10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2018

OR

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ________________ to __________________

Commission File Number 000-1321002

AGRITEK HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	20-8484256
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

777 Brickell Avenue, Suite 500, Miami, FL 33131

(Address of principal executive offices)

(305) 721-2727

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a larger accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐ (Do not check if a smaller reporting company)	Smaller reporting company ☑

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Sectionn13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐ No ☑

The number of shares outstanding of the Registrant's $0.0001 par value Common Stock as of May 15, 2018, was 784,121,399 shares.

AGRITEK HOLDINGS, INC.

FORM 10-Q

Quarterly Period Ended March 31, 2018

INDEX

FORWARD-LOOKING STATEMENTS		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets at March 31, 2018 (Unaudited) and December 31, 2017	2
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017 (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017 (Unaudited)	4
	Notes to Condensed Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures about Market Risks	27
Item 4.	Controls and Procedures	27
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30
SIGNATURES		32

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this quarterly report on Form 10-Q. Additionally, statements concerning future matters are forward-looking statements.

Although forward-looking statements in this quarterly report on Form 10-Q reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the fiscal year ended December 31, 2017, in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this quarterly report on Form 10-Q and in other reports that we file with the Securities and Exchange Commission (the “SEC”). You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this quarterly report on Form 10-Q.

We file reports with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. You can also read and copy any materials we file with, or furnish to, the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this quarterly report on Form 10-Q, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

AGRITEK HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
		March 31,			December 31,
		2018			2017
ASSETS
Current Assets:
Cash and cash equivalents	$	201,350		$	304,889
Marketable Securities		24,236			41,862
Inventory, net		19,992			10,000
Prepaid assets and other		58,000			48,500
Total current assets		303,578			405,251
Notes receivable		245,000			210,000
Property and equipment, net of accumulated depreciation of $32,254 (2018) and $23,824 (2017)		297,548			286,415
Security deposit and other		13,825			13,825
Total assets	$	859,951		$	915,490
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable and accrued expenses	$	1,317,745		$	1,089,338
Due to related party		—			7,715
Customer deposits		2,400			2,400
Deferred rent		24,916			24,916
Convertible notes payable, net of discount of $605,743 (2018) and $494,193 (2017)		381,219			485,250
Derivative liabilities		2,194,113			5,416,830
Note payable, current portion		26,500			51,500
Total current liabilities		3,946,893			7,077,950
Commitments and Contingencies
Stockholders' Deficit:
Series B convertible preferred stock, $0.01 par value; 1,000,000 shares authorized, and 1,000 shares issued and outstanding		10			10
Common stock, $.0001 par value; 1,000,000,000 shares authorized; 779,395,047 (2018) and 723,680,348 (2017) shares issued and outstanding		77,940			72,369
Common stock to be issued		4,489			5,257
Additional paid-in capital		20,530,910			19,312,645
Deferred expenses		—
Accumulated comprehensive gain		7,711			25,337
Accumulated deficit		(23,708,002	)		(25,578,077	)
Total stockholders' deficit		(3,086,942	)		(6,162,460	)
Total liabilities and stockholders' deficit	$	859,951		$	915,490
See notes to condensed consolidated financial statements.

2

AGRITEK HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
	2018			2017
Product revenue	$	20		$	—
Cost of revenue, includes $7,500 related party for 2018		7,508			—
Gross profit  (loss)		(7,488	)		—
Operating Expenses:
Management fees, includes $300,000 stock-based compensation (2017)		34,792			337,500
Administrative fees		21,600			15,200
Professional and consulting fees, includes stock-based compensation $97,500 (2018) and $166,831 (2017)		234,380			270,986
Gain on recapture of reserve for land		—			(47,502	)
Rent and other occupancy costs		9,053			21,679
Leased property expense		16,000			9,561
Other general and administrative expenses		144,340			39,512
Total operating expenses		460,165			646,935
Operating loss		(467,653	)		(646,935	)
Other Income (Expense):
Loss on debt settlement		(58,759	)		—
Loss on legal matter		(232,246	)		—
Interest expense		(228,511	)		(333,242	)
Derivative liability expense		2,857,244			218,178
Total other income (expense), net		2,337,728			(115,064	)
Net income (loss)	$	1,870,075		$	(761,999	)
Unrealized loss on marketable securities		(17,626	)		(14,432	)
Net comprehensive income (loss)	$	1,852,449		$	(776,431	)
Basic income (loss) per share	$	0.00		$	(0.00	)
Diluted income (loss) per share	$	0.00		$	(0.00	)
Weighted average number of common shares outstanding
Basic		754,359,212			427,965,019
Diluted		963,411,093			427,965,019
See notes to condensed consolidated financial statements.

3

AGRITEK HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		Three Months Ended Ended March 31,
		2018			2017
Cash flow from operating activities:
Net income (loss)	$	1,870,075		$	(761,999	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Stock based compensation		97,500			466,831
Amortization of deferred financing costs		20,000			22,100
Loss on legal settlement		232,246			—
Loss on debt settlement		58,759
Depreciation		8,430			1,646
Initial expense for fair value of derivative liabilities		44,206			349,934
Amortization of discounts on convertible notes		183,450			289,979
Change in fair values of derivative liabilities		(2,901,355	)		(568,112	)
Recapture of reserve for land		—			(47,502	)
Changes in operating assets and liabilities:
Increase in :
Inventory		(9,992	)		—
Prepaid assets and other		(9,500	)		(9,000	)
Security deposit		—			(3,000	)
Increase (decrease) in:
Accounts payable and accrued expenses		(47,022	)		46,116
Due to related party		(7,715	)		5,527
Deferred rent		—			6,854
Net cash used in operating activities		(460,918	)		(200,626	)
Cash flows from investing activities:
Purchase of property, equipment and furniture		(19,563	)		(51,413	)
Purchase of notes receivable		(35,000	)		—
Net cash used in investing activities		(54,563	)		(51,413	)
Cash flows from financing activities:
Proceeds from issuance of convertible debt		275,000			425,900
Payments made of principal and interest on convertible notes		(178,058	)		—
Payments made on note payable		(25,000	)		—
Proceeds from sale of common stock to be issued		340,000			—
Net cash provided by financing activities		411,942			425,900
Net increase (decrease) in cash and cash equivalents		(103,539	)		173,860
Cash and cash equivalents, Beginning		304,889			67,260
Cash and cash equivalents, Ending	$	201,350		$	241,120
Supplemental disclosure of cash flow information:
Cash paid for interest	$	6,859		$	—
Cash paid for income taxes	$	—		$	—
Schedule of non-cash financing activities:
Discount from derivatives	$	295,000		$	425,900
Conversion of notes payable and interest into common stock	$	125,000		$	191,386
Change in fair value for available for sale marketable securities	$	(17,626	)	$	(14,432	)
Issuance of note payable as part of land acquisition	$	—		$	35,000
Settlement of derivatives	$	660,568		$	513,280
Stock issued for settlement of accounts payable	$	—		$	37,784
Cashless warrant exercise	$	2,855		$	—
See notes to condensed consolidated financial statements.

4

AGRITEK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2018 and 2017

Note 1 - Organization

Business

Agritek Holdings Inc. (“the Company” or “Agritek Holdings”) and its wholly-owned subsidiaries, MediSwipe, Inc. (“MediSwipe”), Prohibition Products Inc., and Agritek Venture Holdings, Inc. (“AVHI”) is a fully integrated, active investor and operator in the legal cannabis sector. Specifically, Agritek Holdings provides strategic capital and functional expertise to accelerate the commercialization of its diversified portfolio of holdings. Currently, the Company is focused on three high-value segments of the cannabis market, including real estate investment, intellectual property brands; and infrastructure, with operations in three U.S. States, Colorado, Washington State, California as well as Canada and Puerto Rico. Agritek Holdings invests its capital via real estate holdings, licensing agreements, royalties and equity in acquisition operations.

We provide key business services to the legal cannabis sector including:

•  Funding and Financing Solutions for Agricultural Land and Properties zoned for the regulated Cannabis Industry.

•  Dispensary and Retail Solutions

•  Commercial Production and Equipment Build Out Solutions

•  Multichannel Supply Chain Solutions

•  Branding, Marketing and Sales Solutions of proprietary product lines

•  Consumer Product Solutions 

The Company intends to bring its’ array of services to each new state that legalizes the use of cannabis according to appropriate state and federal laws. Our primary objective is acquiring commercial properties to be utilized in the commercial marijuana industry as cultivation facilities in compliance with state laws. This is an essential aspect of our overall growth strategy because once acquired and re-zoned, the value of such real property is substantially higher than under the previous zoning and use.

Once properties are identified and acquired to be used for purposes related to the commercial marijuana industry as provided for by state law, and we plan to create vertical channels within that legal jurisdiction including equipment financing, payment processing and marketing of exclusive brands and services to retail dispensaries

Agritek’s business focus is primarily to hold, develop and manage real property. The Company shall also provide oversight on every property that is part of its portfolio. This can include complete architectural design and subsequent build-outs, general support, landscaping, general up-keep, and state of the art security systems. At this time, Agritek does not grow, process, own, handle, transport, or sell marijuana as the Company is organized and directed to operate strictly in accordance with all applicable state and federal laws. As the legal environment changes in Colorado, California and other states, the Company’s management may explore business opportunities that involve ownership interests in dispensaries and growing operations if and when such business opportunities become legally permissible under applicable state and federal laws.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America ("US GAAP"). The consolidated financial statements of the Company include the consolidated accounts of Agritek and its’ wholly owned subsidiaries MediSwipe, AVHI, The American Hemp Trading Company, Inc., a Colorado Corporation (dba 77Acres, Inc.) and PPI. PPI, a Florida corporation, was originally formed on July 1, 2013 as The American Hemp Trading Company, Inc. (“HempFL”) and on August 27, 2014, HempFL changed its’ name to PPI. All intercompany accounts and transactions have been eliminated in consolidation. 

5

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original term of three months or less to be cash equivalents.

Accounts Receivable

The Company records accounts receivable from amounts due from its customers upon the shipment of products. The allowance for losses is established through a provision for losses charged to expenses. Receivables are charged against the allowance for losses when management believes collectability is unlikely. The allowance is an amount that management believes will be adequate to absorb estimated losses on existing receivables, based on evaluation of the collectability of the accounts and prior loss experience. While management uses the best information available to make its evaluations, this estimate is susceptible to significant change in the near term. As of March 31, 2018, and December 31, 2017, based on the above criteria, the Company has a full allowance for doubtful accounts of $43,408.

Inventory

Inventory is valued at the lower of cost or market value. Cost is determined using the first in first out (FIFO) method. Provision for potentially obsolete or slow-moving inventory is made based on management analysis or inventory levels and future sales forecasts.

Notes receivable

	March 31, 2018		December 31, 2017
Client 1	$	130,000	$	110,000
Client 2		115,000		100,000
Total	$	245,000	$	210,000

• Note receivable from Client 1 is pursuant to a five (5) year operational and exclusive licensing agreement with a third party who leases a 25,000-sq. ft. approved cultivation facility located in San Juan, Puerto Rico (see Note 10).

• Note receivable from Client 2 is pursuant to a five (5) year operational and exclusive licensing agreement with a third party who leases a 10,000-sq. ft. approved cultivation facility located in Washington State (see Note 10).

Deferred Financing Costs

The costs related to the issuance of debt are capitalized and amortized to interest expense using the straight-line method through the maturities of the related debt.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of it financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. 

For option-based simple derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. 

Debt Issue Costs and Debt Discount

The Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs prior to maturity a proportionate share of the unamortized amounts is immediately expensed. 

6

Original Issue Discount

For certain convertible debt issued, the Company may provide the debt holder with an original issue discount. The original issue discount would be recorded to debt discount, reducing the initial carrying value of the note and is amortized to interest expense through the maturity of the debt. If a conversion of the underlying debt occurs prior to maturity a proportionate share of the unamortized amounts is immediately expensed. 

Marketable Securities and Other Comprehensive Income

The Company classifies its marketable securities as available-for-sale securities, which are carried at their fair value based on the quoted market prices of the securities with unrealized gains and losses, net of deferred income taxes, reported as accumulated other comprehensive income (loss), a separate component of stockholders’ equity. Realized gains and losses on available-for-sale securities are included in net earnings in the period earned or incurred.

Property and Equipment

Property and equipment are stated at cost, and except for land, depreciation is provided by use of a straight-line method over the estimated useful lives of the assets. The Company reviews property and equipment for potential impairment whenever events or changes in circumstances indicate that the carrying amounts of assets may not be recoverable. In February, 2017, the Company entered into a land purchase contract to acquire approximately 80 acres including water and mineral rights. The total cost of the land was $129,555. The Company paid $41,554 at closing and issued a note payable for $88,000. The Company is on the deed of trust of the property with a remaining note balance of $26,500 and $51,500 due the seller as of March 31, 2018 and December 31, 2017, respectively. The estimated useful lives of property and equipment are as follows:

Furniture and equipment	5 years
Manufacturing equipment	7 years

The Company's property and equipment consisted of the following at March 31, 2018, and December 31, 2017:

	March 31, 2018			December 31, 2017
Furniture and equipment	$	200,247		$	180,684
Land		129,555			129.555
Accumulated depreciation		(32,254	)		(23,824	)
Balance	$	297,548		$	286,415

Depreciation expense of $8,430 and $1,646 was recorded for the three months ended March 31, 2018, and 2017, respectively.

Long-Lived Assets

Long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Deferred rent

The Company calculates the total cost of the lease for the entire lease period and divides that amount by the number of months of the lease. The result is the average monthly expense and is charged to rent expense with the offset to deferred rent, irrespective of the actual amount paid. The amounts paid are charged to the deferred rent account. As of March 31, 2018, and December 31, 2017, the Company has a balance of $24,916 in deferred rent which is included in the consolidated balance sheet.

7

Revenue Recognition

The Company recognizes revenue in accordance with FASB ASC 605, Revenue Recognition. ASC 605 requires that four basic criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery of products and services has occurred, (3) the fee is fixed or determinable and (4) collectability is reasonably assured. The Company recognizes revenue during the month in which products are shipped or fees are earned.

Fair Value of Financial Instruments

The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. 

The following are the hierarchical levels of inputs to measure fair value: 

• Level 1 - Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities.

• Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

• Level 3 - Unobservable inputs reflecting the Company's assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

The carrying amounts of the Company's financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts payable and accrued expenses, certain notes payable and notes payable - related party, approximate their fair values because of the short maturity of these instruments. 

The following table represents the Company’s financial instruments that are measured at fair value on a recurring basis as of March 31, 2018, and December 31, 2017, for each fair value hierarchy level:

March 31, 2018	Derivative Liabilities		Total
Level I	$	—	$	—
Level II	$	—	$	—
Level III	$	2,194,113	$	2,194,113
December 31, 2017
Level I	$	—	$	—
Level II	$	—	$	—
Level III	$	5,416,830	$	5,416,830

Income Taxes

The Company accounts for income taxes in accordance with ASC 740-10, Income Taxes. Deferred tax assets and liabilities are recognized to reflect the estimated future tax effects, calculated at the tax rate expected to be in effect at the time of realization. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

8

ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. Interest and penalties are classified as a component of interest and other expenses. To date, the Company has not been assessed, nor paid, any interest or penalties.

Uncertain tax positions are measured and recorded by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized or continue to be recognized. The Company’s tax years subsequent to 2005 remain subject to examination by federal and state tax jurisdictions.

Earnings (Loss) Per Share

Earnings (loss) per share are computed in accordance with ASC 260, "Earnings per Share". Basic earnings (loss) per share is computed by dividing net income (loss), after deducting preferred stock dividends accumulated during the period, by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share is computed by dividing net income by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities, if any, outstanding during the period. As of March 31, 2018, there were warrants and options to purchase 45,094,763 shares of common stock and the Company’s outstanding convertible debt is convertible into approximately 163,957,118 shares of common stock. These amounts are included in the computation of dilutive net income per share.

Accounting for Stock-Based Compensation 

The Company accounts for stock awards issued to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. The measurement date is the earlier of (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty's performance is complete. Stock awards granted to non-employees are valued at their respective measurement dates based on the trading price of the Company’s common stock and recognized as expense during the period in which services are provided. For the three months ended March 31, 2018, and 2017, the Company recorded stock- based compensation of $97,500 and $466,831, respectively (See Note 9).

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates.

Advertising

The Company records advertising costs as incurred. For the three months ending March 31, 2018, and 2017, advertising expenses was $17,450 and $3,059, respectively.

Note 3 – Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)”. Under this guidance, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. This guidance offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard will have on our consolidated financial statements.

9

In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. The Company elected to early adopt the new guidance in the second quarter of fiscal year 2016 which requires us to reflect any adjustments as of January 1, 2016, the beginning of the annual period that includes the interim period of adoption. The primary impact of adoption was the recognition of additional stock compensation expense and paid-in capital for all periods in fiscal year 2016. Additional amendments to the recognition of excess tax benefits, accounting for income taxes and minimum statutory withholding tax requirements had no impact to retained earnings as of January 1, 2016, where the cumulative effect of these changes is required to be recorded. We have elected to account for forfeitures as they occur to determine the amount of compensation cost to be recognized in each period.

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230).” ASU No. 2016-18 requires that restricted cash be included with cash and cash equivalents when reconciling the change in cash flow. This guidance is reflected in these financial statements.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which removes the second step of the two-step goodwill impairment test. Under ASU 2017-04, an entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. ASU 2017-04 does not amend the optional qualitative assessment of goodwill impairment. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019; early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company has not elected early adoption of this standard and is currently in the process of evaluating the impact of adopting ASU 2017-04 and cannot currently estimate the financial statement impact of adoption.

In May 2017, the FASB issued ASU No. 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” The amendments in this update provide guidance about which changes to the terms or conditions of a share-based award require an entity to apply modification accounting in Topic 718. The guidance will be effective for the Company for its fiscal year 2018, with early adoption permitted. The Company does not expect this ASU to materially impact the Company’s consolidated financial statements.  

Accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

Note 4 – Marketable Securities

The Company owns marketable securities (common stock) as of March 31, 2018, and December 31, 2017 is outlined below:

	March 31, 2018			December 31, 2017
Beginning balance	$	41,862		$	39,769
Unrealized gain (loss) marked to fair value		(17,626	)		2,093
Ending balance	$	24,236		$	41,862

800 Commerce, Inc. (now known as Petrogress, Inc), was a commonly controlled entity until February 29, 2016, owed Agritek $282,947 as of February 29, 2016, as a result of advances received from or payments made by Agritek on behalf of 800 Commerce. These advances were non-interest bearing and were due on demand. Effective February 29, 2016, the Company received 1,102,462 shares of common stock of Petrogress, Inc. as settlement of the $282,947 owed to the Company. The market value on the date the Company received the shares of common stock was $16,525.

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Note 5 – Prepaid Expenses

Prepaid expenses consisted of the following at March 31, 2018 and December 31, 2017:

	March 31, 2018		December 31, 2017
Vendor deposits	$	46,000	$	46,000
Investor relations		12,000		2,500
Total prepaid expenses	$	58,000	$	48,500

Note 6 – Concentration of Credit Risk

Cash

Financial   instruments   that   potentially   subject   the   Company to concentrations of credit risk consist principally of cash. The Company maintains cash balances at one financial institution, which is insured by the Federal Deposit Insurance Corporation (“FDIC”). The FDIC insured institution insures up to $250,000 on account balances.

Note 7 – Note Payable  

Note Payable Land

On March 18, 2014, in conjunction with the land purchase of 80 acres in Pueblo County, Colorado, the Company paid $36,000 cash and entered into a promissory note in the amount of $85,750. In November 2015, the Company was made aware that the land transaction regarding 80 acres in Pueblo County, Colorado, may not have been properly deeded to the Company. The company was a party to the land purchase, however, the second party to the land contract never filed the original quit claim deed on behalf of the Company, even though a copy of the notarized quit claim deed was sent to the Company. In February, 2017, the original owner of the 80 acres foreclosed on the property from the second party and the Company entered into a new land purchase contract (including water and mineral rights) directly with the landowner on February 7, 2017. The Company is on the deed of trust of the property and as March 31, 2018, and December 31, 2017, the note balance is $26,500 and $51,500, respectively.

