accounting and legal | 254,128 | 439,724 | 630,401 | 663,669 |
Business development | 0 | 243,098 | 2,759 | 414,258 |
Consulting fees | 289,718 | 162,891 | 459,882 | 403,367 |
Depreciation and amortization | 96,039 | 269,811 | 192,081 | 539,622 |
Lease expense | 179,879 | 287,555 | 507,619 | 497,654 |
Licenses, utilities and office administration | 999,328 | 845,112 | 2,136,276 | 1,693,495 |
Management fees | 141,888 | 132,252 | 230,062 | 203,957 |
Salaries and wages | 905,495 | 823,794 | 1,847,937 | 1,626,168 |
Total Operating Expenses | (2,866,475) | (3,204,237) | (6,007,017) | (6,042,190) |
Net Operating Loss | (844,079) | (1,433,427) | (1,916,782) | (2,542,686) |
Other Income (Expenses) | ||||
Foreign exchange, net | (1,268) | 199 | (1,268) | 2,166 |
Gain on fair value adjustment of convertible loan (Note 8) | 97,269 | 0 | 209,423 | 0 |
Interest expense | (211,597) | (424,480) | (2,071,105) | (805,660) |
Interest income | 18,000 | 18,000 | 36,000 | 36,000 |
Loss on impairment of equipment (Note 10 and 15) | 0 | 0 | (124,649) | 0 |
Other income | 9,215 | 47,959 | 16,003 | 59,688 |
Total Other Income (Expenses) | (88,381) | (358,322) | (1,935,596) | (707,806) |
Net Loss from Continuing Operations Before Income Tax | (932,460) | (1,791,749) | (3,852,378) | (3,250,492) |
Income tax expense | (532,459) | (370,467) | (1,363,515) | (746,946) |
Net Loss from Continuing Operations | (1,464,919) | (2,162,216) | (5,215,893) | (3,997,438) |
Discontinued Operations | ||||
Net loss from discontinued operations, net of tax | (992,264) | (578,832) | (1,136,140) | (1,696,405) |
Gain on sale of NMG OH 1, LLC, net of tax | 0 | 0 | 4,058,665 | 0 |
Gain on sale of NMG, net of tax | 2,288,383 | 0 | 2,288,383 | 0 |
Net Loss | (168,800) | (2,741,048) | (4,985) | (5,693,843) |
Other Comprehensive Loss | ||||
Foreign currency translation adjustment | (109,791) | (10,342) | (478,993) | (80,402) |
Comprehensive Loss | (278,591) | (2,751,390) | (483,978) | (5,774,245) |
Net income (loss) from continuing operations attributable to: | ||||
Body and Mind Inc. | (1,549,954) | (2,267,287) | (5,380,596) | (4,204,555) |
Non-controlling interest | 85,035 | 105,071 | 164,703 | 207,117 |
Net income (loss) attributable to: | ||||
Body and Mind Inc. | (253,835) | (2,846,119) | (169,688) | (5,900,960) |
Non-controlling interest | 85,035 | 105,071 | 164,703 | 207,117 |
Comprehensive income (loss) attributable to: | ||||
Body and Mind Inc. | (363,626) | (2,856,461) | (648,681) | (5,981,362) |
Non-controlling interest | $ 85,035 | $ 105,071 | $ 164,703 | $ 207,117 |
Income (Loss) per share attributable to Body and Mind Inc. - Basic and Diluted | ||||
Continuing Operations | $ (0.01) | $ (0.02) | $ (0.04) | $ (0.03) |
Discontinued Operations | 0.01 | 0 | 0.04 | (0.01) |
Income (Loss) per share attributable to Body and Mind Inc. | $ 0 | $ (0.02) | $ 0 | $ (0.04) |
Weighted Average Number of Shares Outstanding - Continuing operations | ||||
Basic and Diluted | 145,524,361 | 130,841,727 | 146,080,668 | 122,255,170 |
Weighted Average Number of Shares Outstanding - Discontinuing operations | ||||
Basic and Diluted | 145,524,361 | 130,841,727 | 146,080,668 | 122,255,170 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders Equity (unaudited) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Shares To Be Issued | Accumulated other comprehensive loss | Accumulated Deficit | Noncontrolling Interest |
Balance, amount at Jul. 31, 2022 | $ 10,105,419 | $ 11,366 | $ 52,344,573 | $ 1,853,403 | $ 1,224,093 | $ (45,803,026) | $ 475,010 |
Balance, shares at Jul. 31, 2022 | 113,668,613 | ||||||
Stock-based compensation (Note 16) | 32,458 | $ 0 | 32,458 | 0 | 0 | 0 | 0 |
Foreign currency translation adjustment | (70,060) | 0 | 0 | 0 | (70,060) | 0 | 0 |
Net income/loss | (2,952,795) | 0 | 0 | 0 | 0 | (3,054,841) | 102,046 |
Balance, amount at Oct. 31, 2022 | 7,115,022 | $ 11,366 | 52,377,031 | 1,853,403 | 1,154,033 | (48,857,867) | 577,056 |
Balance, shares at Oct. 31, 2022 | 113,668,613 | ||||||
Balance, amount at Jul. 31, 2022 | 10,105,419 | $ 11,366 | 52,344,573 | 1,853,403 | 1,224,093 | (45,803,026) | 475,010 |
Balance, shares at Jul. 31, 2022 | 113,668,613 | ||||||
Foreign currency translation adjustment | (80,402) | ||||||
Balance, amount at Jan. 31, 2023 | 4,977,802 | $ 14,663 | 54,841,309 | 0 | 1,143,691 | (51,703,988) | 682,127 |
Balance, shares at Jan. 31, 2023 | 146,636,974 | ||||||
Balance, amount at Oct. 31, 2022 | 7,115,022 | $ 11,366 | 52,377,031 | 1,853,403 | 1,154,033 | (48,857,867) | 577,056 |
Balance, shares at Oct. 31, 2022 | 113,668,613 | ||||||
Stock-based compensation (Note 16) | 22,013 | $ 0 | 22,013 | 0 | 0 | 0 | 0 |
Foreign currency translation adjustment | (10,342) | 0 | 0 | 0 | (10,342) | 0 | 0 |
Net income/loss | (2,741,050) | $ 0 | 0 | 0 | 0 | (2,846,121) | 105,071 |
Common stock issued in acquisition of Canopy Shares | 16,301,694 | ||||||
Common stock issued in acquisition of Canopy Amount | 0 | $ 1,630 | 1,851,773 | (1,853,403) | 0 | 0 | 0 |
Common stock issued in merger of CraftedPlants NJ Shares | 16,666,667 | ||||||
Common stock issued in merger of CraftedPlants NJ Amount | 0 | $ 1,667 | (1,667) | 0 | 0 | 0 | 0 |
Warrants issued in convertible debentures financing | 592,159 | 0 | 592,159 | 0 | 0 | 0 | 0 |
Balance, amount at Jan. 31, 2023 | 4,977,802 | $ 14,663 | 54,841,309 | 0 | 1,143,691 | (51,703,988) | 682,127 |
Balance, shares at Jan. 31, 2023 | 146,636,974 | ||||||
Balance, amount at Jul. 31, 2023 | (9,339,609) | $ 14,663 | 55,057,531 | 0 | 1,482,567 | (66,829,507) | 935,137 |
Balance, shares at Jul. 31, 2023 | 146,636,974 | ||||||
Stock-based compensation (Note 16) | 35,343 | $ 0 | 35,343 | 0 | 0 | 0 | 0 |
Foreign currency translation adjustment | (369,202) | 0 | 0 | 0 | (369,202) | 0 | 0 |
Net income/loss | 163,815 | 0 | 0 | 0 | 0 | 84,147 | 79,668 |
Balance, amount at Oct. 31, 2023 | (9,509,653) | $ 14,663 | 55,092,874 | 0 | 1,113,365 | (66,745,360) | 1,014,805 |
Balance, shares at Oct. 31, 2023 | 146,636,974 | ||||||
Balance, amount at Jul. 31, 2023 | (9,339,609) | $ 14,663 | 55,057,531 | 0 | 1,482,567 | (66,829,507) | 935,137 |
Balance, shares at Jul. 31, 2023 | 146,636,974 | ||||||
Foreign currency translation adjustment | (478,993) | ||||||
Balance, amount at Jan. 31, 2024 | (9,769,779) | $ 14,498 | 55,111,504 | 0 | 1,003,574 | (66,999,195) | 1,099,840 |
Balance, shares at Jan. 31, 2024 | 144,986,000 | ||||||
Balance, amount at Oct. 31, 2023 | (9,509,653) | $ 14,663 | 55,092,874 | 0 | 1,113,365 | (66,745,360) | 1,014,805 |
Balance, shares at Oct. 31, 2023 | 146,636,974 | ||||||
Stock-based compensation (Note 16) | 18,465 | $ 0 | 18,465 | 0 | 0 | 0 | 0 |
Foreign currency translation adjustment | (109,791) | 0 | 0 | 0 | (109,791) | 0 | 0 |
Net income/loss | (168,800) | $ 0 | 0 | 0 | 0 | (253,835) | 85,035 |
Shares returned to Treasury related to investment in GLDH Shares | (1,650,974) | ||||||
Shares returned to Treasury related to investment in GLDH Amount | 0 | $ (165) | 165 | 0 | 0 | 0 | 0 |
Balance, amount at Jan. 31, 2024 | $ (9,769,779) | $ 14,498 | $ 55,111,504 | $ 0 | $ 1,003,574 | $ (66,999,195) | $ 1,099,840 |
Balance, shares at Jan. 31, 2024 | 144,986,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) | 6 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Operating Activities | ||
Net loss from continuing operations | $ (5,215,893) | $ (3,997,438) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Accrued interest and accretion | 1,246,711 | 290,649 |
Accrued interest income | (36,000) | (36,000) |
Amortization of intangible assets | 186,831 | 514,826 |
Operating lease expenses | 196,208 | 497,656 |
Depreciation | 140,525 | 94,056 |
Gain on fair value adjustment of convertible loan | (209,423) | 0 |
Loss on impairment of equipment | 124,649 | 0 |
Stock-based compensation | 53,808 | 54,471 |
Accounts receivable and prepaids | (1,865,958) | (38,518) |
Inventory | 266,200 | 128,602 |
Deposits | (739,324) | (62) |
Trade payables and accrued liabilities | 427,321 | 73,603 |
Income taxes payable and deferred taxes | 1,361,915 | 1,242,908 |
Due to related parties | (17,819) | (36,917) |
Operating lease liabilities | (672,866) | (537,019) |
Cash used in operating activities from continuing operations | (4,753,115) | (1,749,183) |
Cash provided by (used in) operating activities from discontinued operations | 3,854,293 | (403,120) |
Cash used in operating activities | (898,822) | (2,152,303) |
Investing Activities | ||
Purchase of property and equipment | (111,820) | 0 |
Proceeds from loans payable, net | 306,205 | 548,933 |
Cash provided by investing activities from continuing operations | 194,385 | 548,933 |
Cash provided by (used in) investing activities from discontinued operations | 8,297,983 | (23,508) |
Cash provided by investing activities | 8,492,368 | 525,425 |
Financing Activities | ||
Payment of bank overdraft | (509,937) | 0 |
(Repayments of) proceeds from loans payable, net | (6,665,149) | 10,758 |
Proceeds from convertible debenture financing | 0 | 3,000,000 |
Cash (used in) provided by financing activities | (7,175,086) | 3,010,758 |
Effect of exchange rate changes on cash | (478,993) | (80,402) |
Cash transferred from assets held for sale | 55,472 | 396,474 |
Net (Decrease) Increase in Cash | (5,061) | 1,699,952 |
Cash- Beginning of Period | 1,460,311 | 1,431,697 |
Cash- End of Period | $ 1,455,250 | $ 3,131,649 |
Nature and Continuance of Opera
Nature and Continuance of Operations | 6 Months Ended |
Jan. 31, 2024 | |
Nature and Continuance of Operations | |
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 its 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. 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 NMG Long Beach LLC (“NMG LB”) California, USA 100 % 18 December 2018 NMG San Diego LLC (“NMG SD”) California, USA 60 % 30 January 2019 NMG Ohio LLC (“NMG Ohio”) Ohio, USA 100 % 27 April 2017 NMG OH P1, LLC (“NMG OH P1”) Ohio, USA 100 % 30 January 2020 NMG MI C1 Inc. Michigan, USA 100 % 24 June 2021 NMG MI P1 Inc. Michigan, USA 100 % 24 June 2021 Canopy Monterey Bay, LLC (“Canopy”) California, USA 100 % 30 November 2021 NMG CA P1, LLC (“NMG CA P1”) California, USA 100 % 7 January 2020 NMG CA C1, LLC (“NMG CA C1”) California, USA 100 % 7 October 2020 BaM Body and Mind Dispensary NJ, Inc. (“BAM NJ”) New Jersey, USA 95 % 21 December 2022 NMG TX 1 LLC Texas, USA 100 % 22 March 2023 NMG IL4, LLC (“NMG IL 4”) Illinois, USA 100 % 25 April 2023 These consolidated financial statements include the Company’s wholly-owned subsidiaries of NMG MI 1, Inc. (“NMG MI 1”), NMG OH 1, LLC (“NMG OH 1”) and Nevada Medical Group LLC (“NMG”) up to the date of disposition on June 13, 2023, on October 17, 2023 and on December 15, 2023, respectively (Note 21). Also see the Consolidated Variable Interest Entity accounting policy in Note 3. All inter-company transactions and balances are eliminated upon consolidation. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jan. 31, 2024 | |
Recent Accounting Pronouncements | |
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 2022. The adoption of this amendment did not have a significant impact on the consolidated 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 |
Jan. 31, 2024 | |
Significant Accounting Policies | |
Significant Accounting Policies | 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 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. In the opinion of management, the unaudited consolidated interim financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the Company’s fiscal year 2023 Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on 14 November 2023. Consolidated Variable Interest Entity A variable interest entity (“VIE”) is an entity that either (i) has insufficient equity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the VIE economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. If the Company determines that it has operating power over an entity and the obligation to absorb losses or receive benefits from such entity, the Company consolidates such entity as a VIE in its capacity as the primary beneficiary, and if the Company determines it does not, then the Company does not consolidate the entity. The Company’s involvement constitutes power that is most significant to the entity when it has unconstrained decision-making ability over key operational functions within the entity. Assets recognized as a result of consolidating VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets. Conversely, liabilities recognized as a result of consolidating VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the applicable consolidated VIEs. During the six months ended 31 January 2024, the Company commenced consolidating Big Stone Farms AR 1, LLC (“Big Stone AR 1”) as a VIE, an Arkansas limited liability company. Also see Note 8. Accounts 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 of 31 January 2024 and 31 July 2023, the Company has no allowance for doubtful accounts. Revenue recognition The Company recognizes revenue from product sales when our customers obtain control of our products. This determination is based on the customer specific terms of the arrangement for wholesale operations. Upon transfer of control, the Company has no further performance obligations. All retail sales are considered cash on delivery. 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 is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration. See Note 17 for revenue disaggregation table. Inventory and cost of goods sold Inventory only consists of consumables. The Company values its consumables at the lower of the actual costs or its current estimated market value less costs to sell. Costs incurred during the growing and production process are capitalized as incurred to the extent that cost is less than net realizable value. These costs include materials, labor and manufacturing overhead used in the growing and production processes. The Company capitalizes pre-harvest costs. The Company periodically reviews its inventory for obsolete and potentially impaired items. Any identified slow moving and obsolete items are written down to its net realizable value through a charge to cost of goods sold. As of 31 January 2024 and 31 July 2023, the Company has no allowance for inventory obsolescence. Cost of goods sold includes the costs directly attributable to product sales and includes amounts paid for finished goods, such as flower, edibles and concentrates, packaging and other supplies, fees for services and processing, and allocated overhead, such as allocations of rent, administrative salaries, utilities and related costs. 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 useful life or the term of the lease Intangible assets 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 acquired from NMG had indefinite lives; therefore, no amortization was recognized. The Company’s brands and licenses acquired by NMG SD have a finite life of 10 years, licenses acquired by Canopy have a finite life of 10 years and are amortized over these estimated useful lives on a straight-line basis. Brands acquired by Canopy have indefinite lives. Impairment of long-lived assets The Company reviews long-lived assets, including property and equipment and definite life intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss is recognized when the sum of projected undiscounted cash flows is less than the carrying value of the asset group. The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying value of the asset group. Impairment of indefinite-lived assets Goodwill and indefinite-lived intangible assets are not amortized. Goodwill and indefinite-lived intangible assets are reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value of the reporting unit has been reduced to less than its carrying amount in accordance with the provisions of ASC 350, “Intangibles—Goodwill and Other”. The Company performs an impairment test annually by comparing the fair value of the indefinite-lived intangible assets or reporting unit (for goodwill) with its carrying amount. The measurement of the impairment loss to be recognized is based on the amount by which the carrying amount exceeds the reporting unit’s fair value. 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. The Company recognizes uncertain income tax positions at the largest amount that is more-likely-than-not to be sustained upon examination by the relevant taxing authority. An uncertain income tax position will be recognized if it has less than a 50% likelihood of being sustained. Recognition or measurement is reflected in the period in which the likelihood changes. Any interest and penalties related to unrecognized tax liabilities are presented within income tax expense in the consolidated statements of operations and comprehensive income. Basic and diluted net income (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. As of 31 January 2024, potential common shares are comprised of 16,146,000 outstanding options that are excluded because they are anti-dilutive, 20,800,000 outstanding warrants and 32,682,740 shares issuable on conversion of convertible debentures. 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 of 31 January 2024 and 31 July 2023, 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 in U.S. dollars. The Company’s subsidiaries have a functional currency in 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. The exchange rates used to translate Canadian dollar to U.S. dollar was 0.7464 for monetary assets and liabilities and 0.7381 as an average rate for transactions occurred during the period ended 31 January 2024. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of net loss. 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. The convertible loan receivable was valued using Level 3 inputs. 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, if any, 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 does 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. Non-controlling Interest Non-controlling interests (“NCI”) represent equity interests owned by outside parties. NCI may be initially measured at fair value or at the NCI’s proportionate share of the recognized amounts of the acquiree's identifiable net assets. The choice of measurement is made on a transaction-by-transaction basis. The Company has elected to measure each NCI at its proportionate share of the recognized amounts of the acquiree’s identifiable net assets. The share of net assets attributable to NCI are presented as a component of equity. NCI's share of net income or loss is recognized directly in equity. Total income or loss of subsidiaries is attributed to the shareholders of the Company and to the NCI, even if this results in the NCI having a deficit balance. Assets and liabilities held for sale The Company classifies assets held for sale in accordance with ASC 360, “Property, Plant and Equipment”. When the Company makes the decision to sell an asset or to stop some part of its business, the Company assesses if such assets should be classified as an asset held for sale. To classify as an asset held for sale, the asset or disposal group must meet all of the following conditions: i) management, having the authority to approve the action, commits to a plan to sell the asset, ii) the asset is available for immediate sale in its present condition subject to certain customary terms, iii) an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated, iv) the sale of the asset is probable and the transfer of the asset is expected to qualify for recognition as a completed sale, within one year, subject to certain exceptions, v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current value, and vi) actions required to complete the plan indicate that it is unlikely that the plan will be significantly changed or withdrawn. Assets held for sale are measured at the lower of their carrying amount or fair value less cost to sell (“FVLCTS”). FVLCTS is the amount obtainable from the sale of the asset in an arm’s length transaction, less the costs of disposal. Once classified as held for sale, any depreciation and amortization on an asset cease to be recorded. For long-lived assets or disposals groups that are classified as held for sale but do not meet the criteria for discontinued operations, the assets and liabilities are presented separately on the balance sheet of the initial period in which it is classified as held for sale. The major classes of assets and liabilities classified as held for sale are disclosed in the notes to the consolidated financial statements. |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jan. 31, 2024 | |
Financial Instruments | |
Financial Instruments | 4. Financial Instruments The following table represents the Company’s assets that are measured at fair value as of 31 January 2024 and 31 July 2023: As of 31 January 2024 As of 31 July 2023 Financial assets at fair value Cash $ 1,455,250 $ 1,460,311 Convertible loan receivable 1,909,834 1,700,411 Total financial assets at fair value $ 3,365,084 $ 3,160,722 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 reduces its exposure to credit risk by maintaining its cash with major financial institutions. Credit risk associated with the convertible loans receivable 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 had cash of $ 1,455,250 and a working capital deficit of $5,961,758 at 31 January 2024 and the Company may require additional financing to meet all current and future financial obligations which causes substantial doubt about its ability to continue as a going concern for a period of one year from the issuance of these financial statements. Management believes that the Company has access to capital resources through future payments for assets held for sale as well as future payments for assets held for sale as well as potential public or private issuances of debt or equity securities to further contribute to growth. 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. |
Other amounts receivable
Other amounts receivable | 6 Months Ended |
Jan. 31, 2024 | |
Other amounts receivable | |
Other amounts receivable | 5 . Other amounts receivable Other amounts receivable consisted of the following as of 31 January 2024 and 31 July 2023: 31 January 2024 31 July 2023 NMG disposition receivable (Note 21) $ 1,750,000 $ - NMG OH 1 disposition receivable held in escrow (Note 21) 100,000 - Total $ 1,850,000 $ - |
Deposit
Deposit | 6 Months Ended |
Jan. 31, 2024 | |
Deposit | |
Deposit | 6 . Deposit The Company’s deposit of $811,941 as of 31 January 2024 (31 July 2023 - $72,617) consisted of the prepaid architect fees and construction costs for the transaction with NMG IL 1, LLC (Note 11 and 20). |
Inventory
Inventory | 6 Months Ended |
Jan. 31, 2024 | |
Inventory | |
Inventory | 7 . Inventory 31 January 2024 31 July 2023 Consumables $ 643,675 $ 909,875 Total $ 643,675 $ 909,875 |
Convertible loan receivable
Convertible loan receivable | 6 Months Ended |
Jan. 31, 2024 | |
Convertible loan receivable | |
