10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarterly Period Ended March 31, 2021

or

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition period from ______________to ______________

Commission File Number: 000-50099

GRAPEFRUIT USA, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	95-4451059
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1000 Northwest Street, Mid-Town Brandy Wine, Suite 1200-3094, Wilmington, DE 19801

(Address of principal executive offices) (Zip Code)

310-575-1175

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of exchange on which registered
No par value common stock	GPFT	OTCQB

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.0001 par value

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 [X] 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 [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One).

Large accelerated filer	[  ]	Accelerated filer	[  ]
Non-accelerated filer	[  ]	Smaller reporting company	[X]
(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ] No [X]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

As of May 24, 2021, the number of shares outstanding of the registrant’s class of common stock was 513,583,695.

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Condensed Financial Statements (Unaudited and Audited)	3
	Condensed Balance Sheets at March 31, 2021 (Unaudited) and December 31, 2020 (Audited)	3
	Condensed Statements of Operations for the Three Months Ended March 31, 2021 (Unaudited) and 2020 (Unaudited)	4
	Condensed Statements of Cash Flows for the Three Months Ended March 31, 2021 (Unaudited) and 2020 (Unaudited)	5
	Condensed Statement of Stockholders’ Deficit for the Three Months Ended March 31, 2021 (Unaudited) and 2020 (Unaudited)	6
	Notes to Condensed Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	24
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	25
SIGNATURES		26

2

PART I. FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

GRAPEFRUIT USA, INC.

CONDENSED BALANCE SHEETS

	March 31, 2021  (Unaudited)			December 31, 2020  (Audited)
ASSETS
CURRENT ASSETS:
Cash	$	440,990		$	299,895
Accounts receivable		245,843			39,408
Inventory		490,815			502,115
Licensee agreement		57,200			63,800
Other		17,774			43,644
Total current assets		1,252,622			948,862
NON-CURRENT ASSETS:
Property, plant and equipment, net		1,798,823			1,790,930
Operating right of use - assets		108,839			131,786
Investment in hemp		169,950			169,950
Other		7,459			7,459
TOTAL ASSETS	$	3,337,693		$	3,048,987
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Notes payable	$	256,534		$	256,436
Accrued loan interest		893,087			758,107
Related party payable		676,225			488,433
Legal settlements - current portion		50,013			180,740
Subscription payable		1,333,585			791,992
Derivative liability		177,960			118,641
Capital lease - current portion		65,810			67,071
Operating right of use - liability - current portion		68,040			82,038
Convertible notes - current portion		2,621,786			829,072
Accounts payable and accrued expenses		771,820			807,051
Total current liabilities		6,914,860			4,379,581
Legal settlements - long-term		23,953			29,226
Capital lease		24,519			38,835
Operating right of use - liability		43,984			52,724
Long-term notes payable, net		905,667			904,633
Long-term convertible notes, net of discount		1,163,547			2,323,735
Total long-term liabilities		2,161,670			3,349,153
TOTAL LIABILITIES		9,076,530			7,728,734
STOCKHOLDERS’ DEFICIT
Common stock ($0.0001 par value, 1,000,000,000 shares authorized; 510,767,041 and 505,700,437 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively)		51,077			50,570
Preferred stock ($0.0001 par value, 1,000,000 shares authorized; no shares issued and outstanding as of March 31, 2021 and December 31, 2020)		-			-
Additional paid in capital		6,948,281			6,591,177
Accumulated deficit		(12,738,195	)		(11,321,494	)
Total stockholders’ deficit		(5,738,837	)		(4,679,747	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	3,337,693		$	3,048,987

The accompanying notes are an integral part of these unaudited condensed financial statements

3

GRAPEFRUIT USA, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended			Three months ended
	March 31, 2021			March 31, 2020
Revenues
Bulk sales	$	350,815		$	393,559
Total revenues		350,815			393,559
Cost of goods sold		423,435			454,987
Gross loss		(72,620	)		(61,428	)
Operating expenses:
Sales		3,596			-
General and administrative		401,412			302,559
Total operating expenses		405,008			302,559
Loss from operations		(477,628	)		(363,987	)
Other income (expense):
Interest expense		(421,381	)		(372,322	)
Change in value of derivative instruments		(59,319	)		(2,110,718	)
Gain (loss) on extinguishment of debt		(458,373	)		74,304
Total other income (expense)		(939,073	)		(2,408,736	)
Loss before income taxes		(1,416,701	)		(2,772,723	)
Tax provision		-			-
Net loss	$	(1,416,701	)	$	(2,772,723	)
Net loss per share - Basic and diluted	$	(0.00	)	$	(0.01	)
Weighted average common stock outstanding - Basic and diluted		508,357,473			394,315,293

The accompanying notes are an integral part of these unaudited condensed financial statements

4

GRAPEFRUIT USA, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three months ended			Three months ended
	March 31, 2021			March 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,416,701	)	$	(2,772,723	)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization expense		22,629			20,262
Amortization of debt discount		237,226			202,979
Change in value of derivative		59,319			2,110,718
Loss on issuance of warranty		235,103			-
Loss on extinguishment of debt		654,693			(74,304	)
Stock-based compensation for services		9,407			95,625
Changes in operation assets and liabilities:
Accounts Receivables		(206,435	)		(95,818	)
Inventory		11,299			11,228
Prepaid expense and current assets		32,471
Right-of-use assets		22,947
Accounts payable		(35,231	)		58,420
Other					5,000
Accrued loan interest expense		134,980			85,290
Right-of-use liability		(22,738	)
Net cash (used for)/provided by used for operating activities		(261,031	)		(353,323	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of land and equipment		(30,521	)		-
Net cash used for investing activities		(30,521	)		-
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal repayment of capital lease liability		(15,577	)		(13,060	)
Repayment of legal liability		(136,000	)
Proceeds from convertible notes, net		398,000			250,000
Proceeds from (repayment of) loans, net		(1,568	)		(15,291	)
Proceeds from related parties		187,792
Net cash proceeds from financing activities		432,647			221,649
NET INCREASE (DECREASE) IN CASH		141,095			(131,674	)
CASH, BEGINNING BALANCE		299,895			266,607
CASH, ENDING BALANCE	$	440,990		$	134,933
SUPPLEMENTAL DISCLOSURE ON NON-CASH FINANCING ACTIVITY
Cash paid for interest expense		32,667			185,820
Debt converted to common stock		51,667			640,597
Compensation paid through issuance of common stock		67,420			347,783
Notes and accrued interest converted to common stock		-			79,754
Reclassification of derivative liabilities to APIC		-			423,340

The accompanying notes are an integral part of these unaudited condensed financial statements

5

GRAPEFRUIT USA, INC.