Note 8 – Convertible Debt

2016 Convertible Notes

On October 31, 2016, the Company entered into a Convertible Promissory Note ("St. George 2016 Notes") for $555,000 to St. George Investments, LLC. (“St. George”) which included a purchase price of $500,000 and transaction costs of $5,000 and OID interest of $50,000. On October 31, 2016, the Company received $100,000 and recorded $115,000 as convertible note payable, including $5,000 of transaction costs and $10,000 OID interest. St. George also issued to the Company eight secured promissory notes, each in the amount of $50,000. All or any portion of the outstanding balance of the St. George 2016 Notes may be prepaid, without penalty, along with accrued but unpaid interest at any time prior to maturity. The Company has no obligation to pay St. George any amounts on the unfunded portion of the St. George 2016 Notes. The St. George 2016 Note bears interest at 10% per annum (increases to 22% per annum upon an event of default) and is convertible into shares of the Company’s common stock at St. George’s option at a price of $0.05 per share. On December 14, 2016, St. George funded one of the secured promissory notes issued to the Company. During the year ended December 31, 2017, St. George funded the remaining secured promissory notes issued to the Company. During the three ended March 31, 2018, the Company issued 22,163,120 shares of common stock upon the conversion of $116,282 of principal and $8,718 accrued and unpaid interest on the note. The shares were issued at approximately $0.00564 per share. The principal and interest balance of the note as of March 31, 2018, and December 31, 2017, was $196,962 and $313,244, respectively.

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Beginning on the date that is six (6) months after the later of (i) the Issuance Date, and (ii) the date the Initial Cash Purchase Price is paid to the Company (the “Initial Installment Date”), and on each applicable Installment Date thereafter, the Company is to pay the Holder, the applicable Installment Amount due on such date. Five Installment Amounts of $111,000 plus the sum of any accrued and unpaid interest, fees, costs or charges may be made (a) in cash (a “Company Redemption”), (b) by converting such Installment Amount into shares of Common Stock (a “Company Conversion”), or (c) by any combination of a Company Conversion and a Company Redemption so long as the entire amount of such Installment Amount due shall be converted and/or redeemed by the Company on the applicable Installment Date. The St. George 2016 Note matures fifteen months after the Issuance Date.

2017 Convertible Notes

On January 24, 2017, the Company completed the closing of a private placement financing transaction with Cerberus, pursuant to a Securities Purchase Agreement (the “Cerberus Purchase Agreement”). Pursuant to the Cerberus Purchase Agreement, Cerberus purchased an 8% Convertible Debenture (the “Cerberus Debenture”) in the aggregate principal amount of $63,000, and delivered on January 25, 2017, gross proceeds of $60,000 excluding transaction costs, fees, and expenses. During the three months ended March 31, 2017, the Company recorded a debt discount of $60,000 and recorded amortization expense of $10,833. As of March 31, 2018, and December 31, 2017, the note was paid in full. Also, on January 24, 2017, the Company issued to Cerberus, a back-end note under the same terms and conditions, in the amount of $63,000. On June 30, 2017, the back-end note was funded upon receipt of $60,000, excluding transaction costs, fees, and expenses. During the three months ended March 31, 2018, the Company redeemed the back- end note. The principal and interest balance of the back-end note as of March 31, 2018, and December 31, 2017 was $-0- and $63,000, respectively.

On February 1, 2017, the Company completed the closing of a private placement financing transaction with Power Up Lending Group, LTD (“Power Up”), pursuant to a Securities Purchase Agreement (the “Power Up Purchase Agreement”). Pursuant to the Power Up Purchase Agreement, Power Up purchased an 12% Convertible Debenture (the “Power Up Debenture”) in the aggregate principal amount of $140,000, and delivered on February 3, 2017 (the “Funding Date”), gross proceeds of $136,500 excluding transaction costs, fees, and expenses. Principal and interest on the Power Up Debentures is due and payable on November 5, 2017, and the Power Up Debenture is convertible into shares of the Company’s common stock beginning six months from the Funding Date, at a VCP. The VCP is calculated as the average of the three (3) lowest closing bid price during the ten (10) trading days immediately prior to the conversion date multiplied by fifty eight percent (58%), representing a forty two percent (42%) discount. During the year ended December 31, 2017, the Company recorded a debt discount of $136,500 and during the year ended December 31, 2017, recorded amortization expense of $136,500. The Company may prepay the Power Up Debenture, subject to prior notice to the holder within an initial 30-day period after issuance, by paying an amount equal to 120% multiplied by the amount that the Company is prepaying. For each additional 30-day period the amount being prepaid is multiplied by an additional 5%, up to a maximum of 140% on the 180^th day from issuance. Beginning on the 180^th day after the issuance of the Debentures, the Company is not permitted to prepay the Debenture, so long as the Debenture is still outstanding, unless the Company and the holder agree otherwise in writing. On June 23, 2017, the Company accepted and agreed to Assignment Agreements (‘AA”), whereby, Power Up assigned $70,000 of their note to LG, and $70,000 of their note to Cerberus. As part of the AA, the Company agreed to pay Power Up $65,000. The Company issued an 8% Replacement Note to LG for $73,198 (the “First Power Up Replacement Note”), and an 8% Replacement Note to Cerberus for $73,198 (the “Second Power Up Replacement Note”) The First and Second Power Up Replacement Notes are due June 23, 2018 and are convertible into shares of the Company’s common stock at any time at the discretion of LG and Cerberus, respectively, at a VCP. The VCP is calculated as the lowest trading price during the eighteen (18) trading days immediately prior to the conversion date multiplied by fifty eight percent (58%), representing a forty two percent (42%) discount. During the year ended December 31, 2017, the Company issued 12,721,391 shares of common stock upon the conversion of $73,198 of principal and $967 accrued and unpaid interest on the First Power Up Replacement Note. The shares were issued at approximately $0.00583 per share. The principal balance of the First Power Up Replacement Note as of December 31, 2017 was $-0-. During the three months ended March 31, 2018, the Company redeemed the back- end note. The principal and interest balance of the Second Power Up Replacement Note as of December 31, 2017 was $-0- and $73,199 respectively.

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On February 24, 2017, the Company completed the closing of a private placement financing transaction with Cerberus, pursuant to a Securities Purchase Agreement (the “Cerberus Purchase Agreement”). Pursuant to the Cerberus Purchase Agreement, Cerberus purchased an 8% Convertible Debenture (the “Cerberus Debenture”) in the aggregate principal amount of $17,500, and delivered on February 27, 2017, gross proceeds of $16,000 excluding transaction costs, fees, and expenses. During the three months ended March 31, 2018, the Company redeemed the note. The principal and interest balance of the note as of March 31, 2018, and December 31, 2017 was $-0- and $17,500, respectively. Also, on February 24, 2017, the Company issued to Cerberus, a back-end note under the same terms and conditions, in the amount of $17,500. On December 7, 2017, the back-end note was funded upon receipt of $16,000, excluding transaction costs, fees, and expenses. -. During the three months ended March 31, 2018, the Company redeemed the back- end note The principal and interest balance of the back-end note as of March 31, 2018 and December 31, 2017 was $-0- and $17,500, respectively.

On December 20, 2017, the Company entered into a Convertible Promissory Note ("St. George 2017 Notes") for $1,105,000 to St. George which includes a purchase price of $1,000,000 and transaction costs of $5,000 and OID interest of $100,000. On December 21, 2017, the Company received $200,000 and recorded $225,000 as convertible note payable, including $5,000 of transaction costs and $20,000 OID interest. St. George also issued to the Company four secured promissory notes, each in the amount of $200,000. All or any portion of the outstanding balance of the St. George 2017 Notes may be prepaid, without penalty, along with accrued but unpaid interest at any time prior to maturity. The Company has no obligation to pay St. George any amounts on the unfunded portion of the St. George 2017 Notes. The St. George 2017 Note bears interest at 10% per annum (increases to 22% per annum upon an event of default) and is convertible into shares of the Company’s common stock at St. George’s option at a price of $0.05 per share. On December 27, 2017, St. George funded $250,000 of the secured promissory notes issued to the Company, and the Company recorded $270,000 as convertible note payable, including $20,000 OID interest. During the year ended December 31, 2017, the Company recorded debt discounts of $450,000. On January 9, 2018, and March 20, 2018, St. George funded $200,000 and $75,000, respectively, of the secured promissory notes issued to the Company, and the Company recorded $295,000 as convertible note payable, including $20,000 OID interest. The principal and interest balance of the St George 2017 Note as of March 31, 2018 and December 31, 2017, was $790,000 and $495,000 respectively.

Principal and interest on the 2017 LG and Cerberus Debentures above is due and payable one year from their respective funding date, and the LG and Cerberus Debentures are convertible into shares of the Company’s common stock at any time at the discretion of LG and Cerberus, respectively, at a VCP. The VCP is calculated as the lowest trading price during the eighteen (18) trading days immediately prior to the conversion date multiplied by fifty eight percent (58%), representing a forty two percent (42%) discount.

The Company may prepay the 2017 LG and/or the Cerberus Debentures, subject to prior notice to the holder within an initial 30-day period after issuance, by paying an amount equal to 118% multiplied by the amount that the Company is prepaying. For each additional 30-day period the amount being prepaid is multiplied by an additional 6%, up to a maximum of 148% on the 180^th day from issuance. Beginning on the 180^th day after the issuance of the Debentures, the Company is not permitted to prepay the Debenture, so long as the Debenture is still outstanding, unless the Company and the holder agree otherwise in writing.

The Company determined that the conversion feature of the 2017 Convertible Notes represent an embedded derivative since the Notes are convertible into a variable number of shares upon conversion. Accordingly, the 2017 Convertible Notes were not considered to be conventional debt under ASC 815-40 (formerly EITF 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock) and the embedded conversion feature was bifurcated from the debt host and accounted for as a derivative liability. Accordingly, the fair value of these derivative instruments being recorded as a liability on the consolidated balance sheet with the corresponding amount recorded as a discount to each Note. Such discount is being amortized from the date of issuance to the maturity dates of the Notes. The change in the fair value of the liability for derivative contracts are recorded in other income or expenses in the consolidated statements of operations at the end of each quarter, with the offset to the derivative liability on the balance sheet. The embedded feature included in the 2017 Convertible Notes that were funded in 2018, resulted in an initial debt discount of $295,000, an initial derivative liability expense of $44,206 and an initial derivative liability of $339,206. During the three months ended March 3, 2018, the Company recorded amortization expense on the debt discounts of $132,618, and there remains $605,743 of unamortized debt discount as of March 31, 2018.

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Convertible Note Conversions   

During the three months ended March 31, 2018, the Company issued the following shares of common stock upon the conversions of portions of the Convertible Notes:

Date		Principal Conversion		Interest Conversion		Total Conversion		Conversion Price		Shares Issued		Issued to
	2/12/18	$	69,221	$	5,779	$	75,000	$	0.00564		13,297,872	St Georges
	3/27/18	$	47,061	$	2,939	$	50,000	$	0.00564		8,865,248	St Georges
		$	116,282	$	8,718	$	125,000				22,163,120

A summary of the convertible notes payable balance as of March 31, 2018, and December 31, 2017, is as follows:

	2018			2017
Beginning Principal Balance	$	979,443			826,480
Convertible notes-newly issued		295,000			1,813,210
Conversion of convertible notes (principal)		(116,282	)		(1,350,247	)
Principal payments		(171,199	)		(310,000	)
Unamortized discount		(605,743	)		(494,193	)
Ending Principal Balance, net	$	381,219			485,260

The Company recorded a loss on debt settlement of $58,759 on the redemption of convertible notes for the three months ended March 31, 2018.

Note 9 - Derivative liabilities

As of March 31, 2018, the Company revalued the embedded conversion feature of the Convertible Notes, and warrants (see note 9). The fair values were calculated based on the Monte Carlo simulation method consistent with the terms of the related debt.

A summary of the derivative liability balance as of March 31, 2018, is as follows:

		Notes			Warrants			Total
Beginning Balance	$	3,608,345		$	1,808,485		$	5,416,830
Initial Derivative Liability		339,206			—			339,206
Fair Value Change		(1,902,885	)		(998,470	)		(2,901,355	)
Reclassified to Additional paid- in capital		(369,823	)		(76,676	)		(446,499	)
Reduction for debt extinguishment		(214,069	)		—			(214,069	)
Ending Balance	$	1,460,774		$	733,339		$	2,194,113

The credit to derivative expense for the three months ended March 31, 2018, of $2,857,244 is comprised of the initial derivative expense of $44,111 resulting from the issuances of new convertible notes in the period and the fair value change decreasing the liability and expense by $2,901,355. For the three months ended March 31, 2017, there was a credit to derivative expense of $218,178, comprised of $349,934 of initial derivative expense resulting form new convertible notes issued during the three months ended March 31, 2017, and the change, decreasing the liability and expense by $568,112.

The fair value at the commitment date for the 2018 Convertible Notes and the re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions as of March 31, 2018:

	Commitment date		Remeasurement date
Expected dividends		-0-		-0-
Expected volatility		147%-152%		148%-162%
Expected term		12-14 months		6-12 months
Risk free interest		1.83%-2.08%		1.58%-2.09%

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There were no new warrants issued for the three months ended March 31, 2018. The Company evaluated all outstanding warrants to determine whether these instruments may be tainted. All warrants outstanding were considered tainted. The Company valued the embedded derivatives within the warrants using the Black-Scholes valuation model.   The fair value for Warrant #’s 1-9 were based upon the following management assumptions:

	Remeasurement date
Expected dividends	-0-
Expected volatility	256%
Expected term	3.59 years
Risk free interest	2.44%

Note 10 – Related Party Transactions

Effective January 1, 2013, the Company agreed to an annual compensation of $150,000 for its CEO, Mr. Michael Friedman (resigned March 20, 2015, re-appointed November 4, 2015). Effective March 20, 2015, Mr. Justin Braune was named CEO and President. Mr. Braune also was appointed to the Board of Directors. The Company agreed to an annual compensation of $100,000 for Mr. Braune in his role of CEO and Director of the Company and to issue Mr. Braune 15,000,000 shares of restricted common stock. Mr. Braune resigned from the board of directors and as CEO on November 4, 2015, and agreed to cancel the 15,000,000 shares in his letter of resignation. The Company also initially issued Mr. Braune 12,500,000 shares of common stock on October 13, 2015. On October 16, 2015, Mr. Braune advised the Company’s transfer agent at the time to cancel the shares. 

For the three months ended March 31, 2018 and 2017, the Company recorded expenses of $37,500 to the CEO, included in Management Fees in the condensed consolidated statements of operations, included herein. As of March 31, 2018, and December 31, 2017, the Company owed the CEO $-0- and $7,715, respectively, and is included in due to related party on the Company’s consolidated balance sheet. On January 30, 2017, the Company issued 10,000,000 shares of common stock to the Company’s CEO. The shares were issued for services performed as the sole Officer and director of the Company since November 2014. The shares were valued at $301,000 ($0.0301 per share, the market price of the common stock on the grant date) and are included in Management Fees in the consolidated statements of operations, included herein.

On October 5, 2017, the Company agreed to lease from the Company’s CEO, a "420 Style" resort and estate property approximately one hour outside of Quebec City, Canada. The fifteen-acre estate consists of nine (9) unique guest suites, horse stables, and is within walking distance to a public golf course. A separate structure will serve as a small grow facility run by patient employees and caretakers on the property which may be toured by guests of the facility. Pursuant to the agreement, the Company will pay $8,000 per month in exchange for the Company being entitled to all rents and income generated from the property. For the three months ended March 31, 2018, the Company paid and recorded $16,000 of expense, included in leased property expense, related party in the condensed consolidated statements of operations, included herein. The Company will be responsible for all costs of the property, including, but not limited to, renovations, repairs and maintenance, insurance and utilities. For the three months ended March 31, 2018, the Company has incurred $25,000 of renovation expense. On August 8, 2017, the Company issued 5,000,000 shares of common stock to the seller. The Company valued the shares at $0.0123 per share (the market price of the common stock) and has included $61,500 in stock- based compensation expense for the year ended December 31, 2017.

Note 11 – Common and Preferred Stock  

Common Stock

2018 Issuances

Date		Principal Conversion		Interest Conversion		Total Conversion		Conversion Price		Shares Issued		Issued to
	2/12/18	$	69,221	$	5,779	$	75,000	$	0.00564		13,297,872	St Georges
	3/27/18	$	47,061	$	2,939	$	50,000	$	0.00564		8,865,248	St Georges
		$	116,282	$	8,718	$	125,000				22,163,120

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In addition to the above, during the three months ended March 31, 2018, the Company:

On February 26, 2018, the Company agreed to issue 5,000,000 shares of common stock to Dr. Stephen Holt, for his appointment to the advisory board. The Company recorded an expense of $97,500 (based on the market price of the Company’s common stock of $0.0195 per share) and is included in professional and consulting fees in the condensed consolidated statements of operations for the three months ended March 31, 2018.

Issued 28,551,579 shares of common stock to St. George pursuant to Notices of Exercise of Warrant received. The shares were issued based upon the cashless exercise provision of the warrant. The Company recorded the shares at their par value of $0.0001, with the offset to additional-paid-in-capital.

Common stock to be issued

During the three months ended March 31, 2018, the Company reduced the shares of common stock to be issued previously recorded in fiscal year ended December 31, 2017, by 23,202,587 shares. The adjustment was a result of the terms of the SPA, whereby the purchase price of the common stock to be issued is based on 90% of the closing share price 6 months after the SPA. St. George and the Company have agreed to amend the SPA, whereby, the purchase price is 90% of the closing price of the common stock, the day preceding any SPA. During the three months ended March 31, 2018, the Company received $340,000, pursuant to Stock Purchase Agreements (the “SPA”) with St. George to buy 15,515,543 shares of common stock. As of March 31, 2018, and December 31, 2017, shares of common stock to be issued are 44,887,291 and 52,574,335, respectively.

Preferred Stock

On June 26, 2015, the Company filed with the Delaware Secretary of State the Amended and Restated Designation Preferences and Rights (the “Certificate of Designation”) of Class B Preferred Stock (the “Series B Preferred Stock”). Pursuant to the Certificate of Designation, 1,000 shares constitute the Series B Preferred Stock. The Series B Preferred Stock and any accrued and unpaid dividends thereon shall, with respect to rights on liquidation, winding up and dissolution, rank senior to the Company’s issued and outstanding common stock and Series A preferred stock.

The SeriesB Preferred Stockhas the right to vote in aggregate, on all shareholder matters equal to 51% of the total vote, no matter how many shares of common stock or other voting stock of the Company are issued or outstanding in the future.The Series B Preferred Stock has a right to vote on all matters presented or submitted to the Company’s stockholders for approval in pari passu with the common stockholders, and not as a separate class. The holders of Series B Preferred Stock have the right to cast votes for each share of Series B Preferred Stock held of record on all matters submitted to a vote of common stockholders, including the election of directors. There is no right to cumulative voting in the election of directors. The holders of Series B Preferred Stock vote together with all other classes and series of common stock of the Company as a single class on all actions to be taken by the common stockholders except to the extent that voting as a separate class or series is required by law. As of March 31, 2018, and December 31, 2017, there were 1,000 shares of Class B Preferred Stock outstanding.

Warrants and Options

On April 14, 2015, in connection with the appointment of Dr. Stephen Holt to the advisory board, the Company agreed the advisor shall receive a non-qualified stock option to purchase 1,000,000 shares (“Option Shares”) of the Company’s common stock at an exercise price equal to $0.05 per share and expiring April 14, 2018. Option Shares of 400,000 vested immediately and 50,000 Option Shares vested each month from April 2015 through March 2016. Accordingly, as of March 31, 2016, 1,000,000 Option Shares have vested and the Company recorded $2,317 as stock compensation expense for the year ended December 31, 2016, based on Black-Scholes.