Convertible loan receivable | 8 . 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. The convertible loan agreement can be extended by either party and the current agreement has a maturity date of 30 March 2024. Under no circumstances the maturity date of the convertible loan agreement shall extend beyond the expiration of the management agreement as described below. 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 management agreement has an expiration of 15 March 2024 and can be mutually extendable. However, as of March 15, 2024, the management agreement between NMG and CCG ended and was not extended (Note 23). 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 preferred units of CCG that carry 66.7% voting interest, subject to approval of the Arkansas Medical Marijuana Commission. The Company had advanced $1,250,000 (31 July 2023 - $1,250,000) at 31 January 2024, and accrued interest income of $18,000 (2023 - $18,000) and $36,000 (2023 - $36,000) for the three and six months ended 31 January 2024, respectively. As of 31 January 2024, total interest receivable was $330,000 (31 July 2023 - $294,000). On or around August 22, 2023, DEP assigned the convertible loan agreement to a related entity, Big Stone AR 1, an Arkansas limited liability company, which is wholly owned by the Company’s Chief Operating Officer and Director, in exchange for an option to purchase the outstanding interests of Big Stone AR 1 for a purchase price of $1.00. Big Stone AR 1 was consolidated as a VIE for the period due to the fact that it was controlled by the Company’s Chief Operating Officer. See Note 3, Consolidated Variable Interest Entity. The terms of the convertible loan agreement remain the same. On or around September 18, 2023, Big Stone AR 1 exercised the conversion feature of the convertible note and CCG members approved certain actions to allow Big Stone AR 1 to become a member of CCG through preferred units, to elect Big Stone AR 1 as the manager of CCG and to amend the operating agreement. The transfer of ownership as a result of conversion of the Convertible Loan Agreement is before the Arkansas regulator. 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 discounted cash flow model for the straight debt portion uses four different scenarios as follows: The Company discounts the principal amount of $1,250,000, monthly interest payment of $6,000 using these four different maturity dates: (1) March 30, 2024, (2) March 30, 2025, (3) March 30, 2026 and (4) March 30, 2027, whereby each scenario is given 25% probability of occurring since the actual conversion date is uncertain. The discount rate used is 22.60%. The assumptions used in the Black-Scholes Option Pricing Model for the conversion option are as follows: (i) equity price of $43,169 per unit calculated as BAM’s portion of the future projected profits, on a per unit basis, discounted using Weighted Average Cost of Capital of 15%; (ii) exercise price of $31,250 per unit as there are 40 units in total, (iii) volatility of 102.825% using similar companies and BAM as benchmark, (iv) expected life of 1.70 years and (v) risk-free rate of 4.568%. The sum of these two valuation models resulted in an estimated fair value of the loan receivable balance of $1,909,834 as of 31 January 2024. The change in the fair value of the convertible loan receivable has been recorded as a gain on fair value adjustment of convertible loan during the period ended 31 January 2024. |
Operating loans to CCG
Operating loans to CCG | 6 Months Ended |
Jan. 31, 2024 | |
Operating loans to CCG | |
Operating loans to CCG | 9 . Operating loans to CCG In addition to the convertible loan receivable (Note 8), the Company provides operating loans to CCG that are non-interest bearing, unsecured and due on demand. During the six months ended 31 January 2024, the Company advanced $393,462 (2023 - $645,092) to CCG and received repayments totaling $699,667 (2023 - $1,194,025) for a net increase in loan payable of $306,205 (2023 –$548,933). At 31 January 2024, the amount payable to CCG was $454,426 (31 July 2023 - $148,221). See also Note 14. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jan. 31, 2024 | |
Property and Equipment | |
Property and Equipment | 10. Property and Equipment Office Equipment Production Equipment Kitchen Equipment Vault Equipment Leasehold Improvements Total Cost: Balance, 31 July 2023 $ 62,892 $ 235,685 $ 22,052 $ 8,163 $ 2,150,661 $ 2,479,453 Additions - - - - 111,820 111,820 Impairment - (235,685 ) (22,052 ) - - (257,737 ) Balance, 31 January 2024 62,892 - - 8,163 2,262,481 2,333,536 Accumulated Depreciation: Balance, 31 July 2023 25,705 120,479 12,609 2,914 490,531 652,238 Depreciation 4,529 - - 588 135,408 140,525 Impairment - (120,479 ) (12,609 ) - - (133,088 ) Balance, 31 January 2024 30,234 - - 3,502 625,939 659,675 Net Book Value: At 31 July 2023 37,187 115,206 9,443 5,249 1,660,130 1,827,215 At 31 January 2024 $ 32,658 $ - $ - $ 4,661 $ 1,636,542 $ 1,673,861 For the six months ended 31 January 2024, a total depreciation of $5,250 (2023 - $24,796) was included in General and Administrative Expenses and a total depreciation of $135,275 (2023 - $69,260) was included in Cost of Sales. During the six months ended 31 January 2024, the Company recorded an impairment loss of $124,649 related to the production equipment and kitchen equipment. |
Acquisitions
Acquisitions | 6 Months Ended |
Jan. 31, 2024 | |
Acquisitions | |
Acquisitions | 11. Acquisitions Canopy Monterey Bay, LLC – Business Acquisition On 30 November 2021, the Company entered into two definitive agreements with Canopy Monterey Bay, LLC (“Canopy”) and the membership interest owners (the “Sellers”) of Canopy to acquire an aggregate of 100% of Canopy, which owns a retail dispensary in the limited license jurisdiction of Seaside, California, to expand our retail operations. The first purchase agreement (“PA #1”) between DEP and Canopy and all of the Sellers provides for the assignment of 80% of the membership interests of Canopy to DEP in exchange for a purchase price of $4,800,000 comprised of $2,500,000 in cash (the “Cash Purchase Price”) and a secured promissory note in the amount of $2,300,000 bearing interest at a rate of 10% per annum compounded annually and having a maturity date of five years from the effective date of PA #1. Interest is payable for the first 6 months with the principal and accrued interest due at maturity. There are no prepayment penalties. The Cash Purchase Price is to be paid into escrow pursuant to an escrow agreement between the parties to PA #1 and Secured Trust Escrow, which Cash Purchase Price is to be released to the Sellers upon the receipt of city and state approval and completion of the audited annual financial statements (the “Financial Statements”) of Canopy, or returned to DEP in the event of the denial of city or state approval or failure to complete the Financial Statements and the agreement is terminated, in which case the 80% membership interests will be transferred back to the Sellers and the promissory note will automatically be terminated. As of the date hereof, the city and state approvals have been received and the formal closing of the purchase of the 80% of the membership interests in Canopy closed in June 2022. The second purchase agreement (“PA #2”) between DEP and the one continuing Seller provides for the assignment of the remaining 20% of the membership interests of Canopy to DEP following the receipt of the city and state approval and completion of the Financial Statements under PA #1 in exchange for $1,000,000 to be paid in either shares of common stock of the Company (the “Consideration Shares”) or in cash at DEP’s sole option if such payment takes place within six (6) months following the execution of PA #1. If DEP elects to pay the purchase price in Consideration Shares, the amount of Consideration Shares shall be determined based on the 10 day volume weighted average price (“VWAP”) ending on 30 November 2021, which is US$0.3665 per share for a total of 2,728,156 shares (issued) (Note 16). In the event that six (6) months following the execution of PA #1, the value of the Consideration Shares have decreased such that total value of the Consideration Shares is less than ninety percent (90%) of its value, DEP agrees to cause the Company to issue an additional $100,000 worth of shares of common stock of the Company (the “Additional Shares”) to be issued to the one continuing Seller based on the ten day VWAP calculated as of six (6) months following the closing of PA #1. This was included as contingent consideration in the purchase price and $100,000 was recorded in accounts payable at 31 July 2022. PA #2 contains a working capital adjustment provision, which provides that if there is a working capital deficiency as of the closing date of PA #1, then the purchase price under PA #2 shall be reduced by the amount of the deficiency, and if there is a working capital surplus as of the closing date of PA #1, then the purchase price under PA #2 shall be increased by the amount of the surplus. On or around 1 December 2021, 80% of the membership interests of Canopy were transferred to DEP for purposes of applying for city and state approvals of the change in ownership of Canopy, however, the purchase price consideration of (i) $2.5 million in cash, and (ii) a promissory note in the amount of $2.3 million to be paid by DEP, were placed in escrow and not to be released to the sellers of the 80% membership interests in Canopy until the city and state approvals have been received and the Financial Statements of Canopy are completed. If the city or state approvals are not received, or the Financial Statements of Canopy are not completed, then the Buyer may terminate the membership interest purchase agreement requiring the membership interests in Canopy to be transferred back to the sellers and the escrow agent to deliver back to DEP the cash consideration and the promissory note shall automatically be terminated. As of the date hereof, the city and state approvals have been received and the formal closing of the purchase of the 80% membership interests in Canopy closed in June 2022. On 17 June 2022, the Company, through its wholly owned subsidiary, DEP Nevada, Inc., entered into the first amendment to PA #1 and PA #2 (the “First Amendment”) whereby the cash purchase price under PA #1 will be reduced from $2.5 million to $1.25 million and the Company will issue $1.25 million in shares of common stock of the Company to the Sellers based on the 10 day volume weighted average price (“VWAP”) for the ten (10) consecutive trading days prior to the effective date of the First Amendment (the “Effective Date”) and subject to compliance with the policies of the Canadian Securities Exchange (the “CSE”), which equates to 9,328,358 shares of common stock. The Company will also issue additional shares to Cary Stiebel equal to the difference between the amount of the shares of common stock of the Company that were issued by the Company to Mr. Stiebel on December 3, 2021 (the “PA #2 Shares”) and the amount of shares that Mr. Stiebel would have received had the VWAP for the PA #2 Shares been calculated as of the Effective Date (the “Additional PA #2 Shares”) which equates to 4,734,530 shares of common stock. Additionally, on the date that is eighteen (18) months (548 days) following the Effective Date of this First Amendment (the “Additional Share Issuance Date”) the Company will issue $100,000 worth of shares to the Sellers based on the ten (10) day VWAP and subject to compliance with the policies of the CSE, calculated as of the Additional Share Issuance Date. This $100,000 was recorded as consulting fees for the year ended 31 July 2022. Furthermore, DEP shall cause the Company to issue to Mr. Stiebel $300,000 worth of shares of common stock of the Company within three (3) days following the Effective Date of this First Amendment, and subject to compliance with the policies of the CSE (the “Additional True up Shares”) which equates to 2,238,806 shares of common stock. Prior to the conclusion of the calculation of the actual working capital in accordance with PA #1 and PA #2, Sellers shall complete, execute and deliver to DEP Schedule D to the First Amendment, which shall set forth the amount of Additional True-up Shares each Seller is entitled to (as applicable) and such Additional True-up Shares shall be retitled in accordance with Schedule D to the First Amendment. In the event Schedule D to the First Amendment is not completed, executed and delivered to DEP prior to the conclusion of the calculation of the actual working capital, DEP shall have no obligation to retitle the shares and all Sellers hereby waive any claims against DEP and the Company in connection with such issuance made in accordance with Section 2(b)(v) of the First Amendment. Upon conclusion of the calculation of the actual working capital in accordance with PA #1 and PA #2, the parties agree as follows: (a) If the actual working capital is less than the target working capital of $nil, the Purchase Price (as defined in PA #2) shall be reduced by an amount equal to the difference between the target working capital and the actual working capital and all of the Additional True-up Shares shall be forfeited and retuned to Company for cancellation; (b) If the actual working capital is greater than the target working capital of $nil and the Additional True-up Shares are sufficient to cover the difference between the actual working capital and the target working capital (the “DEP Deficit”), the parties agree that all or a portion of the Additional True-up Shares (valued at the ten (10) day VWAP calculated as of the Effective Date of the First Amendment and subject to compliance with the policies of the CSE) shall be issued to Sellers to satisfy the DEP Deficit owed by DEP to the Sellers in accordance with Section 2.02(b) of PA #2; (c) If the actual working capital is greater than the target working capital and the Additional True-up Shares are insufficient to cover the DEP Deficit, all of the Additional True-up Shares shall be issued to Sellers and the parties agree that any additional amounts owed to the Sellers shall be paid by DEP to the Sellers via additional shares of common stock of the Company. In addition to the terms of the First Amendment, the parties have agreed that the release of any Additional True-up Shares hereunder shall be subject to the Sellers providing written direction to DEP for the release of the Additional True-up Shares payable under the First Amendment. On December 7, 2022, pursuant to the previously announced (i) membership interest purchase agreement (“MIPA #1”), dated November 30, 2021, as amended on June 17, 2022, entered into between the Company’s wholly-owned subsidiary, DEP Nevada, Inc. (“DEP”), Canopy Monterey Bay, LLC (“Canopy”) and the membership interest owners of Canopy, Carey Stiebel (the “Continuing Owner”), Jana Stiebel, Jayme Rivard, Adrian Dermicek and Laurie Johnson (collectively, the “Sellers”) to purchase eighty percent (80%) of the issued and outstanding membership interests of Canopy, and (ii) membership interest purchase agreement (“MIPA #2”), dated November 30, 2021, as amended on June 17, 2022, entered into between DEP and the Continuing Owner to purchase the remaining twenty percent (20%) of the issued and outstanding membership interests of Canopy, the Company through DEP completed the acquisition of all of the membership interests of Canopy from the Sellers and closed MIPA #1, as amended, and MIPA #2, as amended. Pursuant to the closing of MIPA #1, as amended, and MIPA #2, as amended, the Company issued an aggregate of 16,301,694 shares of common stock to the Sellers in accordance with their instructions at a deemed price of US$0.134 per share. 2,238,806 of the 16,301,694 shares are being held in escrow pending the results of a working capital adjustment in accordance with MIPA #1 and MIPA #2. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. For accounting purposes, the acquisition date is the date that the Company obtained full control over the operations, although not all conditions for closing the acquisition had occurred as of 1 December 2021. The following table summarizes the fair value of the assets acquired and the liabilities assumed, which were recorded as of the acquisition date, as well as the aggregate consideration for the acquisition of Canopy made by the Company: Purchase consideration Cash $ 1,250,000 Promissory note 2,300,000 Shares of common stock (Note 16) 2,189,544 Contingent consideration 100,000 Total consideration 5,839,544 Assets acquired: Cash 378,503 Prepaid expenses 241,449 Inventory 630,039 Liabilities assumed: Trade payable and accrued liabilities (266,307 ) Income taxes payable (1,229,213 ) Net assets acquired (245,529 ) Brand and licenses 1,240,000 Goodwill 4,845,073 TOTAL $ 5,839,544 During the year ended 31 July 2022, the Company also recorded a loss on settlement of contingent consideration of $503,179 resulting from the fair value adjustment of the Company’s shares of common stock that have not been issued at 31 July 2022 and also recorded a consulting fee of $100,000 to be paid to the sellers in shares that was not included in the purchase consideration. CraftedPlants NJ Corp (“Merger”) – Asset Acquisition from a Related Party On December 21, 2022, the Company, its wholly owned subsidiary, DEP Nevada, Inc. (“DEP”), BaM Body and Mind Dispensary NJ Inc., a New Jersey corporation and wholly owned subsidiary of DEP (the “Merger Sub”), CraftedPlants NJ Corp., a New Jersey corporation (the “Surviving Entity”), an entity controlled by a Director of the Company, and those certain shareholders of the Surviving Entity (the “Sellers”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) whereby the Merger Sub merged with and into the Surviving Entity, and following the consummation of the merger, which occurred on December 21, 2022, the Surviving Entity became a wholly owned subsidiary of DEP and changed its name to BaM Body and Mind Dispensary NJ, Inc. (the “Merged Entity”). CraftedPlants NJ Corp. had a lease in Lawrenceville, New Jersey that was already zoned for cannabis retail store. There is no operational history for CraftedPlants NJ Corp. and is essentially comprised of one operating lease asset. The lease agreement does not include any provision that would revoke the approval for a cannabis retail store in a change of ownership of CraftedPlants NJ. Management is not aware of any laws and regulations that would revoke the zoning approval upon change of ownership. The purpose of the merger is expansion into the New Jersey adult use market through merging with an entity with a lease in New Jersey with local preapproval for an adult us cannabis location. The compensation for merger is contingent on success milestones including granting of pending license approval from the State of New Jersey Cannabis Regulatory Commission and opening of the business as a recreational cannabis dispensary. The Company also entered into a three-year strategic advisory services agreement with Bengal Impact Partners, LLC (“Bengal Capital”) dated 5 January 2023 (“Bengal Advisory Agreement”). The Company shall pay Bengal Capital $240,000 on each anniversary, of which $60,000 is to be paid in cash and $180,000 is to be paid in cash, common stock, or warrants to purchase shares of the Company’s common stock, in such proportions as are determined by the Company. In addition, if the Company successfully obtains a cultivation license in New Jersey during the term of the Bengal Advisory Agreement, the Company will owe a fee of $1,000,000, which will be payable in the form of the Company’s common stock or a warrant to purchase shares of the Company’s common stock, in either case as requested by Bengal Capital. Bengal Catalyst Funds and CraftedPlants NJ Corp were both owned or managed by the principals of the Bengal Capital Group and Bengal Catalyst Fund also participated in the 19 December 2022 convertible debenture financings (Note 14). Joshua Rosen is a managing principal of the Bengal Capital Group and he was involved in both transactions of the convertible note investment and the merger acquisition of Crafted Plants NJ Corp. Joshua Rosen was appointed as a director of the Company effective 1 February 2023, and therefore this transaction is considered a related party transaction. Pursuant to the terms of the Merger Agreement, on the closing DEP delivered a cash payment of $50,000 to the Sellers, with a delayed payment of approximately $120,000 to be paid to the Sellers upon funding of the project buildout which is anticipated to occur after receipt of the New Jersey state license and local construction approvals. Further, pursuant to the terms of the Merger Agreement, on December 21, 2022, the Company issued to the Sellers an aggregate of 16,666,667 shares of its common stock (the “Merger Consideration Shares”). The Merger Consideration Shares will be held in escrow and will not be released to the Sellers until the Surviving Entity achieves certain milestones, however, the Sellers will still maintain the voting and participation rights with respect to the Merger Consideration Shares while being held in escrow. The post-closing milestones are as follows: 1. If, within two (2) years of the closing date, the Surviving Entity’s application is approved and is granted pending license approval from the New Jersey Cannabis Regulatory Commission (the “CRC”), 70% of the Merger Consideration Shares will be release from escrow. 2. If, within three (3) years of the closing date, the Surviving Entity opens for business as a recreational cannabis dispensary, 30% of the Merger Consideration Shares will be released from escrow. If either or both of the milestones are not achieved within the time periods after the closing date (the “Milestone Dates”), the Company shall have the option to cancel the Merger Consideration Shares attributable to the failed milestone by delivering written notice to Sellers and in the event of such cancellation, the portion of the Merger Consideration Shares attributable to the failed milestone shall be surrendered and cancelled without any further action required by the parties. Notwithstanding the foregoing, if either or both of the milestones are not achieved (or if it becomes obvious that they will not be achieved) by their respective Milestone Dates because of delays that are not caused by the Sellers, the Sellers may, before the applicable Milestone Dates, provide notice to the Company, and the applicable Milestone Date will be extended to such date as is reasonably necessary for the milestone to be achieved. The parties will work together in mutual good faith to determine the dates by when the milestones can be reasonably achieved. If the Company fails to diligently pursue issuance of the state recreational licenses at any time prior to the second anniversary, and the Company fails to cure such failures in accordance with the Merger Agreement, the Company will owe to Sellers a termination fee equal to 25% of the Merger Consideration Shares. The likelihood of achieving both milestones is uncertain at this time and, as such, the Company recorded the Merger Consideration Shares at par value. The acquisition was accounted for as an asset acquisition since the Surviving Entity did not meet the definition of a business in accordance with ASC 805, as it had no outputs and did not have a substantive process that could significantly contribute to the ability to create outputs. In accordance with ASC 805-50 and measurement of share-based payment in ASC 718, the acquisition should be measured on the date on which the acquirer obtains control of the acquiree. The date on which the acquirer obtains control of the acquiree generally is the date on which the acquirer legally transfers the consideration, acquires the assets, and assumes the liabilities of the acquiree. The Company obtained 100% ownership and control over the Merged Entity and the lease asset on 21 December 2022. The purchase price, as measured on 21 December 2022, was $170,000 which was included in the lease liability and right-of-use assets calculation for the lease acquired in the State of New Jersey (see Note 15). On September 22, 2023, DEP sold 5% of the outstanding shares (the “Subject Shares”) of BaM Body and Mind Dispensary NJ, Inc. (“BaM NJ”) to an individual who resides in New Jersey (the “Purchaser”) in exchange for $1.00, and concurrently therewith, DEP and the Purchaser entered into an option agreement (the “Option”) whereby the Purchaser granted DEP the option to acquire to Subject Shares for the purchase price of $1.00. In addition, in connection with the sale of the Subject Shares to the Purchaser and the Option, the Purchaser, DEP and BaM NJ entered into a consulting agreement (the “Consulting Agreement”) whereby the Purchaser shall assist BaM NJ with its pre-license matters with the New Jersey Cannabis Regulator Commission and post-license operational matters to maintain the license. Pursuant to the Consulting Agreement, and provided that BaM NJ is issued a commercial cannabis retain license in and from the State of New Jersey, BaM NJ shall pay to the Purchaser an aggregate amount of $50,000 for the services to be provided by the Purchaser to BaM NJ. NMG IL 4, LLC – Asset Acquisition from a Related Party In 2019, the Company’s wholly owned subsidiary, DEP Nevada, Inc. (“DEP”), executed definitive agreements with NMG Illinois, LLC (“Management Company”), IL Resident, LLC (“IL Resident”), an entity which is controlled by our social equity partner, and other NMG entities in Illinois, NMG IL 1, LLC (“NMG IL 1”) and NMG IL 4, LLC (“NMG IL 4”), in connection with a proposed business combination (the “Transaction”). NMG IL 1 and NMG IL 4 were originally owned by Tall Bird, LLC (“Tall Bird”), a company owned by our social equity partner, and Big Stone, LLC (“Big Stone”), a company controlled by the Company’s Chief Operating Officer. The Transaction with NMG IL 4 expands our retail operation in the limited license jurisdiction and ownership has been transferred to DEP, which is pending state regulatory approval, however, the Company through DEP controls NMG IL 4 and is consolidating the financial information from NMG IL 4 from the opening day of the dispensary on April 25, 2023 as described in more detail below. a) DEP entered into a Convertible Credit Facility Agreement (the “Convertible Note”) with NMG IL 4 on December 26, 2019 to build-out the facility for up to $1,500,000 in lieu of converting into 99,900 membership units of NMG IL 4; b) DEP also entered into a Membership Interest Purchase Agreement (the “MIPA”) on December 26, 2019 with both Tall Bird and Big Stone to purchase the remaining 100 units for $10 per unit; c) Upon receipt of the Illinois license, NMG IL 4 entered into a management agreement with Management Company and would be paid a management fee equal to 30% of net profits; d) NMG IL 4 was granted the operational license on April 20, 2023; e) On April 25, 2023, DEP converted the Convertible Note for 99,900 units and purchased 100 units for $1,000 pursuant to the MIPA, after the opening of the Markham dispensary on or about April 25, 2023; f) Upon the conversion, DEP obtained 100% ownership (or 100,000 units) of NMG IL 4, subject to regulatory approval (approved); g) The Management Agreement has been dissolved concurrently with the conversion, in the meanwhile, the Company took control of operations of NMG IL 4. The acquisition of NMG IL 4 was accounted for as an asset acquisition with a related party since NMG IL 4 did not meet the definition of a business in accordance with ASC 805. The purchase price, as measured on 25 April 2023, was $995,035 in advances under the Convertible Note. The following table summarizes the assets acquired and the liabilities assumed: Assets acquired: Cash 100,707 Prepaid and deposits 70,230 Inventory 194,075 Property and equipment 918,492 Liabilities assumed: Trade payable and accrued liabilities (288,469 ) Net assets acquired $ 995,035 As the acquisition of NMG IL 4 was from a related party, the Company did not recognize any fair value increase in assets acquired or liabilities assumed, nor recognized any intangible assets. The excess of the amount paid over the fair value of the net assets acquired was included in Business Development expenses during the period NMG IL 4 was acquired. |