CONDENSED STATEMENT OF STOCKHOLDERS’ DEFICIT

(Unaudited)

	Common Stock				Additional					Total
	Number of				Paid in		Accumulated			Stockholders’
	Shares		Amount		Capital		Deficit			Deficit
Balance as of December 31, 2019		486,320,329	$	48,632	$	2,781,839	$	(7,264,498	)	$	(4,434,027	)
Shares issued for services		300,000		30		106,096		-			106,126
Shares issued for settlement		7,213,933		721		565,572		-			566,293
Net loss		-		-		-		(2,772,723	)		(2,772,723	)
Balance as of March 31, 2020		493,834,262	$	49,383	$	3,453,507	$	(10,037,221	)	$	(6,534,331	)
Balance as of December 31, 2020		505,700,437	$	50,570	$	6,591,177	$	(11,321,494	)	$	(4,679,747	)
Shares issued for services		1,399,937		140		55,804					55,944
Shares issued for settlement		1,666,667		167		51,500					51,667
Shares issued upon warrant exercise		2,000,000		200		249,800					250,000
Net loss		-		-		-		(1,416,701	)		(1,416,701	)
Balance as of March 31, 2021		510,767,041	$	51,077	$	6,948,281	$	(12,738,195	)	$	(5,738,837	)

The accompanying notes are an integral part of these unaudited condensed financial statements

6

GRAPEFRUIT USA, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2021 AND 2020

NOTE 1 –ORGANIZATION AND NATURE OF OPERATIONS

Grapefruit USA, Inc (“we”, “our”, “us”, “GBI”, “Grapefruit”, or “the Company”) was formed as a California corporation on August 28, 2017 and began operating in September 2017.

On July 10, 2019, Grapefruit closed the Share Exchange after the completion of all conditions subsequent contemplated by the Share Exchange Agreement among the parties thereto ( “SEA”), by which Imaging3, Inc. (“IGNG”) was acquired in a reverse acquisition (the “Acquisition”) by the former shareholders of Grapefruit, the accounting acquirer. Under the terms of the SEA executed on May 31, 2019, IGNG became obligated to issue to Grapefruit’s existing shareholders that number of newly issued restricted IGNG common shares such that the former Grapefruit shareholders (now new IGNG shareholders) will own approximately 81% of the post-Acquisition IGNG common shares and the current IGNG shareholders will retain 19% of the post-Acquisition IGNG common shares. At the time of the execution of the SEA, IGNG had approximately 85,218,249 outstanding shares of common stock. Therefore, IGNG issued to Grapefruit’s shareholders 362,979,114 IGNG common shares to Grapefruit’s current shareholder on a pro rata basis with their then-current ownership of Grapefruit of which Bradley Yourist and Daniel J. Yourist own a combined 72.26%, or approximately 259,967,136 shares. Accordingly, the financial statements are prepared using the acquisition method of accounting with GBI as the accounting acquirer and IGNG treated as the legal acquirer and accounting acquiree. Because Imaging3, Inc. did not meet the accounting definition of an operating business, having only nominal assets, the reverse merger transaction was treated as a recapitalization and no goodwill was recognized.

7

The Company has applied for and received our provisional distribution renewal licensure which allows us to operate through May 13, 2021. Our annual manufacturing license has been renewed by the California Department of Health. Grapefruit has not yet applied for a license to cultivate and will not until construction has begun on our cultivation facility. We own two acres of fully entitled cannabis real property located in the Coachillin’ Industrial Cultivation and Ancillary Canna-Business Park. The location within Coachillin’ allows the Company to apply for and hold every cannabis license available under the California Cannabis laws.

We intend to buildout out the real property into a distribution, manufacturing and high-tech cultivation facility to facilitate our goal to become a seed to sale, fully vertically integrated Cannabis and CBD product Company. Grapefruit’s plans include an indoor 22,000 square foot multi-tiered canopy and adjoining tissue culture rooms.

We became members of the Indian Canyon and 18th Property Association on September 19, 2017 and have an ownership interest of 1.46% based upon the 77,156 gross parcel square foot of our property located in an approximately 5.3 million square foot facility. As of December 31, 2020, the common areas continue to be built throughout the entire canna-business park and are not complete.

NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”).

The unaudited financial statements as of March 31, 2021 and December 31, 2020, and for the three months ended March 31, 2021 and March 31, 2020, have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. They do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company’s audited financial statements and notes filed with the SEC for the year ended December 31, 2020.

Use of Estimates – The preparation of our financial statements in conformity with U.S. GAAP requires us to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our financial statements and the reported amounts of revenues and expenses during the periods presented.

We make our estimate of the ultimate outcome for these items based on historical trends and other information available when our financial statements are prepared. We recognize changes in estimates in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Our actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term. The company’s most significant estimates related to useful life for depreciation, the value of long-lived assets and related impairment, and provision for income taxes of property and equipment.

Inventory – Inventory is comprised of raw material, work in process and finished goods. The following sets forth selected items from our inventory as of March 31, 2021 and December 31, 2020:

	March 31, 2021		December 31, 2020
Raw material	$	62,862	$	16,891
Work in process		13,144		23,566
Finished goods		414,810		461,659
	$	490,816	$	502,116

8

We periodically review the value of our inventory and provide a write-down of inventory based on our assessment of the market conditions. Any write-down is charged to cost of goods sold.

Property, Plant and Equipment, net – Our property and equipment are recorded at cost. Assets held under capital leases are capitalized at the commencement of the lease at the lower of the present value of minimum lease payments at the inception of the lease or fair value. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over estimated useful lives of four to seven years, and amortization is computed using the straight-line method over the life of the applicable lease. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from our accounts and any resulting gain or loss is reflected in our consolidated statements of operations.

Land Improvements – Our land improvements are recorded at cost provided by our property association. These costs will continue to be capitalized until construction has been completed. Land improvements will not be depreciated after the construction has been completed by the property association.

Long-Lived Assets Impairment Assessment – Our long-lived assets are subject to an impairment test if there is an indicator of impairment. The carrying value and ultimate realization of these assets is dependent upon our estimates of future earnings and benefits that we expect to generate from their use. If our expectations of future results and cash flows are significantly diminished, other long-lived assets may be impaired and the resulting charge to operations may be material. When we determine that the carrying value of intangibles or other long-lived assets may not be recoverable based upon the existence of one or more indicators of impairment, we use the projected undiscounted cash flow method or realizable value to determine whether an impairment exists, and then measure the impairment using discounted cash flows.

Revenue Recognition – The Company derives revenues from the sale of product in accordance to ASC Topic 606. Revenues are recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods or services.

Revenue is recognized based on the following five step model:

- Identification of the contract with a customer

- Identification of the performance obligations in the contract

- Determination of the transaction price

- Allocation of the transaction price to the performance obligations in the contract

- Recognition of revenue when, or as, the Company satisfies a performance obligation

Performance Obligations

Sales of products are recognized when all the following criteria are satisfied: (i) a contract with an end user exists which has commercial substance; (ii) it is probable the Company will collect the amount charged to the end user; and (iii) the Company has completed its performance obligation whereby the end user has obtained control of the product. A contract with commercial substance exists once the Company receives and accepts a purchase order or once it enters into a contract with an end user. If collectability is not probable, the sale is deferred and not recognized until collection is probable or payment is received. Control of products typically transfers when title and risk of ownership of the product has transferred to the customer. For contracts with multiple performance obligations, the Company allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. The Company uses an observable price to determine the stand-alone selling price for separate performance obligations or a cost-plus margin approach when one is not available. Historically the Company’s contracts have not had multiple performance obligations. The large majority of the Company’s performance obligations are recognized at a point in time related to the sale of products.

9

Cost of Goods Sold – Our cost of goods sold includes the costs directly attributable to revenue recognized and includes expenses related to the production, packaging and labelling of cannabis products; personnel-related costs, fees for third-party services, such as testing and transportation costs related to our distribution services.

Basic and Diluted Net Income Per Share – Basic net income per share is based upon the weighted average number of common shares outstanding. Diluted net income per share assumes that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. During 2019, potentially dilutive securities were excluded from the computation of weighted average shares outstanding-diluted because their effect was anti-dilutive.