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On October 31, 2016, the Company granted (Warrant #1) to St. George the right to purchase at any time on or after November 10, 2016 (the “Issue Date”) until the date which is the last calendar day of the month in which the fifth anniversary of the Issue Date occurs (the “Expiration Date”), a number of fully paid and non-assessable shares (the “Warrant Shares”) of Company’s common stock, equal to $57,500 divided by the Market Price (defined below) as of the Issue Date, as such number may be adjusted from time to time pursuant to the terms and conditions of Warrant #1 to Purchase Shares of Common Stock. The Market Price is equal to the lowest intra-day trade price in the twenty (20) Trading Days immediately preceding the applicable date of exercise, multiplied by sixty percent (60%). The exercise price is the lower of $0.05 and is subject to price adjustments pursuant to the agreement and includes a cashless exercise provision. The Company also issued Warrant #’s 2-9, with each warrant only effective upon St. George funding of the secured notes they issued to the Company. Warrant #’s 2-9 give St. George the right to purchase Warrant Shares equal to $27,500 divided by the Market Price on the funded date. On December 14, 2016, the Company received a payment of $50,000, and accordingly, Warrant #2 became effective. During the year ended December 31, 2017, the Company received the funding on the remaining notes and Warrant #’s 3-9 became effective. During the three months ended March 31, 2018, the company issued 28,551,579 shares of common stock to St. George pursuant to Notices of Exercise of 3,040,629 Warrants received. The shares were issued based upon the cashless exercise provision of the warrant.

The following table summarizes the activity related to warrants of the Company for the years ended December 31, 2017 and 2016:

	Number of Warrants			Weighted-Average Exercise Price per share		Weighted-Average Remaining Life (Years)
Outstanding and exercisable at December 31, 2016		17,926,130		$	0.0811		4.88
Warrant issued		40,573,870			0.00564		—
Warrants exercised		(9,364,108	)		0.00564		—
Outstanding and exercisable at December 31, 2017		49,135,892			0.00654		4.17
Warrants exercised		(3,040,629	)		0.00564		—
Outstanding and exercisable March 31, 2018		46,095,623		$	0.0066		3.92

Note 12 – Income Taxes

The Company accounts for income taxes under standards issued by the FASB. Under those standards, deferred tax assets and liabilities are recognized for future tax benefits or consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. 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. A valuation allowance is provided for significant deferred tax assets when it is more likely than not that such assets will not be realized through future operations.

No provision for federal income taxes has been recorded due to the available net operating loss carry forwards of approximately $8,524,193 will expire in various years through 2032. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the future tax loss carry forwards.

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The actual income tax provisions differ from the expected amounts calculated by applying the statutory income tax rate to the Company's loss before income taxes.  The components of these differences are as follows at March 31, 2018 and December 31, 2017:

	2018			2017
Net tax loss carry-forwards	$	8,524,193		$	7,878,733
Statutory rate		37.6	%		37.6	%
Expected tax recovery		3,205,097			2,962,404
Change in valuation allowance		(3,205,097	)		(2,962,404	)
Income tax provision	$	—		$	—

Components of deferred tax asset:
Non capital tax loss carry forwards	$	3,205,097		$	2,962,404
Less: valuation allowance		(3,205,097	)		(2,962,404	)
Net deferred tax asset	$	—		$	—

Note 13 – Commitments and Contingencies

Office Space

In April 2014, the Company entered into a two-year sublease agreement for the use of up to 7,500 square feet with a Colorado based oncology clinical trial and drug testing company and facility presently doing cancer research and testing for established pharmaceutical companies seeking FDA approval for new drugs. Pursuant to the lease, as amended, the Company agreed to pay $3,500 per month for the space. The lease expired in April 2016, and the Company owes the landlord $48,750.

In January 2017, the Company signed a five (5) year lease, beginning February 1, 2107, for approximately 6,000 square feet of office space, comprised of two floors, in San Juan, Puerto Rico. Pursuant to the lease, the Company will pay $3,000 per month for the third floor of the building for the first year of the lease. The rent will increase 3% per year on February beginning in 2018 and an additional 3% per year on each successive February 1, during the term of the lease. The landlord has agreed that for the month of February 2017, the rent will be $1,500. The rent for second floor of the building will be $2,000 per month during the term of the lease and the Company does not have any rent payments for the first three months of the lease (February 2017 through April 2017). Through September 30, 2017, the Company calculated the total amount of the rent for the term lease and recorded straight line rent expense of $45,417 and had made payments of $20,516. As of March 31, 2018 and December 31, 2017, the Company has a balance of $24,916 in deferred rent which is included in the consolidated balance sheet. The leases for the second and third floor were cancelled in September 2017 as a result of Hurricane Irma.

Rent expense was $9,053 and $21,679 for the three months ended March 31 2018, and 2017, respectively.

Leased Properties

On April 28, 2014, the Company executed and closed a ten-year lease agreement for 20 acres of an agricultural farming facility located in South Florida following the approval of the so-called “Charlotte’s Web” legislation, aimed at decriminalizing low grade marijuana specifically for the use of treating epilepsy and cancer patients.  Pursuant to the lease agreement, the Company maintains a first right of refusal to purchase the property for three years. The Company has recorded $38,244 of expense (included in leased property expenses) for the years ended December 31, 2017, and 2016, respectively. The Company is currently in default of the lease agreement, as rents have not been for the second year of the lease beginning May 2015.

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On July 11, 2014, the Company signed a ten-year lease agreement for an additional 40 acres in Pueblo, Colorado. The lease requires monthly rent payments of $10,000 during the first year and is subject to a 2% annual increase over the life of the lease. The lease also provides rights to 50 acres of certain tenant water rights for $50,000 annually plus cost of approximately $2,400 annually. The Company paid the $50,000 in July 2014, and has not used the property and any water and has not paid for any water rights after September 30, 2015. The Company has not recorded any expense for the three months ended March 31, 2018, and 2017. The Company is currently in default of the lease agreement, as rents have not been paid since February 2015.

Agreements

On April 5, 2017, the Company executed a five (5) year operational and exclusive licensing agreement with a third party who leases a 25,000-sq. ft. approved cultivation facility located in San Juan, Puerto Rico. The Company will be the exclusive funding source, and supervise all infrastructure buildout, equipment lease/finance, security systems and personnel and provide access of seasoned Colorado and California cultivation crews to ensure the facility meets all standard operating procedures as set forth by the Department Of Health of Puerto Rico. Under the agreement, the Company receives $12,000 a month in consulting fees, licensing fees on all vaporizer and edible sales, equipment and lighting rental and financing fees along with equity interest in the property. As of March 31, 2018, and December 31, 2017, the Company has invested $130,000 and $110,000, respectively.

On August 7, 2017, the Company signed a LOI with Green Acres, whereby in consideration of consulting fees, licensing fees on all vaporizer and edible brands, equipment and lighting rental and financing fees, the Company will provide up to $250,000 of working capital and potentially, up to $3,500,000 for the buyout of Green Acres existing mortgage on their Washington State facility. As of March 31, 2018, and December 31, 2017, the Company has invested $115,000 and $100,000, respectively.

On October 5, 2017, the Company agreed to lease from the Company’s CEO, a "420 Style" resort and estate property approximately one hour outside of Quebec City, Canada. The fifteen-acre estate consists of nine (9) guest suites, horse stables, and is within walking distance to a public golf course. A separate structure will serve as a small grow facility run by patient employees and caretakers on the property which may be toured by guests of the facility. Pursuant to the agreement, the Company will pay $8,000 per month in exchange for the Company being entitled to all rents and income generated from the property. For the three months ended March 31, 2018, the Company paid and recorded $16,000 of expense, included in leased property expense, related party in the condensed consolidated statements of operations, included herein. The Company will be responsible for all costs of the property, including, but not limited to, renovations, repairs and maintenance, insurance and utilities. For the three months ended March 31, 2018, the Company has incurred $25,000 of renovation expense.

Legal & Other

On March 2, 2015, the Company, the Company’s CEO and the Company’s CFO at the time were named in a civil complaint filed by Erick Rodriguez in the District Court in Clark County, Nevada (the “DCCC”). The complaint alleges that Mr. Rodriguez never received 250,000 shares of Series B preferred stock that were initially approved by the Board of Directors in 2012, subject to the completion of a merger of a company controlled by Mr. Rodriguez. Since the merger was never completed, the shares were never certificated to Mr. Rodriguez. On March 21, 2017, the DCC agreed to Set Aside the Entry of Default against the Defendants. Mr. Rodriguez resigned in June 2013.  On April 12, 2018, an Arbitrator issued a final award to Rodriguez in the amount of $399,291. The Company and the Company’s counsel believe the Arbitrator denied a number of detailed objections to the award, which cited clear mistakes as to Nevada law and to the facts. The Company recorded a loss on legal matter, included in other expenses for the year ended December 31, 2017. On May 3, 2018, the Arbitrator issued an amended final award of $631,537, inclusive of interest and legal fees. The Company recorded a loss of $232,246 on the legal matter, included in other expenses for the three months ended March 31, 2018. The Company has retained a Nevada attorney who is an expert in fighting attempts to convert arbitration awards into judgments in Nevada courts, to work with our arbitration counsel. A hearing is scheduled on June 12, 2018 in District Court in Clark County Nevada to confirm or reject the award. The Company will vigorously defend any adverse ruling including appeals to the Nevada Supreme Court.

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On May 6, 2016, the Company, B. Michael Freidman and Barry Hollander (former CFO) were named as defendants in a Summons/Complaint filed by Justin Braune (the “Plaintiff”) in Palm Beach County Civil Court, Florida (the “PBCCC”). The complaint alleges that Mr. Braune was entitled to shares of common stock of the Company. On December 5, 2016, the PBCCC set aside a court default that had been previously issued. The defendants have answered the complaint, including the defenses that Mr. Braune advised the Company’s transfer agent and the Company in his letter of resignation dated November 4, 2015, clearly stating that he has relinquished all shares of common stock. The Company has filed a counterclaim suit against the Plaintiff, as well as sanctions against the Plaintiff and their counsel.

Note 14 – Going Concern

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. As of March 31, 2018, the Company had an accumulated deficit of $23,708,002 and working capital deficit of $3,643,315, inclusive of a derivative liability of $2,194,113. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 15 – Subsequent Events

On April 19, 2018, the Company issued 4,875,887 shares of common stock upon the conversion of $27,500 of principal and interest. The shares were issued at $0.00564 per share.

The Company previously issued 5,000,000 shares of common stock for security on renovations of the Company’s Canada bed and breakfast management agreement. The Company has since paid in excess of $50,000 towards renovations. Mr. Johnston will now retain the shares under an amended agreement in exchange for legal fees, tax and license applications, and as a financial custodian over the renovation account as a Canadian resident. The 5,000,000 shares will be in exchange for 12 months of services.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is management’s discussion and analysis of certain significant factors that have affected our financial position and operating results during the periods included in the accompanying consolidated financial statements, as well as information relating to the plans of our current management. This report includes forward-looking statements. Generally, the words “believes,” “anticipates,” “may,” “will,” “should,” “expect,” “intend,” “estimate,” “continue,” and similar expressions or the negative thereof or comparable terminology are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, including the matters set forth in this report or other reports or documents we file with the Securities and Exchange Commission from time to time, which could cause actual results or outcomes to differ materially from those projected. Undue reliance should not be placed on these forward-looking statements which speak only as of the date hereof. We undertake no obligation to update these forward-looking statements.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and notes thereto for the three months ended March 31, 2018 and 2017.

The independent auditor’s reports on our financial statements for the years ended December 31, 2017 and 2016 includes a “going concern” explanatory paragraph that describes substantial doubt about our ability to continue as a going concern. Management’s plans in regard to the factors prompting the explanatory paragraph are discussed below and also in Note 14 to the unaudited condensed consolidated financial statements.

While our financial statements are presented on the basis that we are a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time, our auditor has raised substantial doubt about our ability to continue as a going concern.

Results of Operations

For the three months ended March 31, 2018 compared to the three months ended March 31, 2017

Revenues

Revenues for the three months ended March 31, 2018 and 2017 were $20 and $-0- and consisted of wholesale goods.

Cost of Sales

For the three months ended March 31, 2018, cost of sales of $7,508 is comprised of consulting fees, including an allocation of $7,500, or twenty (20%) percent of the Company’s CEO fees.

Operating Expenses

Operating expenses were $460,165 and $646,935 for the three months ended March 31, 2018 and 2017, respectively. The expenses were comprised of:

	Three months ended March 31,
Description	2018		2017
Management fees	$	34,792	$	337,500
Administration fees		21,600		15,200
Gain on recapture of reserve on land		—		(47,502	)
Professional and consulting fees		234,380		270,986
Rent and occupancy costs		9,053		21,679
Property and maintenance cost		16,000		9,561
General and other administrative		144,340		39,512
Total	$	460,165	$	646,935

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Administration and management fees includes $30,000 and $37,500 expensed as fees for our CEO for the three months ended March 31, 2018 and 2017, respectively. Also included were fees paid for administration services of $21,600 and $15,200 for the three months ended March 31, 2018 and 2017, respectively. The Company has agreed to compensation of $12,500 per month for the Company’s CEO and estimates that administration fees will be approximately $7,600 per month at this time. Also included in the three months ended March 31, 2017 was stock compensation expense of $300,000, comprised of the Company issuing 10,000,000 shares of common stock to the Company’s CEO. The shares were issued for services performed as the sole Officer and director of the Company since November 2014. The Company valued the shares at $0.03 per share (the market price of the common stock) and recorded stock compensation expense, management, of $300,000.

Professional and consulting fees decreased to $234,830 for the three months ended March 31, 2018, from $270,986 for the three months ended March 31, 2017, and is comprised of the following:

	Three months ended March 31,
	2018		2017
Legal fees	$	34,880	$	46,155
Consulting fees		71,500		16,000
Accounting and audit fees		10,500		29,500
Stock compensation expense		97,500		166,831
Investor relation costs, including related party of $5,000 (2018) and $12,500 (2017)		20,000		12,500
Total	$	234,380	$	270,986

Stock compensation expense for the three months ended March 31, 2018, was a result of 5,000,000 shares of common stock issued to Dr. Stephen Holt, for his appointment to the advisory board. The Company recorded an expense of $97,500 (based on the market price of the Company’s common stock of $0.0195 per share).

Stock compensation expense of $166,831 for the three months ended March 31, 2017, was comprised of:

On January 16, 2017, the Company entered into a Business Consultant Agreement (the “BCA”). Pursuant to the BCA, the Company issued 5,000,000 shares of common stock for services to be provided to the Company related to business development, product marketing, helping identify mergers and acquisition candidates, and will consult with and advise the Company on matters pertaining to business modeling and strategic alliances. The Company valued the shares at $0.03 per share (the market price of the common stock) and recorded stock compensation expense of $150,000, and

On January 30, 2017, the Company issued 1,000,000 shares of common stock to Venture Equity. The Company valued the shares at $0.03 per share (the market price of the common stock) and cancelled of $13,169 of accrued and unpaid fees owed Venture Equity and recorded stock- based compensation expense of $16,831.

Rent and occupancy costs were $9,053 and $21,679 for the three months ended March 31, 2018, and 2017, respectively. The decrease was primarily due to in January 2017, the Company signed a five (5) year lease, beginning February 1, 2107, for approximately 6,000 square feet of office space, comprised of two floors, in San Juan, Puerto Rico. Pursuant to the lease, the Company will pay $3,000 per month for one floor for the first year of the lease. The rent will increase 3% per year on February beginning in 2018 and an additional 3% per year on each successive February 1, during the term of the lease. The landlord has agreed that for the month of February 2017, the rent will be $1,500. The rent for the other floor will be $2,000 per month during the term of the lease and the Company does not have any rent payments for the first three months of the lease (February 2017 through April 2017). The Company is straight lining the total lease payments over the term of the lease and for the three months ended March 31, 2017 has included $11,354 of rent expense.

Leased property available for sub-lease and property maintenance costs were $16,000 (related) and $9,561 for the three months ended March 31, 2018 and 2017, respectively. For the three months ended March 31, 2018, the Company made lease payments of $16,000 for their lease with the Company’s CEO for, the "420 Style" resort and estate property approximately one hour outside of Quebec City, Canada. The 2107 costs were comprised of leased real estate. On April 28, 2014, the Company executed and closed a 10 year lease agreement for 20 acres of an agricultural farming facility located in South Florida. Pursuant to the lease agreement, the Company maintains a first right of refusal to purchase the property for three years. The Company has recorded $9,561 of expense for the three months ended March 31, 2017.

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General and other administrative costs for the three months ended March 31, 2018, were $144,340, compared to $39,512, for the three months ended March 31, 2017, respectively, consisting of public company expenses (transfer agent, filing fees and etc.), advertising, travel, website development, payroll, office and other taxes.

Other Income (Expense), Net

Other income, net, for the three months ended March 31, 2018 was $2,337,728 compared to other expenses, net, of $115,064 for the three months ended March 31, 2017, respectively. Other income, net, for the 2018 period was from the decrease on the fair value of derivatives of $2,857,244, partially offset by the loss on debt settlement of $58,759, loss on legal matter of $232,246 and interest expense of $228,511. Other expense for the 2017 period was from the decrease on the fair value of derivatives of $218,178 and interest expense of $333,242.

Interest expense for each of the periods is as follows:

	Three months ended March 31,
	2018		2017
Interest on face value	$	24,887	$	21,163
Amortization of note discount		183,450		289,979
Amortization of deferred financing fees		20,000		22,100
Other		174		—
Total	$	228,511	$	333,242

Capital Resources and Liquidity

Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. As of March 31, 2018, we had cash and cash equivalents of $201,350, a decrease of $103,539, from $304,889 as of December 31, 2017. At March 31, 2018, we had current liabilities of $3,946,893 (including $2,194,113 of non-cash derivative liabilities) compared to current assets of $303,578 which resulted in working capital deficit of $3,643,315. The current liabilities are comprised of accounts payable, accrued expenses, convertible debt, derivative liabilities and notes payable.

Operating Activities

For the three months ended March 31, 2018, net cash used in operating activities was $460,918 compared to $200,626 for the three months ended March 31, 2017.

The Company had net income for the three months ended March 31, 2018 of $1,870,075 primarily attributable to a gain of $2,901,355 in the change of the fair value of derivative liabilities, partially offset by non-cash expenses of stock- based compensation of $97,500, the initial derivative liability expense of $44,206 on new convertible notes issued and the amortization of discounts and financing fees on convertible notes of $203,450, loss on debt settlement of $58,759 and loss on legal matter of $232,246.

The Company had a net loss for the three months ended March 31, 2017 of $761,999 which included non-cash expenses of stock based compensation of $466,831, the initial derivative liability expense of $349,934 on new convertible notes issued and the amortization of discounts on convertible notes of $312,079, reduced by a gain on reversing a previous reserve on land acquired of $47,502 and for the decrease in fair value of the derivative liability of $568,112. Changes in operating assets and liabilities that decreased cash used in operating activities included an increase in accounts payable and accrued expenses of $46,116, related party payable of $5,527 and deferred rent of $6,854.

Investing Activities

During the three months ended March 31, 2018, net cash used in investing activities was $54,563 compared to $51,413 for the three months ended March 31, 2017. For the period ending March 31, 2018, the Company purchased furniture and equipment of $19,563 and also expended $35,000 to increasing the investment in note receivables related to two separate five- year exclusive licensing and operation agreements. The 2017 period was the result of the Company paying $41,554 as part of the purchase price to acquire 80 acres in Pueblo Colorado and $9,859 in furniture and equipment for the Puerto Rico offices.

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Financing Activities

Net cash provided by financing activities was $411,942 and $425,900 for the three months ended March 31, 2018 and 2017, respectively. The 2018 activity was comprised of proceeds received related to the issuance of convertible promissory notes of $275,000 and $340,000 related to Stock Purchase Agreements with St. George. The Company also made payments of $178,058 of principal and accrued interest on convertible promissory notes and $25,000 on notes payable. The 2017 period was a result of proceeds from the issuance of convertible promissory notes. 

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

As reflected in the accompanying unaudited condensed consolidated financial statements, the Company had an accumulated deficit at March 31, 2018, a net loss and net cash used in operating activities for the reporting period then ended. These conditions raise substantial doubt about its ability to continue as a going concern.

The Company is attempting to produce sufficient revenue; however, the Company’s cash position may not be sufficient to support its daily operations. While the Company believes in the viability of its strategy to produce sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenues and in its ability to raise additional funds.

The unaudited consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Critical Accounting Policies

Accounting Policies and Estimates

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America requires our management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our management periodically evaluates the estimates and judgments made. Management bases its estimates and judgments on historical experience and on various factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates as a result of different assumptions or conditions.