Intangible Assets Net
Intangible Assets Net | 6 Months Ended |
Jan. 31, 2024 | |
Intangible Assets Net | |
Intangible Assets, Net | 12 . Intangible Assets, Net Gross Weighted As of 31 January 2024 carrying amount average life (years) Accumulated amortization Net carrying amount Indefinite life intangible assets: Brand $ 220,000 - $ - $ 220,000 Amortizable intangible assets: Licenses 4,683,508 10.0 (1,240,407 ) 3,443,101 Total intangible assets $ 4,903,508 $ (1,240,407 ) $ 3,663,101 Gross Weighted As of 31 July 2023 carrying amount average life (years) Accumulated amortization Net carrying amount Indefinite life intangible assets: Brand $ 220,000 - $ - $ 220,000 Amortizable intangible assets: Licenses 4,683,508 10.0 (1,053,576 ) 3,629,932 Total intangible assets $ 4,903,508 $ (1,053,576 ) $ 3,849,932 Amortization expense for intangible assets was $186,831 (2023 - $514,826) for the six months ended 31 January 2024. The expected amortization of the intangible assets, as of 31 January 2024, for each of the next five years and thereafter is as follows: 2024 $ 184,800 2025 370,616 2026 370,616 2027 370,616 2028 371,632 Thereafter 1,774,821 $ 3,443,101 |
Related Party Balances and Tran
Related Party Balances and Transactions | 6 Months Ended |
Jan. 31, 2024 | |
Related Party Balances and Transactions | |
Related Party Balances and Transactions | 13. Related Party Balances and Transactions In addition to those disclosed elsewhere in these consolidated financial statements, related party transactions paid/accrued for the three and six months ended 31 January 2024 and 2023 are as follows: For the three months ended 31 January 2024 For the three months ended 31 January 2023 For the six months ended 31 January 2024 For the six months ended 31 January 2023 A company controlled by the President, Chief Executive Officer and a director Management fees $ 87,046 $ 52,290 $ 143,254 $ 107,221 A company controlled by the Chief Financial Officer and a director Management fees 54,842 30,000 86,808 62,363 A company controlled by the former Corporate Secretary Management fees - 16,241 - 34,373 $ 141,888 $ 98,531 $ 230,062 $ 203,957 At 31 January 2024, amounts owing to related parties of $75,662 (31 July 2023 - $93,481) are as follows: a) As of 31 January 2024, the Company owed $62,029 (31 July 2023 - $61,777) to the Chief Executive Officer of the Company and a company controlled by him. b) As of 31 January 2024, the Company owed $Nil (31 July 2023 - $31,704) to the Chief Operating Officer. c) As of 31 January 2024, the Company owed $13,633 (31 July 2023 - $Nil) to the Chief Financial Officer of the Company and a company controlled by him. d) See also Note 11 for merger agreement and Note 14 for convertible debentures financing with entities controlled by the Company’s Director. e) See also Note 11 for the acquisition of NMG IL 4. f) The Company is committed to pay a commission fee of 2.5% of the transaction total to Bengal Impact Partners LLC, a company controlled by Josh Rosen, in connection with the disposition of NMG OH 1 (Note 21). The above amounts owing to related parties are unsecured, non-interest bearing and are due on demand. |
Loans Payable and Convertible D
Loans Payable and Convertible Debenture | 6 Months Ended |
Jan. 31, 2024 | |
Loans Payable and Convertible Debenture | |
Loans Payable and Convertible Debenture | 14. Loans Payable and Convertible Debenture As of 31 January 2024 and 31 July 2023, the following loans payable are outstanding: 31 January 2024 31 July 2023 FocusGrowth loan $ - $ 6,666,667 Long Beach loan 4,173 10,728 CCG loan 454,426 148,221 Canopy loan Secured promissory note 2,300,000 2,300,000 Unsecured loan balance 15,125 7,052 Total principal amount $ 2,773,724 $ 9,132,668 Debt discount - (1,187,008 ) Outstanding balance, net $ 2,773,724 $ 7,945,660 Current portion (473,724 ) (166,001 ) Long-term portion $ 2,300,000 $ 7,779,659 FocusGrowth loan On 19 July 2021, the Company entered into and closed a loan agreement (the “Loan Agreement”) with FG Agency Lending LLC (the “Agent”) and Bomind Holdings LLC (the “Lender”). Upon entering into the Loan Agreement, the Lender provided the initial term loan (the “Initial Term Loan”) in the face amount of $6,666,667 of which $6,000,000 was advanced to the Company with the 10% representing an origination discount as consideration for the use or forbearance of money. The Company may draw upon the remaining face amount of $4,444,444 (the “Delayed Draw Term Loan”) upon providing a 30-day request to the Agent by 1 December 2021, whereby $4,000,000 will be advanced to the Company after applying the 10% origination discount. The Initial Term Loan and the Delayed Draw Term Loan mature on 19 July 2025 and bear interest at a rate of 13% per annum payable on the first day of each month hereafter. Pursuant to the Loan Agreement, the Company issued an aggregate of 8,000,000 common stock purchase warrants (each, a “Warrant”) to the Agent of which (i) 4,800,000 Warrants will entitle the holder to acquire shares of common stock (each, a “Warrant Share”) at an exercise price of $0.40 per Warrant Share until July 19, 2025, and (ii) 3,200,000 Warrants was held in escrow to be released to the Agent at the time the Company draws on the Delayed Draw Term Loan, or cancelled if we do not draw on the Delayed Draw Term Loan, which will entitle the holder to acquire a Warrant Share at an exercise price of $0.45 per Warrant Share until July 19, 2025. The Company did not draw on the Delayed Draw Term Loan, and the warrants were cancelled. The Company also paid agent fees, legal fees and other fees in the amount of $175,758. The 4,800,000 Warrants had a relative fair value of $1,037,146 and when combined with the $175,758 in fees and the $666,667 origination discount, resulted in a debt discount of $1,883,901. The Initial Term Loan is secured by certain of the Company’s assets, equity interest in subsidiaries and various agreements, under the Security Agreement, the Pledge Agreement and the Omnibus Collateral Assignment. On 15 June 2022, the Company entered into a second amendment to the Loan Agreement (“Amendment No. 2 to Loan Agreement”) to extend the maturity date by one year to 19 July 2026. Additionally, Amendment No. 2 to Loan Agreement allows the outside date for the Company to draw on the delayed draw term loan of US$4.44 million to be extended from June 1, 2022 to March 31, 2023, whereby US$4 million in funds will be advanced to the Company. The ability of the Company to draw on the delayed draw term loan was subject to compliance with certain provisions in Loan Agreement including provision of a satisfactory budget approved at the sole discretion of the Lender. The Company did not draw or extend the Delayed Draw Term Loan and has expired. The Amendment No. 2 to Loan Agreement increases the interest rate on the advanced funds from 13% to 15% per annum, which additional 2% interest may be paid in kind, with the interest being payable on the first day of each month. Amendment No. 2 to Loan Agreement provides for an exit fee equal to 1.5% of the principal balance, which is due and payable upon any payment, in part or in full, of the initial term loan and the delayed draw term loan. As partial consideration for Amendment No. 2 to Loan Agreement, the Company has issued 1,000,000 common stock purchase warrants (each, a “Warrant”) to the Lender. Each Warrant entitles the holder to acquire one share of common stock (each, a “Warrant Share”) at an exercise price of US$0.16 per Warrant Share until June 14, 2027. The Amendment No. 2 to Loan Agreement was accounted for as a modification consistent with ASC 470-50, Debt Modification, where the lender fees, including 1,000,000 additional common stock purchase warrants valued at $79,585 and the exit fee of $100,000, are capitalized as additional debt discount and amortized as par to the effective yield. On December 12, 2022, the Company, the Guarantors (collectively, the “Loan Parties”) the Agent and the Lender entered into a Limited Waiver and Amendment to Loan Agreement (the “Limited Waiver and Amendment to Loan Agreement”) to deal with certain events of default that occurred under the Loan Agreement, as amended, with respect to (i) the Company’s failure to deliver to Agent the audited annual financial statements of the Company and its subsidiaries for the fiscal year ended July 31, 2022, on or before ninety (90) days after the end of such fiscal year in accordance with Section 7.2(c) of the Loan Agreement (the “First Specified Default”) and (ii) the Agent being informed that the Company anticipates that it will fail to deliver the quarterly financial statements of the Company and its subsidiaries for the fiscal quarter ending October 31, 2022, in form and substance acceptable to Agent, on or before forty-five (45) days after the end of such fiscal quarter, in accordance with Section 7.2(b) (the “Second Specified Default”, and together with the First Specified Default, the “Specified Defaults”). Pursuant to the Limited Waiver and Amendment to Loan Agreement, the Agent and the Lender each waive the Specified Defaults on a limited one-time basis subject to the terms and conditions thereof until (i) with respect to the First Specified Default, 5:00 PM EST on December 30, 2022, and (ii) with respect to the Second Specified Default, 5:00 PM EST on January 13, 2023 (the “Waiver Period”); provided that if the Loan Parties do not deliver each of the Amended Deliverables (as defined below) on or before expiration of their respective Waiver Period; the waiver shall no longer be of any effect, and the Lender shall be entitled to enforce all remedies set forth in the Loan Agreement as of the date each Specified Default first occurred. Subsequent to entering into the Limited Waiver and Amendment to Loan Agreement, the parties verbally agreed and confirmed via email on December 20, 2022, that Waiver Period for the First Specified Default shall be extended from December 30, 2022 to January 17, 2023, and the Waiver Period for the Second Specified Default shall be extended from January 13, 2023 to January 27, 2023; and that the corresponding amendments shall be made to sections 7.2(b) and 7.2(c) of the Loan Agreement as set forth above. During the six months ended 31 January 2024, in connection with the disposition of NMG OH 1 (Note 21), the Company fully repaid the loan in the amount of $7,335,722, which included the principal balance of $6,666,666, accrued interest of $326,512, and prepayment premium of $342,543 included in interest expense on the consolidated statements of operations and comprehensive loss. During the six months ended 31 January 2024, the Company recorded interest expense of $1,415,504 related to this loan, which included $1,187,008 of unamortized debt discount fully recognized during the period. Long Beach loan The loan payable at 31 January 2024 in the amount of $4,173 (31 July 2023 - $10,728) assumed from NMG LB is unsecured, non-interest bearing and has no set terms of repayment. Canopy loan On 30 November 2021, the Company completed PA #1 related to the Company’s acquisition of initial 80% interest in Canopy (Note 11). In connection with PA #1, DEP entered into secured promissory note (the “Promissory Note”) promising to pay $2,300,000 to the Sellers bearing interest at a rate of 10% per annum compounded annually and having a maturity date of 30 November 2026. The Promissory Note was delivered as partial consideration for DEP’s agreement to purchase 80% of the issued and outstanding membership interests (the “Purchased Interests) of Canopy from the Sellers. The loan payable at 31 January 2024 in the amount of $15,125 (31 July 2023 - $7,052) assumed from Canopy is unsecured, non-interest bearing and has no set terms of repayment. CCG loan The Company received operating loans from CCG that are non-interest bearing, unsecured and due on demand. During the six months ended 31 January 2024, the Company advanced $393,462 (2023 - $645,092) to CCG and received repayments totaling $699,667 (2023 - $1,194,025) for a net increase in loan payable of $306,205 (2023 –$548,933). At 31 January 2024, the amount payable to CCG was $454,426 (31 July 2023 - $148,221). See also Note 9. Big Stock AR 1 exercised the conversion feature of the convertible note in September 2023, which is subject to approval by the State of Arkansas Department of Finance and Administration Alcoholic Beverage Control. See also Note 8. Convertible Debenture Financing – Related Parties As of 31 January 2024 and 31 July 2023, the following convertible debentures are outstanding: 31 January 2024 31 July 2023 BAM I, A Series of Bengal Catalyst Fund SPV, LP (related party – Note 11) $ 2,750,000 $ 2,750,000 Mindset Value Fund LP 150,000 150,000 Mindset Value Wellness Fund LP 100,000 100,000 Total principal amount $ 3,000,000 $ 3,000,000 Debt discount (459,775 ) (519,478 ) Outstanding balance, net $ 2,540,225 $ 2,480,522 On December 19, 2022, the Company entered into Securities Purchase Agreements (“SPAs”) with each of BAM I, A Series of Bengal Catalyst Fund SPV, LP, a Delaware limited partnership, an entity which is controlled by a Company Director, Mindset Value Fund LP, a Delaware limited partnership, and Mindset Value Wellness Fund LP, a Delaware limited partnership (collectively, the “Investors”) pursuant to which the Company issued to the Investors unsecured five-year convertible debentures in the aggregate principal amount of US$3,000,000 (the “Debentures”) bearing interest at 8% per annum, compounded annually, and common stock purchase warrants (the “Warrants”) to acquire 15,000,000 shares of common stock of the Company (each, a “Warrant Share”). The proceeds from the sale of the Debentures and the Warrants will be used for business development purposes. In addition, pursuant to the SPAs, following the closing and until the later of (a) the repayment or conversion of the Debentures, and (b) Bengal Impact Partners, LLC (“Bengal Capital”) (or any of its affiliates) ceasing to own at least 10% of the issued and outstanding shares of common stock on an as-converted basis in the aggregate, Bengal Capital shall be entitled to nominate one (1) director to the Company’s Board and one (1) Board observer, provided that the nominee director must meet the requirements of applicable corporate, securities and other applicable laws, and the policies of the Canadian Securities Exchange. Joshua Rosen was appointed to the Board of Directors on 1 February 2023. Bengal Capital and CraftedPlants NJ Corp. were both owned and managed by the principals of the Bengal Capital. As Joshua Rosen is a managing principal of the Bengal Capital Group, he was involved in both transactions of the convertible note investment and the merger acquisition of Crafted Plants NJ. The Debentures have a maturity date of December 19, 2027 (the “Maturity Date”) and the accrued interest shall be payable on the Maturity Date. The Investors have the right at any time prior to the Maturity Date, to convert all or any portion of the principal amount and/or any interest amount, into shares of common stock of the Company at US$0.10 per share, subject to customary adjustments, and subject to a beneficial ownership limitation by each Investor and their respective affiliates of 9.99% of the outstanding shares of common stock of the Company, provided, however, that the beneficial ownership limitation on conversion may be waived by the Investor upon providing not less than 61 days’ prior notice to the Company. The Warrants will entitle the holders to acquire Warrant Shares until December 19, 2026, at an exercise price of US$0.10 per Warrant Share, subject to customary adjustments. The Warrants can be exercised on a cash basis or on a cashless (net exercise) basis. The Warrants contain the same beneficial ownership limitation as the Debentures. During the six months ended 31 January 2024, the Company recorded the interest expense of $180,689 related to the Debentures. The loan balance as at 31 January 2024 was $3,000,000, net of remaining debt discount of $459,775 (31 July 2023 - $519,478). |
Operating Leases
Operating Leases | 6 Months Ended |
Jan. 31, 2024 | |
Operating Leases | |
Operating Leases | 15. Operating Leases a) On 10 November 2017, Nevada Medical Group, LLC entered a ten-year lease agreement with Resort Holdings 5, LLC, a Nevada limited liability company, for the property located at 3375 Pepper Lane, Las Vegas, NV, containing approximately 18,000 square feet. We have four options to extend the lease agreement and each option is for five years. In July 2018, Resort Holdings 5, LLC, the landlord, sold the property to a third party and assigned the lease to Minor Street Properties, LLC. All lease terms remained the same. On 9 May 2022, we amended the lease agreement which exercised our first option to extend the lease for an additional five years with rent during the option term subject to a 3% increase on each anniversary date of the lease. The monthly rent was $13,663 + common area expenses, increased to 13,936 + common area expenses on 1 December 2022 and increased to $14,215 + common area expenses on 1 December 2023. Currently, the guaranteed minimum monthly rent is subject to a 2% increase on each anniversary date of the lease. b) On 7 May 2019, Nevada Medical Group, LLC entered into a five-year lease agreement with Haigaz and Nora Atamian, commercial property owners, for the property located at 6420 Sunset Corporate Drive, Las Vegas, NV, containing approximately 7,700 square feet. We had two options 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 was $6,478 + common area expenses, increased to $6,780 + common area expenses on 1 May 2022 and increased to $7,081 + common area expenses on 1 May 2023. The guaranteed minimum monthly rent is subject to a $0.03 per square foot, per month, increase on each anniversary date of the lease for years one through three of the term and $0.04 per square foot, per month, increase on each anniversary date of the lease for years four through five of the term. On 30 October 2023, the lease agreement was terminated, and a new lease agreement was executed for the remaining term. The monthly rent increased to $8,557.24 + common area expenses through the remaining term. c) On 1 December 2018, SGSD, LLC entered into a five-year lease agreement with Green Road, LLC, a California limited liability company, for the property located at 7625 Carroll Road, San Diego, California, containing approximately 4,600 square feet. On June 13, 2019, SGSD, LLC assigned the lease to NMG San Diego, LLC. Under the terms of the assignment and first amendment to the original lease agreement dated 13 June 2019, we have three options to extend the lease and each option is for five years. On 1 August 2023, the lease agreement was extended for one additional term of five years. The monthly base was $16,883 plus common area expenses and increased to $17,389 plus common area expenses on 1 December 2023. The guaranteed monthly rent is subject to a 1% to 6% increase on each anniversary date of the lease, based on increases in the Consumer Price Index for San Diego County. The lease contains a sale bonus provision of $2,000,000 or 10% of the purchase price of the entire business, whichever is greater, in the event of sale or assignment of the lease. d) On 10 January 2017, SJK Services, LLC entered into a five-year lease agreement with Meng Lin Zhang, a commercial property owner, for the property located at 3411 E. Anaheim St., Long Beach, California, containing approximately 1,856 square feet. On 7 September 2018, SJK Services, LLC amended its lease agreement with Meng Lin Zhang. On 14 December 2018, SJK Services, LLC assigned the amended lease agreement to The Airport Collective, Inc., a California corporation. On 8 March 2019, The Airport Collective, Inc. assigned the amended lease agreement to NMG Long Beach, LLC. On 14 June 2021, we exercised our option to extend the lease agreement for one additional term of five years. On 1 March 2022, we amended the lease agreement to include two additional options to extend the lease agreement for five years each and expanded the lease agreement to include 3413 E. Anaheim St., Long Beach, California, containing approximately 816 square feet. The guaranteed minimum monthly base for unit 3411 was $8,067 + common area expenses, increased to $8,470 + common area expenses in January 2024, and is subject to a 5% increase on each anniversary date of the lease. The guaranteed monthly base rent for unit 3413 was $1,632 + common area expenses, increased to $1,681 + common area expenses on 1 April 2023 and is subject to a 3% increase on each anniversary date of