	March 31, 2021			December 31, 2020
Numerator:
Net income attributable to common shareholders	$	(1,416,701	)		(4,229,851	)
Denominator:
Weighted-average number of common shares outstanding during the period		508,357,473			498,230,051
Dilutive effect of stock options, warrants, and convertible promissory notes		-			-
Common stock and common stock equivalents used for diluted earnings per share	$	(0.00	)	$	(0.00	)

Derivative Financial Instruments - The Company generally does not use derivative financial instruments to hedge exposures to cash-flow risks or market-risks that may affect the fair values of its financial instruments. The Company utilizes various types of financing to fund its business needs, including convertible notes and warrants and other instruments not indexed to our stock. The Company is required to record its derivative instruments at their fair value. Changes in the fair value of derivatives are recognized in earnings in accordance with ASC 815. The Company’s only asset or liability measured at fair value on a recurring basis is its derivative liability associated with warrants to purchase common stock and convertible notes.

Fair Value of Financial Instruments – We value our financial assets and liabilities using fair value measurements. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

Level 2: Observable inputs other than prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated with observable market data.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.

The carrying amount of our cash and cash equivalents approximates fair value because of the short-term nature of the instruments. The carrying amount of our notes payable at December 31, 2019, approximates their fair values based on comparable borrowing rates available to the company. The Company evaluated the fair market value of LVCA using Level 3 inputs. From that measurement, the Company recorded an impairment of LVCA.

10

There have been no changes in Level 1, Level 2, and Level 3 categorizations and no changes in valuation techniques for these assets or liabilities for the three months ended March 31, 2021 and year ended December 31, 2020.

	Level 1		Level 2		Level 3		Total
Derivative Liabilities March 31, 2021	$	-	$	-	$	118,641	$	118,641
Derivative Liabilities December 31, 2020	$	-	$	-	$	118,641	$	118,641

Income Taxes – Income tax assets and liabilities are recorded using the asset and liability method. Under the asset and liability method, tax assets and liabilities are recognized for the tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as net operating loss and tax credit carryovers. Future tax assets and liabilities are measured using the enacted tax rates expected to apply when the asset is realized, or the liability settled. The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period that enactment occurs. To the extent that we do not consider it more likely than not that a future tax asset will be recovered, we will provide a valuation allowance against the excess.

We follow the provisions of ASC 740, Income Taxes. Because of ASC 740, we make a comprehensive review of our portfolio of tax positions in accordance with recognition standards established by ASC 740.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in our consolidated financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

We have created our tax provision leveraging known tax court cases involving various marijuana dispensaries and other cannabis related businesses, including the section of the IRS Tax code of 280E. The U.S. Tax Code Section 280E is the federal statute that states that a business engaging in the trafficking of a Schedule I or II controlled substance, which includes cannabis and cannabis related products, are barred from taking the tax deductions or credits in their federal tax returns which are not considered as part of the business’ cost of goods sold. Given the guidance offered by the Tax code 280E we have prepared our tax provision according to this tax code.

Interest and penalties associated with unrecognized tax benefits, if any, are classified as interest expense and penalties and are included in selling, general and administrative expenses in our consolidated statements of operations.

On December 22, 2017, the U.S. Tax Cuts and Jobs Act was enacted. U.S. tax reform introduced many changes, including lowering the U.S. corporate tax rate to 21 percent, changes in incentives, provisions to prevent U.S. base erosion and significant changes in the taxation of international income, including provisions which allow for the repatriation of foreign earnings without U.S. tax. The enactment of U.S. tax reform had no significant impact on our income taxes for the three months ended March 31, 2021 and 2020, respectively.

Research and Development Expenses – Research and development (“R&D”) costs are charged to expense as incurred. Our R&D expenses include, but are not limited to, consulting service fees and materials and supplies used in the development of our proprietary products and services.

General and Administrative Expenses – General and administrative expenses consist primarily of personnel-related costs, fees for professional and consulting services, travel costs, rent, bad debt expense, general corporate costs, and other costs of administration such as human resources, finance and administrative roles.

11

Commitments and Contingencies – Certain conditions may exist as of the date our financial statements are issued, which may result in a loss, but which will only be resolved when one or more future events occur or fail to occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of the legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

Net Loss Per Share – We compute net loss per share in accordance with ASC 260, Earnings per Share. Under the provisions of ASC 260, basic net loss per share includes no dilution and is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share takes into consideration shares of common stock outstanding (computed under basic net loss per share) and potentially dilutive securities that are not anti-dilutive.

Cash and Cash Equivalents – The Company considers all highly liquid investment securities with remaining maturities at the date of purchase of three months or less to be cash equivalents. Cash equivalents may be invested in money market funds, certificates of deposit or other interest-bearing accounts.

Concentration of Credit Risk – Financial instruments that potentially subject us to credit risk consist of cash. We maintain our cash with high credit quality financial institutions; at times, such balances with any one financial institution may not be insured by the FDIC.

Accounts Receivable and Revenue – The accounts receivable balance was $ 245,843 as of March 31,2021 and $39,480 as of December 31, 2020. As the March 31, 2021, 75% of accounts receivable was split between two customers. In 2020, 99% of accounts receivable consisted of one customer. During the three months ended March 31, 2021, we diversified our customer base, but still have 30% of the revenues from one customer. For the three months ended March 31, 2020, 95% of the net revenues generated with one customer.

Recently Issued Accounting Pronouncements – From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASCs are communicated through issuance of an Accounting Standards Update (“ASU”). Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on our condensed consolidated financial statements upon adoption.

Recently Issued Accounting Pronouncements Not Yet Adopted

Convertible Debt, and Derivatives and Hedging In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. ASU 2020-06 will be effective for the Company in the first quarter of 2022. The Company is currently evaluating the amended guidance and the impact on its consolidated financial statements and related disclosures.

12

Recently Issued Accounting Pronouncements Adopted

Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). The amendments in ASU 2019-12 simplify the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes. The amendments also improve consistent application of and simplify U.S. GAAP for other areas of ASC Topic 740 by clarifying and amending existing guidance. ASU 2019-12 became effective for the Company in the first quarter of fiscal year 2021. The adoption of this standard did not have any impact on the Company’s condensed consolidated financial statements.

Equity Securities, Equity-method Investments and Certain Derivatives In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The guidance provides clarification of the interaction of rules for equity securities, the equity method of accounting and forward contracts and purchase options on certain types of securities. ASU 2020-01 became effective for the Company in the first quarter of 2021. The adoption of this standard did not have any impact on the Company’s condensed consolidated financial statements.

NOTE 3 – GOING CONCERN

Our consolidated financial statements have been prepared on a going concern basis which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. During the three months ended March 31, 2020, we incurred a net loss of $1,416,701, had a working capital deficit of $5,662,238 and had an accumulated deficit of $12,738,195 at March 31,2021. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and, or, obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations as they come due. There is no assurance that these events will be satisfactorily completed. As a result, there is doubt about our ability to continue as a going concern for one year from the issuance date of these financial statements

Management’s plan regarding this matter is to, amongst other things, seek additional equity financing by selling our equity securities and obtaining funds through the issuance of debt. We cannot be certain that funds from these sources will be available when needed or, if available, will be on terms favorable to us or to our stockholders. If we raise additional funds or settle liabilities by issuing equity securities, the percentage ownership of our stockholders may be reduced, stockholders may experience additional dilution, or such equity securities may provide for rights, preferences and/or privileges senior to those of the holders of our common stock. Our ability to execute our business plan and continue as a going concern may be adversely affected if we are unable to raise additional capital or operate profitably.