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments necessary to present the financial position, results of operations and cash flows for the stated periods have been made. Except as described below, these adjustments consist only of normal and recurring adjustments. Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated unaudited financial statements should be read in conjunction with a reading of the Company’s consolidated financial statements and notes thereto. Interim results of operations for the three months ended March 31, 2018, are not necessarily indicative of future results for the full year. Certain amounts from the 2017 period have been reclassified to conform to the presentation used in the current period.

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The condensed consolidated unaudited financial statements of the Company include the consolidated accounts of Agritek and its wholly owned subsidiaries AVHI and Prohibition Products, Inc. (“PPI”). PPI, a Florida corporation, was originally formed on July 1, 2013 as The American Hemp Trading Company, Inc. (“AHTC”) and on August 27, 2014, AHTC changed its name to PPI. All intercompany accounts and transactions have been eliminated in consolidation.

Revenue Recognition

The Company recognizes revenue in accordance with the Securities and Exchange Commission, Staff Accounting Bulletin (SAB) No. 104, “Revenue Recognition” (“SAB No. 104”). SAB 104 clarifies application of generally accepted accounting principles related to revenue transactions. The Company also follows the guidance in EITF Issue No. 00-21, Revenue Arrangements with Multiple Deliverables (“EITF Issue No. 00-21”), in arrangements with multiple deliverables.

The Company recognizes revenues when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery of products and services has occurred, (3) the fee is fixed or determinable and (4) collectability is reasonably assured.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original term of three months or less to be cash equivalents.

Accounts Receivable

The Company records accounts receivable from amounts due from its customers upon the shipment of products. The allowance for losses is established through a provision for losses charged to expenses. Receivables are charged against the allowance for losses when management believes collectibility is unlikely. The allowance is an amount that management believes will be adequate to absorb estimated losses on existing receivables, based on evaluation of the collectability of the accounts and prior loss experience. While management uses the best information available to make its evaluations, this estimate is susceptible to significant change in the near term. As of March 31, 2018, and December 31, 2017, based on the above criteria, the Company has a full allowance for doubtful accounts of $43,408.

Inventory

Inventory is valued at the lower of cost or market value. Cost is determined using the first in first out (FIFO) method. Provision for potentially obsolete or slow moving inventory is made based on management analysis or inventory levels and future sales forecasts.

Notes receivable

As of March 31, 2018, the Company has recorded notes receivable the following:

• $130,000 pursuant to a five (5) year operational and exclusive licensing agreement with a third party who leases a 25,000-sq. ft. approved cultivation facility located in San Juan, Puerto Rico (see Note 10).

• $115,000 pursuant to a five (5) year operational and exclusive licensing agreement with a third party who leases a 10,000-sq. ft. approved cultivation facility located in Washington State (see Note 10).

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Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed

We evaluate long-lived assets and identifiable intangible assets with finite useful lives in accordance with ASC 350-30 and ASC 360 (formerly SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets), and accordingly, management reviews our long-lived assets and identifiable intangible assets with finite useful lives for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We recognize an impairment loss when the sum of the future undiscounted net cash flows expected to be realized from the asset is less than its carrying amount. If an asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Considerable judgment is necessary to estimate the fair value of the assets and accordingly, actual results could vary significantly from such estimates. Our most significant estimates and judgments relating to the long-lived asset impairments include the timing and amount of projected future cash flows.

Fair Value of Financial Instruments

Fair value measurements are determined under a three-level hierarchy for fair value measurements that prioritizes the inputs to valuation techniques used to measure fair value, distinguishing between market participant assumptions developed based on market data obtained from sources independent of the reporting entity (“observable inputs”) and the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (“unobservable inputs”).

Fair value is the price that would be received to sell an asset or would be paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, the Company primarily uses prices and other relevant information generated by market transactions involving identical or comparable assets (“market approach”). The Company also considers the impact of a significant decrease in volume and level of activity for an asset or liability when compared with normal activity to identify transactions that are not orderly.

The highest priority is given to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Securities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The three hierarchy levels are defined as follows:

Level 1 – Quoted prices in active markets that is unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly;

Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

Credit risk adjustments are applied to reflect the Company’s own credit risk when valuing all liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the Company’s own credit risk as observed in the credit default swap market.

The Company's financial instruments consist primarily of cash, accounts receivable, notes receivable, accounts payable and accrued expenses, note payable and convertible debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.  The estimated fair value is not necessarily indicative of the amounts the Company would realize in a current market exchange or from future earnings or cash flows.

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Earnings (Loss) Per Share

Earnings (loss) per share are computed in accordance with ASC 260, "Earnings per Share". Basic earnings (loss) per share is computed by dividing net income (loss), after deducting preferred stock dividends accumulated during the period, by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share is computed by dividing net income by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities, if any, outstanding during the period. As of March 31, 2018, there were warrants and options to purchase 45,094,763 shares of common stock and the Company’s outstanding convertible debt is convertible into approximately 163,957,118 shares of common stock. These amounts are included in the computation of income per share because their impact is dilutive.

Accounting for Stock-Based Compensation 

The Company accounts for stock awards issued to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. The measurement date is the earlier of (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty's performance is complete. Stock awards granted to non-employees are valued at their respective measurement dates based on the trading price of the Company’s common stock and recognized as expense during the period in which services are provided. For the three months ended March 31, 2018, and 2017, the Company recorded stock- based compensation of $97,500 and $466,831, respectively (See Note 9).

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable to smaller reporting companies.

Item 4. Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our filings under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC. This information is accumulated to allow our management to make timely decisions regarding required disclosure. Our President, who serves as our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report and he determined that our disclosure controls and procedures were not effective as of March 31, 2018 due to a control deficiency. During the period we did not have additional personnel to allow segregation of duties to ensure the completeness or accuracy of our information. Due to the size and operations of the Company, we are unable to remediate this deficiency until we acquire or merge with another company.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or 15d-15 of the Exchange Act that occurred during the quarter ended March 31, 2018, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II. Other Information

Item 1. Legal Proceedings

On March 2, 2015, the Company, the Company’s CEO and the Company’s CFO at the time were named in a civil complaint filed by Erick Rodriguez in the District Court in Clark County, Nevada (the “DCCC”). The complaint alleges that Mr. Rodriguez never received 250,000 shares of Series B preferred stock that were initially approved by the Board of Directors in 2012, subject to the completion of a merger of a company controlled by Mr. Rodriguez. Since the merger was never completed, the shares were never certificated to Mr. Rodriguez. On March 21, 2017, the DCC agreed to Set Aside the Entry of Default against the Defendants. Mr. Rodriguez resigned in June 2013.  On April 12, 2018, an Arbitrator issued a final award to Rodriguez in the amount of $399,291. The Company and the Company’s counsel believe the Arbitrator denied a number of detailed objections to the award, which cited clear mistakes as to Nevada law and to the facts. The Company has retained a Nevada attorney who is an expert in fighting attempts to convert arbitration awards into judgments in Nevada courts, to work with our arbitration counsel. The Company recorded a loss on legal matter, included in other expenses for the year ended December 31, 2017. On May 3, 2018, the Arbitrator issued an amended final award of $631,537, inclusive of interest and legal fees. The Company recorded a loss of $232,246 on the legal matter, included in other expenses for the three months ended March 31, 2018.

On May 6, 2016, the Company, B. Michael Freidman and Barry Hollander (former CFO) were named as defendants in a Summons/Complaint filed by Justin Braune (the “Plaintiff”) in Palm Beach County Civil Court, Florida (the “PBCCC”). The complaint alleges that Mr. Braune was entitled to shares of common stock of the Company. On December 5, 2016, the PBCCC set aside a court default that had been previously issued. The defendants have answered the complaint, including the defenses that Mr. Braune advised the Company’s transfer agent and the Company in his letter of resignation dated November 4, 2015, clearly stating that he has relinquished all shares of common stock. The Company has filed a counterclaim suit against the Plaintiff, as well as sanctions against the Plaintiff and their counsel.

Item 1A. Risk Factors

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Act of 1934 and are not required to provide the information under this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended March 31, 2018, the Company issued the following shares of common stock upon the conversions of portions of the convertible notes:

Date		Principal Conversion		Interest Conversion		Total Conversion		Conversion Price		Shares Issued		Issued to
	2/12/18	$	69221	$	5,779	$	75,000	$	0.00564		13,297,872	St Georges
	3/27/18	$	47,061	$	2,939	$	50,000	$	0.00564		8,865,248	St Georges
		$	116,282	$	8,718	$	125,000				22,163,120

In addition to the above, during the three months ended March 31, 2018, the Company:

On February 26, 2018, the Company agreed to issue 5,000,000 shares of common stock to Dr. Stephen Holt, for his appointment to the advisory board. The Company recorded an expense of $97,500 (based on the market price of the Company’s common stock of $0.0195 per share) and is included in professional and consulting fees in the condensed consolidated statements of operations for the three months ended March 31, 2018.

Issued 28,551,579 shares of common stock to St. George pursuant to Notices of Exercise of Warrant received. The shares were issued based upon the cashless exercise provision of the warrant.

During the three months ended March 31, 2018, the Company received $340,000, pursuant to Stock Purchase Agreements (the “SPA”) with St. George to buy 15,515,543 shares of common stock.

28

Item 3. Defaults upon Senior Securities

None. 

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Convertible Debenture Proceeds

On January 9, 2018, and March 20, 2018, St. George funded $200,000 and $75,000, respectively, of the secured promissory notes issued to the Company, and the Company recorded $295,000 as convertible note payable, including $20,000 OID interest.

Item 6. Exhibits

Exhibit
Number	Description of Exhibit
10.1	Form of Convertible Promissory Note by and between Agritek Holdings, Inc. and Vis Vires Group, Inc. dated February 23, 2015. (Incorporated herein by reference to Exhibit 10.1 as filed on Form 10-Q with the SEC on May 18, 2015).
10.2	Form of 8% Convertible Redeemable Note by and between Agritek Holdings, Inc. and LG Capital Funding, LLC dated March 27, 2015. (Incorporated herein by reference to Exhibit 10.1 as filed on Form 10-Q with the SEC on May 18, 2015).
10.3	Form of 8% Convertible Redeemable Note by and between Agritek Holdings, Inc. and GW Holding Group, LLC dated March 30, 2015. (Incorporated herein by reference to Exhibit 10.1 as filed on Form 10-Q with the SEC on May 18, 2015).
10.4+	Employment and Board of Directors Agreement effective March 20, 2015 by and between Agritek Holdings, Inc. and Justin Braune (Incorporated herein by reference to Exhibit 10.1 as filed on Form 8-K with the SEC on March 20, 2015).
10.5	Deed in Lieu of Foreclosure Agreement dated December 16, 2015, by and among Agritek Holdings, Inc. and Tonaquint, Inc. (Incorporated herein by reference to Exhibit 10.1 as filed on Form 8-K with the SEC on February 12, 2016).
10.6	Replacement Note dated January 5, 2016, issued to LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.2 as filed on Form 8-K with the SEC on February 12, 2016).
10.7	Replacement Note dated January 5, 2016, issued to LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.3 as filed on Form 8-K with the SEC on February 12, 2016).
10.8	Replacement Note dated January 5, 2016, issued to Cerberus Finance Group, LTD (Incorporated herein by reference to Exhibit 10.4 as filed on Form 8-K with the SEC on February 12, 2016).
10.9	Securities Purchase Agreement dated January 19, 2016, by and between Agritek Holdings, Inc. and LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.5 as filed on Form 8-K with the SEC on February 12, 2016).
10.10	Convertible Redeemable Note dated January 19, 2016, by and between Agritek Holdings, Inc. and LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.6 as filed on Form 8-K with the SEC on February 12, 2016).
10.11	Securities Purchase Agreement dated January 19, 2016, by and between Agritek Holdings, Inc. and Cerberus Finance Group, LTD. (Incorporated herein by reference to Exhibit 10.7 as filed on Form 8-K with the SEC on February 12, 2016).
10.12	Convertible Redeemable Note dated January 19, 2016, by and between Agritek Holdings, Inc. and Cerberus Finance Group, LTD (Incorporated herein by reference to Exhibit 10.8 as filed on Form 8-K with the SEC on February 12, 2016).

29

10.13	Securities Purchase Agreement dated March 23, 2016, by and between Agritek Holdings, Inc. and Cerberus Finance Group, LTD. (Incorporated herein by reference to Exhibit 10.13 as filed on Form 10-Q with the SEC on May 23, 2016).
10.14	Convertible Redeemable Note dated March 23, 2016, by and between Agritek Holdings, Inc. and Cerberus Finance Group, LTD (Incorporated herein by reference to Exhibit 10.14 as filed on Form 10-Q with the SEC on May 23, 2016).
10.15	Securities Purchase Agreement dated December 13, 2016 by and between Agritek Holdings, Inc. and LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.1 as filed on Form 8-K with the SEC on December 19, 2016).
10.16	Convertible Redeemable Note dated December 13, 2016, by and between Agritek Holdings, Inc. and LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.2 as filed on Form 8-K with the SEC on December 19, 2016).
10.17	Convertible Redeemable Note Back End dated December 13, 2016, by and between Agritek Holdings, Inc. and LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.3 as filed on Form 8-K with the SEC on December 19, 2016).

10.18	Collateralized Secured Promissory Note dated December 13, 2016, by and between Agritek Holdings, Inc. and LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.4 as filed on Form 8-K with the SEC on December 19, 2016).
10.19	Termination Agreement dated December 13, 2016 by and between Agritek Holdings, Inc. and LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.5 as filed on Form 8-K with the SEC on December 19, 2016).
10.20	Investor Note #1 dated October 31, 2016, by and between Agritek Holdings, Inc. and St. George Investments LLC. (Incorporated herein by reference to Exhibit 10.6 as filed on Form 8-K with the SEC on December 19, 2016).
10.21	Warrant #2 dated October 31, 2016, by and between Agritek Holdings, Inc. and St. George Investments LLC. (Incorporated herein by reference to Exhibit 10.7 as filed on Form 8-K with the SEC on December 19, 2016).
10.22	Investments LLC. (Incorporated herein by reference to Exhibit 10.7 as filed on Form 8-K with the SEC on December 19, 2016).
10.23	Securities Purchase Agreement dated January 24, 2017 by and between Agritek Holdings, Inc. and LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.1 as filed on Form 8-K with the SEC on January 31, 2017).
10.24	Convertible Redeemable Note dated January 24, 2017, by and between Agritek Holdings, Inc. and LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.2 as filed on Form 8-K with the SEC on January 31, 2017).
10.25	Convertible Redeemable Note Back End dated January 24, 2017, by and between Agritek Holdings, Inc. and LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.3 as filed on Form 8-K with the SEC on January 31, 2017).
10.26	Collateralized Secured Promissory Note dated January 24, 2017, by and between Agritek Holdings, Inc. and LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.4 as filed on Form 8-K with the SEC on January 31, 2017).
10.27	Securities Purchase Agreement dated January 24, 2017 by and between Agritek Holdings, Inc. and Cerberus Finance Group LTD. (Incorporated herein by reference to Exhibit 10.5 as filed on Form 8-K with the SEC on January 31, 2017).
10.28	Convertible Redeemable Note dated January 24, 2017, by and between Agritek Holdings, Inc. and Cerberus Finance Group LTD. (Incorporated herein by reference to Exhibit 10.6 as filed on Form 8-K with the SEC on January 31, 2017).
10.29	Convertible Redeemable Note Back End dated January 24, 2017, by and between Agritek Holdings, Inc. and Cerberus Finance Group LTD.  (Incorporated herein by reference to Exhibit 10.7 as filed on Form 8-K with the SEC on January 31, 2017).
10.30	Collateralized Secured Promissory Note dated January 24, 2017, by and between Agritek Holdings, Inc. and Cerberus Finance Group LTD. (Incorporated herein by reference to Exhibit 10.8 as filed on Form 8-K with the SEC on January 31, 2017).
10.31	Securities Purchase Agreement dated February 1, 2017 by and between Agritek Holdings, Inc. and Power Up Lending Group, LTD. (Incorporated herein by reference to Exhibit 10.31 as filed on Form 10-K with the SEC on March 31, 2017).

30

10.32 Convertible Promissory Note dated February 1, 2017, by and between Agritek Holdings, Inc. and Power Up Lending Group, LTD. (Incorporated herein by reference to Exhibit 10.32 as filed on Form 10-K with the SEC on March 31, 2017).

10.33	Securities Purchase Agreement dated February 24, 2017 by and between Agritek Holdings, Inc. and LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.33 as filed on Form 10-K with the SEC on March 31, 2017).
10.34	Convertible Redeemable Note dated February 24, 2017, by and between Agritek Holdings, Inc. and LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.34 as filed on Form 10-K with the SEC on March 31, 2017).
10.35	Convertible Redeemable Note Back End dated February 24, 2017, by and between Agritek Holdings, Inc. and LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.35 as filed on Form 10-K with the SEC on March 31, 2017).
10.36	Collateralized Secured Promissory Note dated February 24, 2017, by and between Agritek Holdings, Inc. and LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.36 as filed on Form 10-K with the SEC on March 31, 2017).
10.37	Securities Purchase Agreement dated February 24, 2017 by and between Agritek Holdings, Inc. and Cerberus Finance Group LTD. (Incorporated herein by reference to Exhibit 10.37 as filed on Form 10-K with the SEC on March 31, 2017).
10.38	Convertible Redeemable Note dated February 24, 2017, by and between Agritek Holdings, Inc. and Cerberus Finance Group LTD. (Incorporated herein by reference to Exhibit 10.38 as filed on Form 10-K with the SEC on March 31, 2017).
10.39	Convertible Redeemable Note Back End dated February 24, 2017, by and between Agritek Holdings, Inc. and Cerberus Finance Group LTD.  (Incorporated herein by reference to Exhibit 10.39 as filed on Form 10-K with the SEC on March 31, 2017).

10.40	Collateralized Secured Promissory Note dated February 24, 2017, by and between Agritek Holdings, Inc. and Cerberus Finance Group LTD.  (Incorporated herein by reference to Exhibit 10.40 as filed on Form 10-K with the SEC on March 31, 2017).
10.41	Securities Purchase Agreement dated March 24, 2017, by and between Agritek Holdings, Inc. and LG Capital Funding, LLC.  (Incorporated herein by reference to Exhibit 10.41 as filed on Form 10-K with the SEC on March 31, 2017).
10.42	Convertible Redeemable Note dated March 24, 2017, by and between Agritek Holdings, Inc. and LG Capital Funding, LLC.   (Incorporated herein by reference to Exhibit 10.42 as filed on Form 10-K with the SEC on March 31, 2017).
10.43	Convertible Redeemable Note Back End dated March 24, 2017, by and between Agritek Holdings, Inc. and LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.43 as filed on Form 10-K with the SEC on March 31, 2017).
10.44	Collateralized Secured Promissory Note dated March 24, 2017, by and between Agritek Holdings, Inc. and LG Capital Funding, LLC. (Incorporated herein by reference to Exhibit 10.44 as filed on Form 10-K with the SEC on March 31, 2017).
10.45	Securities Purchase Agreement dated April 24, 2017 by and between Agritek Holdings, Inc. and Cerberus Finance Group LTD.
10.46 10.47	Convertible Redeemable Note dated April 24, 2017, by and between Agritek Holdings, Inc. and Cerberus Finance Group LTD.  Convertible Redeemable Note Back End dated April 24, 2017, by and between Agritek Holdings, Inc. and Cerberus Finance Group LTD.
31.1*	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive and Financial Officer
32.1*	Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
101.INS*	XBRL Instance
101.SCH*	XBRL Taxonomy Extension Schema
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase
101.DEF*	XBRL Taxonomy Extension Definition Linkbase
101.LAB*	XBRL Taxonomy Extension Labels Linkbase
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase

* Filed herewith.

+ Management contract or compensatory plan or arrangement.

31

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: May 15, 2018

AGRITEK HOLDINGS, INC.

By:   /s/ B. Michael Friedman          

B. Michael Friedman

Chief Executive Officer (principal executive, principal financial and accounting officer)

32

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, B. Michael Friedman, certify that:

1. I have reviewed this Form 10-Q of Agritek Holdings, Inc..;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods present in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the small business issuer's internal control over financing reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.