the lease agreement. e) On 1 October 2019, NMG Ohio, LLC entered into a three-year lease agreement with MMCA Development, LLC, an Ohio limited liability company, for the property located at 719 Sugar Lane, Elyria, Ohio 44035, containing approximately 4,000 square feet. We have three options to extend the lease agreement for an additional three-year term. The guaranteed minimum monthly rent is subject to 5% increase for each option period. On 1 September 2021, the lease agreement was assigned to NMG OH P1, LLC with the same terms. On 18 October 2022, NMG OH P1, LLC extended the lease agreement with MMCA Development, LLC for one additional term of three years. The base rent is $4,200 plus common area expenses. f) On 10 February 2021, NMG MI C1, Inc. entered into a five-year lease agreement with 254 River Street, LLC, a Michigan limited liability company, for the property located at 254 River St., Manistee, Michigan 49660, containing approximately 30,000 square feet. The base rent was $22,500 during the operational period, beginning after the rent abatement and reduced rent periods, and increased to $22,950 on 1 November 2023. The lease agreement includes 2% annual base rent increases and three options to extend for five-years each. The license(s) would allow NMG MI C1 to operate a cultivation facility for adult-use and/or medical marihuana and all activities permissible under the Michigan and Manistee Marihuana Laws. Upon NMG MI C1 receiving one or more Licenses, NMG MI C1 agrees to cause the Company to issue common shares having a value of up to $600,000 to River Street, with portions of the Common Shares to be issued upon the achievement of certain milestones as follows: i. US$200,000 of common shares to be issued within 30 days of NMG MI C1 receiving local and state commercial marihuana cultivation licenses; ii. US$200,000 of common shares to be issued within 30 days of passing final inspections at the premises with respect to cultivation and receiving local operating permit to begin commercial marihuana cultivation operations at the premises; iii. US$100,000 of common shares to be issued within 30 days of NMG MI C1 receiving local and state commercial marihuana retail licenses; and iv. US$100,000 of common shares to be issued within 30 days of passing final inspections at the premises with respect to retail operations and receiving local operating permit to begin commercial marihuana retail operations at the premises. On 21 September 2021, the Company issued the necessary common shares to settle milestone (i) above. During the year ended 31 July 2022, the Company accrued an additional $231,374 and were included in the related operating lease liability for milestone (ii) above. Milestones (iii) and (iv) have not yet been achieved as of 31 January 2024. At 31 July 2022, in order to better utilize its resources, it was deemed unlikely that the Company will continue to pursue the opportunity for a cultivation facility in Michigan. As a result, the Company impaired the right-of-use asset related to this lease during the year ended 31 July 2022. The lease liability at 31 January 2024 related to NMG MI C1 was $1,385,712 . g) On 10 February 2021, NMG MI P1, Inc. entered into a five-year lease agreement with 254 River Street, LLC, a Michigan limited liability company, for the property located at 254 River St., Manistee, Michigan 49660, containing approximately 30,000 square feet. The base rent was $7,500 during the operational period, beginning after the rent abatement and reduced rent periods, and increased to $7,650 on 1 November 2023. The lease agreement includes 2% annual base rent increases and three options to extend for five-years each. The license(s) would allow NMG MI P1 to operate a production facility for adult-use and/or medical marihuana and all activities permissible under the Michigan and Manistee Marihuana Laws. Upon NMG MI P1 receiving one or more Licenses, NMG MI P1 agrees to cause the Company to issue common shares having a value of up to $400,000 to River Street, with portions of the Common Shares to be issued upon the achievement of certain milestones as follows: i. US$200,000 of common shares to be issued within 30 days of NMG MI P1 receiving local and state commercial marihuana processing licenses; and ii. US$200,000 of common shares to be issued within 30 days of passing final inspections at the premises with respect to processing and receiving local operating permit to begin commercial marihuana processing operations at the premises. During the year ended 31 July 2022, a total deposit $470,546 for prior year shares were reclassified and incorporated into the right-of-use asset and lease liabilities related to the Company’s leases for the River Street. On 21 September 2021, the Company issued the necessary common shares to settle milestone (i) above. During the year ended 31 July 2022, the Company accrued an additional $239,173 and were included in the related operating lease liability for milestone (ii) above. At 31 July 2022, in order to better utilize its resources, it was deemed unlikely that the Company will continue to pursue the opportunity for a production facility in Michigan. As a result, the Company impaired the right-of-use asset related to this lease during the year ended 31 July 2022. The lease liability at 31 January 2024 related to NMG MI P1 was $461,904 . The value of the common shares will be calculated based on the lesser of: (1) the closing market price on the respective milestone achievement date and (2) a ten percent discount to the twenty-day volume weighted average price for the twenty days immediately prior to the respective milestone achievement date(s). Leases for 254 River St., Manistee, Michigan 49660 were subject to the Company subsidiaries receiving approval by the State of Michigan and could be cancelled by the Company if licenses were not awarded. The licenses for NMG MI P1 and NMG MI C1 were issued on 19 July 2021. h) On 1 July 2021, the Company’s subsidiary Canopy Monterey Bay, LLC assumed and entered into a three-and-a-half-year lease agreement for the property located at 1900 Fremont Blvd., Seaside, California 93955. On 1 December 2021, Canopy Monterey Bay, LLC entered into a second amendment that includes three options to extend the lease agreement for five years each with 3% annual base rent increases. The base rent is now $9,913 per month until June 2024. In March 2023, the Company and the landlord agreed to extend the lease for until 30 June 2028. Canopy Monterey Bay, LLC agreed to pay the landlord a maintenance fee equal to 1.5% of gross sales each month. i) On 7 April 2022, DEP Nevada, Inc. entered into a three-year lease agreement with 2625 GV, LLC, a Nevada limited liability company, for the property located at 2625 N. Green Valley Pkwy., Ste 150, Henderson, Nevada 89014, containing approximately 5,059 square feet. The base rent was $4,482 per month plus common area expenses and increased to $4,662 per month plus common area expenses on 1 June 2023. The lease agreement includes 4% annual base rent increases and two options to extend for three years each. j) On 4 December 2020, NMG CA P1, LLC entered into a five-year lease agreement with Cat City 2, LLC, a California limited liability company, for the property located at 68945 Perez Rd., Suite 1, Cathedral City, California 92234, containing approximately 5,840 square feet. The lease agreement includes 3% annual base rent increases and two options to extend for five-years each. We amended the lease agreement on 27 January 2022, which extended the term to 31 December 2026 and rent commencement date. The base rent is $6,028 plus common area expenses for the first six months, increases to $9,590 plus common area expenses on the seventh month and increases to $9,878 plus common area expenses on 1 March 2023. We amended the lease agreement on 1 October 2023, which reduced the base rent since then. The current base rent is $5,767 per month plus common area expenses. k) On 1 December 2020, NMG CA C1, LLC entered into a five-year lease agreement with Cat City 2, LLC, a California limited liability company, for the property located at 68945 Perez Rd., Suite 2,3&4, Cathedral City, California 92234, containing approximately 13,023 square feet. The lease agreement includes a rent abatement period, 3% annual base rent increases and two options to extend for five-years each. We amended the lease agreement on 2 February 2022, which extended the term to 31 December 2026. The base rent increased to $22,790 plus common area expenses effective January 1, 2023 and increased to $23,474 plus common area expenses effective March 1, 2023. The base rent will increase to $24,178 plus common area expenses effective on 1 March 2024. l) On 15 February 2022, CraftedPlants NJ Corp. (“Tenant”) entered into a lease agreement (the “Lease”) with Simone Investment Group, LLC, a New Jersey limited liability company, for the property located at 3191 U.S. Route 1, Lawrenceville, New Jersey 08648, containing approximately 6,923 square feet. The term of this Lease consists of Phase I commencing on 15 February 2022 (the “Lease Commencement Date”) and ending on the earlier of (i) twelve months from the Lease Commencement Date, (ii) upon issuance to Tenant of the Class 5 Cannabis Retail License by the Commission plus thirty days, or (iii) the date when the Tenant opens for business; and Phase II of ten years from the earlier of (i) the date when the Tenant opens for business, (ii) twelve months from 15 February 2022, or (iii) thirty days after the issuance to Tenant of the Class 5 Cannabis Retail License by the Commission. Tenant has four options to extend the lease and each option is for five years. On 21 December 2022, the Company acquired the rights to the lease agreement from the merger with CraftedPlants NJ Corp. for consideration of $170,000 (Note 11). The rent for Phase I was $10,000 per month for the first eight months and increased to $14,000 per month on the nineth month. The monthly rent for Phase II is $25,146 annually for the first five years and will increase to $29,583 on the sixth year. m) On 4 January 2022, NMG IL 4, LLC entered into a ten-year lease agreement with CB Chicago Partners, Ltd., a Texas limited partnership, for the property located at 2941 W. 159th Street, Markham, Illinois, containing approximately 20,000 square feet with a building containing approximately 2,832 square feet. This lease includes two (2) options to extend for ten-years each. Concurrently with the execution of this lease, NMG IL 4 paid the sum of $92,234 consisting of twelve (12) months’ minimum rent in the sum of $84,960 plus one (1) fiscal year’s real estate taxes in the sum of $63,914 less the minimum rent credit in the sum of $56,640. On 12 October 2022, NMG IL 4 amended the lease agreement to relocate to certain premises containing approximately 3,600 square feet located at 3063 W. 159th Street, Markham, Illinois. The term of the lease as to relocated premises commenced on 12 October 2022 and as amended shall end on 31 January 2032. The Company acquired the rights to the lease agreement with NMG IL 4 on 25 April 2023 (Note 11). The base rent is currently $13,600 plus common area expenses until 31 January 2024 and will increase to $13,804 on 1 February 2024. During the six months ended 31 January 2024, the Company recorded a total lease expense of $646,183 related to the amortization of right-of-use assets, which was included in Operating Expenses. 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 $ 1,047,328 Weighted-average remaining lease term – operating leases 6.43 years Weighted-average discount rate – operating leases 12 % The discount rate of 12% was determined by the Company as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Maturities of lease liabilities were as follows: Year Ending 31 July Operating Leases 2024 $ 848,272 2025 1,712,955 2026 1,740,745 2027 1,469,408 2028 and thereafter 4,650,416 Total lease payments $ 10,421,796 Less imputed interest (3,312,686 ) Total $ 7,109,110 Less current portion (894,280 ) Long term portion $ 6,214,830 At 31 January 2024 and 31 July 2023, the right-of-use assets and the lease liabilities related to NMG, NMG OH 1 and NMG OH P1 have been reclassified to assts held for sale and liabilities related to assets held for sale as follows: 31 January 2024 31 July 2023 NMG OH 1 – right-of-use assets $ - $ 158,336 NMG OH P1 – right-of-use assets $ 184,724 $ 198,412 NMG - lease liabilities $ - $ 1,176,729 NMG OH 1- lease liabilities $ - $ 162,552 NMG OH P1 – lease liabilities $ 189,244 $ 202,618 The right-of-use assets and the lease liabilities associated with NMG and NMG OH 1 have been deconsolidated as of the date of the disposition (Note 21). |
Capital Stock
Capital Stock | 6 Months Ended |
Jan. 31, 2024 | |
Capital Stock | |
Capital Stock | 16. Capital Stock The Company’s authorized share capital comprises 900,000,000 Common Shares, with a $0.0001 par value per share. Pursuant to the ShowGrow Long Beach Purchase Agreement, the Company issued 2,681,006 common shares in escrow. The share consideration was subject to reduction with reference to the liabilities of the business that will be outstanding on the closing date, which occurred in November 2023. As a result of finalization of seller liabilities during closing, the Company has released 1,030,032 shares of common stock previously issued and held in escrow pending closing to the seller. Additionally, as a result of the working capital settlement, the Company has returned to treasury 1,650,974 shares of common stock that were previously issued and held in escrow. Pursuant to the PA #2 for the acquisition of Canopy’s membership interest, the Company issued 2,728,156 common shares on 3 December 2021 in escrow (Note 11). On 15 July 2022, the Company issued 319,149 common shares to one entity based on the terms and conditions of the certain lease agreement for the Muskegon, Michigan premises. Pursuant to the closing of MIPA #1, as amended, and MIPA #2, as amended, for the acquisition of Canopy’s membership interest, the Company issued an aggregate of 16,301,694 shares of common stock on 7 December 2022, of which 2,238,806 are being held in escrow ending the results of a working capital adjustment in accordance with MIPA #1 and MIPA #2 (Note 11). Pursuant to the terms of the Merger Agreement with CraftedPlants, NJ, the Company issued an aggregate of 16,666,667 common shares on 21 December 2022 in escrow (Note 11). Stock options The Company previously approved an incentive stock option plan, pursuant to which the Company may grant stock options up to an aggregate of 10% of the issued and outstanding common shares in the capital of the Company from time to time. Number of options Weighted average exercise price Weighted average contractual term remaining (in years) Aggregate intrinsic value Outstanding at 31 July 2022 9,453,000 CAD$ 0.67 2.11 CAD$ - Granted 9,773,000 CAD$ 0.07 CAD$ - Expired (2,075,000 ) CAD$ 0.64 CAD$ - Outstanding at 31 July 2023 17,151,000 CAD$ 0.33 3.39 CAD$ - Expired (1,005,000 ) CAD$ 0.58 CAD$ - Outstanding at 31 January 2024 16,146,000 CAD$ 0.32 3.07 CAD$ - Vested and fully exercisable at 31 January 2024 13,226,500 CAD$ 0.38 2.75 CAD$ - As of 31 January 2024, the following stock options are outstanding: Number of options outstanding Number of options exercisable Exercise price Expiry dates 1,600,000 1,600,000 CAD$0.88 21 August 2024 250,000 250,000 CAD$0.93 1 October 2024 200,000 200,000 CAD$0.88 23 January 2025 250,000 250,000 CAD$0.405 1 March 2025 1,375,000 1,375,000 CAD$0.67 30 April 2025 350,000 350,000 CAD$0.88 21 August 2024 1,250,000 1,250,000 CAD$0.68 6 March 2026 250,000 250,000 CAD$0.65 5 April 2024 448,000 448,000 CAD$0.44 30 November 2026 200,000 200,000 CAD$0.44 30 November 2024 200,000 200,000 CAD$0.15 8 July 2027 4,050,000 1,012,500 CAD$0.065 25 April 2028 5,723,000 5,723,000 CAD$0.065 25 April 2028 16,146,000 13,108,500 On 25 April 2023, the Company granted 4,050,000 stock options to certain directors, officers, employees and consultants of the Company with an exercise price of CAD$0.065 per share expiring on 25 April 2028. These stock options vest equally every 6 months for a period of 24 months. On 25 April 2023, the Company granted 5,723,000 stock options to certain directors, officers, employees and consultants of the Company with an exercise price of CAD$0.065 per share expiring on 25 April 2028. These stock options vest immediately. Total fair value of the stock options granted was calculated to be $395,526 using the Black-Scholes Option Pricing Model using the following weighted average assumptions: Expected life of the options 2.76 years Expected volatility 103 % Expected dividend yield Nil Risk-free interest rate 3.27 % The Company recorded total stock-based compensation expense of $18,465 (2023 - $22,013) and $53,808 (2023 - $54,471) for the three and six months ended 31 January 2024 and 2023, respectively, in connection with prior issuances of options to purchase common stock. Stock-based compensation expense is included in general and administrative expenses on the accompanying statements of operations. Share Purchase Warrants Number of warrants Weighted average exercise price Outstanding at 31 July 2023 and 31 October 2023 20,800,000 CAD$ 0.17 Outstanding at 31 January 2024 20,800,000 CAD$ 0.17 During the year ended 31 July 2023, the Company issued 15,000,000 warrants in connection with the issuance of convertible debentures pursuant to SPAs (Note 14). The Warrants will entitle the holders to acquire Warrant Shares until December 19, 2026, at an exercise price of US$0.10 per Warrant Share, subject to customary adjustments. The Warrants can be exercised on a cash basis or on a cashless (net exercise) basis. The Debentures was accounted for as a liability in its entirety equal to the proceeds received from issuance, net of the fair value of the 15,000,000 Warrants valued at $592,159 using the Black Scholes Option Pricing Model using the following assumptions, which was recorded as a debt discount: Expected life of the options 4 years Expected volatility 107 % Expected dividend yield 0 % Risk-free interest rate 3.03 % As of 31 January 2024 and 31 July 2023, the following warrants are outstanding: Number of warrants outstanding and exercisable Exercise price Expiry dates 4,800,000 USD$ 0.40 19 July 2025 15,000,000 USD$ 0.10 19 December 2026 1,000,000 USD$ 0.16 14 June 2027 20,800,000 USD$ 0.23 |
Segmented Information and Major
Segmented Information and Major Customers | 6 Months Ended |
Jan. 31, 2024 | |
Segmented Information and Major Customers | |
Segmented Information and Major Customers | 17. Segment Information and Major Customers In its operation of the business, management, including our chief operating decision marker, who is also our Chief Executive Officer, reviews certain financial information, including segmented internal profit and loss statements prepared on a basis not consistent with GAAP. During the periods presented, the Company reported its financial performance based on the following segments: · Retail; and · All others Revenue and costs are generally directly attributed to our segments. However, due to the integrated structure of our business, certain costs incurred by one segment may benefit other segments. In addition, certain costs incurred at a corporate level are not allocated to our segments. Segment revenue and net loss were as follows during the six months ended 31 January 2024: 31 January 2024 Revenue Retail $ 8,986,886 Total $ 8,986,886 Net loss from continuing operations before taxes Retail 646,837 All others (4,499,215 ) Total $ (3,852,378 ) During the six months ended 31 January 2024, the Company had no major customer over 10% of its revenues. |
Supplemental Disclosures with R
Supplemental Disclosures with Respect to Cash Flows | 6 Months Ended |
Jan. 31, 2024 | |
Supplemental Disclosures with Respect to Cash Flows | |
Supplemental Disclosures with Respect to Cash Flows | 18. Supplemental Disclosures with Respect to Cash Flows Six Months Ended 31 January 2024 2023 Cash paid during the period for interest $ 129,361 $ 446,040 Cash paid during the period for income taxes $ 1,600 $ 3,228 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jan. 31, 2024 | |
Commitments and Contingencies | |
Commitments and Contingencies | 19. Commitments and Contingencies From time to time, the Company may be subject to various legal proceedings in the ordinary course of its business. The Company intends to take appropriate action with respect to any such legal actions, including by defending itself against such legal claims as necessary. Acquisition of Long Beach On 3 July 2019, the Company entered into various agreements with GLDH and other third parties to acquire 100% ownership interest in GLDH’s Long Beach, California dispensary ("ShowGrow Long Beach"). The purchase price was $6,700,000, of which $1,500,000 was 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”) 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 2,681,006 common shares were issued on 12 August 2019. The Share Payment is subject to reduction with reference to the liabilities of the business that will be outstanding on the closing date, which is expected to occur in the near future. The Share Payment reduction is pending and, as a result, the related shares have not been released from escrow. Any final settlement that is different than liabilities' balances currently recorded will be allocated to other income or expense. The Company closed the acquisition of ShowGrow Long Beach. As a result of finalization of seller liabilities during closing, the Company has released 1,030,032 shares of common stock previously issued and held in escrow pending closing to the seller. Additionally, as a result of the working capital settlement, the Company has returned to treasury 1,650,974 shares of common stock that were previously issued and held in escrow. Acquisition of Assets – Crafted Plants NJ On 21 December 2022, pursuant to the terms of the Merger Agreement, the Company issued to the Sellers an aggregate of 16,666,667 shares of its common stock, which will be held in escrow and will not be released to the Sellers until the Surviving Entity achieves certain milestones (Note 11). Since no cannabis sales have commenced, the $50,000 liability for consultant is not payable. The Company entered into a three-year strategic advisory services agreement with Bengal Capital dated 5 January 2023 (“Bengal Advisory Agreement”). The Company shall pay Bengal Capital $240,000 on each anniversary, of which $60,000 is to be paid in cash and $180,000 is to be paid in cash, common stock, or warrants to purchase shares of the Company’s common stock, in such proportions as are determined by the Company. The Company has accrued $260,000 under this agreement as of 31 January 2024. In February 2024, the Company settled the annual advisory fees of $240,000 accrued as of January 5, 2024, of which $60,000 was paid in cash and $180,000 was paid by issuing 2,700,393 common shares (Note 23). In addition, if the Company successfully obtains a cultivation license in New Jersey during the term of the Bengal Advisory Agreement, the Company will owe a fee of $1,000,000, which will be payable in the form of the Company’s common stock or a warrant to purchase shares of the Company’s common stock, in either case as requested by Bengal Capital. As of 31 January 2024, no license has been obtained and therefore the related fee has not been paid or accrued. On September 22, 2023, DEP sold 5% of the outstanding shares (the “Subject Shares”) of BaM Body and Mind Dispensary NJ, Inc. (“BaM NJ”) to an individual who resides in New Jersey (the “Purchaser”) in exchange for $1.00, and concurrently therewith, DEP and the Purchaser entered into an option agreement (the “Option”) whereby the Purchaser granted DEP the option to acquire to Subject Shares for the purchase price of $1.00. In addition, in connection with the sale of the Subject Shares to the Purchaser and the Option, the