On May 31, 2019, the Company executed the Stock Purchase Agreement (“SPA”) with Auctus pursuant to the terms of which the Company agreed to sell $4,000,000 of the Notes and issue $6,200,000 of callable warrants (the “Warrants” and, together with the Notes, the “Securities”) to Auctus. Auctus is the Selling Security Holder. In addition, on May 31, 2019, we also entered into a registration rights agreement with Auctus (the “Registration Rights Agreement”) whereby we are obligated to file a registration statement to register the resale of the shares underlying the Securities. On July 25, 2019 (as amended on January 17, 2020), a registration statement was filed to comply with the Registration Rights Agreement .. Pursuant to the SPA, Auctus became obligated to purchase the $4,000,000 of Notes from Grapefruit in four tranches as follows: $600,000 at the SPA closing, which was funded on June 6, 2019; the second tranche of $1,422,750 on the day IGNG filed the registration statement, which was funded on August 16, 2019; the third tranche of $1,030,000 was funded the day the SEC declares the registration statement effective and the fourth tranche of $1 million was funded 90 days after effectiveness. As of December 31, 2020, all tranches of this financing were completed. The Company has received gross proceeds of $4,052,750.

In the first quarter of 2021, Auctus exercised 2,000,000 warrants at $0.125, for proceeds to the Company of $250,000 and issued a $450,000 convertible note to Auctus.

13

NOTE 4 – RIGHT OF USE ASSET AND LIABILITY

During 2018 we reviewed various facilities and identified a suitable, compliant cannabis facility located in the city of Dessert Hot Springs, to build our manufacturing and distribution facility. This commercial park is owned and operated by Coachillin’ Holding LLC and we purchased land rights from Coachillin’ Holding LLC on December 21, 2017 to secure our specific location within their commercial park.

Construction of our facility has not been completed, and we have been provided an estimated completion date of September 2022. In order for us to obtain California cannabis licensing from state and local officials we entered into an operating lease with Coachillin’ Holdings to temporarily occupy an area near the location of our permanent location within the Coachillin’ commercial park.

We entered into this operating land lease agreement with Coachillin’ Holdings LLC on September 1, 2018 to rent approximately 2,268 square feet of leasable land area. The operating lease renews annually and has a base rent of $0.50 square foot of leasable area of the designated premise assigned by Coachillin’ Holdings LLC. We paid an initial non-refundable prepaid rent of $3,402 which was expensed during the three months following the signed agreement, and we will continue to pay $1,134 monthly. We entered into this operating agreement in order to obtain our provisional cannabis licenses for manufacturing and distribution during 2020.

The Company entered into a 36-month lease agreement for office space in July 2019 at $6,963 a month, with an approximate 2% increase annually.

The Company utilizes the incremental borrowing rate in determining the present value of lease payments unless the implicit rate is readily determinable. The Company used an estimated incremental borrowing rate of 6% to estimate the present value of the right of use liability.

The Company has right-of-use assets of $108,839, right-of-use liability of $112,025 as of March 31, 2021. Operating lease expense for the three months ended March 31, 2020 was $24,932.

The following table provides the maturities of lease liabilities at March 31, 2021:

Maturity of Lease Liabilities
2021		71,748
2022		44,756
2023		-
2024		-
2025
2026 and thereafter		-
Total future undiscounted lease payments		116,504
Less: Interest		(4,479	)
Present value of lease liabilities	$	112,025

14

NOTE 5 – INVENTORY

At March 31, 2021 and December 31, 2020, our inventory was, as follows:

	March 31, 2021		December 31, 2020
Raw material	$	62,862	$	16,891
Work in process		13,144		23,566
Finished goods		414,810		461,659
	$	490,816	$	502,116

We periodically review the value of our inventory and provide a write-down of inventory based on our assessment of the market conditions. Any write-down is charged to cost of goods sold.

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net of accumulated depreciation and amortization, at March 31, 2021 and December 31, 2020 was as follows:

	March 31, 2021			December 31, 2020
Vehicle	$	41,142		$	41,142
Extraction equipment		296,748			287,028
Extraction laboratory		126,707			126,707
Warehouse facility		50,158			50,158
Land and land improvement/development		1,476,996			1,456,194
Accumulated depreciation and amortization		(192,928	)		(170,299	)
Property, plant and equipment	$	1,798,823		$	1,790,930

The Company acquired the extraction equipment, laboratory, and warehouse facility during 2018 and 2019 and made preparations and final testing for future production. Final preparations for certain extraction and warehouse work were completed, and these related assets were placed in service on April 1, 2019, at which time we commenced depreciating this asset.

The amount of related depreciation expense for the three months ended March 31, 2021 and 2020 is $22,629 and $19,622, respectively.

NOTE 7 – CAPITAL LEASE PAYABLE

Capital lease payable consists a capital lease agreement entered into in April 2018 to finance the purchase of various lab and manufacturing equipment. The outstanding balance on the 48-month installment capital lease was $148,511 and $161,570 as of March 31, 2021 and December 31, 2020, respectively. The terms of the 48-month capital lease specify monthly payments of $4,575. The interest rate implicit in the lease is about 15% and the maturity date is February 2022.

In addition, the Company entered into additional 48-month leases in May 2019 for production facilities and storage of product. Monthly payments for the facility and storage totals $1,935.

15

A summary of minimum lease payments on capital lease payable for future years is as follows:

	March 31, 2021
Remainder 2021	$	58,590
2022		32,337
2023		7,740
2024		-
2025		-
Thereafter		-
Total minimum lease payments		98,667
Less: amount representing interest		(8,338	)
Capital lease liability	$	90,329

NOTE 8 – NOTES PAYABLE

In October 2017, in connection with our purchase of two acres of fully entitled cannabis real property located in the Coachillin’ Industrial Cultivation and Ancillary Canna-Business Park, the Company issued a first and second trust deed note in the amounts of $700,000 and $200,000, respectively. The first and second trust deed notes are long-term notes and are interest only notes, at 13.0%, and mature in August 2022, with the principal payment due at maturity. For the $700,000 loan, the monthly payment is approximately $7,500. For the $200,000 loan, the monthly payment is approximately $2,200. The 1st and 2nd trust deeds are secured by the land as well as property owned by two officers of the company and three other related parties. Also, each party has personally guaranteed or pledged additional collateral. The notes include a debt discount as of March 31, 2021 of $30,600.

In April 2018, the Company issued a note due 60 days after funding with a principal amount of $250,000 and interest totaling $125,000. As of March 31, 2021, the note has not been repaid and was amended to carry an additional 10% interest rate of the total balance due, Accrued interest for this loan totals $190,625. The note is past due. Two officers of the Company have personally guaranteed the loan.

In September 2019, the Company issued another note of $102,569 to an unrelated party with 5% interest, which was repaid in full on October 20, 2020.

NOTE 9 – CONVERTIBLE NOTES PAYABLE

In August 2020, 9,100,380 shares were issued to settle $80,754 debt of a note and accrued interest resulting in a loss of $5,225.

Amortization of note discounts, which is included in interest expense, amounted to $353,811 during the three months ended March 31, 2021 and $278,204 for the three months ended March 31, 2020.