Date: May 15, 2018

/s/ B. Michael Friedman                

B. Michael Friedman, Principal Executive Officer and Principal Financial Officer

Agritek Holdings, Inc.

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Annual Report on Form 10-Q of Agritek Holdings, Inc., for the quarter ended March 31, 2018, I, B. Michael Friedman hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 Date: May 15, 2018

/s/ B. Michael Friedman                

B. Michael Friedman

Principal Executive Officer and Principal Financial Officer

Agritek Holdings, Inc.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 15, 2018
Document And Entity Information
Entity Registrant Name	AGRITEK HOLDINGS, INC.
Entity Central Index Key	0001040850
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		784,121,399
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2018

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Current Assets:
Cash and cash equivalents	$ 201,350	$ 304,889
Marketable Securities	24,236	41,862
Inventory, net	19,992	10,000
Prepaid assets and other	58,000	48,500
Total current assets	303,578	405,251
Notes receivable	245,000	210,000
Property and equipment, net of accumulated depreciation of $32,254 (2018) and $23,824 (2017)	297,548	286,415
Security deposit and other	13,825	13,825
Total assets	859,951	915,490
Current Liabilities:
Accounts payable and accrued expenses	1,317,745	1,089,338
Due to related party		7,715
Customer deposits	2,400	2,400
Deferred rent	24,916	24,916
Convertible note payable, net of discounts of $605,743 (2018) and $494,193 (2017)	381,219	485,250
Derivative liabilities	2,194,113	5,416,830
Note payable, current portion	26,500	51,500
Total current liabilities	3,946,893	7,077,950
Total liabilities	3,946,893	7,077,950
Commitments and Contingencies
Stockholders' Deficit:
Series B convertible preferred stock, $0.01 par value; 1,000,000 shares authorized, and 1,000 shares issued and outstanding	10	10
Common stock, $.0001 par value; 1,000,000,000 shares authorized; 779,395,047 (2018) and 723,680,348 (2017) shares issued and outstanding	77,940	72,369
Common stock to be issued	4,489	5,257
Additional paid-in capital	20,530,910	19,312,645
Deferred expenses
Accumulated comprehensive gain	7,711	25,337
Accumulated deficit	(23,708,002)	(25,578,077)
Total stockholders' deficit	(3,086,942)	(6,162,460)
Total liabiities and stockholders' deficit	$ 859,951	$ 915,490

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Assets
Accumulated depreciation of property and equipment	$ (32,254)	$ (23,824)
Current Liabilities
Discount on convertible notes payable	$ (605,743)	$ (494,193)
Stockholders' Deficit
Preferred stock Series B par value	$ 0.01	$ 0.01
Preferred stock Series B authorized	1,000,000	1,000,000
Preferred stock Series B issued	1,000	1,000
Preferred stock Series B outstanding	1,000	1,000
Common stock par value	$ 0.0001	$ 0.0001
Common stock shares authorized	1,000,000,000	1,000,000,000
Common stock shares issued	779,395,047	723,680,348
Common stock shares outstanding	779,395,047	723,680,348

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement [Abstract]
Product revenue	$ 20
Cost of revenue, includes $7,500 related party for 2018	7,508
Gross profit (loss)	(7,488)
Operating Expenses:
Management fees, including $300,000 of stock based compensation (2017)	34,792	337,500
Administrative fees	21,600	15,200
Professional and consulting fees, includes stock-based compensation $97,500 (2018) and $166,831 (2017)	234,380	270,986
Gain on recapture of reserve for land		(47,502)
Rent and other occupancy costs	9,053	21,679
Leased property expense	16,000	9,561
Other general and administartive expenses	144,340	39,512
Total operating expenses	460,165	646,935
Operating loss	(467,653)	(646,935)
Other Income (Expense):
Loss on debt settlement	(58,759)
Loss on legal matter	(232,246)
Interest expense	(228,511)	(333,242)
Derivative liability expense	2,857,244	218,178
Total other income (expense), net	2,337,728	(115,064)
Net income (loss)	1,870,075	(761,999)
Unrealized loss on marketable securities	(17,626)	(14,432)
Net comprehensive income (loss)	$ 1,852,449	$ (776,431)
Basic income (loss) per share	$ 0.00	$ (0.00)
Diluted income (loss) per share	$ 0.00	$ (0.00)
Weighted average number of common shares outstanding Basic	754,359,212	427,965,019
Weighted average number of common shares outstanding Diluted	963,411,093	427,965,019

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Related party cost of revenue	$ 7,500
Management fees
Stock based compensation expense		$ 300,000
Professional and consulting fees
Stock based compensation expense	$ 97,500	$ 166,831

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities:
Net income (loss)	$ 1,870,075	$ (761,999)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Stock based compensation	97,500	466,831
Amortization of deferred financing costs	20,000	22,100
Loss on legal settlement	232,246
Loss on debt settlement	58,759
Depreciation	8,430	1,646
Initial expense for fair value of derivative liabilities	44,206	349,934
Amortization of discount on convertible notes	183,450	289,979
Change in fair values of derivative liabilities	(2,901,355)	(568,112)
Recapture of reserve for land		(47,502)
Changes in operating assets and liabilities:
Increase in Inventory	(9,992)
Increase in Prepaid assets and other	(9,500)	(9,000)
Increase in Security deposit		(3,000)
Increase (decrease) in Accounts payable and accrued expenses	(47,022)	46,116
Increase (decrease) in Due to related party	(7,715)	5,527
Increase (decrease) in Deferred rent		6,854
Net cash used in operating activities	(460,918)	(200,626)
Cash flows from investing activities:
Purchase of property, equipment and furniture	(19,563)	(51,413)
Purchase of notes receivable	(35,000)
Net cash used in investing activities	(54,563)	(51,413)
Cash flows from financing activities:
Proceeds from issuance of convertible debt	275,000	425,900
Payments made of principal and interest on convertible notes	(178,058)
Payments made on note payable	(25,000)
Proceeds from sale of common stock to be issued	340,000
Net cash provided by financing activities	411,942	425,900
Net increase (decrease) in cash and cash equivalents	(103,539)	173,860
Cash and cash equivalents, Beginning	304,889	67,260
Cash and cash equivalents, Ending	201,350	241,120
Supplemental disclosure of cash flow information:
Cash paid for interest	6,859
Cash paid for income taxes
Schedule of non-cash financing activities:
Discount from derivatives	295,000	425,900
Conversion of notes payable and interest into common stock	125,000	191,386
Change in fair value for available for sale marketable securities	(17,626)	(14,432)
Issuance of note payable as part of land acquisition		35,000
Settlement of derivatives	660,568	513,280
Stock issued for settlement of accounts payable		37,784
Cashless warrant exercise	$ 2,855

XML

Organization

3 Months Ended

Mar. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Note 1 - Organization

Business

Agritek Holdings Inc. (“the Company” or “Agritek Holdings”) and its wholly-owned subsidiaries, MediSwipe, Inc. (“MediSwipe”), Prohibition Products Inc., and Agritek Venture Holdings, Inc. (“AVHI”) is a fully integrated, active investor and operator in the legal cannabis sector. Specifically, Agritek Holdings provides strategic capital and functional expertise to accelerate the commercialization of its diversified portfolio of holdings. Currently, the Company is focused on three high-value segments of the cannabis market, including real estate investment, intellectual property brands; and infrastructure, with operations in three U.S. States, Colorado, Washington State, California as well as Canada and Puerto Rico. Agritek Holdings invests its capital via real estate holdings, licensing agreements, royalties and equity in acquisition operations.

We provide key business services to the legal cannabis sector including:

•  Funding and Financing Solutions for Agricultural Land and Properties zoned for the regulated Cannabis Industry.

•  Dispensary and Retail Solutions

•  Commercial Production and Equipment Build Out Solutions

•  Multichannel Supply Chain Solutions

•  Branding, Marketing and Sales Solutions of proprietary product lines

•  Consumer Product Solutions 

The Company intends to bring its’ array of services to each new state that legalizes the use of cannabis according to appropriate state and federal laws. Our primary objective is acquiring commercial properties to be utilized in the commercial marijuana industry as cultivation facilities in compliance with state laws. This is an essential aspect of our overall growth strategy because once acquired and re-zoned, the value of such real property is substantially higher than under the previous zoning and use.

Once properties are identified and acquired to be used for purposes related to the commercial marijuana industry as provided for by state law, and we plan to create vertical channels within that legal jurisdiction including equipment financing, payment processing and marketing of exclusive brands and services to retail dispensaries

Agritek’s business focus is primarily to hold, develop and manage real property. The Company shall also provide oversight on every property that is part of its portfolio. This can include complete architectural design and subsequent build-outs, general support, landscaping, general up-keep, and state of the art security systems. At this time, Agritek does not grow, process, own, handle, transport, or sell marijuana as the Company is organized and directed to operate strictly in accordance with all applicable state and federal laws. As the legal environment changes in Colorado, California and other states, the Company’s management may explore business opportunities that involve ownership interests in dispensaries and growing operations if and when such business opportunities become legally permissible under applicable state and federal laws.

XML

Summary of Significant Account Policies

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Summary of Significant Account Policies

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America ("US GAAP"). The consolidated financial statements of the Company include the consolidated accounts of Agritek and its’ wholly owned subsidiaries MediSwipe, AVHI, The American Hemp Trading Company, Inc., a Colorado Corporation (dba 77Acres, Inc.) and PPI. PPI, a Florida corporation, was originally formed on July 1, 2013 as The American Hemp Trading Company, Inc. (“HempFL”) and on August 27, 2014, HempFL changed its’ name to PPI. All intercompany accounts and transactions have been eliminated in consolidation. 

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original term of three months or less to be cash equivalents.

Accounts Receivable

The Company records accounts receivable from amounts due from its customers upon the shipment of products. The allowance for losses is established through a provision for losses charged to expenses. Receivables are charged against the allowance for losses when management believes collectability is unlikely. The allowance is an amount that management believes will be adequate to absorb estimated losses on existing receivables, based on evaluation of the collectability of the accounts and prior loss experience. While management uses the best information available to make its evaluations, this estimate is susceptible to significant change in the near term. As of March 31, 2018, and December 31, 2017, based on the above criteria, the Company has a full allowance for doubtful accounts of $43,408.

Inventory

Inventory is valued at the lower of cost or market value. Cost is determined using the first in first out (FIFO) method. Provision for potentially obsolete or slow-moving inventory is made based on management analysis or inventory levels and future sales forecasts.

Notes receivable

	March 31, 2018		December 31, 2017
Client 1	$	130,000	$	110,000
Client 2		115,000		100,000
Total	$	245,000	$	210,000

• Note receivable from Client 1 is pursuant to a five (5) year operational and exclusive licensing agreement with a third party who leases a 25,000-sq. ft. approved cultivation facility located in San Juan, Puerto Rico (see Note 10).

• Note receivable from Client 2 is pursuant to a five (5) year operational and exclusive licensing agreement with a third party who leases a 10,000-sq. ft. approved cultivation facility located in Washington State (see Note 10).

Deferred Financing Costs

The costs related to the issuance of debt are capitalized and amortized to interest expense using the straight-line method through the maturities of the related debt.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of it financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. 

For option-based simple derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. 

Debt Issue Costs and Debt Discount

The Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs prior to maturity a proportionate share of the unamortized amounts is immediately expensed. 

Original Issue Discount

For certain convertible debt issued, the Company may provide the debt holder with an original issue discount. The original issue discount would be recorded to debt discount, reducing the initial carrying value of the note and is amortized to interest expense through the maturity of the debt. If a conversion of the underlying debt occurs prior to maturity a proportionate share of the unamortized amounts is immediately expensed. 

Marketable Securities and Other Comprehensive Income

The Company classifies its marketable securities as available-for-sale securities, which are carried at their fair value based on the quoted market prices of the securities with unrealized gains and losses, net of deferred income taxes, reported as accumulated other comprehensive income (loss), a separate component of stockholders’ equity. Realized gains and losses on available-for-sale securities are included in net earnings in the period earned or incurred.

Property and Equipment

Property and equipment are stated at cost, and except for land, depreciation is provided by use of a straight-line method over the estimated useful lives of the assets. The Company reviews property and equipment for potential impairment whenever events or changes in circumstances indicate that the carrying amounts of assets may not be recoverable. In February, 2017, the Company entered into a land purchase contract to acquire approximately 80 acres including water and mineral rights. The total cost of the land was $129,555. The Company paid $41,554 at closing and issued a note payable for $88,000. The Company is on the deed of trust of the property with a remaining note balance of $26,500 and $51,500 due the seller as of March 31, 2018 and December 31, 2017, respectively. The estimated useful lives of property and equipment are as follows:

Furniture and equipment	5 years
Manufacturing equipment	7 years

The Company's property and equipment consisted of the following at March 31, 2018, and December 31, 2017:

	March 31, 2018			December 31, 2017
Furniture and equipment	$	200,247		$	180,684
Land		129,555			129.555
Accumulated depreciation		(32,254	)		(23,824	)
Balance	$	297,548		$	286,415

Depreciation expense of $8,430 and $1,646 was recorded for the three months ended March 31, 2018, and 2017, respectively.

Long-Lived Assets

Long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Deferred rent

The Company calculates the total cost of the lease for the entire lease period and divides that amount by the number of months of the lease. The result is the average monthly expense and is charged to rent expense with the offset to deferred rent, irrespective of the actual amount paid. The amounts paid are charged to the deferred rent account. As of March 31, 2018, and December 31, 2017, the Company has a balance of $24,916 in deferred rent which is included in the consolidated balance sheet.

Revenue Recognition

The Company recognizes revenue in accordance with FASB ASC 605, Revenue Recognition. ASC 605 requires that four basic criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery of products and services has occurred, (3) the fee is fixed or determinable and (4) collectability is reasonably assured. The Company recognizes revenue during the month in which products are shipped or fees are earned.

Fair Value of Financial Instruments

The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. 

The following are the hierarchical levels of inputs to measure fair value: 

• Level 1 - Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities.

• Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

• Level 3 - Unobservable inputs reflecting the Company's assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

The carrying amounts of the Company's financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts payable and accrued expenses, certain notes payable and notes payable - related party, approximate their fair values because of the short maturity of these instruments. 

The following table represents the Company’s financial instruments that are measured at fair value on a recurring basis as of March 31, 2018, and December 31, 2017, for each fair value hierarchy level:

March 31, 2018	Derivative Liabilities		Total
Level I	$	—	$	—
Level II	$	—	$	—
Level III	$	2,194,113	$	2,194,113
December 31, 2017
Level I	$	—	$	—
Level II	$	—	$	—
Level III	$	5,416,830	$	5,416,830

Income Taxes

The Company accounts for income taxes in accordance with ASC 740-10, Income Taxes. Deferred tax assets and liabilities are recognized to reflect the estimated future tax effects, calculated at the tax rate expected to be in effect at the time of realization. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. Interest and penalties are classified as a component of interest and other expenses. To date, the Company has not been assessed, nor paid, any interest or penalties.

Uncertain tax positions are measured and recorded by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized or continue to be recognized. The Company’s tax years subsequent to 2005 remain subject to examination by federal and state tax jurisdictions.

Earnings (Loss) Per Share

Earnings (loss) per share are computed in accordance with ASC 260, "Earnings per Share". Basic earnings (loss) per share is computed by dividing net income (loss), after deducting preferred stock dividends accumulated during the period, by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share is computed by dividing net income by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities, if any, outstanding during the period. As of March 31, 2018, there were warrants and options to purchase 45,094,763 shares of common stock and the Company’s outstanding convertible debt is convertible into approximately 163,957,118 shares of common stock. These amounts are included in the computation of dilutive net income per share.

Accounting for Stock-Based Compensation 

The Company accounts for stock awards issued to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. The measurement date is the earlier of (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty's performance is complete. Stock awards granted to non-employees are valued at their respective measurement dates based on the trading price of the Company’s common stock and recognized as expense during the period in which services are provided. For the three months ended March 31, 2018, and 2017, the Company recorded stock- based compensation of $97,500 and $466,831, respectively (See Note 9).

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates.

Advertising

The Company records advertising costs as incurred. For the three months ending March 31, 2018, and 2017, advertising expenses was $17,450 and $3,059, respectively.

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Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2018

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

Note 3 – Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)”. Under this guidance, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. This guidance offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard will have on our consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. The Company elected to early adopt the new guidance in the second quarter of fiscal year 2016 which requires us to reflect any adjustments as of January 1, 2016, the beginning of the annual period that includes the interim period of adoption. The primary impact of adoption was the recognition of additional stock compensation expense and paid-in capital for all periods in fiscal year 2016. Additional amendments to the recognition of excess tax benefits, accounting for income taxes and minimum statutory withholding tax requirements had no impact to retained earnings as of January 1, 2016, where the cumulative effect of these changes is required to be recorded. We have elected to account for forfeitures as they occur to determine the amount of compensation cost to be recognized in each period.

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230).” ASU No. 2016-18 requires that restricted cash be included with cash and cash equivalents when reconciling the change in cash flow. This guidance is reflected in these financial statements.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which removes the second step of the two-step goodwill impairment test. Under ASU 2017-04, an entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. ASU 2017-04 does not amend the optional qualitative assessment of goodwill impairment. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019; early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company has not elected early adoption of this standard and is currently in the process of evaluating the impact of adopting ASU 2017-04 and cannot currently estimate the financial statement impact of adoption.

In May 2017, the FASB issued ASU No. 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” The amendments in this update provide guidance about which changes to the terms or conditions of a share-based award require an entity to apply modification accounting in Topic 718. The guidance will be effective for the Company for its fiscal year 2018, with early adoption permitted. The Company does not expect this ASU to materially impact the Company’s consolidated financial statements.  

Accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

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Marketable Securities

3 Months Ended

Mar. 31, 2018

Investments, Debt and Equity Securities [Abstract]

Marketable Securities

Note 4 – Marketable Securities

The Company owns marketable securities (common stock) as of March 31, 2018, and December 31, 2017 is outlined below:

	March 31, 2018			December 31, 2017
Beginning balance	$	41,862		$	39,769
Unrealized gain (loss) marked to fair value		(17,626	)		2,093
Ending balance	$	24,236		$	41,862

800 Commerce, Inc. (now known as Petrogress, Inc), was a commonly controlled entity until February 29, 2016, owed Agritek $282,947 as of February 29, 2016, as a result of advances received from or payments made by Agritek on behalf of 800 Commerce. These advances were non-interest bearing and were due on demand. Effective February 29, 2016, the Company received 1,102,462 shares of common stock of Petrogress, Inc. as settlement of the $282,947 owed to the Company. The market value on the date the Company received the shares of common stock was $16,525.

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Prepaid Expenses

3 Months Ended

Mar. 31, 2018

Other Income (Expense):

Prepaid Expenses

Note 5 – Prepaid Expenses

Prepaid expenses consisted of the following at March 31, 2018 and December 31, 2017:

	March 31, 2018		December 31, 2017
Vendor deposits	$	46,000	$	46,000
Investor relations		12,000		2,500
Total prepaid expenses	$	58,000	$	48,500

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Concentration of Credit Risk

3 Months Ended

Mar. 31, 2018

Risks and Uncertainties [Abstract]

Concentration of Credit Risk

Note 6 – Concentration of Credit Risk

Cash

Financial   instruments   that   potentially   subject   the   Company to concentrations of credit risk consist principally of cash. The Company maintains cash balances at one financial institution, which is insured by the Federal Deposit Insurance Corporation (“FDIC”). The FDIC insured institution insures up to $250,000 on account balances.

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Note Payable

3 Months Ended

Mar. 31, 2018

Debt Disclosure [Abstract]

Note Payable

Note 7 – Note Payable  

Note Payable Land

On March 18, 2014, in conjunction with the land purchase of 80 acres in Pueblo County, Colorado, the Company paid $36,000 cash and entered into a promissory note in the amount of $85,750. In November 2015, the Company was made aware that the land transaction regarding 80 acres in Pueblo County, Colorado, may not have been properly deeded to the Company. The company was a party to the land purchase, however, the second party to the land contract never filed the original quit claim deed on behalf of the Company, even though a copy of the notarized quit claim deed was sent to the Company. In February, 2017, the original owner of the 80 acres foreclosed on the property from the second party and the Company entered into a new land purchase contract (including water and mineral rights) directly with the landowner on February 7, 2017. The Company is on the deed of trust of the property and as March 31, 2018, and December 31, 2017, the note balance is $26,500 and $51,500, respectively.