Purchaser, DEP and BaM NJ entered into a consulting agreement (the “Consulting Agreement”) whereby the Purchaser shall assist BaM NJ with its pre-license matters with the New Jersey Cannabis Regulator Commission and post-license operational matters to maintain the license. Pursuant to the Consulting Agreement, and provided that BaM NJ is issued a commercial cannabis retain license in and from the State of New Jersey, BaM NJ shall pay to the Purchaser an aggregate amount of $50,000 for the services to be provided by the Purchaser to BaM NJ. Acquisition of Canopy At 31 January 2024, the Company had $100,000 in consulting fee payable to the sellers of Canopy (Note 11), related to the common shares that are to be issued to the Canopy sellers 18 months after the First Amendment in June 2022, that was not included in the purchase consideration and is included in accrued liabilities. As part of the Canopy acquisition agreements PA #1 and PA #2 on November 29, 2021, a Letter of Intent (“LOI”) was executed to engage the Sellers, Jayme Rivard and Cary Stiebel, as business consultants at a rate of $5,000 per month each, for 12 months beginning December 1, 2021. Subsequently, this LOI was amended on June 2, 2022 to extend the agreement until December 31, 2024 and for the Company to issue 100,000 stock options to purchase 100,000 shares of the Company 's common stock to Consultant, Mr. Stiebel, and 100,000 stock options to purchase 100,000 shares of the Company's common stock to Consultant, Jayme Rivard (collectively, the "Stock Options"). The exercise price for the Stock Options shall not be lower than the greater of the closing market price of the Company's shares on (a) the trading day prior to the date of grant of the Stock Options, and (b) the date of grant of the Stock Options and will have an expiry date of five (5) years from the date of grant. Any delays by any of the Sellers (as defined in PA # 1) in providing requested materials, escrow instructions or otherwise failing to cooperate with Buyer will extend the Closing Deadline by an amount corresponding to the length of delay caused by Sellers. As of the date of these financial statements, the Stock Options have not been granted. Further, this LOI was amended again on August 5, 2022 to defer all payments for consulting services from 1 August 2022 to 1 August 2023, in lieu of potential unknown working capital liabilities. Acquisition of Assets - Illinois On 17 January 2023, the Company entered into an agreement with John Kim, our consultant in the State of Illinois for a two-year services related to licensing process for a total payment of $86,500 payable in tranches until 10 June 2023, as well as $15,000 per month to three designated individuals for two (2) years ending on 31 December 2024, and $5,000 per month to one additional individual for six (6) months ending 30 June 2023 for an aggregate total of $476,500. On 10 May 2023, the Company entered into a Settlement and Release Agreement with John Kim to revise and increase the payments for services related to licensing process as described in the agreement that the Company entered into on 17 January 2023. Effective 10 May 2023, the revised committed payments total $733,150 as follows: a) $30,000 due 10 May 2023, $10,000 payable in each month of June, September, November 2023, and $15,000 each month for the period from January 2024 to February 2025, to John Kim; b) $7,500 per month to John Kim for May and June 2023, and $5,000 per month for remaining months until 31 December 2024; c) $5,000 or $5,833 per month to three designated individuals until 31 December 2024, except for certain months with variable payments ranging from $7,500 to $15,833. As of 31 January 2024, the Company has paid $299,817, leaving $433,333 to be earned subsequent to 31 January 2024. |
Other Agreements
Other Agreements | 6 Months Ended |
Jan. 31, 2024 | |
Other Agreements | |
Other Agreements | 20. Other Agreements On 6 August 2021, the Company entered into management agreements with each of NMG IL 1, LLC (“NMG IL 1”) and NMG IL 4, LLC (“NMG IL 4”) along with an option to indirectly acquire all of the membership interests in each of NMG IL 1 and NMG IL 4 pursuant to a convertible credit facility between our subsidiary, DEP and each of NMG IL 1 and NMG IL 4, and membership interest purchase agreements between DEP and the members of NMG IL 1 and NMG IL 4, subject to obtaining all required local and state regulatory authorization. Each of NMG IL 1 and NMG IL 4 have been identified in the Illinois Department of Financial and Professional Regulation (IDFPR) results of the Social Equity Justice Involved Lottery for 55 Conditional Adult-Use Cannabis Dispensary Licenses (Conditional Licenses) across the state. The certified results are from a lottery with a pool of applicants who scored 85% or greater in their applications. NMG IL 1 and NMG IL 4 were drawn in BLS Region #5 (Chicago-Naperville-Elgin) where 36 conditional licenses are available. The applications are not tied to specified locations. The Transaction with NMG IL 4 was completed on 25 April 2023 (Note 11). In January 2024, the final ownership changes were approved by the state. The Transaction with NMG IL 1, following the same pattern described in Note 11, has not been completed as of the date of these financial statements. |
Discontinued Operations and Ass
Discontinued Operations and Assets Held for Sale | 6 Months Ended |
Jan. 31, 2024 | |
Discontinued Operations and Assets Held for Sale | |
Discontinued Operations and Assets Held for Sale | 21. Discontinued Operations and Assets Held for Sale The following table summarizes the Company’s loss from discontinued operations for the three and six months ended 31 January 2024 and 2023. The gain and loss resulting from the forgiveness of intercompany payables has been eliminated in consolidation. Three months ended 31 January 2024 Three months ended 31 January 2023 Six months ended 31 January 2024 Six months ended 31 January 2023 Sales $ 428,595 $ 3,308,447 $ 2,581,452 $ 6,507,631 Cost of sales (676,196 ) (2,812,932 ) (2,329,988 ) (6,101,604 ) Gross profit (loss) (247,601 ) 495,515 251,464 406,027 Operating expenses (171,826 ) (824,752 ) (658,538 ) (1,604,070 ) Other items (640,664 ) - (581,282 ) 828 (812,490 ) (824,752 ) (1,239,820 ) (1,603,242 ) Loss from discontinued operations before income taxes $ (1,060,091 ) $ (329,237 ) $ (988,356 ) $ (1,197,215 ) Income tax expense (recovery) 67,827 (249,595 ) (147,784 ) (499,190 ) Net loss from discontinued operations $ (992,264 ) $ (578,832 ) $ (1,136,140 ) $ (1,696,405 ) The assets and liabilities associated with discontinued operations consisted of the following as of 31 January 2024 and 31 July 2023: 31 January 2024 31 July 2023 Assets held for sale Cash $ 5,081 $ 215,622 Accounts receivable 63,337 564,392 Other amounts receivable - 20,000 Prepaids 44,951 332,814 Inventory 120,283 1,609,521 Property and equipment, net 617,422 1,143,818 Operating lease right-of-use assets 184,724 356,748 Brand and licenses, net - 2,047,295 Total assets held for sale 1,035,798 6,290,210 Liabilities held for sale Accounts payable and accrued liabilities 2,036,461 479,619 Income taxes payable - 239,434 Operating lease liabilities 189,244 1,541,900 Total liabilities held for sale $ 2,225,705 $ 2,260,953 Total assets and liabilities associated held for sale are presented as current assets and liabilities, respectively, due to the fact that they are likely to be sold within 12 months. A reconciliation of the beginning and ending balances of assets held for sale for the six months ended 31 January 2024 and for year ended 31 July 2023, are as follows: Held for Sale Subsidiaries Subsidiaries Disposed Total Balance as of 31 July 2022 $ 1,230,011 $ 4,712,393 $ 5,942,404 Transferred in - 7,300,845 7,300,845 Ongoing activity from discontinued operations (136,336 ) (5,637,909 ) (5,774,245 ) Disposition - (1,178,794 ) (1,178,794 ) Balance as of 31 July 2023 1,093,675 5,196,535 6,290,210 Ongoing activity from discontinued operations (57,877 ) - (57,877 ) Disposition - (5,196,535 ) (5,196,535 ) Balance as of 31 January 2024 $ 1,035,798 $ - $ 1,035,798 A reconciliation of the beginning and ending balances of liabilities held for sale for the six months ended 31 January 2024 and for year ended 31 July 2023 are as follows: Held for Sale Subsidiaries Subsidiaries Disposed Total Balance as of 31 July 2022 $ 259,470 $ 819,612 $ 1,079,082 Transferred in - 1,789,189 1,789,189 Ongoing activity from discontinued operations (40,291 ) (158,306 ) (198,597 ) Disposition - (408,721 ) (408,721 ) Balance as of 31 July 2023 219,179 2,041,774 2,260,953 Ongoing activity from discontinued operations 2,006,526 - 2,006,526 Disposition - (2,041,774 ) (2,041,774 ) Balance as of 31 January 2024 $ 2,225,705 $ - $ 2,225,705 In April 2023, the Company approved the sale of the Michigan retail operation. In July 2023 and August 2023, the Company approved the sale of the Ohio operations. In January 2024, the Company approved the sale of Nevada operation. Available for Sale Subsidiaries Membership Interest Purchase Agreement (NMG OH P1) On September 5, 2023, DEP entered into a membership interest purchase agreement (the “NMG OH P1 Purchase Agreement”) with LMTB LLC, an Ohio limited liability company (the “LMTB”), pursuant to which DEP will sell the issued and outstanding membership interests (the “NMG OH P1 Interests”) in NMG OH P1 to LMTB for the purchase price of US$2,000,000, subject to adjustment in the event that NMG OH P1’s Working Capital (as defined in the NMG OH P1 Purchase Agreement) on the NMG OH P1 Closing Date (as defined in the NMG OH P1 Purchase Agreement) varies from the Target Working Capital (as defined in the NMG OH P1 Purchase Agreement and thereby fixed at zero (0) dollars). An amount equal to the Deposit (as defined in the NMG OH P1 Purchase Agreement), being US$1,000,000, shall be held in escrow by Murphy Schiller & Wilkes LLP as escrow agent (the “NMG OH P1 Escrow Agent”) pursuant to the terms and conditions of an escrow agreement entered into among DEP, NMG OH P1 and LMTB contemporaneously with the NMG OH P1 Purchase Agreement. Subsidiaries Disposed Membership Interest Purchase Agreement (NMG) On 31 January 2024, the Company’s wholly owned subsidiaries, DEP Nevada entered into a membership interest purchase agreement (the “NMG Purchase Agreement”) with Vegas Brazil LLC, a California limited liability company (the “Vegas Brazil”), pursuant to which DEP will sell the issued and outstanding membership interests (the “NMG Interests”) in NMG to Vegas Brazil for the purchase price of US$2,000,000, subject to adjustment in the event that NMG’s Working Capital (as defined in the NMG Purchase Agreement) on the NMG Closing Date (as hereinafter defined) varies from the Target Working Capital (as defined in the NMG Purchase Agreement and thereby fixed at zero (0) dollars). Closing shall occur no later than fifteen (15) calendar days following receipt of regulatory approval and satisfaction or waiver, if applicable, of all closing conditions, or in such other manner or at such other time or date as the parties may mutually agree in writing. In connection with the NMG Purchase Agreement, DEP and Vegas Brazil entered into a letter agreement (the “Letter Agreement”), commencing on December 15, 2023 (the “Economic Takeover Date”) and expiring on the earlier of: (i) the termination of the NMG Purchase Agreement, or (ii) the closing date of the NMG Purchase Agreement. Economic Takeover Date is defined in the NMG Purchase Agreement as the date Vegas Brazil accepts responsibility for all forward-going profits and losses. The financial performance of NMG-LV has been deconsolidated as of Dec 15, 2023 while the entity is in the Transfer of Ownership process. The purchase price of US$2,000,000 consists of: (i) a cash deposit of US$250,000 (paid); (ii) US$750,000 in cash to be paid within six months of receipt of regulatory approval by the Nevada Cannabis Compliance Board, which cash payment will be covered by a personal guarantee of an affiliate of Vegas Brazil; and (iii) a secured promissory note in the amount of US$1,000,000 (the "Note") to be delivered by Vegas Brazil to DEP on the closing date, and which Note will be personally guaranteed by an affiliate of Vegas Brazil. The Note shall bear interest at the applicable federal rate as of the closing date and the Note will be paid in six (6) equal monthly payments with the first payment occurring on the seven (7) month anniversary of the closing date. As of January 31, 2024, there was $1,750,000 disposition receivable from Vegas Brazil, of which $750,000 will be paid in cash within six months of receipt of regulatory approval by the Nevada Cannabis Compliance Board, which is expected to occur in the near future, and $1,000,000 will be paid by a secured promissory note on the closing date. Operating Lease as a Lessor (NMG) On 21 July 2023, Nevada Medical Group, LLC and Moj NV, LLC entered into a Manufacturing Equipment Lease Agreement, whereby Moj NV will lease certain equipment from the Company. Moj NV is solely responsible for the operation and maintenance of the equipment and all costs related thereto. The term of the agreement commenced on 21 July 2023 and received a deposit of $20,000 that will be applied to the last monthly rent payment. For the first year of the lease, the rent is $20,000 per month. The lease can be terminated by either party with a 90-day written notice, or 30-day notice with cause. The Company records monthly rent payments as other income as they are received. NMG OH 1 Disposition On 17 October 2023, pursuant to equity purchase agreement (the “EPA”) dated 21 July 2023, between the Company’s wholly owned subsidiaries, DEP Nevada, NMG OH 1 and FarmaceuticalRX, LLC (the “Purchaser”), DEP sold all of the issued and outstanding interests and other ownership, equity or profits interests in NMG OH 1 to the Purchaser (the “Disposition”). Pursuant to the closing of the Disposition, on 17 October 2023 (the “Closing Date”), the Purchaser paid an initial total consideration of US$8.225 million (US$7,975,000 on closing plus US$250,000 deposit upon signing of the EPA) (the “Initial Purchase Price”) in cash to DEP Nevada, which Initial Purchase Price is subject to a working capital adjustment and other customary adjustments pursuant to the EPA to be calculated within 365 days of the Closing Date (the “Final Purchase Price”). Based on the Accepted Adjustment Statement (as defined in the EPA), the parties shall determine if the Final Purchaser Price shall be adjusted upwards or downwards. An amount equal to the Escrow Amount (as defined in the EPA) of US$100,000 from the Final Purchase Price is being held in escrow and will be released to DEP Nevada on the fifth day of the twelfth month after the Closing Date unless there are any indemnification claims pending until such time as the claim is resolved. The $100,000 held in escrow was included in other amounts receivable as of 31 January 2024. In addition, DEP Nevada shall receive a payment of US$2,500,000 (each, a “Bonus Payment”) for each additional dispensary license granted to NMG OH 1 by the State of Ohio Board of Pharmacy or other regulatory body, in accordance with the terms of the EPA. Additional dispensary licenses that will receive the Bonus Payment shall specifically exclude an adult use license issued for the License (as defined in the EPA) and current lease location. Simultaneously with the closing of the EPA, the Company used US$7.33 million of the Initial Purchase Price funds to fully repay the debt owing to its senior secured lender. NMG MI 1 Disposition In April 2023, the Company approved the sale of the Michigan retail operation, which was completed in June 2023. Assets held for sale related to NMG wholesale operation, Ohio operations and Michigan retail operation represent a strategic shift in the Company's operations and therefore is classified as available for sale subsidiaries and discontinued operations as of 31 July 2023. During the year ended 31 July 2023, the Company performed an analysis of any impairments prior to reclassifying certain assets as held for sale and recorded an impairment of $944,015 which is included as a component of loss on impairment in the consolidated statements of operations and comprehensive loss. |
Income Taxes
Income Taxes | 6 Months Ended |
Jan. 31, 2024 | |
Income Taxes | |
Income Taxes | 22. Income Taxes For the three and six months ended 31 January 2024 and 2023, the Company recorded an income tax expense of $532,459 (2023 - $370,467) and $1,363,515 (2023 - $746,946), respectively. The provision for income taxes represents federal and state and local income taxes. The effective rate differs from statutory rates due to the effect of state and local income taxes and certain nondeductible expenses. Our effective tax rate will change from quarter to quarter based on recurring and non-recurring factors including, but not limited to, the geographical mix of earnings, enacted tax legislation, and state and local income taxes. In addition, changes in judgment from the evaluation of new information resulting in the recognition de-recognition or re-measurement of a tax position taken in a prior annual period is recognized separately in the quarter of the change. As of 31 January 2024, the Company had unrecognized tax benefits of all of which would currently affect the Company's effective tax rate if recognized. The Company estimates that approximately $706,210 of unrecognized tax benefits, including penalties and interest, may be recognized in the next 12 months. Interest expense and penalties of $71,334 related to unrecognized tax benefits were recorded through 31 January 2024. A number of years may elapse before an uncertain tax position is audited and finally resolved. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, the Company believes that its reserves for income taxes reflect the most likely outcome. The Company adjusts these reserves, as well as the related interest, in light of changing facts and circumstances. Settlement of any particular position could require the use of cash. The Company files a consolidated U.S. income tax return and tax returns in certain state and local jurisdictions. Currently, the Company is not under examination by any taxing authority. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jan. 31, 2024 | |
Subsequent Events | |
Subsequent Events | 23. Subsequent Events On February 9, 2024, the Company issued 2,700,393 common shares to a related party to settle $180,000 of accrued advisory fees pursuant to the Bengal Advisory Agreement (Note 19). As of March 15, 2024, the management agreement between NMG and CCG ended and was not extended (Note 8). On or around September 18, 2023, Big Stone AR 1 exercised the conversion feature of the Convertible Loan Agreement to convert into preferred units of CCG at a conversion price equal to the current indebtedness under the Convertible Loan Agreement constituting forty percent (40%) of the overall ownership interests of CCG with the following preferred rights: (i) the right to an allocative share of sixty-six and 67/100 percent (66.67%) of the net profits of CCG and the right to distributions equal to sixty-six and 67/100 percent (66.67%) of the net profits on a monthly basis; (ii) the right to a sixty-six and 67/100 percent (66.67%) share of CCG’s assets upon dissolution of CCG; and (iii) the right to sixty-six and 67/100 percent (66.67%) of all voting rights of members of CCG. On or around September 18, 2023, Big Stone AR 1 exercised the conversion feature of the convertible note and CCG members approved certain actions to allow Big Stone AR 1 to become a member of CCG through preferred units, to elect Big Stone AR 1 as the manager of CCG and to amend the operating agreement. The transfer of ownership as a result of conversion of the Convertible Loan Agreement is before the Arkansas regulator. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jan. 31, 2024 | |
Significant Accounting Policies | |
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. In the opinion of management, the unaudited consolidated interim financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the Company’s fiscal year 2023 Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on 14 November 2023. |
Consolidated Variable Interest Entity | A variable interest entity (“VIE”) is an entity that either (i) has insufficient equity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the VIE economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. If the Company determines that it has operating power over an entity and the obligation to absorb losses or receive benefits from such entity, the Company consolidates such entity as a VIE in its capacity as the primary beneficiary, and if the Company determines it does not, then the Company does not consolidate the entity. The Company’s involvement constitutes power that is most significant to the entity when it has unconstrained decision-making ability over key operational functions within the entity. Assets recognized as a result of consolidating VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets. Conversely, liabilities recognized as a result of consolidating VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the applicable consolidated VIEs. During the six months ended 31 January 2024, the Company commenced consolidating Big Stone Farms AR 1, LLC (“Big Stone AR 1”) as a VIE, an Arkansas limited liability company. Also see Note 8. |
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 of 31 January 2024 and 31 July 2023, the Company has no allowance for doubtful accounts. |
Revenue recognition | The Company recognizes revenue from product sales when our customers obtain control of our products. This determination is based on the customer specific terms of the arrangement for wholesale operations. Upon transfer of control, the Company has no further performance obligations. All retail sales are considered cash on delivery. 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 is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration. See Note 17 for revenue disaggregation table. |
Inventory and cost of goods sold | Inventory only consists of consumables. The Company values its consumables at the lower of the actual costs or its current estimated market value less costs to sell. Costs incurred during the growing and production process are capitalized as incurred to the extent that cost is less than net realizable value. These costs include materials, labor and manufacturing overhead used in the growing and production processes. The Company capitalizes pre-harvest costs. The Company periodically reviews its inventory for obsolete and potentially impaired items. Any identified slow moving and obsolete items are written down to its net realizable value through a charge to cost of goods sold. As of 31 January 2024 and 31 July 2023, the Company has no allowance for inventory obsolescence. Cost of goods sold includes the costs directly attributable to product sales and includes amounts paid for finished goods, such as flower, edibles and concentrates, packaging and other supplies, fees for services and processing, and allocated overhead, such as allocations of rent, administrative salaries, utilities and related costs. |
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 useful life or the term of the lease |
Intangible assets | 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 acquired from NMG had indefinite lives; therefore, no amortization was recognized. The Company’s brands and licenses acquired by NMG SD have a finite life of 10 years, licenses acquired by Canopy have a finite life of 10 years and are amortized over these estimated useful lives on a straight-line basis. Brands acquired by Canopy have indefinite lives. |