Grapefruit acquired convertible notes in its acquisition of Imaging3, Inc. on July 10, 2019. (See Note 15.) On May 31, 2019, the Company executed the SPA with Auctus pursuant to the terms of which the Company agreed to sell $4,000,000 of the Notes and issue $6,200,000 of callable warrants (the “Warrants” and, together with the Notes, the “Securities”) to Auctus. Auctus is the Selling Security Holder. In addition, on May 31, 2019, we also entered into a registration rights agreement with Auctus (the “Registration Rights Agreement”) whereby we are obligated to file a registration statement to register the resale of the shares underlying the Securities. On July 25, 2019 (as amended on January 17, 2020), a registration statement was filed to comply with the Registration Rights Agreement .. Pursuant to the SPA, Auctus became obligated to purchase the $4,000,000 of Notes from Grapefruit in four tranches as follows: $600,000 at the SPA closing, which was funded on June 6, 2019; the second tranche of $1,422,750 on the day IGNG filed the registration statement, which was funded on August 16, 2019; the third tranche of $1,030,000 was funded the day the SEC declares the registration statement effective and the fourth tranche of $1 million was funded 90 days after effectiveness. As of December 31, 2020, all tranches of this financing were completed. The Company has received gross proceeds of $4,052,750. The Notes have a two-year term and will bear interest at 10%.

16

On April 15, 2021, the company renegotiated the debt agreement related to these notes modifying the convertible notes conversion price from a variable rate to a fixed rate conversion price with an effective date of December 31, 2020. As a result of the agreement, the Company recorded a noncash expense for the change in the value of derivative instruments of $40,372,883, which was simultaneously offset by a noncash gain of $39,640,477 from the extinguishment of debt, resulting a net loss of $753,699 from the renegotiation of the debt.

On February 26, 2021, the company issued a $450,000 convertible to Auctus bearing 12% interest and 1-year maturity date. Principal payments shall be made in six (6) installments each in the amount of $75,000 commencing one hundred and eighty (180) days following the Issue Date and continuing thereafter each thirty (30) days for six (6) months. Notwithstanding the forgoing, the final payment of Principal and Interest shall be due on the Maturity Date. The conversion price set at $0.075.

In addition, the Company has eleven other convertible notes comprising $296,000 outstanding and they are currently in default. The interest on these notes varies from 5-10%. As of March 12, 2021, we are in the process of converting eight of the notes amounting to $241,000.

NOTE 10 – NOTES PAYABLE, RELATED PARTY NOTES PAYABLES, AND OPERATING LEASE – RELATED PARTY

Notes payable to officers and directors as of March 31, 2021 and December 31, 2020 are due on demand and consisted of the following:

	March 31, 2021		December 31, 2020
Payable to an officer and director	$	82,056	$	82,056
Payable to an individual affiliate of an officer and director		40,000		40,000
Payable to a company affiliate to an officer and director		554,169		366,377
	$	676,225	$	488,433

Notes payables bear interest at 10%.

A related party leased two eco-pods in April 2019 and May 2019, which are refurbished shipping containers, located on this specific parcel within Coachillin’. The lease is treated as an operating lease and payment responsibility is ultimately the responsibility of the related party. The Company assumed these lease payment obligations in May 2019. The monthly payments are $1,055 and $880, for the duration of the lease terms of four and five years, respectively.

NOTE 11 – EQUITY

Preferred Stock

The Company has authorized 1,000,000 shares of $0.0001 par value preferred stock. As of March 31, 2021, and December 31, 2020, there are no shares of preferred stock outstanding.

Common Stock

The Company is authorized to issue 1,000,000,000 shares of $0.0001 par value common stock.

During the three months ended March 31, 2021 the Company issued a total of 1,399,937 shares were issued for services rendered valued at $55,945; 1,666,667 shares were issued related to for a settlement valued at $51,667; and 2,000,000 shares were issued for warrant exercised at $0.125.

17

As of March 31, 2021, there were approximately 613 record holders of our common stock, not including shares held in “street name” in brokerage accounts which is unknown. As of March 31, 2021, there were 510,767,041 shares of our common stock outstanding on record.

Stock Option Plan

During 2014, the Board of Directors adopted, and the shareholders approved, the 2014 Stock Option Plan under which a total of 1,811,401 shares of common stock had been reserved for issuance. The 2014 Stock Option Plan will terminate in September 2024.

Stock Options

As of March 31, 2021, employees of the Company hold options to purchase 250,000 shares of common stock at an exercise price of $1.00.

Transactions in FY 2021	Quantity		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life
Outstanding, December 31, 2020		250,000	$	1.00		4.57
Granted
Exercised		-
Cancelled/Forfeited		-
Outstanding, March 31, 2021		250,000	$	1.00		4.32
Exercisable, March 31, 2021		250,000	$	1.00		4.32

The weighted average remaining contractual life of options outstanding issued under the Plan was 4.32 years at March 31, 2021.

NOTE 12 — WARRANTS

Following is a summary of warrants outstanding at March 31, 2021:

Number of Warrants	Exercise Price		Expiration Date
2,250,000	$	0.20	July 2023
37,500	$	0.10	April 2022
500,00	$	0.10	August 2022
575,000	$	0.10	April 2023
125,000	$	0.10	May 2023
162,500	$	0.10	August 2023
2,800,000	$	0.40	May 2022
302,776	$	0.10	January 2024
12,000,000	$	0.10	March 2021
2,160,000	$	0.10	June 2021
14,000,000	$	0.125	May 2021
15,000,000	$	0.15	May 2021
8,000,000	$	0.25	May 2021

Grapefruit recorded warrants to issue common stock upon exercise in its acquisition of Imaging3, Inc. on July 10, 2019. (See Note 15.) As part of the SEA, the Company also issued 16,000,000 warrants to purchase 16,000,000 shares of the Company’s common stock at an exercise price of $0.125 per share, 15,000,000 warrants to purchase 15,000,000 shares of the Company’s common stock at an exercise price of $0.15 per share, 8,000,000 warrants to purchase 8,000,000 shares of the Company’s common stock at an exercise price of $0.25 per share for a period of two year from the date of issuance.

18

In addition to the Notes in connection with the SPA agreement, IGNG issued to the Investor a warrant to purchase 16,000,000 shares of its common stock at $0.125 per share, a warrant to purchase 15,000,000 shares at $0.15 per share and a warrant to purchase 8,000,000 shares at $0.25 per share (collectively, the “Warrants”). The Warrants are “cash only” and are callable if IGNG stock trades on the OTCQB at 200% or more of a given exercise price for 5 consecutive days.

On February 26, 2021, 2,250,000 warrants were issue with an exercise price of $0.20 in relation to the convertible note (See Note 9 Convertible note payable). On April 15, 2021 as part of the renegotiated terms of the convertible notes, 20,000,000 additional warrants were issued at an exercise price of $0.075.

NOTE 13 — DERIVATIVE LIABILITIES

Grapefruit recorded derivative instruments in its acquisition of Imaging3, Inc. on July 10, 2019. (See Note 15.) The Company’s only asset or liability measured at fair value on a recurring basis was its derivative liability associated with related warrants to purchase common stock and the conversion features embedded in convertible promissory notes.

In connection with financing transactions, the Company issued warrants to purchase common stock and convertible promissory notes. These instruments included provisions that could result in a reduced exercise price based on specified full-ratchet anti-dilution provisions. The “reset” provisions were triggered in the event the Company subsequently issued common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than contractually specified amounts. Upon triggering the “reset” provisions, the exercise / conversion price of the instrument will be reduced. Accordingly, pursuant to ASC 815, these instruments were not considered to be solely indexed to the Company’s own stock and were not afforded equity treatment.