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Convertible Debt

3 Months Ended

Mar. 31, 2018

Debt Disclosure [Abstract]

Convertible Debt

Note 8 – Convertible Debt

2016 Convertible Notes

On October 31, 2016, the Company entered into a Convertible Promissory Note ("St. George 2016 Notes") for $555,000 to St. George Investments, LLC. (“St. George”) which included a purchase price of $500,000 and transaction costs of $5,000 and OID interest of $50,000. On October 31, 2016, the Company received $100,000 and recorded $115,000 as convertible note payable, including $5,000 of transaction costs and $10,000 OID interest. St. George also issued to the Company eight secured promissory notes, each in the amount of $50,000. All or any portion of the outstanding balance of the St. George 2016 Notes may be prepaid, without penalty, along with accrued but unpaid interest at any time prior to maturity. The Company has no obligation to pay St. George any amounts on the unfunded portion of the St. George 2016 Notes. The St. George 2016 Note bears interest at 10% per annum (increases to 22% per annum upon an event of default) and is convertible into shares of the Company’s common stock at St. George’s option at a price of $0.05 per share. On December 14, 2016, St. George funded one of the secured promissory notes issued to the Company. During the year ended December 31, 2017, St. George funded the remaining secured promissory notes issued to the Company. During the three ended March 31, 2018, the Company issued 22,163,120 shares of common stock upon the conversion of $116,282 of principal and $8,718 accrued and unpaid interest on the note. The shares were issued at approximately $0.00564 per share. The principal and interest balance of the note as of March 31, 2018, and December 31, 2017, was $196,962 and $313,244, respectively.

Beginning on the date that is six (6) months after the later of (i) the Issuance Date, and (ii) the date the Initial Cash Purchase Price is paid to the Company (the “Initial Installment Date”), and on each applicable Installment Date thereafter, the Company is to pay the Holder, the applicable Installment Amount due on such date. Five Installment Amounts of $111,000 plus the sum of any accrued and unpaid interest, fees, costs or charges may be made (a) in cash (a “Company Redemption”), (b) by converting such Installment Amount into shares of Common Stock (a “Company Conversion”), or (c) by any combination of a Company Conversion and a Company Redemption so long as the entire amount of such Installment Amount due shall be converted and/or redeemed by the Company on the applicable Installment Date. The St. George 2016 Note matures fifteen months after the Issuance Date.

2017 Convertible Notes

On January 24, 2017, the Company completed the closing of a private placement financing transaction with Cerberus, pursuant to a Securities Purchase Agreement (the “Cerberus Purchase Agreement”). Pursuant to the Cerberus Purchase Agreement, Cerberus purchased an 8% Convertible Debenture (the “Cerberus Debenture”) in the aggregate principal amount of $63,000, and delivered on January 25, 2017, gross proceeds of $60,000 excluding transaction costs, fees, and expenses. During the three months ended March 31, 2017, the Company recorded a debt discount of $60,000 and recorded amortization expense of $10,833. As of March 31, 2018, and December 31, 2017, the note was paid in full. Also, on January 24, 2017, the Company issued to Cerberus, a back-end note under the same terms and conditions, in the amount of $63,000. On June 30, 2017, the back-end note was funded upon receipt of $60,000, excluding transaction costs, fees, and expenses. During the three months ended March 31, 2018, the Company redeemed the back- end note. The principal and interest balance of the back-end note as of March 31, 2018, and December 31, 2017 was $-0- and $63,000, respectively.

On February 1, 2017, the Company completed the closing of a private placement financing transaction with Power Up Lending Group, LTD (“Power Up”), pursuant to a Securities Purchase Agreement (the “Power Up Purchase Agreement”). Pursuant to the Power Up Purchase Agreement, Power Up purchased an 12% Convertible Debenture (the “Power Up Debenture”) in the aggregate principal amount of $140,000, and delivered on February 3, 2017 (the “Funding Date”), gross proceeds of $136,500 excluding transaction costs, fees, and expenses. Principal and interest on the Power Up Debentures is due and payable on November 5, 2017, and the Power Up Debenture is convertible into shares of the Company’s common stock beginning six months from the Funding Date, at a VCP. The VCP is calculated as the average of the three (3) lowest closing bid price during the ten (10) trading days immediately prior to the conversion date multiplied by fifty eight percent (58%), representing a forty two percent (42%) discount. During the year ended December 31, 2017, the Company recorded a debt discount of $136,500 and during the year ended December 31, 2017, recorded amortization expense of $136,500. The Company may prepay the Power Up Debenture, subject to prior notice to the holder within an initial 30-day period after issuance, by paying an amount equal to 120% multiplied by the amount that the Company is prepaying. For each additional 30-day period the amount being prepaid is multiplied by an additional 5%, up to a maximum of 140% on the 180^th day from issuance. Beginning on the 180^th day after the issuance of the Debentures, the Company is not permitted to prepay the Debenture, so long as the Debenture is still outstanding, unless the Company and the holder agree otherwise in writing. On June 23, 2017, the Company accepted and agreed to Assignment Agreements (‘AA”), whereby, Power Up assigned $70,000 of their note to LG, and $70,000 of their note to Cerberus. As part of the AA, the Company agreed to pay Power Up $65,000. The Company issued an 8% Replacement Note to LG for $73,198 (the “First Power Up Replacement Note”), and an 8% Replacement Note to Cerberus for $73,198 (the “Second Power Up Replacement Note”) The First and Second Power Up Replacement Notes are due June 23, 2018 and are convertible into shares of the Company’s common stock at any time at the discretion of LG and Cerberus, respectively, at a VCP. The VCP is calculated as the lowest trading price during the eighteen (18) trading days immediately prior to the conversion date multiplied by fifty eight percent (58%), representing a forty two percent (42%) discount. During the year ended December 31, 2017, the Company issued 12,721,391 shares of common stock upon the conversion of $73,198 of principal and $967 accrued and unpaid interest on the First Power Up Replacement Note. The shares were issued at approximately $0.00583 per share. The principal balance of the First Power Up Replacement Note as of December 31, 2017 was $-0-. During the three months ended March 31, 2018, the Company redeemed the back- end note. The principal and interest balance of the Second Power Up Replacement Note as of December 31, 2017 was $-0- and $73,199 respectively.

On February 24, 2017, the Company completed the closing of a private placement financing transaction with Cerberus, pursuant to a Securities Purchase Agreement (the “Cerberus Purchase Agreement”). Pursuant to the Cerberus Purchase Agreement, Cerberus purchased an 8% Convertible Debenture (the “Cerberus Debenture”) in the aggregate principal amount of $17,500, and delivered on February 27, 2017, gross proceeds of $16,000 excluding transaction costs, fees, and expenses. During the three months ended March 31, 2018, the Company redeemed the note. The principal and interest balance of the note as of March 31, 2018, and December 31, 2017 was $-0- and $17,500, respectively. Also, on February 24, 2017, the Company issued to Cerberus, a back-end note under the same terms and conditions, in the amount of $17,500. On December 7, 2017, the back-end note was funded upon receipt of $16,000, excluding transaction costs, fees, and expenses. -. During the three months ended March 31, 2018, the Company redeemed the back- end note The principal and interest balance of the back-end note as of March 31, 2018 and December 31, 2017 was $-0- and $17,500, respectively.

On December 20, 2017, the Company entered into a Convertible Promissory Note ("St. George 2017 Notes") for $1,105,000 to St. George which includes a purchase price of $1,000,000 and transaction costs of $5,000 and OID interest of $100,000. On December 21, 2017, the Company received $200,000 and recorded $225,000 as convertible note payable, including $5,000 of transaction costs and $20,000 OID interest. St. George also issued to the Company four secured promissory notes, each in the amount of $200,000. All or any portion of the outstanding balance of the St. George 2017 Notes may be prepaid, without penalty, along with accrued but unpaid interest at any time prior to maturity. The Company has no obligation to pay St. George any amounts on the unfunded portion of the St. George 2017 Notes. The St. George 2017 Note bears interest at 10% per annum (increases to 22% per annum upon an event of default) and is convertible into shares of the Company’s common stock at St. George’s option at a price of $0.05 per share. On December 27, 2017, St. George funded $250,000 of the secured promissory notes issued to the Company, and the Company recorded $270,000 as convertible note payable, including $20,000 OID interest. During the year ended December 31, 2017, the Company recorded debt discounts of $450,000. On January 9, 2018, and March 20, 2018, St. George funded $200,000 and $75,000, respectively, of the secured promissory notes issued to the Company, and the Company recorded $295,000 as convertible note payable, including $20,000 OID interest. The principal and interest balance of the St George 2017 Note as of March 31, 2018 and December 31, 2017, was $790,000 and $495,000 respectively.

Principal and interest on the 2017 LG and Cerberus Debentures above is due and payable one year from their respective funding date, and the LG and Cerberus Debentures are convertible into shares of the Company’s common stock at any time at the discretion of LG and Cerberus, respectively, at a VCP. The VCP is calculated as the lowest trading price during the eighteen (18) trading days immediately prior to the conversion date multiplied by fifty eight percent (58%), representing a forty two percent (42%) discount.

The Company may prepay the 2017 LG and/or the Cerberus Debentures, subject to prior notice to the holder within an initial 30-day period after issuance, by paying an amount equal to 118% multiplied by the amount that the Company is prepaying. For each additional 30-day period the amount being prepaid is multiplied by an additional 6%, up to a maximum of 148% on the 180^th day from issuance. Beginning on the 180^th day after the issuance of the Debentures, the Company is not permitted to prepay the Debenture, so long as the Debenture is still outstanding, unless the Company and the holder agree otherwise in writing.

The Company determined that the conversion feature of the 2017 Convertible Notes represent an embedded derivative since the Notes are convertible into a variable number of shares upon conversion. Accordingly, the 2017 Convertible Notes were not considered to be conventional debt under ASC 815-40 (formerly EITF 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock) and the embedded conversion feature was bifurcated from the debt host and accounted for as a derivative liability. Accordingly, the fair value of these derivative instruments being recorded as a liability on the consolidated balance sheet with the corresponding amount recorded as a discount to each Note. Such discount is being amortized from the date of issuance to the maturity dates of the Notes. The change in the fair value of the liability for derivative contracts are recorded in other income or expenses in the consolidated statements of operations at the end of each quarter, with the offset to the derivative liability on the balance sheet. The embedded feature included in the 2017 Convertible Notes that were funded in 2018, resulted in an initial debt discount of $295,000, an initial derivative liability expense of $44,206 and an initial derivative liability of $339,206. During the three months ended March 3, 2018, the Company recorded amortization expense on the debt discounts of $132,618, and there remains $605,743 of unamortized debt discount as of March 31, 2018.

Convertible Note Conversions   

During the three months ended March 31, 2018, the Company issued the following shares of common stock upon the conversions of portions of the Convertible Notes:

Date		Principal Conversion		Interest Conversion		Total Conversion		Conversion Price		Shares Issued		Issued to
	2/12/18	$	69221	$	5,779	$	75,000	$	0.00564		13,297,872	St Georges
	3/27/18	$	47,061	$	2,939	$	50,000	$	0.00564		8,865,248	St Georges
		$	116,282	$	8,718	$	125,000				22,163,120

A summary of the convertible notes payable balance as of March 31, 2018, and December 31, 2017, is as follows:

	2018			2017
Beginning Principal Balance	$	979,443			826,480
Convertible notes-newly issued		295,000			1,813,210
Conversion of convertible notes (principal)		(116,282	)		(1,350,247	)
Principal payments		(171,199	)		(310,000	)
Unamortized discount		(605,743	)		(494,193	)
Ending Principal Balance, net	$	381,219			485,260

The Company recorded a loss on debt settlement of $58,759 on the redemption of convertible notes for the three months ended March 31, 2018.

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Derivative liabilities

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Derivative liabilities

Note 9 - Derivative liabilities

As of March 31, 2018, the Company revalued the embedded conversion feature of the Convertible Notes, and warrants (see note 9). The fair values were calculated based on the Monte Carlo simulation method consistent with the terms of the related debt.

A summary of the derivative liability balance as of March 31, 2018, is as follows:

		Notes			Warrants			Total
Beginning Balance	$	3,608,345		$	1,808,485		$	5,416,830
Initial Derivative Liability		339,206			—			339,206
Fair Value Change		(1,902,885	)		(998,470	)		(2,901,355	)
Reclassified to Additional paid- in capital		(369,823	)		(76,676	)		(446,499	)
Reduction for debt extinguishment		(214,069	)		—			(214,069	)
Ending Balance	$	1,460,774		$	733,339		$	2,194,113

The credit to derivative expense for the three months ended March 31, 2018, of $2,857,244 is comprised of the initial derivative expense of $44,111 resulting from the issuances of new convertible notes in the period and the fair value change decreasing the liability and expense by $2,901,355. For the three months ended March 31, 2017, there was a credit to derivative expense of $218,178, comprised of $349,934 of initial derivative expense resulting form new convertible notes issued during the three months ended March 31, 2017, and the change, decreasing the liability and expense by $568,112.

The fair value at the commitment date for the 2018 Convertible Notes and the re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions as of March 31, 2018:

	Commitment date		Remeasurement date
Expected dividends		-0-		-0-
Expected volatility		147%-152%		148%-162%
Expected term		12-14 months		6-12 months
Risk free interest		1.83%-2.08%		1.58%-2.09%

There were no new warrants issued for the three months ended March 31, 2018. The Company evaluated all outstanding warrants to determine whether these instruments may be tainted. All warrants outstanding were considered tainted. The Company valued the embedded derivatives within the warrants using the Black-Scholes valuation model.   The fair value for Warrant #’s 1-9 were based upon the following management assumptions:

	Remeasurement date
Expected dividends	-0-
Expected volatility	256%
Expected term	3.59 years
Risk free interest	2.44%

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Related Party Transactions

3 Months Ended

Mar. 31, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Note 10 – Related Party Transactions

Effective January 1, 2013, the Company agreed to an annual compensation of $150,000 for its CEO, Mr. Michael Friedman (resigned March 20, 2015, re-appointed November 4, 2015). Effective March 20, 2015, Mr. Justin Braune was named CEO and President. Mr. Braune also was appointed to the Board of Directors. The Company agreed to an annual compensation of $100,000 for Mr. Braune in his role of CEO and Director of the Company and to issue Mr. Braune 15,000,000 shares of restricted common stock. Mr. Braune resigned from the board of directors and as CEO on November 4, 2015, and agreed to cancel the 15,000,000 shares in his letter of resignation. The Company also initially issued Mr. Braune 12,500,000 shares of common stock on October 13, 2015. On October 16, 2015, Mr. Braune advised the Company’s transfer agent at the time to cancel the shares. 

For the three months ended March 31, 2018 and 2017, the Company recorded expenses of $37,500 to the CEO, included in Management Fees in the condensed consolidated statements of operations, included herein. As of March 31, 2018, and December 31, 2017, the Company owed the CEO $-0- and $7,715, respectively, and is included in due to related party on the Company’s consolidated balance sheet. On January 30, 2017, the Company issued 10,000,000 shares of common stock to the Company’s CEO. The shares were issued for services performed as the sole Officer and director of the Company since November 2014. The shares were valued at $301,000 ($0.0301 per share, the market price of the common stock on the grant date) and are included in Management Fees in the consolidated statements of operations, included herein.

On October 5, 2017, the Company agreed to lease from the Company’s CEO, a "420 Style" resort and estate property approximately one hour outside of Quebec City, Canada. The fifteen-acre estate consists of nine (9) unique guest suites, horse stables, and is within walking distance to a public golf course. A separate structure will serve as a small grow facility run by patient employees and caretakers on the property which may be toured by guests of the facility. Pursuant to the agreement, the Company will pay $8,000 per month in exchange for the Company being entitled to all rents and income generated from the property. For the three months ended March 31, 2018, the Company paid and recorded $16,000 of expense, included in leased property expense, related party in the condensed consolidated statements of operations, included herein. The Company will be responsible for all costs of the property, including, but not limited to, renovations, repairs and maintenance, insurance and utilities. For the three months ended March 31, 2018, the Company has incurred $25,000 of renovation expense. On August 8, 2017, the Company issued 5,000,000 shares of common stock to the seller. The Company valued the shares at $0.0123 per share (the market price of the common stock) and has included $61,500 in stock- based compensation expense for the year ended December 31, 2017.

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Common and Preferred Stock

3 Months Ended

Mar. 31, 2018

Equity [Abstract]

Common and Preferred Stock

Note 11 – Common and Preferred Stock  

Common Stock

2018 Issuances

Date		Principal Conversion		Interest Conversion		Total Conversion		Conversion Price		Shares Issued		Issued to
	2/12/18	$	69,221	$	5,779	$	75,000	$	0.00564		13,297,872	St Georges
	3/27/18	$	47,061	$	2,939	$	50,000	$	0.00564		8,865,248	St Georges
		$	116,282	$	8,718	$	125,000				22,163,120

In addition to the above, during the three months ended March 31, 2018, the Company:

On February 26, 2018, the Company agreed to issue 5,000,000 shares of common stock to Dr. Stephen Holt, for his appointment to the advisory board. The Company recorded an expense of $97,500 (based on the market price of the Company’s common stock of $0.0195 per share) and is included in professional and consulting fees in the condensed consolidated statements of operations for the three months ended March 31, 2018.

Issued 28,551,579 shares of common stock to St. George pursuant to Notices of Exercise of Warrant received. The shares were issued based upon the cashless exercise provision of the warrant. The Company recorded the shares at their par value of $0.0001, with the offset to additional-paid-in-capital.

Common stock to be issued

During the three months ended March 31, 2018, the Company reduced the shares of common stock to be issued previously recorded in fiscal year ended December 31, 2017, by 23,202,587 shares. The adjustment was a result of the terms of the SPA, whereby the purchase price of the common stock to be issued is based on 90% of the closing share price 6 months after the SPA. St. George and the Company have agreed to amend the SPA, whereby, the purchase price is 90% of the closing price of the common stock, the day preceding any SPA. During the three months ended March 31, 2018, the Company received $340,000, pursuant to Stock Purchase Agreements (the “SPA”) with St. George to buy 15,515,543 shares of common stock. As of March 31, 2018, and December 31, 2017, shares of common stock to be issued are 44,887,291 and 52,574,335, respectively.

Preferred Stock

On June 26, 2015, the Company filed with the Delaware Secretary of State the Amended and Restated Designation Preferences and Rights (the “Certificate of Designation”) of Class B Preferred Stock (the “Series B Preferred Stock”). Pursuant to the Certificate of Designation, 1,000 shares constitute the Series B Preferred Stock. The Series B Preferred Stock and any accrued and unpaid dividends thereon shall, with respect to rights on liquidation, winding up and dissolution, rank senior to the Company’s issued and outstanding common stock and Series A preferred stock.

The SeriesB Preferred Stockhas the right to vote in aggregate, on all shareholder matters equal to 51% of the total vote, no matter how many shares of common stock or other voting stock of the Company are issued or outstanding in the future.The Series B Preferred Stock has a right to vote on all matters presented or submitted to the Company’s stockholders for approval in pari passu with the common stockholders, and not as a separate class. The holders of Series B Preferred Stock have the right to cast votes for each share of Series B Preferred Stock held of record on all matters submitted to a vote of common stockholders, including the election of directors. There is no right to cumulative voting in the election of directors. The holders of Series B Preferred Stock vote together with all other classes and series of common stock of the Company as a single class on all actions to be taken by the common stockholders except to the extent that voting as a separate class or series is required by law. As of March 31, 2018, and December 31, 2017, there were 1,000 shares of Class B Preferred Stock outstanding.

Warrants and Options

On April 14, 2015, in connection with the appointment of Dr. Stephen Holt to the advisory board, the Company agreed the advisor shall receive a non-qualified stock option to purchase 1,000,000 shares (“Option Shares”) of the Company’s common stock at an exercise price equal to $0.05 per share and expiring April 14, 2018. Option Shares of 400,000 vested immediately and 50,000 Option Shares vested each month from April 2015 through March 2016. Accordingly, as of March 31, 2016, 1,000,000 Option Shares have vested and the Company recorded $2,317 as stock compensation expense for the year ended December 31, 2016, based on Black-Scholes.