Impairment of long-lived assets | The Company reviews long-lived assets, including property and equipment and definite life intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss is recognized when the sum of projected undiscounted cash flows is less than the carrying value of the asset group. The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying value of the asset group. |
Impairment of indefinite-lived assets | Goodwill and indefinite-lived intangible assets are not amortized. Goodwill and indefinite-lived intangible assets are reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value of the reporting unit has been reduced to less than its carrying amount in accordance with the provisions of ASC 350, “Intangibles—Goodwill and Other”. The Company performs an impairment test annually by comparing the fair value of the indefinite-lived intangible assets or reporting unit (for goodwill) with its carrying amount. The measurement of the impairment loss to be recognized is based on the amount by which the carrying amount exceeds the reporting unit’s fair value. |
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. The Company recognizes uncertain income tax positions at the largest amount that is more-likely-than-not to be sustained upon examination by the relevant taxing authority. An uncertain income tax position will be recognized if it has less than a 50% likelihood of being sustained. Recognition or measurement is reflected in the period in which the likelihood changes. Any interest and penalties related to unrecognized tax liabilities are presented within income tax expense in the consolidated statements of operations and comprehensive income. |
Basic and diluted net income (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. As of 31 January 2024, potential common shares are comprised of 16,146,000 outstanding options that are excluded because they are anti-dilutive, 20,800,000 outstanding warrants and 32,682,740 shares issuable on conversion of convertible debentures. |
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 of 31 January 2024 and 31 July 2023, 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 in U.S. dollars. The Company’s subsidiaries have a functional currency in 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. The exchange rates used to translate Canadian dollar to U.S. dollar was 0.7464 for monetary assets and liabilities and 0.7381 as an average rate for transactions occurred during the period ended 31 January 2024. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of net loss. |
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. The convertible loan receivable was valued using Level 3 inputs. 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, if any, 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 does 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. |
Non-controlling Interest | Non-controlling interests (“NCI”) represent equity interests owned by outside parties. NCI may be initially measured at fair value or at the NCI’s proportionate share of the recognized amounts of the acquiree's identifiable net assets. The choice of measurement is made on a transaction-by-transaction basis. The Company has elected to measure each NCI at its proportionate share of the recognized amounts of the acquiree’s identifiable net assets. The share of net assets attributable to NCI are presented as a component of equity. NCI's share of net income or loss is recognized directly in equity. Total income or loss of subsidiaries is attributed to the shareholders of the Company and to the NCI, even if this results in the NCI having a deficit balance. |
Assets and liabilities held for sale | The Company classifies assets held for sale in accordance with ASC 360, “Property, Plant and Equipment”. When the Company makes the decision to sell an asset or to stop some part of its business, the Company assesses if such assets should be classified as an asset held for sale. To classify as an asset held for sale, the asset or disposal group must meet all of the following conditions: i) management, having the authority to approve the action, commits to a plan to sell the asset, ii) the asset is available for immediate sale in its present condition subject to certain customary terms, iii) an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated, iv) the sale of the asset is probable and the transfer of the asset is expected to qualify for recognition as a completed sale, within one year, subject to certain exceptions, v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current value, and vi) actions required to complete the plan indicate that it is unlikely that the plan will be significantly changed or withdrawn. Assets held for sale are measured at the lower of their carrying amount or fair value less cost to sell (“FVLCTS”). FVLCTS is the amount obtainable from the sale of the asset in an arm’s length transaction, less the costs of disposal. Once classified as held for sale, any depreciation and amortization on an asset cease to be recorded. For long-lived assets or disposals groups that are classified as held for sale but do not meet the criteria for discontinued operations, the assets and liabilities are presented separately on the balance sheet of the initial period in which it is classified as held for sale. The major classes of assets and liabilities classified as held for sale are disclosed in the notes to the consolidated financial statements. |
Nature and Continuance of Ope_2
Nature and Continuance of Operations (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Nature and Continuance of Operations | |
Schedule of subsidiaries of company | Name Jurisdiction Ownership Date of acquisition or formation DEP Nevada Inc. (“DEP Nevada”) Nevada, USA 100 % 10 August 2017 NMG Long Beach LLC (“NMG LB”) California, USA 100 % 18 December 2018 NMG San Diego LLC (“NMG SD”) California, USA 60 % 30 January 2019 NMG Ohio LLC (“NMG Ohio”) Ohio, USA 100 % 27 April 2017 NMG OH P1, LLC (“NMG OH P1”) Ohio, USA 100 % 30 January 2020 NMG MI C1 Inc. Michigan, USA 100 % 24 June 2021 NMG MI P1 Inc. Michigan, USA 100 % 24 June 2021 Canopy Monterey Bay, LLC (“Canopy”) California, USA 100 % 30 November 2021 NMG CA P1, LLC (“NMG CA P1”) California, USA 100 % 7 January 2020 NMG CA C1, LLC (“NMG CA C1”) California, USA 100 % 7 October 2020 BaM Body and Mind Dispensary NJ, Inc. (“BAM NJ”) New Jersey, USA 95 % 21 December 2022 NMG TX 1 LLC Texas, USA 100 % 22 March 2023 NMG IL4, LLC (“NMG IL 4”) Illinois, USA 100 % 25 April 2023 |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Significant Accounting Policies | |
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 useful life or the term of the lease |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Financial Instruments | |
Schedule of financial assets at fair value | As of 31 January 2024 As of 31 July 2023 Financial assets at fair value Cash $ 1,455,250 $ 1,460,311 Convertible loan receivable 1,909,834 1,700,411 Total financial assets at fair value $ 3,365,084 $ 3,160,722 |
Other amounts receivable (Table
Other amounts receivable (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Other amounts receivable | |
Other amounts receivables | 31 January 2024 31 July 2023 NMG disposition receivable (Note 21) $ 1,750,000 $ - NMG OH 1 disposition receivable held in escrow (Note 21) 100,000 - Total $ 1,850,000 $ - |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Inventory | |
Schedule of inventory | 31 January 2024 31 July 2023 Consumables $ 643,675 $ 909,875 Total $ 643,675 $ 909,875 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Property and Equipment | |
Schedule of property and equipment | Office Equipment Production Equipment Kitchen Equipment Vault Equipment Leasehold Improvements Total Cost: Balance, 31 July 2023 $ 62,892 $ 235,685 $ 22,052 $ 8,163 $ 2,150,661 $ 2,479,453 Additions - - - - 111,820 111,820 Impairment - (235,685 ) (22,052 ) - - (257,737 ) Balance, 31 January 2024 62,892 - - 8,163 2,262,481 2,333,536 Accumulated Depreciation: Balance, 31 July 2023 25,705 120,479 12,609 2,914 490,531 652,238 Depreciation 4,529 - - 588 135,408 140,525 Impairment - (120,479 ) (12,609 ) - - (133,088 ) Balance, 31 January 2024 30,234 - - 3,502 625,939 659,675 Net Book Value: At 31 July 2023 37,187 115,206 9,443 5,249 1,660,130 1,827,215 At 31 January 2024 $ 32,658 $ - $ - $ 4,661 $ 1,636,542 $ 1,673,861 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
NMG IL 4, LLC [Member] | |
Schedule of Purchase consideration | Assets acquired: Cash 100,707 Prepaid and deposits 70,230 Inventory 194,075 Property and equipment 918,492 Liabilities assumed: Trade payable and accrued liabilities (288,469 ) Net assets acquired $ 995,035 |
Canopy Monterey Bay, LLC [Member] | |
Schedule of Purchase consideration | Purchase consideration Cash $ 1,250,000 Promissory note 2,300,000 Shares of common stock (Note 16) 2,189,544 Contingent consideration 100,000 Total consideration 5,839,544 Assets acquired: Cash 378,503 Prepaid expenses 241,449 Inventory 630,039 Liabilities assumed: Trade payable and accrued liabilities (266,307 ) Income taxes payable (1,229,213 ) Net assets acquired (245,529 ) Brand and licenses 1,240,000 Goodwill 4,845,073 TOTAL $ 5,839,544 |
Intangible Assets Net (Tables)
Intangible Assets Net (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Intangible Assets Net | |
Schedule of intangible assets | Gross Weighted As of 31 January 2024 carrying amount average life (years) Accumulated amortization Net carrying amount Indefinite life intangible assets: Brand $ 220,000 - $ - $ 220,000 Amortizable intangible assets: Licenses 4,683,508 10.0 (1,240,407 ) 3,443,101 Total intangible assets $ 4,903,508 $ (1,240,407 ) $ 3,663,101 Gross Weighted As of 31 July 2023 carrying amount average life (years) Accumulated amortization Net carrying amount Indefinite life intangible assets: Brand $ 220,000 - $ - $ 220,000 Amortizable intangible assets: Licenses 4,683,508 10.0 (1,053,576 ) 3,629,932 Total intangible assets $ 4,903,508 $ (1,053,576 ) $ 3,849,932 |
Schedule of intangible assets future amortization expense | 2024 $ 184,800 2025 370,616 2026 370,616 2027 370,616 2028 371,632 Thereafter 1,774,821 $ 3,443,101 |
Related Party Balances and Tr_2
Related Party Balances and Transactions (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Related Party Balances and Transactions | |
Schedule of related party transactions | For the three months ended 31 January 2024 For the three months ended 31 January 2023 For the six months ended 31 January 2024 For the six months ended 31 January 2023 A company controlled by the President, Chief Executive Officer and a director Management fees $ 87,046 $ 52,290 $ 143,254 $ 107,221 A company controlled by the Chief Financial Officer and a director Management fees 54,842 30,000 86,808 62,363 A company controlled by the former Corporate Secretary Management fees - 16,241 - 34,373 $ 141,888 $ 98,531 $ 230,062 $ 203,957 |
Loans Payable and Convertible_2
Loans Payable and Convertible Debenture (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Loans Payable and Convertible Debenture | |
Schedule of Loan | 31 January 2024 31 July 2023 FocusGrowth loan $ - $ 6,666,667 Long Beach loan 4,173 10,728 CCG loan 454,426 148,221 Canopy loan Secured promissory note 2,300,000 2,300,000 Unsecured loan balance 15,125 7,052 Total principal amount $ 2,773,724 $ 9,132,668 Debt discount - (1,187,008 ) Outstanding balance, net $ 2,773,724 $ 7,945,660 Current portion (473,724 ) (166,001 ) Long-term portion $ 2,300,000 $ 7,779,659 |
Schedule of Convertible Debenture Financing | 31 January 2024 31 July 2023 BAM I, A Series of Bengal Catalyst Fund SPV, LP (related party – Note 11) $ 2,750,000 $ 2,750,000 Mindset Value Fund LP 150,000 150,000 Mindset Value Wellness Fund LP 100,000 100,000 Total principal amount $ 3,000,000 $ 3,000,000 Debt discount (459,775 ) (519,478 ) Outstanding balance, net $ 2,540,225 $ 2,480,522 |
Operating leases (Tables)
Operating leases (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Operating Leases | |
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 $ 1,047,328 Weighted-average remaining lease term – operating leases 6.43 years Weighted-average discount rate – operating leases 12 % |
Schedule of maturities of lease liabilities | Year Ending 31 July Operating Leases 2024 $ 848,272 2025 1,712,955 2026 1,740,745 2027 1,469,408 2028 and thereafter 4,650,416 Total lease payments $ 10,421,796 Less imputed interest (3,312,686 ) Total $ 7,109,110 Less current portion (894,280 ) Long term portion $ 6,214,830 |
Schedule of right-of-use assets and the lease liabilities | 31 January 2024 31 July 2023 NMG OH 1 – right-of-use assets $ - $ 158,336 NMG OH P1 – right-of-use assets $ 184,724 $ 198,412 NMG - lease liabilities $ - $ 1,176,729 NMG OH 1- lease liabilities $ - $ 162,552 NMG OH P1 – lease liabilities $ 189,244 $ 202,618 |
Capital Stock (Tables)
Capital Stock (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
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 2022 9,453,000 CAD$ 0.67 2.11 CAD$ - Granted 9,773,000 CAD$ 0.07 CAD$ - Expired (2,075,000 ) CAD$ 0.64 CAD$ - Outstanding at 31 July 2023 17,151,000 CAD$ 0.33 3.39 CAD$ - Expired (1,005,000 ) CAD$ 0.58 CAD$ - Outstanding at 31 January 2024 16,146,000 CAD$ 0.32 3.07 CAD$ - Vested and fully exercisable at 31 January 2024 13,226,500 CAD$ 0.38 2.75 CAD$ - |
Schedule of number of options outstanding and exercisable | Number of options outstanding Number of options exercisable Exercise price Expiry dates 1,600,000 1,600,000 CAD$0.88 21 August 2024 250,000 250,000 CAD$0.93 1 October 2024 200,000 200,000 CAD$0.88 23 January 2025 250,000 250,000 CAD$0.405 1 March 2025 1,375,000 1,375,000 CAD$0.67 30 April 2025 350,000 350,000 CAD$0.88 21 August 2024 1,250,000 1,250,000 CAD$0.68 6 March 2026 250,000 250,000 CAD$0.65 5 April 2024 448,000 448,000 CAD$0.44 30 November 2026 200,000 200,000 CAD$0.44 30 November 2024 200,000 200,000 CAD$0.15 8 July 2027 4,050,000 1,012,500 CAD$0.065 25 April 2028 5,723,000 5,723,000 CAD$0.065 25 April 2028 16,146,000 13,108,500 |
Schedule of Share purchase warrants and brokers' warrants | Number of warrants Weighted average exercise price Outstanding at 31 July 2023 and 31 October 2023 20,800,000 CAD$ 0.17 Outstanding at 31 January 2024 20,800,000 CAD$ 0.17 |
Schedule of number of warrants outstanding and exercisable | Number of warrants outstanding and exercisable Exercise price Expiry dates 4,800,000 USD$ 0.40 19 July 2025 15,000,000 USD$ 0.10 19 December 2026 1,000,000 USD$ 0.16 14 June 2027 20,800,000 USD$ 0.23 |
Warrant [Member] | |
Schedule of weighted average assumptions | Expected life of the options 4 years Expected volatility 107 % Expected dividend yield 0 % Risk-free interest rate 3.03 % |
Options [Member] | |
Schedule of weighted average assumptions | Expected life of the options 2.76 years Expected volatility 103 % Expected dividend yield Nil Risk-free interest rate 3.27 % |
Segmented Information and Maj_2
Segmented Information and Major Customers (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Segmented Information and Major Customers | |
Schedule of Segment revenue and net loss | 31 January 2024 Revenue Retail $ 8,986,886 Total $ 8,986,886 Net loss from continuing operations before taxes Retail 646,837 All others (4,499,215 ) Total $ (3,852,378 ) |
Supplemental Disclosures with_2
Supplemental Disclosures with Respect to Cash Flows (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Supplemental Disclosures with Respect to Cash Flows | |
Schedule of supplemental disclosures with respect to cash flows | Six Months Ended 31 January 2024 2023 Cash paid during the period for interest $ 129,361 $ 446,040 Cash paid during the period for income taxes $ 1,600 $ 3,228 |
Discontinued Operations and A_2
Discontinued Operations and Assets Held for Sale (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Discontinued Operations and Assets Held for Sale | |
Schedule of loss from discontinued operations | Three months ended 31 January 2024 Three months ended 31 January 2023 Six months ended 31 January 2024 Six months ended 31 January 2023 Sales $ 428,595 $ 3,308,447 $ 2,581,452 $ 6,507,631 Cost of sales (676,196 ) (2,812,932 ) (2,329,988 ) (6,101,604 ) Gross profit (loss) (247,601 ) 495,515 251,464 406,027 Operating expenses (171,826 ) (824,752 ) (658,538 ) (1,604,070 ) Other items (640,664 ) - (581,282 ) 828 (812,490 ) (824,752 ) (1,239,820 ) (1,603,242 ) Loss from discontinued operations before income taxes $ (1,060,091 ) $ (329,237 ) $ (988,356 ) $ (1,197,215 ) Income tax expense (recovery) 67,827 (249,595 ) (147,784 ) (499,190 ) Net loss from discontinued operations $ (992,264 ) $ (578,832 ) $ (1,136,140 ) $ (1,696,405 ) |
Schedule of assets and liabilities with discontinued operations | 31 January 2024 31 July 2023 Assets held for sale Cash $ 5,081 $ 215,622 Accounts receivable 63,337 564,392 Other amounts receivable - 20,000 Prepaids 44,951 332,814 Inventory 120,283 1,609,521 Property and equipment, net 617,422 1,143,818 Operating lease right-of-use assets 184,724 356,748 Brand and licenses, net - 2,047,295 Total assets held for sale 1,035,798 6,290,210 Liabilities held for sale Accounts payable and accrued liabilities 2,036,461 479,619 Income taxes payable - 239,434 Operating lease liabilities 189,244 1,541,900 Total liabilities held for sale $ 2,225,705 $ 2,260,953 |
Schedule of reconciliation of beginning and ending balances of assets held for sale | Held for Sale Subsidiaries Subsidiaries Disposed Total Balance as of 31 July 2022 $ 1,230,011 $ 4,712,393 $ 5,942,404 Transferred in - 7,300,845 7,300,845 Ongoing activity from discontinued operations (136,336 ) (5,637,909 ) (5,774,245 ) Disposition - (1,178,794 ) (1,178,794 ) Balance as of 31 July 2023 1,093,675 5,196,535 6,290,210 Ongoing activity from discontinued operations (57,877 ) - (57,877 ) Disposition - (5,196,535 ) (5,196,535 ) Balance as of 31 January 2024 $ 1,035,798 $ - $ 1,035,798 Held for Sale Subsidiaries Subsidiaries Disposed Total Balance as of 31 July 2022 $ 259,470 $ 819,612 $ 1,079,082 Transferred in - 1,789,189 1,789,189 Ongoing activity from discontinued operations (40,291 ) (158,306 ) (198,597 ) Disposition - (408,721 ) (408,721 ) Balance as of 31 July 2023 219,179 2,041,774 2,260,953 Ongoing activity from discontinued operations 2,006,526 - 2,006,526 Disposition - (2,041,774 ) (2,041,774 ) Balance as of 31 January 2024 $ 2,225,705 $ - $ 2,225,705 |
Nature and Continuance of Ope_3
Nature and Continuance of Operations (Details) | 6 Months Ended |
Jan. 31, 2024 | |
BaM Body and Mind Dispensary NJ Inc [Member] | |
Date of acquisition or formation | 21 December 2022 |
Ownership | 95% |
Jurisdiction | New Jersey, USA |
NMG IL4, LLC ("NMG IL 4") [Member] | |
Date of acquisition or formation | 25 April 2023 |
Ownership | 100% |
Jurisdiction | Illinois, USA |
NMG TX 1 LLC [Member] | |
Date of acquisition or formation | 22 March 2023 |
Ownership | 100% |
Jurisdiction | Texas, USA |
NMG CA C1, LLC ("NMG CA C1") [Member] | |
Date of acquisition or formation | 7 October 2020 |
Ownership | 100% |
Jurisdiction | California, USA |
NMG CA P1, LLC ("NMG CA P1") [Member] | |
Date of acquisition or formation | 7 January 2020 |
Ownership | 100% |
Jurisdiction | California, USA |
NMG Ohio LLC | |
Date of acquisition or formation | 27 April 2017 |
Jurisdiction | Ohio, USA |
Ownership | 100% |
DEP Nevada Inc [Member] | |
Date of acquisition or formation | 10 August 2017 |
Ownership | 100% |
Jurisdiction | Nevada, USA |
NMG Long Beach LLC [Member] | |
Date of acquisition or formation | 18 December 2018 |
Ownership | 100% |
Jurisdiction | California, USA |
NMG San Diego LLC [Member] | |
Date of acquisition or formation | 30 January 2019 |
Ownership | 60% |
Jurisdiction | California, USA |
NMG OH P1, LLC [Member] | |
Date of acquisition or formation | 30 January 2020 |
Ownership | 100% |
Jurisdiction | Ohio, USA |
NMG MI C1 Inc. [Member] | |
Date of acquisition or formation | 24 June 2021 |
Ownership | 100% |
Jurisdiction | Michigan, USA |
NMG MI P1 Inc. [Member] | |
Date of acquisition or formation | 24 June 2021 |
Ownership | 100% |
Jurisdiction | Michigan, USA |
Canopy Monterey Bay, LLC [Member] | |
Date of acquisition or formation | 30 November 2021 |
Ownership | 100% |
Jurisdiction | California, USA |
Nature and Continuance of Ope_4
Nature and Continuance of Operations (Details Narrative) | May 31, 2004 |
Represents information related to Vocalscape, Inc. | |
Ownership | 100% |
Significant Accounting Polici_4
Significant Accounting Policies (Details) | 6 Months Ended |
Jan. 31, 2024 | |
Office Equipment [Member] | |
Estimated Useful Life | 7 years |
Cultivation equipment [Member] | |
Estimated Useful Life | 7 years |
Production Equipment [Member] | |
Estimated Useful Life | 7 years |
Kitchen equipment [Member] | |
Estimated Useful Life | 7 years |
Vehicles [Member] | |
Estimated Useful Life | 7 years |
Vault equipment [Member] | |
Estimated Useful Life | 7 years |
Leasehold Improvements [Member] | |
Estimated Useful Life | shorter of useful life or the term of the lease |
Significant Accounting Polici_5
Significant Accounting Policies (Details Narrative) | 6 Months Ended |
Jan. 31, 2024 shares | |
Dilutive options and warrants existed | 16,146,000 |
Conversion of convertible debentures | 20,800,000 |
Brands and licenses acquired by NMG SD | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years |
Brands and licenses acquired by NMG LB and NMG OH 1 | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years |
Brands and licenses acquired by Canopy | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years |
Warrants [Member] | |
Dilutive options and warrants existed | 32,682,740 |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) | Jan. 31, 2024 | Jul. 31, 2023 |
Financial Instruments | ||
Cash | $ 1,455,250 | $ 1,460,311 |
Convertible loan receivable | 1,909,834 | 1,700,411 |
Total financial assets at fair value | $ 3,365,084 | $ 3,160,722 |
Financial Instruments (Details
Financial Instruments (Details Narrative) | Jan. 31, 2024 USD ($) |
Financial Instruments | |
Working capital deficit | $ (5,961,758) |
Other amounts receivable (Detai
Other amounts receivable (Details) - USD ($) | Jan. 31, 2024 | Jul. 31, 2023 |
Other amounts receivable | $ 1,850,000 | $ 0 |
NMG disposition receivable (Note 21) | ||
Other amounts receivable | 1,750,000 | 0 |
NMG OH 1 disposition receivable held in escrow (Note 21) | ||
Other amounts receivable | $ 100,000 | $ 0 |
Deposit (Details Narrative)
Deposit (Details Narrative) - USD ($) | Jan. 31, 2024 | Jul. 31, 2023 |
Deposit | ||
Deposit | $ 811,941 | $ 72,617 |
Inventory (Details)
Inventory (Details) - USD ($) | Jan. 31, 2024 | Jul. 31, 2023 |
Inventory | ||
Consumables | $ 643,675 | $ 909,875 |
Total | $ 643,675 | $ 909,875 |
Convertible loan receivable (De
Convertible loan receivable (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | Jul. 31, 2023 | |
Loan receivable | $ 1,250,000 | $ 1,250,000 | $ 1,250,000 | ||
Overhead expenses | 1,250,000 | ||||
Interests receivable | 330,000 | 330,000 | $ 294,000 | ||
Accrued interest income | 18,000 | $ 18,000 | 36,000 | $ 36,000 | |
Loan receivable balance | 1,909,834 | $ 1,909,834 | |||
Weighted Average Cost of Capital | 15% | ||||
Discount rate | 22.60% | ||||
Exercise price | $ 31,250 | ||||
Expected life of the options | 1 year 8 months 12 days | ||||
Management fee (per month) | 141,888 | $ 132,252 | $ 230,062 | $ 203,957 | |
Description management agreement expiring date | four different maturity dates: (1) March 30, 2024, (2) March 30, 2025, (3) March 30, 2026 and (4) March 30, 2027, whereby each scenario is given 25% probability of occurring since the actual conversion date is uncertain | ||||
Loan bears interest per month | 6,000 | $ 6,000 | |||
Equity price | 43,169 | ||||
CCG | Convertible Loan Agreement | |||||
Loan bears interest per month | $ 6,000 | $ 6,000 | |||
Outstanding units percentage | 66.70% | 66.70% | |||
Proceeds from fund construction | $ 1,250,000 | $ 1,250,000 | |||
NMG [Member] | |||||
Management fee (per month) | $ 6,000 | ||||
Percentage of monthly management fee | 66.67% | ||||
Management Agreement Expiring Date | 15 March 2024 | ||||