On April 15, 2021, the company renegotiated conversion terms on $4,502,750 of convertible notes with Auctus. All variable conversion prices were replaced with a fixed conversion price of $0.075. In addition, the Company issued an additional 20,000,000 warrants with an exercise price of $0.075 per share.

The following table summarizes activity in the Company’s derivative liability during the three-month period ended March 31, 2021:

12-31-20 Balance	$	118,641
Creation/acquisition		-
Reclassification of equity		-
Change in Value		59,319
3-31-21 Balance	$	177,960

The Company classifies the fair value of these derivative liabilities under level 3 of the fair value hierarchy of financial instruments. The fair value of the derivative liability was calculated using a Black Scholes model. The Company’s stock price and estimates of volatility are the most sensitive inputs in validation of assets and liabilities at fair value. The liabilities were measured using the following assumptions:

Term	1-3 years
Dividend Yield		0	%
Risk-free rate		0.07% - 0.16	%
Volatility		167	%

19

NOTE 14 – INVESTMENTS

Investment in Hemp

In September 2019, the Company invested in hemp product that was purchased and stored by a third party. The Company expects to sell the product by the third quarter of 2021.

NOTE 15 – COMMITMENTS AND CONTINGENCIES

Alpha Capital Anstalt and Brio Capital Master Fund, LTD

On September 13, 2017, Alpha Capital Anstalt and Brio Capital Master Fund, LTD, two minority members of a group of investors in the Company (the “Plaintiff”) filed a lawsuit seeking damages and injunctive relief in the United States District Court for the Southern District of New York claiming that the Company breached certain Note and Warrant agreements among the parties to the action. The holders of the majority of the investment involved in the above lawsuit chose not to join in the lawsuit and have informed the Company that they believe the lawsuit to be baseless. On November 21, 2017, the Court denied the Plaintiff’s request for injunctive relief against the Company. As a result, the case essentially became an action for money damages against the Company, which the Company believed to be without merit and defended vigorously. However, on July 27, 2018 United States District Court for the Southern District of New York granted the plaintiffs motion for summary judgement, awarding them approximately $1.4 million dollars. On April 15, 2019 the Company executed a settlement agreement (the “Settlement Agreement”) with the defendants to settle the matter by agreeing to pay the defendants an aggregate of $200,000 and issuing them an aggregate of 7,705,698 of the Company’s common shares (subject to certain possible adjustments to the amount of shares to be issued to the Defendants by the Company). The Company paid this $200,000 to the defendants and issued the 7,705,698 shares to the defendants in the fourth quarter of 2019. Subsequently, the defendant’s claimed the aforementioned share adjustment had been triggered and made a demand that the Company issue additional shares pursuant to the terms of the Settlement. In April 2021, the Company issued an additional aggregate of 2,822,654 shares the Company’s stock to these defendants in final settlement of the dispute.

Galileo Surgery Center LP/Cypress Ambulatory Surgery Center LP vs Imaging3, Inc. Settlement

The Company came to a settlement with Galileo Surgery Center LP/Cypress Ambulatory Surgery Center LP (“Galileo”) for $75,572 with an interest rate of 10%, requiring payments of $2,000 per month beginning in August 2019 until paid in full. The company is currently behind on payments.

NOTE 16 – SUBSEQUENT EVENTS

On April 15, 2021, the company renegotiated conversion terms on $4,502,750 of convertible notes with Auctus. All variable conversion prices were replaced with a fixed conversion price of $0.075. In addition, the Company issued an additional 20,000,000 warrants with an exercise price of $0.075 per share.

On April 19, 2021, Alpha Capital Anstalt and Brio Capital Master Fund, LTD were issued 2,822,654 shares pursuant to the true-up provision in their settlement (See Note 15 Commitments and Contingencies).

In May 2021, 3,920,865 shares were issued to Greenberg Glusker Fields Claman & Machtinger LLP pursuant to the make-whole provision (See Note 15 Commitments and Contingencies).

20

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

Cautionary Statements

This Form 10-Q contains financial projections and other “forward-looking statements,” as that term is used in federal securities laws, about Grapefruit’s financial condition, results of operations and business. These statements include, among others, statements concerning the potential for revenues and expenses and other matters that are not historical facts. These statements may be made expressly in this Form 10-K. You can find many of these statements by looking for words such as “believes,” “expects,” “anticipates,” “estimates,” or similar expressions used in this Form 10-K. These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause our actual results to be materially different from any future results expressed or implied by us in those statements. The most important facts that could prevent us from achieving our stated goals include, but are not limited to, the following:

(a)	volatility or decline of our stock price;
(b)	potential fluctuation in quarterly results;
(c)	our failure to earn revenues or profits;
(d)	inadequate capital to continue the business and barriers to raising the additional capital or to obtaining the financing needed to implement our business plans;
(e)	failure to make sales;
(f)	changes in demand for our products and services;
(g)	rapid and significant changes in markets;
(h)	litigation with or legal claims and allegations by outside parties, causing us to incur substantial losses and expenses;
(i)	insufficient revenues to cover operating costs;
(j)	dilution in the ownership of the Company through the issuance by us of additional securities and the conversion of outstanding warrants, notes and other securities;

We cannot assure that we will be profitable. We may not be able to develop, manage or market our products and services successfully. We may not be able to attract or retain qualified executives and technology personnel. We may not be able to obtain customers for our products or services. Our products and services may become obsolete. Government regulation may hinder our business. Additional dilution in outstanding stock ownership will be incurred due to the issuance or exercise of more shares, warrants and other convertible securities.

Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. We caution you not to place undue reliance on the statements, which speak only as of the date of this Form 10-Q. The cautionary statements contained or referred to in this section should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may make. We do not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect the occurrence of unanticipated events.

The following discussion should be read in conjunction with our financial statements and notes to those statements. In addition to historical information, the following discussion and other parts of this annual report contain forward-looking information that involves risks and uncertainties.

21

Results of Operations for the Three Months Ended March 31, 2021 as compared to the Three Months Ended March 31, 2020.

The following sets forth selected items from our statements of operations for three months ended March 31, 2021 and for the three months ended March 31, 2020.

	Three Months Ended			Three Months Ended
	March 31, 2021			March 31, 2020
Net revenues	$	350,815		$	393,559
Cost of goods sold		423,435			454,987
Gross loss		(72,620	)		(61,428	)
Sales expense		3,596			-
General and administrative expense		401,412			302,559
Loss from operations		(477,628	)		(363,987	)
Change in value of derivatives		(59,319	)		(2,110,718	)
Interest and other income (expense)		(879,754	)		(298,018	)
Net loss	$	(1,416,701	)	$	(2,772,723	)

Revenue for the three months ended March 31, 2021 was $350,815 compared to $393,559 for the corresponding period in 2020, a decrease of $42,744 or 10.8%. This decrease in revenue is primarily due to the fact that there was a very strong cannabis crop in the last quarter of 2020, which drove down wholesale cannabis prices significantly and limited the profitability of our distribution and trading operations. The Company expects such cyclical revenue deviations to be mitigated in 2021 and following years by a significant growth of revenue from our HourGlass products, which will be unaffected by these cyclical events.