On October 31, 2016, the Company granted (Warrant #1) to St. George the right to purchase at any time on or after November 10, 2016 (the “Issue Date”) until the date which is the last calendar day of the month in which the fifth anniversary of the Issue Date occurs (the “Expiration Date”), a number of fully paid and non-assessable shares (the “Warrant Shares”) of Company’s common stock, equal to $57,500 divided by the Market Price (defined below) as of the Issue Date, as such number may be adjusted from time to time pursuant to the terms and conditions of Warrant #1 to Purchase Shares of Common Stock. The Market Price is equal to the lowest intra-day trade price in the twenty (20) Trading Days immediately preceding the applicable date of exercise, multiplied by sixty percent (60%). The exercise price is the lower of $0.05 and is subject to price adjustments pursuant to the agreement and includes a cashless exercise provision. The Company also issued Warrant #’s 2-9, with each warrant only effective upon St. George funding of the secured notes they issued to the Company. Warrant #’s 2-9 give St. George the right to purchase Warrant Shares equal to $27,500 divided by the Market Price on the funded date. On December 14, 2016, the Company received a payment of $50,000, and accordingly, Warrant #2 became effective. During the year ended December 31, 2017, the Company received the funding on the remaining notes and Warrant #’s 3-9 became effective. During the three months ended March 31, 2018, the company issued 28,551,579 shares of common stock to St. George pursuant to Notices of Exercise of 3,040,629 Warrants received. The shares were issued based upon the cashless exercise provision of the warrant.

The following table summarizes the activity related to warrants of the Company for the years ended December 31, 2017 and 2016:

	Number of Warrants			Weighted-Average Exercise Price per share		Weighted-Average Remaining Life (Years)
Outstanding and exercisable at December 31, 2016		17,926,130		$	0.0811		4.88
Warrant issued		40,573,870			0.00564		—
Warrants exercised		(9,364,108	)		0.00564		—
Outstanding and exercisable at December 31, 2017		49,135,892			0.00654		4.17
Warrants exercised		(3,040,629	)		0.00564		—
Outstanding and exercisable March 31, 2018		46,095,623		$	0.0066		3.92

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Income Taxes

3 Months Ended

Mar. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Note 12 – Income Taxes

The Company accounts for income taxes under standards issued by the FASB. Under those standards, deferred tax assets and liabilities are recognized for future tax benefits or consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. 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. A valuation allowance is provided for significant deferred tax assets when it is more likely than not that such assets will not be realized through future operations.

No provision for federal income taxes has been recorded due to the available net operating loss carry forwards of approximately $8,524,193 will expire in various years through 2032. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the future tax loss carry forwards.

The actual income tax provisions differ from the expected amounts calculated by applying the statutory income tax rate to the Company's loss before income taxes.  The components of these differences are as follows at March 31, 2018 and December 31, 2017:

	2018			2017
Net tax loss carry-forwards	$	8,524,193		$	7,878,733
Statutory rate		37.6	%		37.6	%
Expected tax recovery		3,205,097			2,962,404
Change in valuation allowance		(3,205,097	)		(2,962,404	)
Income tax provision	$	—		$	—

Components of deferred tax asset:
Non capital tax loss carry forwards	$	3,205,097		$	2,962,404
Less: valuation allowance		(3,205,097	)		(2,962,404	)
Net deferred tax asset	$	—		$	—

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 13 – Commitments and Contingencies

Office Space

In April 2014, the Company entered into a two-year sublease agreement for the use of up to 7,500 square feet with a Colorado based oncology clinical trial and drug testing company and facility presently doing cancer research and testing for established pharmaceutical companies seeking FDA approval for new drugs. Pursuant to the lease, as amended, the Company agreed to pay $3,500 per month for the space. The lease expired in April 2016, and the Company owes the landlord $48,750.

In January 2017, the Company signed a five (5) year lease, beginning February 1, 2107, for approximately 6,000 square feet of office space, comprised of two floors, in San Juan, Puerto Rico. Pursuant to the lease, the Company will pay $3,000 per month for the third floor of the building for the first year of the lease. The rent will increase 3% per year on February beginning in 2018 and an additional 3% per year on each successive February 1, during the term of the lease. The landlord has agreed that for the month of February 2017, the rent will be $1,500. The rent for second floor of the building will be $2,000 per month during the term of the lease and the Company does not have any rent payments for the first three months of the lease (February 2017 through April 2017). Through September 30, 2017, the Company calculated the total amount of the rent for the term lease and recorded straight line rent expense of $45,417 and had made payments of $20,516. As of March 31, 2018 and December 31, 2017, the Company has a balance of $24,916 in deferred rent which is included in the consolidated balance sheet. The leases for the second and third floor were cancelled in September 2017 as a result of Hurricane Irma.

Rent expense was $9,053 and $21,679 for the three months ended March 31 2018, and 2017, respectively.

Leased Properties

On April 28, 2014, the Company executed and closed a ten-year lease agreement for 20 acres of an agricultural farming facility located in South Florida following the approval of the so-called “Charlotte’s Web” legislation, aimed at decriminalizing low grade marijuana specifically for the use of treating epilepsy and cancer patients.  Pursuant to the lease agreement, the Company maintains a first right of refusal to purchase the property for three years. The Company has recorded $38,244 of expense (included in leased property expenses) for the years ended December 31, 2017, and 2016, respectively. The Company is currently in default of the lease agreement, as rents have not been for the second year of the lease beginning May 2015.

On July 11, 2014, the Company signed a ten-year lease agreement for an additional 40 acres in Pueblo, Colorado. The lease requires monthly rent payments of $10,000 during the first year and is subject to a 2% annual increase over the life of the lease. The lease also provides rights to 50 acres of certain tenant water rights for $50,000 annually plus cost of approximately $2,400 annually. The Company paid the $50,000 in July 2014, and has not used the property and any water and has not paid for any water rights after September 30, 2015. The Company has not recorded any expense for the three months ended March 31, 2018, and 2017. The Company is currently in default of the lease agreement, as rents have not been paid since February 2015.

Agreements

On April 5, 2017, the Company executed a five (5) year operational and exclusive licensing agreement with a third party who leases a 25,000-sq. ft. approved cultivation facility located in San Juan, Puerto Rico. The Company will be the exclusive funding source, and supervise all infrastructure buildout, equipment lease/finance, security systems and personnel and provide access of seasoned Colorado and California cultivation crews to ensure the facility meets all standard operating procedures as set forth by the Department Of Health of Puerto Rico. Under the agreement, the Company receives $12,000 a month in consulting fees, licensing fees on all vaporizer and edible sales, equipment and lighting rental and financing fees along with equity interest in the property. As of March 31, 2018, and December 31, 2017, the Company has invested $130,000 and $110,000, respectively.

On August 7, 2017, the Company signed a LOI with Green Acres, whereby in consideration of consulting fees, licensing fees on all vaporizer and edible brands, equipment and lighting rental and financing fees, the Company will provide up to $250,000 of working capital and potentially, up to $3,500,000 for the buyout of Green Acres existing mortgage on their Washington State facility. As of March 31, 2018, and December 31, 2017, the Company has invested $115,000 and $100,000, respectively.

On October 5, 2017, the Company agreed to lease from the Company’s CEO, a "420 Style" resort and estate property approximately one hour outside of Quebec City, Canada. The fifteen-acre estate consists of nine (9) guest suites, horse stables, and is within walking distance to a public golf course. A separate structure will serve as a small grow facility run by patient employees and caretakers on the property which may be toured by guests of the facility. Pursuant to the agreement, the Company will pay $8,000 per month in exchange for the Company being entitled to all rents and income generated from the property. For the three months ended March 31, 2018, the Company paid and recorded $16,000 of expense, included in leased property expense, related party in the condensed consolidated statements of operations, included herein. The Company will be responsible for all costs of the property, including, but not limited to, renovations, repairs and maintenance, insurance and utilities. For the three months ended March 31, 2018, the Company has incurred $25,000 of renovation expense.

Legal & Other

On March 2, 2015, the Company, the Company’s CEO and the Company’s CFO at the time were named in a civil complaint filed by Erick Rodriguez in the District Court in Clark County, Nevada (the “DCCC”). The complaint alleges that Mr. Rodriguez never received 250,000 shares of Series B preferred stock that were initially approved by the Board of Directors in 2012, subject to the completion of a merger of a company controlled by Mr. Rodriguez. Since the merger was never completed, the shares were never certificated to Mr. Rodriguez. On March 21, 2017, the DCC agreed to Set Aside the Entry of Default against the Defendants. Mr. Rodriguez resigned in June 2013.  On April 12, 2018, an Arbitrator issued a final award to Rodriguez in the amount of $399,291. The Company and the Company’s counsel believe the Arbitrator denied a number of detailed objections to the award, which cited clear mistakes as to Nevada law and to the facts. The Company recorded a loss on legal matter, included in other expenses for the year ended December 31, 2017. On May 3, 2018, the Arbitrator issued an amended final award of $631,537, inclusive of interest and legal fees. The Company recorded a loss of $232,246 on the legal matter, included in other expenses for the three months ended March 31, 2018. The Company has retained a Nevada attorney who is an expert in fighting attempts to convert arbitration awards into judgments in Nevada courts, to work with our arbitration counsel. A hearing is scheduled on June 12, 2018 in District Court in Clark County Nevada to confirm or reject the award. The Company will vigorously defend any adverse ruling including appeals to the Nevada Supreme Court.

On May 6, 2016, the Company, B. Michael Freidman and Barry Hollander (former CFO) were named as defendants in a Summons/Complaint filed by Justin Braune (the “Plaintiff”) in Palm Beach County Civil Court, Florida (the “PBCCC”). The complaint alleges that Mr. Braune was entitled to shares of common stock of the Company. On December 5, 2016, the PBCCC set aside a court default that had been previously issued. The defendants have answered the complaint, including the defenses that Mr. Braune advised the Company’s transfer agent and the Company in his letter of resignation dated November 4, 2015, clearly stating that he has relinquished all shares of common stock. The Company has filed a counterclaim suit against the Plaintiff, as well as sanctions against the Plaintiff and their counsel.

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Going Concern

3 Months Ended

Mar. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Going Concern

Note 14 – Going Concern

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. As of March 31, 2018, the Company had an accumulated deficit of $23,708,002 and working capital deficit of $3,643,315, inclusive of a derivative liability of $2,194,113. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Subsequent Events

3 Months Ended

Mar. 31, 2018

Subsequent Events [Abstract]

Subsequent Events

Note 15 – Subsequent Events

On April 19, 2018, the Company issued 4,875,887 shares of common stock upon the conversion of $27,500 of principal and interest. The shares were issued at $0.00564 per share.

The Company previously issued 5,000,000 shares of common stock for security on renovations of the Company’s Canada bed and breakfast management agreement. The Company has since paid in excess of $50,000 towards renovations. Mr. Johnston will now retain the shares under an amended agreement in exchange for legal fees, tax and license applications, and as a financial custodian over the renovation account as a Canadian resident. The 5,000,000 shares will be in exchange for 12 months of services.

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Summary of Significant Account Policies (Policies)

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America ("US GAAP"). The consolidated financial statements of the Company include the consolidated accounts of Agritek and its’ wholly owned subsidiaries MediSwipe, AVHI, The American Hemp Trading Company, Inc., a Colorado Corporation (dba 77Acres, Inc.) and PPI. PPI, a Florida corporation, was originally formed on July 1, 2013 as The American Hemp Trading Company, Inc. (“HempFL”) and on August 27, 2014, HempFL changed its’ name to PPI. All intercompany accounts and transactions have been eliminated in consolidation. 

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original term of three months or less to be cash equivalents.

Accounts Receivable

Accounts Receivable

The Company records accounts receivable from amounts due from its customers upon the shipment of products. The allowance for losses is established through a provision for losses charged to expenses. Receivables are charged against the allowance for losses when management believes collectability is unlikely. The allowance is an amount that management believes will be adequate to absorb estimated losses on existing receivables, based on evaluation of the collectability of the accounts and prior loss experience. While management uses the best information available to make its evaluations, this estimate is susceptible to significant change in the near term. As of March 31, 2018, and December 31, 2017, based on the above criteria, the Company has a full allowance for doubtful accounts of $43,408.

Inventory

Inventory

Inventory is valued at the lower of cost or market value. Cost is determined using the first in first out (FIFO) method. Provision for potentially obsolete or slow-moving inventory is made based on management analysis or inventory levels and future sales forecasts.

Notes receivable

Notes receivable

	March 31, 2018		December 31, 2017
Client 1	$	130,000	$	110,000
Client 2		115,000		100,000
Total	$	245,000	$	210,000

• Note receivable from Client 1 is pursuant to a five (5) year operational and exclusive licensing agreement with a third party who leases a 25,000-sq. ft. approved cultivation facility located in San Juan, Puerto Rico (see Note 10).

• Note receivable from Client 2 is pursuant to a five (5) year operational and exclusive licensing agreement with a third party who leases a 10,000-sq. ft. approved cultivation facility located in Washington State (see Note 10).

Deferred Financing Costs

Deferred Financing Costs

The costs related to the issuance of debt are capitalized and amortized to interest expense using the straight-line method through the maturities of the related debt.

Derivative Financial Instruments

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of it financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. 

For option-based simple derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. 

Debt Issue Costs and Debt Discount

Debt Issue Costs and Debt Discount

The Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs prior to maturity a proportionate share of the unamortized amounts is immediately expensed. 

Original Issue Discount

Original Issue Discount

For certain convertible debt issued, the Company may provide the debt holder with an original issue discount. The original issue discount would be recorded to debt discount, reducing the initial carrying value of the note and is amortized to interest expense through the maturity of the debt. If a conversion of the underlying debt occurs prior to maturity a proportionate share of the unamortized amounts is immediately expensed. 

Marketable Securities and Other Comprehensive Income

Marketable Securities and Other Comprehensive Income

The Company classifies its marketable securities as available-for-sale securities, which are carried at their fair value based on the quoted market prices of the securities with unrealized gains and losses, net of deferred income taxes, reported as accumulated other comprehensive income (loss), a separate component of stockholders’ equity. Realized gains and losses on available-for-sale securities are included in net earnings in the period earned or incurred.

Property and Equipment

Property and Equipment

Property and equipment are stated at cost, and except for land, depreciation is provided by use of a straight-line method over the estimated useful lives of the assets. The Company reviews property and equipment for potential impairment whenever events or changes in circumstances indicate that the carrying amounts of assets may not be recoverable. In February, 2017, the Company entered into a land purchase contract to acquire approximately 80 acres including water and mineral rights. The total cost of the land was $129,555. The Company paid $41,554 at closing and issued a note payable for $88,000. The Company is on the deed of trust of the property with a remaining note balance of $26,500 and $51,500 due the seller as of March 31, 2018 and December 31, 2017, respectively. The estimated useful lives of property and equipment are as follows:

Furniture and equipment	5 years
Manufacturing equipment	7 years

The Company's property and equipment consisted of the following at March 31, 2018, and December 31, 2017:

	March 31, 2018			December 31, 2017
Furniture and equipment	$	200,247		$	180,684
Land		129,555			129.555
Accumulated depreciation		(32,254	)		(23,824	)
Balance	$	297,548		$	286,415

Depreciation expense of $8,430 and $1,646 was recorded for the three months ended March 31, 2018, and 2017, respectively.

Long-Lived Assets

Long-Lived Assets

Long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Deferred rent

Deferred rent

The Company calculates the total cost of the lease for the entire lease period and divides that amount by the number of months of the lease. The result is the average monthly expense and is charged to rent expense with the offset to deferred rent, irrespective of the actual amount paid. The amounts paid are charged to the deferred rent account. As of March 31, 2018, and December 31, 2017, the Company has a balance of $24,916 in deferred rent which is included in the consolidated balance sheet.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue in accordance with FASB ASC 605, Revenue Recognition. ASC 605 requires that four basic criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery of products and services has occurred, (3) the fee is fixed or determinable and (4) collectability is reasonably assured. The Company recognizes revenue during the month in which products are shipped or fees are earned.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. 

The following are the hierarchical levels of inputs to measure fair value: 

• Level 1 - Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities.

• Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

• Level 3 - Unobservable inputs reflecting the Company's assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

The carrying amounts of the Company's financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts payable and accrued expenses, certain notes payable and notes payable - related party, approximate their fair values because of the short maturity of these instruments. 

The following table represents the Company’s financial instruments that are measured at fair value on a recurring basis as of March 31, 2018, and December 31, 2017, for each fair value hierarchy level:

March 31, 2018	Derivative Liabilities		Total
Level I	$	—	$	—
Level II	$	—	$	—
Level III	$	2,194,113	$	2,194,113
December 31, 2017
Level I	$	—	$	—
Level II	$	—	$	—
Level III	$	5,416,830	$	5,416,830

Income Taxes

Income Taxes

The Company accounts for income taxes in accordance with ASC 740-10, Income Taxes. Deferred tax assets and liabilities are recognized to reflect the estimated future tax effects, calculated at the tax rate expected to be in effect at the time of realization. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. Interest and penalties are classified as a component of interest and other expenses. To date, the Company has not been assessed, nor paid, any interest or penalties.

Uncertain tax positions are measured and recorded by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized or continue to be recognized. The Company’s tax years subsequent to 2005 remain subject to examination by federal and state tax jurisdictions.

Earnings (Loss) Per Share

Earnings (Loss) Per Share

Earnings (loss) per share are computed in accordance with ASC 260, "Earnings per Share". Basic earnings (loss) per share is computed by dividing net income (loss), after deducting preferred stock dividends accumulated during the period, by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share is computed by dividing net income by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities, if any, outstanding during the period. As of March 31, 2018, there were warrants and options to purchase 45,094,763 shares of common stock and the Company’s outstanding convertible debt is convertible into approximately 163,957,118 shares of common stock. These amounts are included in the computation of dilutive net income per share.

Accounting for Stock-Based Compensation

Accounting for Stock-Based Compensation 

The Company accounts for stock awards issued to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. The measurement date is the earlier of (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty's performance is complete. Stock awards granted to non-employees are valued at their respective measurement dates based on the trading price of the Company’s common stock and recognized as expense during the period in which services are provided. For the three months ended March 31, 2018, and 2017, the Company recorded stock- based compensation of $97,500 and $466,831, respectively (See Note 9).

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates.

Advertising

Advertising

The Company records advertising costs as incurred. For the three months ending March 31, 2018, and 2017, advertising expenses was $17,450 and $3,059, respectively.