Risk-free interest rate | |||||
Risk-free interest rate | 4.568% | ||||
Benchmark [Member] | |||||
Expected volatility | 102.825% |
Operating loans to CCG (Details
Operating loans to CCG (Details Narrative) - USD ($) | 6 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Jul. 31, 2023 | |
Other loan receivable | $ 1,850,000 | $ 0 | |
CCG [Member] | |||
Loan receivables | 393,462 | $ 645,092 | |
Net increase decrease in loan receivable | 306,205 | 548,933 | |
Repayment of loan | 699,667 | $ 1,194,025 | |
Other loan receivable | $ 454,426 | $ 148,221 |
Property and Equipment (Details
Property and Equipment (Details) | 6 Months Ended |
Jan. 31, 2024 USD ($) | |
Cost, beginning Balance | $ 2,479,453 |
Additions | 111,820 |
Impairment, cost | (257,737) |
Cost, ending balance | 2,333,536 |
Accumulated Depreciation, beginning balance | 652,238 |
Depreciation | 140,525 |
Impairment, Accumulated depreciation | (133,088) |
Accumulated Depreciation, ending balance | 659,675 |
Net Book Value, beginning balance | 1,827,215 |
Net Book Value, ending balance | 1,673,861 |
Office Equipment [Member] | |
Cost, beginning Balance | 62,892 |
Additions | 0 |
Impairment, cost | 0 |
Cost, ending balance | 62,892 |
Accumulated Depreciation, beginning balance | 25,705 |
Depreciation | 4,529 |
Impairment, Accumulated depreciation | 0 |
Accumulated Depreciation, ending balance | 30,234 |
Net Book Value, beginning balance | 37,187 |
Net Book Value, ending balance | 32,658 |
Production Equipment [Member] | |
Cost, beginning Balance | 235,685 |
Additions | 0 |
Impairment, cost | (235,685) |
Cost, ending balance | 0 |
Accumulated Depreciation, beginning balance | 120,479 |
Depreciation | 0 |
Impairment, Accumulated depreciation | (120,479) |
Accumulated Depreciation, ending balance | 0 |
Net Book Value, beginning balance | 115,206 |
Net Book Value, ending balance | 0 |
Kitchen equipment [Member] | |
Cost, beginning Balance | 22,052 |
Additions | 0 |
Impairment, cost | (22,052) |
Cost, ending balance | 0 |
Accumulated Depreciation, beginning balance | 12,609 |
Depreciation | 0 |
Impairment, Accumulated depreciation | (12,609) |
Accumulated Depreciation, ending balance | 0 |
Net Book Value, beginning balance | 9,443 |
Net Book Value, ending balance | 0 |
Vault equipment [Member] | |
Cost, beginning Balance | 8,163 |
Additions | 0 |
Impairment, cost | 0 |
Cost, ending balance | 8,163 |
Accumulated Depreciation, beginning balance | 2,914 |
Depreciation | 588 |
Impairment, Accumulated depreciation | 0 |
Accumulated Depreciation, ending balance | 3,502 |
Net Book Value, beginning balance | 5,249 |
Net Book Value, ending balance | 4,661 |
Leasehold Improvements [Member] | |
Cost, beginning Balance | 2,150,661 |
Additions | 111,820 |
Impairment, cost | 0 |
Cost, ending balance | 2,262,481 |
Accumulated Depreciation, beginning balance | 490,531 |
Depreciation | 135,408 |
Impairment, Accumulated depreciation | 0 |
Accumulated Depreciation, ending balance | 625,939 |
Net Book Value, beginning balance | 1,660,130 |
Net Book Value, ending balance | $ 1,636,542 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 6 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Property and Equipment | ||
General and administrative expenses | $ 135,275 | $ 69,260 |
Depreciation | 5,250 | $ 24,796 |
Impairment loss | $ 124,649 |
Acquisitions (Details)
Acquisitions (Details) | 1 Months Ended |
Nov. 30, 2021 USD ($) | |
Promissory note | $ 2,300,000 |
Canopy Monterey Bay, LLC [Member] | |
Cash gross | 1,250,000 |
Promissory note | 2,300,000 |
Shares of common stock (Note 14) | 2,189,544 |
Contingent consideration | 100,000 |
Purchase consideration | 5,839,544 |
Cash | 378,503 |
Prepaid expenses | 241,449 |
Inventory | 630,039 |
Trade payable and accrued liabilities | (266,307) |
Income taxes payable | (1,229,213) |
Net assets acquired | (245,529) |
Brand and licenses | 1,240,000 |
Goodwill | 4,845,073 |
TOTAL | $ 5,839,544 |
Acquisitions (Details 1)
Acquisitions (Details 1) - NMG IL4, LLC ("NMG IL 4") [Member] | Jan. 31, 2024 USD ($) |
Cash | $ 100,707 |
Prepaid and deposits | 70,230 |
Inventory | 194,075 |
Property and equipment | 918,492 |
Trade payable and accrued liabilities | (288,469) |
Net assets acquired | $ 995,035 |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Sep. 22, 2023 | Apr. 25, 2023 | Jan. 17, 2023 | Dec. 21, 2022 | Jul. 31, 2022 | Nov. 30, 2021 | Jan. 31, 2024 | Jul. 31, 2022 | Jul. 31, 2023 | Jun. 17, 2022 | |
Promissory note | $ 2,300,000 | |||||||||
Loss on settlement | $ 503,179 | |||||||||
Consulting fee paid | 100,000 | |||||||||
Number of share issued | 16,301,694 | |||||||||
Lease liability and right-of-use assets | $ 170,000 | |||||||||
Common stock, shares issued | 16,666,667 | 4,986,000 | 146,636,974 | |||||||
Acquisition destribition | the Company entered into an agreement with John Kim, our consultant in the State of Illinois for a two-year services related to licensing process for a total payment of $86,500 payable in tranches until 10 June 2023, as well as $15,000 per month to three designated individuals for two (2) years ending on 31 December 2024, and $5,000 per month to one additional individual for six (6) months ending 30 June 2023 for an aggregate total of $476,500 | The Company entered into a three-year strategic advisory services agreement with Bengal Capital dated 5 January 2023 (“Bengal Advisory Agreement”). The Company shall pay Bengal Capital $240,000 on each anniversary, of which $60,000 is to be paid in cash and $180,000 is to be paid in cash, common stock, or warrants to purchase shares of the Company’s common stock, in such proportions as are determined by the Company. The Company has accrued $260,000 under this agreement as of 31 January 2024. In February 2024, the Company settled the annual advisory fees of $240,000 accrued as of January 5, 2024, of which $60,000 was paid in cash and $180,000 was paid by issuing 2,700,393 common shares (Note 23). In addition, if the Company successfully obtains a cultivation license in New Jersey during the term of the Bengal Advisory Agreement, the Company will owe a fee of $1,000,000, which will be payable in the form of the Company’s common stock or a warrant to purchase shares of the Company’s common stock, in either case as requested by Bengal Capital. As of 31 January 2024, no license has been obtained and therefore the related fee has not been paid or accrued | ||||||||
First Amendment [Member] | ||||||||||
Common stock, shares issued | 16,666,667 | |||||||||
Acquisition destribition | First Amendment (the “Effective Date”) and subject to compliance with the policies of the Canadian Securities Exchange (the “CSE”), which equates to 9,328,358 shares of common stock. The Company will also issue additional shares to Cary Stiebel equal to the difference between the amount of the shares of common stock of the Company that were issued by the Company to Mr. Stiebel on December 3, 2021 (the “PA #2 Shares”) and the amount of shares that Mr. Stiebel would have received had the VWAP for the PA #2 Shares been calculated as of the Effective Date (the “Additional PA #2 Shares”) which equates to 4,734,530 shares of common stock. Additionally, on the date that is eighteen (18) months (548 days) following the Effective Date of this First Amendment (the “Additional Share Issuance Date”) the Company will issue $100,000 worth of shares to the Sellers based on the ten (10) day VWAP and subject to compliance with the policies of the CSE, calculated as of the Additional Share Issuance Date. This $100,000 was recorded as consulting fees for the year ended 31 July 2022. Furthermore, DEP shall cause the Company to issue to Mr. Stiebel $300,000 worth of shares of common stock of the Company within three (3) days following the Effective Date of this First Amendment, and subject to compliance with the policies of the CSE (the “Additional True up Shares”) which equates to 2,238,806 shares of common stock | |||||||||
Working capital adjustment description | Sellers in accordance with their instructions at a deemed price of US$0.134 per share. 2,238,806 of the 16,301,694 shares are being held in escrow pending the results of a working capital adjustment in accordance with MIPA #1 and MIPA #2 | |||||||||
Purchase Price Reduced | 2,500,000 | $ 2,500,000 | ||||||||
Interest rate per annum | 10% | |||||||||
Purchase Price of agreement | $ 175,000 | 4,800,000 | ||||||||
Canopy Monterey Bay, LLC [Member] | ||||||||||
Promissory note | $ 2,300,000 | |||||||||
Ownership percentage | 100% | |||||||||
Common stock issued | $ 2,189,544 | |||||||||
Business acquisition payment | $ 1,250,000 | 1,250,000 | ||||||||
Business acquisition payment | $ 1,250,000 | |||||||||
Canopy Monterey Bay, LLC [Member] | Second Purchase Agreement | ||||||||||
Number of share issued | 2,728,156 | |||||||||
Ownership percentage | 100% | 20% | ||||||||
Common stock issued | $ 1,000,000 | |||||||||
Membership interests | 80% | |||||||||
Additional issued share amount | $ 100,000 | $ 100,000,000,000 | ||||||||
Accounts payable included in cash consideration | $ 100,000 | $ 100,000 | ||||||||
Promissory notes deposited in escrow account | 2,300,000 | |||||||||
Promissory notes deposited cash | $ 2,500,000 | |||||||||
Per share common stock issued | $ 0.3665 | |||||||||
Additonal number share issued | 100,000 | |||||||||
Crafted Plants NJ Corp [Member] | ||||||||||
Acquisition destribition | The Company also entered into a three-year strategic advisory services agreement with Bengal Impact Partners, LLC (“Bengal Capital”) dated 5 January 2023 (“Bengal Advisory Agreement”). The Company shall pay Bengal Capital $240,000 on each anniversary, of which $60,000 is to be paid in cash and $180,000 is to be paid in cash, common stock, or warrants to purchase shares of the Company’s common stock, in such proportions as are determined by the Company. In addition, if the Company successfully obtains a cultivation license in New Jersey during the term of the Bengal Advisory Agreement, the Company will owe a fee of $1,000,000, which will be payable in the form of the Company’s common stock or a warrant to purchase shares of the Company’s common stock, in either case as requested by Bengal Capital | |||||||||
Business acquisition payment | $ 995,035 | $ 50,000 | ||||||||
Business Acquisition late payment | $ 120,000 | |||||||||
NMG IL4, LLC ("NMG IL 4") [Member] | Membership Interest Purchase Agreement [Member] | ||||||||||
Description for build out facility | Upon receipt of the Illinois license, NMG IL 4 entered into a management agreement with Management Company and would be paid a management fee equal to 30% of net profits | |||||||||
NMG IL4, LLC ("NMG IL 4") [Member] | Convertible Credit Facility Agreement [Member] | ||||||||||
Description for build out facility | On April 25, 2023, DEP converted the Convertible Note for 99,900 units and purchased 100 units for $1,000 pursuant to the MIPA, after the opening of the Markham dispensary on or about April 25, 2023 | DEP entered into a Convertible Credit Facility Agreement (the “Convertible Note”) with NMG IL 4 on December 26, 2019 to build-out the facility for up to $1,500,000 in lieu of converting into 99,900 membership units | ||||||||
Ownership percentage | DEP also entered into a Membership Interest Purchase Agreement (the “MIPA”) on December 26, 2019 with both Tall Bird and Big Stone to purchase the remaining 100 units for $10 per unit | |||||||||
BaM Body and Mind Dispensary NJ Inc [Member] | ||||||||||
Percentage of shares sold | 5% | |||||||||
Aggregate amount shall pay to the Purchaser | $ 50,000 |
Intangible Assets Net (Details)
Intangible Assets Net (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2024 | Jul. 31, 2023 | |
Accumulated amortization | $ 3,443,101 | |
Brand | ||
Gross carrying amount | 220,000 | $ 220,000 |
Accumulated amortization | 0 | 0 |
Net carrying amount | 220,000 | 220,000 |
Licenses | ||
Gross carrying amount | 4,683,508 | 4,683,508 |
Accumulated amortization | (1,240,407) | (1,053,576) |
Net carrying amount | $ 3,443,101 | $ 3,629,932 |
Weighted average life (years) | 10 years | 10 years |
Total intangible assets | ||
Gross carrying amount | $ 4,903,508 | $ 4,903,508 |
Accumulated amortization | (1,240,407) | (1,053,576) |
Net carrying amount | $ 3,663,101 | $ 3,849,932 |
Intangible Assets Net (Details
Intangible Assets Net (Details 1) | Jan. 31, 2024 USD ($) |
Intangible Assets Net | |
2024 | $ 184,800 |
2025 | 370,616 |
2026 | 370,616 |
2027 | 370,616 |
2028 | 371,632 |
Thereafter | 1,774,821 |
Total | $ 3,443,101 |
Intangible Assets Net (Detail_2
Intangible Assets Net (Details Narrative) - USD ($) | 6 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Intangible Assets Net | ||
Amortization expenses | $ 186,831 | $ 514,826 |
Related Party Balances and Tr_3
Related Party Balances and Transactions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | |
Management Fees | $ 141,888 | $ 98,531 | $ 230,062 | $ 203,957 |
President And Chief Executive Officer [Member] | ||||
Management Fees | 87,046 | 52,290 | 143,254 | 107,221 |
Chief Financial Officer And Director [Member] | ||||
Management Fees | 54,842 | 30,000 | 86,808 | 62,363 |
Corporate Secretary [Member] | ||||
Management Fees | $ 0 | $ 16,241 | $ 0 | $ 34,373 |
Related Party Balances and Tr_4
Related Party Balances and Transactions (Details Narrative) - USD ($) | 6 Months Ended | |
Jan. 31, 2024 | Jul. 31, 2023 | |
Due to Related Parties, Current | $ 75,662 | $ 93,481 |
Commision rate | 2.50% | |
Chief Financial Officer [Member] | ||
Due to Related Parties, Current | $ 13,633 | 0 |
Chief Executive Officer [Member] | ||
Due to Related Parties, Current | 62,029 | 61,777 |
Corporate Secretary [Member] | ||
Due to Related Parties, Current | 0 | |
Cheif Operating Officer Member | ||
Due to Related Parties, Current | $ 0 | $ 31,704 |
Loans Payable and Convertible_3
Loans Payable and Convertible Debenture (Details) - USD ($) | Jan. 31, 2024 | Jul. 31, 2023 |
Loans Payable and Convertible Debenture | ||
Focus Growth loan | $ 0 | $ 6,666,667 |
Long Beach loan | 4,173 | 10,728 |
CCG loan | 454,426 | 148,221 |
Secured promissory note | 2,300,000 | 2,300,000 |
Unsecured loan balance | 15,125 | 7,052 |
Total principal amount | 2,773,724 | 9,132,668 |
Debt discount | 0 | (1,187,008) |
Outstanding loan balance | 2,773,724 | 7,945,660 |
Current portion | (473,724) | (166,001) |
Long-term portion | $ 2,300,000 | $ 7,779,659 |
Loans Payable and Convertible_4
Loans Payable and Convertible Debenture (Details 1) - USD ($) | Jan. 31, 2024 | Jul. 31, 2023 |
BAM I, A Series of Bengal Catalyst Fund SPV, LP [Member] | ||
Total principal amount | $ 2,750,000 | $ 2,750,000 |
Mindset Value Fund LP One [Member] | ||
Total principal amount | 150,000 | 150,000 |
Mindset Value Wellness Fund LP One [Member] | ||
Total principal amount | 100,000 | 100,000 |
Convertible Debenture Financing [Member] | ||
Total principal amount | 3,000,000 | 3,000,000 |
Debt discount | (459,775) | (519,478) |
Outstanding balance, net | $ 2,540,225 | $ 2,480,522 |
Loans Payable and Convertible_5
Loans Payable and Convertible Debenture (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Dec. 19, 2022 | Jun. 15, 2022 | Nov. 30, 2021 | Jul. 19, 2021 | Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | Jul. 31, 2023 | |
Legal fees and other fees | $ 175,758 | ||||||||
Prepayment premium | 342,543 | ||||||||
Original debt discount | 666,667 | ||||||||
Unamortized debt discount | 1,187,008 | ||||||||
Repayment of loan amount | 7,335,722 | ||||||||
Principal Balance | 6,666,666 | ||||||||
Accrued interest | 326,512 | ||||||||
Interest Expenses | $ 211,597 | $ 424,480 | 2,071,105 | $ 805,660 | |||||
Unsecured loan | 4,173 | 4,173 | $ 10,728 | ||||||
Warrants issued for services , amount | $ 1,037,146 | ||||||||
Warrants issued for services , shares | 4,800,000 | ||||||||
Combined fees | $ 175,758 | ||||||||
Origination discount, rate | 10% | ||||||||
Debt discount, loan | 1,883,901 | ||||||||
Description of second amendment to the Loan Agreement | the Company entered into a second amendment to the Loan Agreement (“Amendment No. 2 to Loan Agreement”) to extend the maturity date by one year to 19 July 2026. Additionally, Amendment No. 2 to Loan Agreement allows the outside date for the Company to draw on the delayed draw term loan of US$4.44 million to be extended from June 1, 2022 to March 31, 2023, whereby US$4 million in funds will be advanced to the Company. The ability of the Company to draw on the delayed draw term loan was subject to compliance with certain provisions in Loan Agreement including provision of a satisfactory budget approved at the sole discretion of the Lender. The Company did not draw or extend the Delayed Draw Term Loan and has expired | ||||||||
Fair value of warrant, amount | $ 79,585 | ||||||||
Exercise price per share | $ 0.10 | ||||||||
Maturity date | Dec. 19, 2026 | ||||||||
Amount payable | 2,908,512 | 2,908,512 | 2,499,181 | ||||||
Lender [Member] | |||||||||
Issued common stock purchase to warrants | 1,000,000 | ||||||||
Exercise cise | $ 0.16 | ||||||||
FG Agency Lending LLC [Member] | |||||||||
Maturity date | 19 July 2025 | ||||||||
Loan balance | $ 6,666,667 | ||||||||
Advance loan payble | $ 6,000,000 | ||||||||
Initial term loan description | The Company may draw upon the remaining face amount of $4,444,444 (the “Delayed Draw Term Loan”) upon providing a 30-day request to the Agent by 1 December 2021, whereby $4,000,000 will be advanced to the Company after applying the 10% origination discount | ||||||||
Additional Common stock purchase | 1,000,000 | ||||||||
Convertible Debenture Financing [Member] | |||||||||
Aggregate principal amount of debenture | $ 3,000,000 | ||||||||
Warrants to purchase | 15,000,000 | ||||||||
Rate of interest | 8% | ||||||||
Exercise price per share | $ 0.10 | ||||||||
Maturity date | Dec. 19, 2027 | ||||||||
Loan balance | 3,000,000 | 3,000,000 | |||||||
Interest expense | 180,689 | ||||||||
Amortization of debt discount | 459,775 | 459,775 | 519,478 | ||||||
Canopy Loan [Member] | |||||||||
Unsecured loan | 15,125 | 15,125 | 7,052 | ||||||
Rate of interest | 10% | ||||||||
Initial interest | 80% | ||||||||
Secured Promissory Note | $ 2,300,000 | ||||||||
Membership Interest | 80% | ||||||||
CCG loan [Member] | |||||||||
Amount receivable | 699,667 | 1,194,025 | |||||||
Advance Amount | 393,462 | 645,092 | |||||||
Amount payable | $ 454,426 | 454,426 | $ 148,221 | ||||||
Loan payable | $ 306,205 | $ 548,933 | |||||||
Warrants [Member] | |||||||||
Exercise price per share | $ 0.40 | ||||||||
Aggregate purchase common stock shares | 8,000,000 | ||||||||
Acquire common stock shares | 4,800,000 | ||||||||
Escrowed shares | 3,200,000 | ||||||||
Escrowed shares price per share | $ 0.45 |
Operating leases (Details)
Operating leases (Details) | 6 Months Ended |
Jan. 31, 2024 USD ($) | |
Operating Leases | |
Operating cash flows from operating leases | $ 1,047,328 |
Weighted-average remaining lease term - operating leases | 6 years 5 months 4 days |
Weighted-average discount rate - operating leases | 12% |
Operating leases (Details 1)
Operating leases (Details 1) - USD ($) | Jan. 31, 2024 | Jul. 31, 2023 |
Operating Leases | ||
2024 | $ 848,272 | |
2025 | 1,712,955 | |
2026 | 1,740,745 | |
2027 | 1,469,408 | |
2028 and thereafter | 4,650,416 | |
Total lease payments | 10,421,796 | |
Less imputed interest | (3,312,686) | |
Total | 7,109,110 | |
Less current portion | (894,280) | $ (980,265) |
Long term portion | $ 6,214,830 | $ 6,801,711 |
Operating leases (Details 2)
Operating leases (Details 2) - USD ($) | Jan. 31, 2024 | Jul. 31, 2023 |
Right-of-use Of assets | $ 4,133,426 | $ 4,329,634 |
NMG OH P1, LLC [Member] | ||
Right-of-use Of assets | 184,724 | 198,412 |
Lease liabilities | 189,244 | 202,618 |
NMG OH 1, LLC | ||
Right-of-use Of assets | 0 | 158,336 |
Lease liabilities | 0 | 162,552 |
NMG [Member] | ||
Lease liabilities | $ 0 | $ 1,176,729 |
Operating Leases (Details Narra
Operating Leases (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||
Apr. 07, 2022 | Jan. 04, 2022 | Feb. 10, 2021 | Dec. 04, 2020 | Dec. 02, 2020 | Oct. 01, 2019 | Jun. 13, 2019 | May 07, 2019 | Dec. 02, 2018 | Aug. 02, 2018 | Nov. 10, 2017 | Jan. 10, 2017 | Feb. 15, 2022 | Jan. 31, 2024 | Jul. 31, 2022 | Jul. 01, 2021 | |
Periodic rent payable percentage | 3% | |||||||||||||||
Lease expense (Monthly) | $ 646,183 | |||||||||||||||
Operating lease liability | $ 7,109,110 | |||||||||||||||
Periodic rent payable amount | $ 9,000 | |||||||||||||||
Accounting Standards Update 2016-02 [Member] | ||||||||||||||||
Discount rate for present value of future lease payments | 12% | |||||||||||||||
SJK Services, LLC [Member] | ||||||||||||||||
Description for lease option to extend | we amended the lease agreement to include two additional options to extend the lease agreement for five years each and expanded the lease agreement to include 3413 | |||||||||||||||
Description about lease rent | The guaranteed minimum monthly base for unit 3411 was $8,067 + common area expenses, increased to $8,470 + common area expenses in January 2024, and is subject to a 5% increase on each anniversary date of the lease. The guaranteed monthly base rent for unit 3413 was $1,632 + common area expenses, increased to $1,681 + common area expenses on 1 April 2023 and is subject to a 3% increase on each anniversary date of the lease agreement | |||||||||||||||
4 December, 2020 [Member] | NMG CA P1, LLC [Member] | ||||||||||||||||
Lease expense (Monthly) | $ 6,028 | |||||||||||||||
Description for lease option to extend | The lease agreement includes 3% annual base rent increases and two options to extend for five-years each. We amended the lease agreement on 27 January 2022, which extended the term to 31 December 2026 and rent commencement date. The base rent is $6,028 plus common area expenses for the first six months | |||||||||||||||
1 October 2019 [Member] | NMG Ohio, LLC [Member] | ||||||||||||||||
Lease expense (Monthly) | $ 4,200 | |||||||||||||||
Description for lease option to extend | We have three options to extend the lease agreement for an additional three-year term | |||||||||||||||
Description about lease rent | The guaranteed minimum monthly rent is subject to 5% increase for each option period. On 1 September 2021, the lease agreement was assigned to NMG OH P1, LLC with the same terms. On 18 October 2022, NMG OH P1, LLC extended the lease agreement with MMCA Development, LLC for one additional term of three years | |||||||||||||||
7 April 2022 [Member] | DEP Nevada, Inc [Member] | ||||||||||||||||
Lease expense (Monthly) | $ 4,482 | |||||||||||||||
Description for lease option to extend | The lease agreement includes 4% annual base rent increases and two options to extend for three years each | |||||||||||||||
From 11 May 2021 [Member] | NMG Ohio, LLC [Member] | ||||||||||||||||
Periodic rent payable amount | $ 4,000 | |||||||||||||||
From 01 July, 2021 [Member] | NMG Ohio, LLC [Member] | ||||||||||||||||
Periodic rent payable amount | $ 4,200 | |||||||||||||||
December 1 , 2018 | SGSD LLC Member | ||||||||||||||||
Description for lease option to extend | Under the terms of the assignment and first amendment to the original lease agreement dated 13 June 2019, we have three options to extend the lease and each option is for five years | |||||||||||||||
Bonus provision | $ 1,000,000 | |||||||||||||||
NMG Ohio LLC | ||||||||||||||||
Description for lease option to extend | The Company has three options to extend the lease and each option is for three years. | |||||||||||||||
Nevada Medical Group LLC [Member] | ||||||||||||||||
Description for lease option to extend | We had two options to extend the lease for an additional three-year term and an option to purchase the property at any point during the initial term | expenses on 1 January 2021 and increased to $16,883 on 1 January 2022. | We have four options to extend the lease agreement and each option is for five years | |||||||||||||