Cost of goods sold for the three months ended March 31, 2021 was $423,435 as compared to $454,987 for the corresponding period in 2020, a decrease of $29,602, or 6.5%. Included in cost of goods sold the three months ended March 31, 2021 and 2020 are plant operation and other direct overhead expenses incurred to maintain our production facilities. These fixed carrying costs affect our gross margin more significantly at lower revenues than at our anticipated full operating activity levels. Consequently, we expect our gross margins to significantly improve during 2021 as sales increase.

Our resulting gross loss for the three months ended March 31, 2021 was $72,620 as compared with $61,428 for the corresponding period in 2020, an increase of $13,442, or 22.7%.

General and administrative expenses for the three months ended March 31, 2021 were $401,412 compared to $302,559 for 2020, an increase of $101,627, or 32.3%. The increase in costs was primarily due to an increase in legal expenses.

Our resulting net loss from operations for the three months ended March 31, 2021 was $477,628 as compared to $363,987 for the corresponding period for 2020, an increase of $115,068, or 31.7%.

22

As part of the reverse merger in July 2019, the Company recorded derivative liabilities substantially in the form of convertible notes and related warrants with variable conversion features. On April 15, 2021, the company renegotiated the debt agreement with the lender modifying the convertible notes conversion price from a variable rate to a fixed rate conversion price for $4,502,750 of convertible notes, with an effective date of December 31, 2020. Change in value of derivatives, a non-cash expense, for the three months ended March 31, 2021, was $59,319 as compared to $2,110,718 for the corresponding period for 2020.

Included in interest and other expense for the three months ended March 31, 2021, is a non-cash expense of $513,267 related to shares issued as part of a make-whole agreement (see Note 15 Commitments and contingencies).

Our resulting net loss for the three months ended March 31, 2021 was $1,416,701 as compared to $2,772,723 for the corresponding period for 2020, a decrease of $1,356,022, or 48.9%.

COVID-19 Impact

Our business and operating results for 2020 was impacted by the COVID-19 pandemic. However, we have seen improvement in our business, which we expect to continue throughout 2021.

Liquidity and Capital Resources

Our cash position increased to $440,990 as of March 31, 2021 from $299,895 as of December 31, 2020. The increase in cash was primarily due to the issuance of debt offset by operating activities. Our total current assets increased to $1,252,622 as of March 31, 2021, from $948,862 as of December 31, 2020.

Our total current liabilities increased to $6,914,860 as of March 31, 2021 from $4,379,581 as of December 31, 2020. This increase is primarily due to convertible note’s nearing maturity dates.

During the three months ended March 31, 2021, we used $261,031 of net cash for operating activities, as compared to cash used by operations of $353,323 used during the three months ended March 31, 2020. Net cash used in investing activities during the three months ended March 31, 2021 was $30,521, as compared to $0 during the three months ended March 31, 2020. Net cash provided by financing activities during the three months ended March 31, 2021 was $432,647, as compared to $221,649 during the three months ended March 31, 2020.

We expect our working capital requirements in the next year to be met primarily by the proceeds of issuance of debt, equity and other securities to our existing creditor, shareholders, and other investors, as well as from cash flow from operations. We also expect that, as in the past, significant amounts of our convertible debt with a major lender will be converted into equity. We expect to need additional working capital from outside sources to cover our anticipated operating expenses. There is no assurance that the Company will be able to raise sufficient additional capital or financing to continue in business or to effectively execute its business plan.

Going Concern Qualification

Our consolidated financial statements have been prepared on a going concern basis which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. During the three months ended March 31, 2021, we incurred a net loss of $1,416,701, had a working capital deficit of $5,662,238 and had an accumulated deficit of $12,738,195 at March 31, 2021. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and, or, obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations as they come due. There is no assurance that these events will be satisfactorily completed. As a result, there is doubt about our ability to continue as a going concern for one year from the issuance date of these financial statements.

Off-Balance Sheet Arrangements

None.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

23

Item 4. Controls and Procedures

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13a-15(f) under the Exchange Act. Internal control over financial reporting is a process designed under the supervision and with the participation of our management, including our principal executive and financial officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

As of March 31, 2021, our management assessed the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013 Framework). Based on this assessment, our management concluded that, as of March 31, 2021, our internal control over financial reporting was effective based on those criteria.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting through the date of this report or during the quarter ended March 31, 2021, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

This report does not include an attestation report from our registered public accounting firm regarding internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Alpha Capital Anstalt and Brio Capital Master Fund, LTD

On September 13, 2017, Alpha Capital Anstalt and Brio Capital Master Fund, LTD, two minority members of a group of investors in the Company (the “Plaintiff”) filed a lawsuit seeking damages and injunctive relief in the United States District Court for the Southern District of New York claiming that the Company breached certain Note and Warrant agreements among the parties to the action. The holders of the majority of the investment involved in the above lawsuit chose not to join in the lawsuit and have informed the Company that they believe the lawsuit to be baseless. On November 21, 2017, the Court denied the Plaintiff’s request for injunctive relief against the Company. As a result, the case essentially became an action for money damages against the Company, which the Company believed to be without merit and defended vigorously. However, on July 27, 2018 United States District Court for the Southern District of New York granted the plaintiffs motion for summary judgement, awarding them approximately $1.4 million dollars. On April 15, 2019 the Company executed a settlement agreement (the “Settlement Agreement”) with the defendants to settle the matter by agreeing to pay the defendants an aggregate of $200,000 and issuing them an aggregate of 7,705,698 of the Company’s common shares (subject to certain possible adjustments to the amount of shares to be issued to the Defendants by the Company). The Company paid this $200,000 to the defendants and issued the 7,705,698 shares to the defendants in the fourth quarter of 2019. Subsequently, the defendant’s claimed the aforementioned share adjustment had been triggered and made a demand that the Company issue additional shares pursuant to the terms of the Settlement. In April 2021, the Company issued an additional aggregate of 2,822,654 shares the Company’s stock to these defendants in final settlement of the dispute.

24

Item 1A. Risk Factors

Smaller reporting companies are not required to provide the information required by this item.

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

There were no unregistered sales of equity securities during the period covered by this quarterly report.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Item 6. Exhibits

(a) Exhibits

EXHIBIT NO.	DESCRIPTION
31.1	Section 302 Certification of Chief Executive Officer
31.2	Section 302 Certification of Chief Financial Officer
32.1	Section 906 Certification
32.2	Section 906 Certification
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

25

SIGNATURES

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

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Bradley J. Yourist	Dated: May 24, 2021
Bradley J. Yourist
Chief Executive Officer
/s/ Kenneth J. Biehl	Dated: May 24, 2021
Kenneth J. Biehl
Chief Financial Officer

26

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Bradley J. Yourist, certify that:

1.	I have reviewed this report on Form 10-Q of Grapefruit USA, 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 registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’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
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (of 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 reasonably likely to adversely affect the registrant’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.

Dated: May 24, 2021

/s/ Bradley J. Yourist

Bradley J. Yourist

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Kenneth J. Biehl, certify that:

1.	I have reviewed this report on Form 10-Q of Grapefruit USA, 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 registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’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
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (of 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 reasonably likely to adversely affect the registrant’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.

Dated: May 24, 2021

/s/ Kenneth J. Biehl

Kenneth J. Biehl,

Chief Financial Officer

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 Quarterly Report of Grapefruit USA, Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2021 (the “Report”) I, Bradley J. Yourist, Chief Executive Officer of the Company, certify, pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

(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.