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Summary of Significant Account Policies (Tables)

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Note receivable

	March 31, 2018		December 31, 2017
Client 1	$	130,000	$	110,000
Client 2		115,000		100,000
Total	$	245,000	$	210,000

Property and equipment

	September 30, 2017			December 31, 2016
Furniture and equipment	$	61,821		$	34,587
Land		124,057			—
Accumulated depreciation		(14,572	)		(8,307	)
Balance	$	171,306		$	26,280

Financial instruments measured at fair value on a recurring basis

March 31, 2018	Derivative Liabilities		Total
Level I	$	—	$	—
Level II	$	—	$	—
Level III	$	2,194,113	$	2,194,113
December 31, 2017
Level I	$	—	$	—
Level II	$	—	$	—
Level III	$	5,416,830	$	5,416,830

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Marketable Securities (Tables)

3 Months Ended

Mar. 31, 2018

Investments, Debt and Equity Securities [Abstract]

Marketable securities owned by Company

	March 31, 2018			December 31, 2017
Beginning balance	$	41,862		$	39,769
Unrealized gain (loss) marked to fair value		(17,626	)		2,093
Ending balance	$	24,236		$	41,862

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Prepaid Expenses (Tables)

3 Months Ended

Mar. 31, 2018

Other Income (Expense):

Prepaid expenses

	March 31, 2018		December 31, 2017
Vendor deposits	$	46,000	$	46,000
Investor relations		12,000		2,500
Total prepaid expenses	$	58,000	$	48,500

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Convertible Debt (Tables)

3 Months Ended

Mar. 31, 2018

Debt Disclosure [Abstract]

Common stock issued upon conversions of portions of Convertible Notes

Date		Principal Conversion		Interest Conversion		Total Conversion		Conversion Price		Shares Issued		Issued to
	2/12/18	$	69,221	$	5,779	$	75,000	$	0.00564		13,297,872	St Georges
	3/27/18	$	47,061	$	2,939	$	50,000	$	0.00564		8,865,248	St Georges
		$	116,282	$	8,718	$	125,000				22,163,120

Summary of convertible notes payable balance

	2018			2017
Beginning Principal Balance	$	979,443			826,480
Convertible notes-newly issued		295,000			1,813,210
Conversion of convertible notes (principal)		(116,282	)		(1,350,247	)
Principal payments		(171,199	)		(310,000	)
Unamortized discount		(605,743	)		(494,193	)
Ending Principal Balance, net	$	381,219			485,260

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Derivative liabilities (Tables)

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Summary of derivative liability balance

		Notes			Warrants			Total
Beginning Balance	$	3,608,345		$	1,808,485		$	5,416,830
Initial Derivative Liability		339,206			—			339,206
Fair Value Change		(1,902,885	)		(998,470	)		(2,901,355	)
Reclassified to Additional paid- in capital		(369,823	)		(76,676	)		(446,499	)
Reduction for debt extinguishment		(214,069	)		—			(214,069	)
Ending Balance	$	1,460,774		$	733,339		$	2,194,113

Fair value assumptions for derivative liabilities

	Commitment date		Remeasurement date
Expected dividends		-0-		-0-
Expected volatility		147%-152%		148%-162%
Expected term		12-14 months		6-12 months
Risk free interest		1.83%-2.08%		1.58%-2.09%

Fair value assumptions for warrants

	Remeasurement date
Expected dividends	-0-
Expected volatility	256%
Expected term	3.59 years
Risk free interest	2.44%

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Common and Preferred Stock (Tables)

3 Months Ended

Mar. 31, 2018

Common And Preferred Stock Tables

Common stock issuances upon conversion of portions of convertible notes

Date		Principal Conversion		Interest Conversion		Total Conversion		Conversion Price		Shares Issued		Issued to
	2/12/18	$	69,221	$	5,779	$	75,000	$	0.00564		13,297,872	St Georges
	3/27/18	$	47,061	$	2,939	$	50,000	$	0.00564		8,865,248	St Georges
		$	116,282	$	8,718	$	125,000				22,163,120

Activity related to warrants

	Number of Warrants			Weighted-Average Exercise Price per share		Weighted-Average Remaining Life (Years)
Outstanding and exercisable at December 31, 2016		17,926,130		$	0.0811		4.88
Warrant issued		40,573,870			0.00564		—
Warrants exercised		(9,364,108	)		0.00564		—
Outstanding and exercisable at December 31, 2017		49,135,892			0.00654		4.17
Warrants exercised		(3,040,629	)		0.00564		—
Outstanding and exercisable March 31, 2018		46,095,623		$	0.0066		3.92

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2018

Income Tax Disclosure [Abstract]

Income tax reconciliation

	2018			2017
Net tax loss carry-forwards	$	8,524,193		$	7,878,733
Statutory rate		37.6	%		37.6	%
Expected tax recovery		3,205,097			2,962,404
Change in valuation allowance		(3,205,097	)		(2,962,404	)
Income tax provision	$	—		$	—

Components of deferred tax asset

Components of deferred tax asset:
Non capital tax loss carry forwards	$	3,205,097		$	2,962,404
Less: valuation allowance		(3,205,097	)		(2,962,404	)
Net deferred tax asset	$	—		$	—

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Summary of Significant Accounting Policies - Notes receivable (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Notes receivable	$ 245,000	$ 210,000
Client 1
Notes receivable	130,000	110,000
Client 2
Notes receivable	$ 115,000	$ 100,000

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Summary of Significant Account Policies - Property and equipment (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Summary Of Significant Account Policies - Property And Equipment Details
Furniture and Equipment	$ 200,247	$ 180,684
Land	129,555	129,555
Accumulated depreciation	(32,254)	(23,824)
Balance	$ 297,548	$ 286,415

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Summary of Significant Accounting Policies - Financial instruments measured at fair value on a recurring basis (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Derivative liabilities	$ 2,194,113	$ 5,416,830
Level I
Derivative liabilities
Level II
Derivative liabilities
Level III
Derivative liabilities	$ 2,194,113	$ 5,416,830

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Summary of Significant Account Policies (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Allowance for doubtful accounts			$ 43,408
Remaining note balance held by original land owner	$ 26,500		$ 51,500
Depreciation expense	$ (8,430)	$ (1,646)
Warrants to purchase common stock excluded from computation of earnings per share	45,094,763
Antidilutive shares excluded from computation of earnings per share	163,957,118
Stock and warrant based compensation	$ 97,500	466,831
Advertising expenses	$ 17,450	$ 3,059
Furniture and fixtures
Useful life	5 years
Manufacturing equipment
Useful life	7 years

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Marketable Securities - Marketable securities owned by Company (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Investments, Debt and Equity Securities [Abstract]
Beginning balance	$ 41,862	$ 39,769	$ 39,769
Unrealized gain marked to fair value	(17,626)	$ (14,432)	2,093
Ending balance	$ 24,236		$ 41,862

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Marketable Securities (Details Narrative)	Feb. 29, 2016 USD ($)
Investments, Debt and Equity Securities [Abstract]
Market value of shares of common stock received	$ 16,525

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Prepaid Expenses - Prepaid expenses (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Prepaid Expenses - Prepaid Expenses Details
Vendor deposits	$ 46,000	$ 46,000
Investor relations	12,000	2,500
Total prepaid expenses	$ 58,000	$ 48,500

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Concentration of Credit Risk (Details Narrative)	Mar. 31, 2018 USD ($)
Risks and Uncertainties [Abstract]
FDIC maximum amount insured	$ 250,000

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Note Payable (Details Narrative) - USD ($)	Mar. 31, 2018	Dec. 31, 2017	Mar. 18, 2014
Remaining note balance held by original land owner	$ 26,500	$ 51,500
Note Payable
Cash paid in conjunction of land purchase			$ 36,000
Promissory note entered in conjunction with land purchase			$ 85,750

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Convertible Debt - Common stock issued upon conversions of portions of Convertible Notes (Details) - Conversions of portions of Convertible Notes - USD ($)			3 Months Ended
	Mar. 28, 2018	Feb. 13, 2018	Mar. 31, 2018
Principal conversion	$ 47,061	$ 69,221
Interest conversion	2,939	5,779
Total conversion	$ 50,000	$ 75,000
Conversion price	$ 0.00564	$ 0.00564
Shares Issued	8,865,248	13,297,872
Issued to	St Georges	St Georges
Principal conversion			$ 116,282
Interest conversion			8,718
Total conversion			$ 125,000
Shares Issued			22,163,120

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Convertible Debt - Summary of convertible notes payable balance (Details) - Convertible notes payable balance summary - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Beginning Principal Balance	$ 485,260	$ 826,480
Convertible notes - newly issued	295,000	1,813,210
Conversion of convertible notes (principal)	(116,282)	(1,350,247)
Principal payments	(171,199)	(310,000)
Unamortized discount	(605,743)	(494,193)
Ending Principal Balance	$ 381,219	$ 485,260

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Convertible Debt - 2016 Convertible Notes (Details Narrative) - USD ($)		3 Months Ended
	Oct. 31, 2016	Mar. 31, 2018	Dec. 31, 2017
Initial debt discount		$ 605,743	$ 494,193
St. George 2016 Notes (1)
Convertible Promissory Note issued, amount	$ 555,000
Purchase price balance	500,000
Transaction costs	5,000
OID interest	50,000
Purchase price received	100,000
Amount recorded as convertible note payable	115,000
Secured promissory notes issued, total	$ 400,000
Conversion of note, principal converted		116,282
Conversion of note, accrued and unpaid interest converted		$ 8,718
Conversion price	$ 0.05	$ 0.00564
Conversion of note, shares issued		22,163,120
Principal and interest balance outstanding		$ 196,962	$ 313,244
Interest rate per annum	10.00%
Interest rate per annum in occurrence of event of default	22.00%

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Convertible Debt - 2017 Convertible Notes (Details Narrative) - USD ($)						1 Months Ended			3 Months Ended		12 Months Ended
	Mar. 21, 2018	Jan. 10, 2018	Dec. 28, 2017	Dec. 21, 2017	Feb. 03, 2017	Dec. 31, 2017	Feb. 24, 2017	Jan. 25, 2017	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Dec. 20, 2017	Jun. 23, 2017	Feb. 01, 2017	Jan. 24, 2017
Initial debt discount						$ 494,193			$ 605,743		$ 494,193
Loss on debt settlement recorded									(58,759)
Cerberus Purchase Agreement 2017 (1)
Convertible Promissory Note issued, amount															$ 63,000
Back end note issued															$ 63,000
Net proceeds received								$ 60,000
Principal and interest balance
Accrued interest outstanding
Principal and interest balance of back-end note						$ 63,000					63,000
Interest rate per annum								8.00%
Power Up Purchase Agreement 2017 (1)
Convertible Promissory Note issued, amount														$ 140,000
Net proceeds received					$ 136,500
Conversion of note, principal converted											73,198
Conversion of note, accrued and unpaid interest converted											$ 967
Conversion price						$ 0.00583					$ 0.00583
Conversion of note, shares issued											12,721,391
Interest rate per annum					12.00%
Replacement note, amount													$ 73,198
Replacement note, outstanding balance						$ 73,199					$ 73,199
Cerberus Purchase Agreement 2017 (2)
Convertible Promissory Note issued, amount							$ 17,500
Back end note issued							17,500
Net proceeds received							$ 16,000
Principal and interest balance of back-end note						17,500					17,500
Interest rate per annum							8.00%
St George 2017 Notes (1)
Convertible Promissory Note issued, amount												$ 1,105,000
Net proceeds received	$ 75,000	$ 200,000	$ 250,000	$ 200,000
Convertible note payable recorded	295,000		270,000	225,000
Purchase price balance												$ 1,000,000
Transaction costs				5,000		5,000
OID interest	$ 20,000		$ 20,000	$ 20,000		100,000
Debt discounts recorded											450,000
Conversion price												$ 0.05
Principal and interest balance						$ 495,000			790,000		$ 495,000
Interest rate per annum						10.00%
2017 Convertible Notes
Initial debt discount									295,000
Initial derivative liability expense									44,206
Initial Derivative Liability									339,206
Amortization expense on debt discounts recorded									132,618
Unamortized debt discount remaining									$ 605,743

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Derivative liabilities - Summary of derivative liability balance (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Fair Value Change	$ 2,857,244	$ 218,178
Notes
Beginning Balance	3,608,345
Initial Derivative Liability	339,206
Fair Value Change	(1,902,885)
Reclassified to Additional paid-in capital	(369,823)
Reduction for debt extinguishment	(214,069)
Ending Balance	1,460,774
Warrants
Beginning Balance	1,808,485
Initial Derivative Liability
Fair Value Change	(998,470)
Reclassified to Additional paid-in capital	(76,676)
Reduction for debt extinguishment
Ending Balance	733,339
Totals
Beginning Balance	5,416,830
Initial Derivative Liability	339,206
Fair Value Change	(2,901,355)
Reclassified to Additional paid-in capital	(446,499)
Reduction for debt extinguishment	(214,069)
Ending Balance	$ 2,194,113

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Derivative liabilities - Fair value assumptions for derivative liabilities (Details)	3 Months Ended
	Mar. 31, 2018
Commitment date
Expected dividends	0.00%
Expected volatility, minimum	147.00%
Expected volatility, maximum	152.00%
Expected term, minimum	12 months
Expected term, maximum	14 months
Risk free interest, minimum	1.83%
Risk free interest, maximum	2.08%
Remeasurement date
Expected dividends	0.00%
Expected volatility, minimum	148.00%
Expected volatility, maximum	162.00%
Expected term, minimum	6 months
Expected term, maximum	12 months
Risk free interest, minimum	1.58%
Risk free interest, maximum	2.09%

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Derivative liabilities - Fair value assumptions for warrants (Details) - Remeasurement date	3 Months Ended
	Mar. 31, 2018
Expected dividends	0.00%
Expected volatility	256.00%
Expected term	3 years 7 months 2 days
Risk free interest	2.44%

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Derivative liabilities (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Derivative Liabilities Details Narrative
Credit to derivative expense	$ 2,857,244	$ 218,178
Initial derivative expense	44,111	349,934
Derivative liability decrease in fair value and expense	$ 2,901,355	$ 568,112

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Related Party Transactions (Details Narrative) - USD ($)		3 Months Ended		8 Months Ended	63 Months Ended
	Oct. 05, 2017	Mar. 31, 2018	Mar. 31, 2017	Nov. 04, 2015	Mar. 31, 2018	Dec. 31, 2017	Aug. 08, 2017	Jan. 30, 2017
Officer compensation expense included in Administrative and Management Fees		$ 37,500	$ 37,500
Amounts owed to officer included in due to related party						$ 7,715
Monthly payment to CEO for rights to rent and income generated from property owned by CEO	$ 8,000
Expense paid included in leased property expense, related party		16,000
Renovation expense		$ 25,000
Shares of common stock issued to seller							5,000,000
Mr. Friedman
Annual compensation					$ 150,000
Common stock issued for services, shares								10,000,000
Mr. Braune, former CEO
Annual compensation				$ 100,000
Restricted common stock issued, shares				15,000,000
Restricted common stock issued, shares cancelled				(15,000,000)
Additional common stock issued, shares				12,500,000
Additional common stock issued, shares cancelled				(12,500,000)

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Common and Preferred Stock - Common stock issuances upon conversion of portions of convertible notes (Details) - Conversions of portions of Convertible Notes - USD ($)			3 Months Ended
	Mar. 28, 2018	Feb. 13, 2018	Mar. 31, 2018
Principal conversion	$ 47,061	$ 69,221
Interest conversion	2,939	5,779
Total conversion	$ 50,000	$ 75,000
Conversion price	$ 0.00564	$ 0.00564
Shares Issued	8,865,248	13,297,872
Issued to	St Georges	St Georges
Principal conversion			$ 116,282
Interest conversion			8,718
Total conversion			$ 125,000
Shares Issued			22,163,120

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Common and Preferred Stock - Activity related to warrants (Details) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Outstanding
Warrants outstanding, beginning		17,926,130
Weighted-average exercise price per share		$ 0.0811
Weighted-average remaining life		4 years 10 months 17 days
Warrants issued
Warrants issued		40,573,870
Weighted-average exercise price per share		$ 0.00564
Warrants exercised
Warrants exercised	(3,040,629)	(9,364,108)
Weighted-average exercise price per share	$ 0.00564	$ 0.00564
Outstanding and exercisable
Warrants outstanding and exercisable	46,095,623	49,135,892
Weighted-average exercise price per share	$ 0.0066	$ 0.00654
Weighted-average remaining life	3 years 11 months 1 day	4 years 2 months 1 day

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Common and Preferred Stock - Common Stock (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Feb. 26, 2018
Issued to Stephen Holt for appointment to advisory board
Common stock issued, shares		5,000,000
Common stock issued, price per share		$ 0.0195
Stock compensation expense recorded		$ 97,500
St. George Note Issuances
Issuance of shares pursuant to Notices of Exercise of Warrant received	28,551,579

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Common and Preferred Stock - Common stock to be issued (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Common And Preferred Stock - Common Stock To Be Issued Details Narrative
Reduction in shares of common stock to be issued previously recorded	(23,202,587)
Proceeds received pursuant to Stock Purchase Agreements	$ 340,000
Shares of common stock to be bought by St George in SPA	15,515,543
Shares of common stock to be issued	44,887,291	52,574,335

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Common and Preferred Stock - Preferred Stock (Details Narrative) - shares	Mar. 31, 2018	Dec. 31, 2017	Jun. 26, 2015
Common And Preferred Stock - Preferred Stock Details Narrative
Preferred stock, shares issued to Mr. B Michael Friedman			1,000
Preferred stock, shares outstanding	1,000	1,000

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Common and Preferred Stock - Warrants (Details Narrative) - USD ($)		3 Months Ended
	Apr. 14, 2015	Mar. 31, 2018	Mar. 31, 2017	Dec. 14, 2016
Payments received from St. George upon Warrants becoming effective				$ 50,000
Common stock issued pursuant to Notice of Exercise of Warrants, shares		28,551,579
Notice of Execise of Warrants received, warrants amount		3,040,629
Dr. Holt
Non-qualified stock option to purchase common stock, shares	1,000,000
Non-qualified stock option to purchase common stock, price per share	$ 0.05
Option shares vested			1,000,000
Stock compensation expense for stock option vested shares			$ 2,317
Warrant expiration date			Apr. 14, 2018

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Income Taxes - Income tax reconciliation (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Net tax loss carry-forwards	$ 8,524,193	$ 7,878,733
Statutory rate	37.60%	37.60%
Expected tax recovery	$ 3,205,097	$ 2,962,404
Change in valuation allowance	(3,205,097)	(2,962,404)
Income tax provision

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Income Taxes - Components of deferred tax asset (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Non capital tax loss carry forwards	$ 3,205,097	$ 2,962,404
Less: valuation allowance	(3,205,097)	(2,962,404)
Net deferred tax asset

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Income Taxes (Details Narrative)	Mar. 31, 2018 USD ($)
Income Tax Disclosure [Abstract]
Net operating loss carry forwards	$ 8,524,193

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Commitments and Contingencies (Details Narrative)	1 Months Ended	3 Months Ended		8 Months Ended		10 Months Ended	12 Months Ended		24 Months Ended	120 Months Ended
	Feb. 28, 2017 USD ($)	Mar. 31, 2018 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Mar. 31, 2016 USD ($)	Jul. 10, 2024 USD ($)	Aug. 07, 2017 USD ($)	Apr. 05, 2017 USD ($)	Jul. 11, 2014 a	Apr. 28, 2014 a
Office Space
Rent expense		$ 9,053	$ 21,679		$ 45,417
Payments made on rent expense					$ 20,516
Deferred rent balance		24,916		$ 24,916		$ 24,916	$ 24,916
Leased Properties
Land leased | a													40	20
Expense recorded in leased property expenses							38,244	$ 38,244
Lease agreement term													10 years	10 years
Lease agreement monthly rent payments during first year										$ 10,000
Lease agreement annual increase percentage										2.00%
Tenant water rights provided by lease, acres | a													50
Tenant water rights provided by lease, annual price										$ 50,000
Tenant water rights provided by lease, approximate annual additional cost										$ 2,400
Expenses related to the land and water rights
Agreements
Monthly consulting and licensing fees received by Company from operation and licensing agreement with third party												$ 12,000
Investment in property pursuant to operation and licensing agreement with third party		130,000		110,000		110,000	110,000
Maximum working capital available to be provided by Company pursuant to LOI with Green Acres											$ 250,000
Maximum buyout amount of existing mortgage on facility prusuant to LOI with Green Acres											$ 3,500,000
Investment pursuant to LOI with Green Acres		115,000		100,000		100,000	$ 100,000
Legal and Other
Loss on legal matter		$ (232,246)
Sublease agreement with Colorado research facility
Office Space
Rent for office space, monthly									$ 3,500
Amounts owed to landlord									$ 48,750
First floor of San Juan, Puerto Rico office (2)
Office Space
Rent for office space, monthly	$ 1,500					$ 3,000
Second floor of San Juan, Puerto Rico office (2)
Office Space
Rent for office space, monthly				$ 2,000

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Going Concern (Details Narrative) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit	$ (23,708,002)	$ (25,578,077)
Working capital deficit	(3,643,315)
Derivative liability included in working capital deficit	$ (2,194,113)

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Subsequent Events (Details Narrative) - USD ($)	1 Months Ended
	May 15, 2018	Apr. 19, 2018
Subsequent Events [Abstract]
Common stock issued upon conversion of principal and interest, shares		4,875,887
Common stock issued upon conversion of principal and interest, amount		$ 27,500
Common stock issued upon conversion of principal and interest, price per share		$ 0.00564
Common stock previously issued for security on renovations of Canadian property	5,000,000
Aggregate amounts paid to custodian of Canadian property	$ 50,000