Description for change in rent | This lease includes two (2) options to extend for ten-years each. Concurrently with the execution of this lease, NMG IL 4 paid the sum of $92,234 consisting of twelve (12) months’ minimum rent in the sum of $84,960 plus one (1) fiscal year’s real estate taxes in the sum of $63,914 less the minimum rent credit in the sum of $56,640. On 12 October 2022, NMG IL 4 amended the lease agreement to relocate to certain premises containing approximately 3,600 square feet located at 3063 W. 159th Street, Markham, Illinois. The term of the lease as to relocated premises commenced on 12 October 2022 and as amended shall end on 31 January 2032. The Company acquired the rights to the lease agreement with NMG IL 4 on 25 April 2023 (Note 11). The base rent is currently $13,600 plus common area expenses until 31 January 2024 and will increase to $13,804 on 1 February 2024 | 2% increase on each anniversary date of the lease | ||||||||||||||
Nevada Medical Group LLC [Member] | From January 1, 2022 [Member] | ||||||||||||||||
Periodic rent payable amount | $ 13,663 | |||||||||||||||
Description for change in rent | 3% increase on each anniversary date of the lease | |||||||||||||||
Nevada Medical Group LLC [Member] | From 09 May, 2022 [Member] | ||||||||||||||||
Periodic rent payable amount | $ 13,936 | |||||||||||||||
Nevada Medical Group LLC [Member] | From May 1, 2022 [Member] | ||||||||||||||||
Periodic rent payable amount | $ 6,478 | $ 15,913 | ||||||||||||||
Nevada Medical Group LLC [Member] | From July 31, 2022 [Member] | ||||||||||||||||
Periodic rent payable amount | $ 6,780 | $ 16,390 | ||||||||||||||
Nevada Medical Group LLC [Member] | 7 May 2019 | ||||||||||||||||
Description about lease rent | The guaranteed minimum monthly rent is subject to a $0.03 per square foot, per month, increase on each anniversary date of the lease for years one through three of the term and $0.04 per square foot, per month, increase on each anniversary date of the lease for years four through five of the term | The guaranteed monthly rent is subject to a 6% increase on each anniversary date of the lease, based on increases in the Consumer Price Index for San Diego County. The lease contains a sale bonus provision of $1,000,000 or 10% of the purchase price of the entire business | ||||||||||||||
Nevada Medical Group LLC [Member] | From May 1, 2023 [Member] | ||||||||||||||||
Periodic rent payable amount | $ 7,081 | |||||||||||||||
NMG MI P1 [Member] | ||||||||||||||||
Amortization of right-of-use assets included in Cost of Sales | $ 470,546 | |||||||||||||||
Lease expense (Monthly) | $ 7,500 | $ 23,474 | ||||||||||||||
Operating lease liability | $ 461,904 | 239,173 | ||||||||||||||
Description for lease option to extend | The lease agreement includes 2% annual base rent increases and three options to extend for five-years each | The lease agreement includes a rent abatement period, 3% annual base rent increases and two options to extend for five-years each | ||||||||||||||
Issued common share upon achieving certain milestones | $ 400,000 | |||||||||||||||
Common share issued on receiving local and state commercial marihuana processing licenses | 200,000 | |||||||||||||||
Common share issued on receiving operating permit to begin commercial marihuana processing operation | $ 200,000 | $ 22,790 | ||||||||||||||
NMG MI C1 [Member] | ||||||||||||||||
Operating lease liability | $ 1,385,712 | $ 231,374 | ||||||||||||||
Description for lease option to extend | The lease agreement includes 2% annual base rent increases and three options to extend for five-years each | |||||||||||||||
Issued common share upon achieving certain milestones | $ 22,500 | |||||||||||||||
Common share issued on receiving local and state commercial marihuana cultivation licenses | 200,000 | |||||||||||||||
Common share issued on receiving local operating permit to begin commercial marihuana cultivation operation | 200,000 | |||||||||||||||
Common share issued on receiving local and state commercial marihuana retail licenses | 100,000 | |||||||||||||||
Common share issued on Common share issued on receiving local operating permit to begin commercial marihuana retail operation | 100,000 | |||||||||||||||
Simone Investment Group, LLC [Member] | ||||||||||||||||
Description for lease option to extend | (i) twelve months from the Lease Commencement Date, (ii) upon issuance to Tenant of the Class 5 Cannabis Retail License by the Commission plus thirty days, or (iii) the date when the Tenant opens for business; and Phase II of ten years from the earlier of (i) the date when the Tenant opens for business, (ii) twelve months from 15 February 2022, or (iii) thirty days after the issuance to Tenant of the Class 5 Cannabis Retail License by the Commission. Tenant has four options to extend the lease and each option is for five years. On 21 December 2022, the Company acquired the rights to the lease agreement from the merger with CraftedPlants NJ Corp. for consideration of $170,000 (Note 11). The rent for Phase I was $10,000 per month for the first eight months and increased to $14,000 per month on the nineth month. The monthly rent for Phase II is $25,146 annually for the first five years and will increase to $29,583 on the sixth year | |||||||||||||||
NMG MI C1 One [Member] | ||||||||||||||||
Issued common share upon achieving certain milestones | $ 600,000 |
Capital Stock (Details)
Capital Stock (Details) | 6 Months Ended | 12 Months Ended | |
Jan. 31, 2024 USD ($) $ / shares shares | Jul. 31, 2023 $ / shares | Jul. 31, 2023 USD ($) shares | |
Outstanding number of share, ending balane | 16,146,000 | ||
Stock options [Member] | |||
Outstanding number of share, beginning balance | 17,151,000 | 9,453,000 | |
Granted, number of share | 9,773,000 | ||
Expired, number of share | (1,005,000) | (2,075,000) | |
Outstanding number of share, ending balane | 16,146,000 | 17,151,000 | |
Vested and fully exercisable option outstanding | 13,226,500 | ||
Weighted average exercise price outstanding, beginning balance | $ / shares | $ 0.67 | ||
Weighted average exercise price, granted | $ / shares | 0.07 | ||
Weighted average exercise price, Expired | (per share) | $ 0.58 | 0.64 | |
Weighted average exercise price outstanding, ending balane | (per share) | 0.32 | $ 0.33 | |
Weighted average exercise price, Vested and fully exercisable | $ / shares | $ 0.38 | ||
Weighted average contractual term remaining (in years) | 2 years 1 month 9 days | ||
Weighted average contractual term remaining (in year) | 3 years 25 days | 3 years 4 months 20 days | |
Weighted average contractual term remaining (in years), Vested and fully exercisable | 2 years 9 months | ||
Aggregate intrinsic value outstanding, beginning balance | $ | $ 0 | $ 0 | |
Aggregate intrinsic value outstanding, ending balane | $ | $ 0 | $ 0 |
Capital Stock (Details 1)
Capital Stock (Details 1) | 6 Months Ended |
Jan. 31, 2024 $ / shares shares | |
Number of options outstanding | 16,146,000 |
Number of options exercisable | 13,108,500 |
Range One [Member] | |
Number of options outstanding | 1,600,000 |
Number of options exercisable | 1,600,000 |
Exercise price | $ / shares | $ 0.88 |
Expire date | 21 August 2024 |
Range Two [Member] | |
Number of options outstanding | 250,000 |
Number of options exercisable | 250,000 |
Exercise price | $ / shares | $ 0.93 |
Expire date | 1 October 2024 |
Range Three [Member] | |
Number of options outstanding | 200,000 |
Number of options exercisable | 200,000 |
Exercise price | $ / shares | $ 0.88 |
Expire date | 23 January 2025 |
Range Four [Member] | |
Number of options outstanding | 250,000 |
Number of options exercisable | 250,000 |
Exercise price | $ / shares | $ 0.405 |
Expire date | 1 March 2025 |
Range Five [Member] | |
Number of options outstanding | 1,375,000 |
Number of options exercisable | 1,375,000 |
Exercise price | $ / shares | $ 0.67 |
Expire date | 30 April 2025 |
Range Six [Member] | |
Number of options outstanding | 350,000 |
Number of options exercisable | 350,000 |
Exercise price | $ / shares | $ 0.88 |
Expire date | 21 August 2024 |
Range Seven [Member] | |
Number of options outstanding | 1,250,000 |
Number of options exercisable | 1,250,000 |
Exercise price | $ / shares | $ 0.68 |
Expire date | 6 March 2026 |
Range Eight [Member] | |
Number of options outstanding | 250,000 |
Number of options exercisable | 250,000 |
Exercise price | $ / shares | $ 0.65 |
Expire date | 5 April 2024 |
Range Nine [Member] | |
Number of options outstanding | 448,000 |
Number of options exercisable | 448,000 |
Exercise price | $ / shares | $ 0.44 |
Expire date | 30 November 2026 |
Range Ten [Member] | |
Number of options outstanding | 200,000 |
Number of options exercisable | 200,000 |
Exercise price | $ / shares | $ 0.44 |
Expire date | 30 November 2024 |
Range Eleven [Member] | |
Number of options outstanding | 200,000 |
Number of options exercisable | 200,000 |
Exercise price | $ / shares | $ 0.15 |
Expire date | 8 July 2027 |
Range Twelve [Member] | |
Number of options outstanding | 4,050,000 |
Number of options exercisable | 1,012,500 |
Exercise price | $ / shares | $ 0.065 |
Expire date | 25 April 2028 |
Range Thirteen [Member] | |
Number of options outstanding | 5,723,000 |
Number of options exercisable | 5,723,000 |
Exercise price | $ / shares | $ 0.065 |
Expire date | 25 April 2028 |
Capital Stock (Details 2)
Capital Stock (Details 2) - Options [Member] | 6 Months Ended |
Jan. 31, 2024 | |
Expected life of the options | 2 years 9 months 3 days |
Expected volatility | 103% |
Expected dividend yield | 0% |
Risk-free interest rate | 3.27% |
Capital Stock (Details 3)
Capital Stock (Details 3) - Share Purchase Warrants [Member] - $ / shares | Jan. 31, 2024 | Oct. 31, 2023 | Jul. 31, 2023 |
Number of warrants Outstanding | 20,800,000 | 20,800,000 | 20,800,000 |
Weighted Average Exercise Price Outstanding balance | $ 0.17 | $ 0.17 | $ 0.23 |
Capital Stock (Details 4)
Capital Stock (Details 4) - Share Purchase Warrants [Member] | 6 Months Ended |
Jan. 31, 2024 | |
Expected life of the options | 4 years |
Expected volatility | 107% |
Expected dividend yield | 0% |
Risk-free interest rate | 3.03% |
Capital Stock (Details 5)
Capital Stock (Details 5) - Share Purchase Warrants [Member] - $ / shares | 6 Months Ended | ||
Jan. 31, 2024 | Oct. 31, 2023 | Jul. 31, 2023 | |
Number of warrants outstanding and exercisable | 20,800,000 | 20,800,000 | 20,800,000 |
Warrants price per share | $ 0.17 | $ 0.17 | $ 0.23 |
One Range [Member] | |||
Number of warrants outstanding and exercisable | 4,800,000 | ||
Warrants price per share | $ 0.40 | ||
ExpiryDate | 19 July 2025 | ||
Two Range [Member] | |||
Number of warrants outstanding and exercisable | 15,000,000 | ||
Warrants price per share | $ 0.10 | ||
ExpiryDate | 19 December 2026 | ||
Three Range [Member] | |||
Number of warrants outstanding and exercisable | 1,000,000 | ||
Warrants price per share | $ 0.16 | ||
ExpiryDate | 14 June 2027 |
Capital Stock (Details Narrativ
Capital Stock (Details Narrative) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Apr. 25, 2023 $ / shares shares | Jan. 31, 2024 USD ($) $ / shares shares | Jan. 31, 2023 USD ($) | Jan. 31, 2024 USD ($) $ / shares shares | Jan. 31, 2023 USD ($) | Jul. 31, 2023 USD ($) $ / shares shares | Dec. 21, 2022 shares | Dec. 07, 2022 shares | Jul. 15, 2021 shares | |
Common shares in escrow | 4,986,000 | 4,986,000 | 146,636,974 | 16,666,667 | |||||
Issuance of aggregate common stock shares | 16,301,694 | 16,301,694 | 319,149 | ||||||
Common stcok shares held in escrow | 2,238,806 | ||||||||
Capital stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Stock option granted, fair value | $ | $ 395,526 | ||||||||
Share based compensation expense | $ | $ 18,465 | $ 22,013 | $ 53,808 | $ 54,471 | |||||
Capital stock, shares authorized | 900,000,000 | 900,000,000 | 900,000,000 | ||||||
Share Purchase Warrants [Member] | |||||||||
Issued warrants in connection with issuance of convertible debentures | 15,000,000 | ||||||||
Exercise price per warrant Share | $ / shares | $ 0.10 | ||||||||
Fair value of warrants, share | 15,000,000 | ||||||||
Fair value of warrants, value | $ | $ 592,159 | ||||||||
Merger Agreement With CraftedPlants [Member] | |||||||||
Common shares in escrow | 16,666,667 | ||||||||
Directors, officers, employees and consultants [Member] | |||||||||
Number of warrants, issued | 4,050,000 | ||||||||
Exercise price | $ / shares | $ 0.065 | ||||||||
Expiry date | 25 April 2028 | ||||||||
Directors, officers, employees and consultants One [Member] | |||||||||
Number of warrants, issued | 5,723,000 | ||||||||
Exercise price | $ / shares | $ 0.065 | ||||||||
Expiry date | 25 April 2028 | ||||||||
November 2023 | |||||||||
Common shares in escrow | 2,681,006 | 2,681,006 | |||||||
Release of common share to seller | 1,030,032 | ||||||||
Cancellation number of common share | 1,650,974 | ||||||||
Number of share issued | 2,728,156 |
Segmented Information and Maj_3
Segmented Information and Major Customers (Details) | 6 Months Ended |
Jan. 31, 2024 USD ($) | |
Revenue | $ 8,986,886 |
Net loss before taxes | (3,852,378) |
All others [Member] | |
Net loss before taxes | (4,499,215) |
Retail [Member] | |
Revenue | 8,986,886 |
Net loss before taxes | $ 646,837 |
Segmented Information and Maj_4
Segmented Information and Major Customers (Details Narrative) | 6 Months Ended |
Jan. 31, 2024 | |
Segmented Information and Major Customers | |
Commision rate | 10% |
Supplemental Disclosures with_3
Supplemental Disclosures with Respect to Cash Flows (Details) - USD ($) | 6 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Supplemental Disclosures with Respect to Cash Flows | ||
Cash paid during the year for interest | $ 129,361 | $ 446,040 |
Cash paid during the period for income taxes | $ 1,600 | $ 3,228 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jul. 03, 2019 | Sep. 22, 2023 | Jan. 17, 2023 | Dec. 21, 2022 | Jan. 31, 2024 | Jul. 31, 2022 | Jul. 31, 2023 | Aug. 12, 2019 | |
Total revised committed payments | $ 733,150 | |||||||
Common shares in escrow | 16,666,667 | 4,986,000 | 146,636,974 | |||||
Consultation fee | $ 100,000 | |||||||
Acquisation description | the Company entered into an agreement with John Kim, our consultant in the State of Illinois for a two-year services related to licensing process for a total payment of $86,500 payable in tranches until 10 June 2023, as well as $15,000 per month to three designated individuals for two (2) years ending on 31 December 2024, and $5,000 per month to one additional individual for six (6) months ending 30 June 2023 for an aggregate total of $476,500 | The Company entered into a three-year strategic advisory services agreement with Bengal Capital dated 5 January 2023 (“Bengal Advisory Agreement”). The Company shall pay Bengal Capital $240,000 on each anniversary, of which $60,000 is to be paid in cash and $180,000 is to be paid in cash, common stock, or warrants to purchase shares of the Company’s common stock, in such proportions as are determined by the Company. The Company has accrued $260,000 under this agreement as of 31 January 2024. In February 2024, the Company settled the annual advisory fees of $240,000 accrued as of January 5, 2024, of which $60,000 was paid in cash and $180,000 was paid by issuing 2,700,393 common shares (Note 23). In addition, if the Company successfully obtains a cultivation license in New Jersey during the term of the Bengal Advisory Agreement, the Company will owe a fee of $1,000,000, which will be payable in the form of the Company’s common stock or a warrant to purchase shares of the Company’s common stock, in either case as requested by Bengal Capital. As of 31 January 2024, no license has been obtained and therefore the related fee has not been paid or accrued | ||||||
Acquisition of Canopy | ||||||||
Consultation fee | $ 100,000 | |||||||
Acquisation description | the Canopy acquisition agreements PA #1 and PA #2 on November 29, 2021, a Letter of Intent (“LOI”) was executed to engage the Sellers, Jayme Rivard and Cary Stiebel, as business consultants at a rate of $5,000 per month each, for 12 months beginning December 1, 2021. Subsequently, this LOI was amended on June 2, 2022 to extend the agreement until December 31, 2024 and for the Company to issue 100,000 stock options to purchase 100,000 shares of the Company 's common stock to Consultant, Mr. Stiebel, and 100,000 stock options to purchase 100,000 shares of the Company's common stock to Consultant, Jayme Rivard (collectively, the "Stock Options"). The exercise price for the Stock Options shall not be lower than the greater of the closing market price of the Company's shares on (a) the trading day prior to the date of grant of the Stock Options, and (b) the date of grant of the Stock Options and will have an expiry date of five (5) years from the date of grant | |||||||
John Kim [Member] | ||||||||
Cash payment | $ 299,817 | |||||||
BaM Body and Mind Dispensary NJ Inc [Member] | ||||||||
Aggregate amount shall pay to the Purchaser | $ 50,000 | |||||||
Percentage of shares sold | 5% | |||||||
GLDH [Member] | ||||||||
Ownership percentage | 100% | |||||||
Investment purchase price | $ 6,700,000 | |||||||
Working capital settlement | 1,650,974 | |||||||
Amount to be paid in common shares | $ 1,500,000 | |||||||
Share price per share | $ 0.7439 | |||||||
Maximum number of common shares | 2,681,006 | |||||||
Common shares in escrow | 2,681,006 |
Other Agreement (Details Narrat
Other Agreement (Details Narrative) | Aug. 06, 2021 |
Other Agreements | |
Lottery with a pool of applicants | 85% |
Discontinued Operations and A_3
Discontinued Operations and Assets Held for Sale (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | |
Discontinued Operations and Assets Held for Sale | ||||
Sales | $ 428,595 | $ 3,308,447 | $ 2,581,452 | $ 6,507,631 |
Cost of sales | (676,196) | (2,812,932) | (2,329,988) | (6,101,604) |
Gross profit | (247,601) | 495,515 | 251,464 | 406,027 |
Operating expenses | (171,826) | (824,752) | (658,538) | (1,604,070) |
Other items | (640,664) | 0 | (581,282) | (828) |
Total Operating Expenses | (812,490) | (824,752) | (1,239,820) | (1,603,242) |
Income (loss) from discontinued operations before income taxes | (1,060,091) | (329,237) | (988,356) | (1,197,215) |
Income tax expense (recovery) | 67,827 | (249,595) | (147,784) | (499,190) |
Net income (loss) from discontinued operations | $ (992,264) | $ (578,832) | $ (1,136,140) | $ (1,696,405) |
Discontinued Operations and A_4
Discontinued Operations and Assets Held for Sale (Details 1) - USD ($) | Jan. 31, 2024 | Jul. 31, 2023 |
Discontinued Operations and Assets Held for Sale | ||
Cash | $ 5,081 | $ 215,622 |
Accounts receivable, net | 63,337 | 564,392 |
Other amounts receivable | 0 | 20,000 |
Prepaids | 44,951 | 332,814 |
Inventory | 120,283 | 1,609,521 |
Property and equipment, net | 617,422 | 1,143,818 |
Operating lease right-of-use assets | 184,724 | 356,748 |
Brand and licenses, net | 0 | 2,047,295 |
Total assets held for sale | 1,035,798 | 6,290,210 |
Accounts payables and accrued liabilities | 2,036,461 | 479,619 |
Income taxes payable | 0 | 239,434 |
Operating lease liabilities | 189,244 | 1,541,900 |
Total liabilities held for sale | $ 2,225,705 | $ 2,260,953 |
Discontinued Operations and A_5
Discontinued Operations and Assets Held for Sale (Details 2) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jan. 31, 2024 | Jul. 31, 2023 | Jul. 31, 2022 | |
Assets held for sale | $ 1,035,798 | $ 6,290,210 | |
Liabilities held for sale | 2,225,705 | 2,260,953 | |
Liability [Member] | |||
Liabilities held for sale | 2,225,705 | 2,260,953 | $ 1,079,082 |
Transfer In | 1,789,189 | ||
Ongoing activity from discontinued operations | 2,006,526 | (198,597) | |
Disposition | (2,041,774) | (408,721) | |
Available for Sale Subsidiaries [Member] | Liability [Member] | |||
Liabilities held for sale | 2,225,705 | 219,179 | 259,470 |
Transfer In | 0 | ||
Ongoing activity from discontinued operations | 2,006,526 | (40,291) | |
Disposition | 0 | 0 | |
Discontinued Operations [Member] | Liability [Member] | |||
Liabilities held for sale | 0 | 2,041,774 | 819,612 |
Transfer In | 1,789,189 | ||
Ongoing activity from discontinued operations | 0 | (158,306) | |
Disposition | (2,041,774) | (408,721) | |
Assets [Member] | |||
Assets held for sale | 1,035,798 | 6,290,210 | 5,942,404 |
Transfer In | 7,300,845 | ||
Ongoing activity from discontinued operations | (57,877) | (5,774,245) | |
Disposition | (5,196,535) | (1,178,794) | |
Assets [Member] | Available for Sale Subsidiaries [Member] | |||
Assets held for sale | 1,035,798 | 1,093,675 | 1,230,011 |
Transfer In | 0 | ||
Ongoing activity from discontinued operations | (57,877) | (136,336) | |
Disposition | 0 | 0 | |
Assets [Member] | Discontinued Operations [Member] | |||
Assets held for sale | 0 | 5,196,535 | $ 4,712,393 |
Transfer In | 7,300,845 | ||
Ongoing activity from discontinued operations | 0 | (5,637,909) | |
Disposition | $ (5,196,535) | $ 1,178,794 |
Discontinued Operations and A_6
Discontinued Operations and Assets Held for Sale (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
Sep. 05, 2023 | Jan. 31, 2024 | Oct. 17, 2023 | Jan. 31, 2024 | Jul. 31, 2023 | |
Discontinued Operations and Assets Held for Sale | |||||
Initial Purchase Price | $ 7,330,000 | ||||
Impairment loss held for sale | $ 944,015 | ||||
Closing plus | $ 7,975,000 | ||||
Deposit | 250,000 | ||||
Initial total consideration | $ 8,225,000 | ||||
Other amounts receivable | $ 100,000 | 100,000 | |||
Purchaser price | $ 2,000,000 | 2,000,000 | 100,000 | ||
Bonus Payment | 2,500,000 | ||||
Disposition receivable | 1,750,000 | 1,750,000 | |||
Cash to be paid | $ 750,000 | 750,000 | |||
Secured promissory note paid | $ 1,000,000 | ||||
Purchase Agreement | $ 1,000,000 | ||||
Letter Agreement, Description | The purchase price of US$2,000,000 consists of: (i) a cash deposit of US$250,000 (paid); (ii) US$750,000 in cash to be paid within six months of receipt of regulatory approval by the Nevada Cannabis Compliance Board, which cash payment will be covered by a personal guarantee of an affiliate of Vegas Brazil; and (iii) a secured promissory note in the amount of US$1,000,000 (the "Note") to be delivered by Vegas Brazil to DEP on the closing date, and which Note will be personally guaranteed by an affiliate of Vegas Brazil. The Note shall bear interest at the applicable federal rate as of the closing date and the Note will be paid in six (6) equal monthly payments with the first payment occurring on the seven (7) month anniversary of the closing date | ||||
Manufacturing Equipment Lease Agreement, Description | The term of the agreement commenced on 21 July 2023 and received a deposit of $20,000 that will be applied to the last monthly rent payment. For the first year of the lease, the rent is $20,000 per month. The lease can be terminated by either party with a 90-day written notice, or 30-day notice with cause |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | |
Income Taxes | ||||
Unrecognized tax benefits interest | $ 706,210 | |||
Unrecognized tax benefits effective tax rate | $ 71,334 | 71,334 | ||
Income tax expense | $ 532,459 | $ 370,467 | $ 1,363,515 | $ 746,946 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - Bengal Advisory Agreement [Member] - USD ($) | Mar. 15, 2024 | Feb. 09, 2024 |
Common stock number of shares issued | 2,700,393 | |
Descriptions of Convertible Loan Agreement | under the Convertible Loan Agreement constituting forty percent (40%) of the overall ownership interests of CCG with the following preferred rights: (i) the right to an allocative share of sixty-six and 67/100 percent (66.67%) of the net profits of CCG and the right to distributions equal to sixty-six and 67/100 percent (66.67%) of the net profits on a monthly basis; (ii) the right to a sixty-six and 67/100 percent (66.67%) share of CCG’s assets upon dissolution of CCG; and (iii) the right to sixty-six and 67/100 percent (66.67%) of all voting rights of members of CCG | |
Accrued advisory fees | $ 180,000 |