/s/ Bradley J. Yourist	Dated: May 24, 2021
Bradley J. Yourist
Chief Executive Officer

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

EX-32.2

Exhibit 32.2

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 Quarterly Report of Grapefruit USA, Inc. (the “Company”) on Form 10-Q/A for the period ending March 31, 2021 (the “Report”) I, Kenneth J. Biehl, Chief Financial Officer (Principal Financial/Accounting Officer) of the Company, certify, pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

(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.

/s/ Kenneth J. Biehl	Dated: May 24, 2021
Kenneth J. Biehl
Chief Financial Officer

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2021	May 24, 2021
Cover [Abstract]
Entity Registrant Name	Grapefruit USA, Inc
Entity Central Index Key	0001205181
Document Type	10-Q
Document Period End Date	Mar. 31, 2021
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		513,583,695
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2021

XML

Condensed Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
CURRENT ASSETS:
Cash	$ 440,990	$ 299,895
Accounts receivable	245,843	39,408
Inventory	490,815	502,115
Licensee agreement	57,200	63,800
Other	17,774	43,644
Total current assets	1,252,622	948,862
NON-CURRENT ASSETS:
Property, plant and equipment, net	1,798,823	1,790,930
Operating right of use - assets	108,839	131,786
Investment in hemp	169,950	169,950
Other	7,459	7,459
TOTAL ASSETS	3,337,693	3,048,987
CURRENT LIABILITIES
Notes payable	256,534	256,436
Accrued loan interest	893,087	758,107
Related party payable	676,225	488,433
Legal settlements - current portion	50,013	180,740
Subscription payable	1,333,585	791,992
Derivative liability	177,960	118,641
Capital lease - current portion	65,810	67,071
Operating right of use - liability - current portion	68,040	82,038
Convertible notes - current portion	2,621,786	829,072
Accounts payable and accrued expenses	771,820	807,051
Total current liabilities	6,914,860	4,379,581
Legal settlements - long-term	23,953	29,226
Capital lease	24,519	38,835
Operating right of use - liability	43,984	52,724
Long-term notes payable, net	905,667	904,633
Long-term convertible notes, net of discount	1,163,547	2,323,735
Total long-term liabilities	2,161,670	3,349,153
TOTAL LIABILITIES	9,076,530	7,728,734
STOCKHOLDERS' DEFICIT
Common stock ($0.0001 par value, 1,000,000,000 shares authorized; 510,767,041 and 505,700,437 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively)	51,077	50,570
Preferred stock ($0.0001 par value, 1,000,000 shares authorized; no shares issued and outstanding as of March 31, 2021 and December 31, 2020)
Additional paid in capital	6,948,281	6,591,177
Accumulated deficit	(12,738,195)	(11,321,494)
Total stockholders' deficit	(5,738,837)	(4,679,747)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 3,337,693	$ 3,048,987

XML

Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares issued	510,767,041	505,700,437
Common stock, shares outstanding	510,767,041	505,700,437
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding

XML

Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenues
Total revenues	$ 350,815	$ 393,559
Cost of goods sold	423,435	454,987
Gross loss	(72,620)	(61,428)
Operating expenses:
Sales	3,596
General and administrative	401,412	302,559
Total operating expenses	405,008	302,559
Loss from operations	(477,628)	(363,987)
Other income (expense):
Interest expense	(421,381)	(372,322)
Change in value of derivative instruments	(59,319)	(2,110,718)
Gain (loss) on extinguishment of debt	(458,373)	74,304
Total other income (expense)	(939,073)	(2,408,736)
Loss before income taxes	(1,416,701)	(2,772,723)
Tax provision
Net loss	$ (1,416,701)	$ (2,772,723)
Net loss per share - Basic and diluted	$ (0.00)	$ (0.01)
Weighted average common stock outstanding - Basic and diluted	508,357,473	394,315,293
Bulk Sales [Member]
Revenues
Total revenues	$ 350,815	$ 393,559

XML

Condensed Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (1,416,701)	$ (2,772,723)	$ (4,229,851)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization expense	22,629	20,262
Amortization of debt discount	237,226	202,979
Change in value of derivative	59,319	2,110,718
Loss on issuance of warranty	235,103
Loss on extinguishment of debt	458,373	(74,304)
Stock-based compensation for services	9,407	95,625
Changes in operation assets and liabilities:
Accounts Receivables	(206,435)	(95,818)
Inventory	11,299	11,228
Prepaid expense and current assets	32,471
Right-of-use assets	22,947
Accounts payable	(35,231)	58,420
Other		5,000
Accrued loan interest expense	134,980	85,290
Right-of-use liability	(22,738)
Net cash (used for)/provided by used for operating activities	(261,031)	(353,323)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of land and equipment	(30,521)
Net cash used for investing activities	(30,521)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal repayment of capital lease liability	(15,577)	(13,060)
Repayment of legal liability	(136,000)
Proceeds from convertible notes, net	398,000	250,000
Proceeds from (repayment of) loans, net	(1,568)	(15,291)
Proceeds from related parties	187,792
Net cash proceeds from financing activities	432,647	221,649
NET INCREASE (DECREASE) IN CASH	141,095	(131,674)
CASH, BEGINNING BALANCE	299,895	266,607	266,607
CASH, ENDING BALANCE	440,990	134,933	$ 299,895
SUPPLEMENTAL DISCLOSURE ON NON-CASH FINANCING ACTIVITY
Cash paid for interest expense	32,667	185,820
Debt converted to common stock	51,667	640,597
Compensation paid through issuance of common stock	67,420	347,783
Notes and accrued interest converted to common stock		79,754
Reclassification of derivative liabilities to APIC		$ 423,340

XML

Condensed Statement of Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid in Capital [Member]	Accumulated Deficit [Member]	Total
Beginning Balance at Dec. 31, 2019	$ 48,632	$ 2,781,839	$ (7,264,498)	$ (4,434,027)
Beginning Balance, shares at Dec. 31, 2019	486,320,329
Shares issued for services	$ 30	106,096		106,126
Shares issued for services, shares	300,000
Shares issued for Settlement	$ 721	565,572		566,293
Shares issued for Settlement, shares	7,213,933
Net loss			(2,772,723)	(2,772,723)
Ending Balance at Mar. 31, 2020	$ 49,383	3,453,507	(10,037,221)	(6,534,331)
Ending Balance, shares at Mar. 31, 2020	493,834,262
Beginning Balance at Dec. 31, 2019	$ 48,632	2,781,839	(7,264,498)	(4,434,027)
Beginning Balance, shares at Dec. 31, 2019	486,320,329
Net loss				(4,229,851)
Ending Balance at Dec. 31, 2020	$ 50,570	6,591,177	(11,321,494)	(4,679,747)
Ending Balance, shares at Dec. 31, 2020	505,700,437
Shares issued for services	$ 140	55,804		55,944
Shares issued for services, shares	1,399,937
Shares issued for Settlement	$ 167	51,500		51,667
Shares issued for Settlement, shares	1,666,667
Shares issued upon warrant exercise	$ 200	249,800		250,000
Shares issued upon warrant exercise, shares	2,000,000
Net loss			(1,416,701)	(1,416,701)
Ending Balance at Mar. 31, 2021	$ 51,077	$ 6,948,281	$ (12,738,195)	$ (5,738,837)
Ending Balance, shares at Mar. 31, 2021	510,767,041

XML

Organization and Nature of Operations

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Nature of Operations

NOTE 1 –ORGANIZATION AND NATURE OF OPERATIONS

Grapefruit USA, Inc (“we”, “our”, “us”, “GBI”, “Grapefruit”, or “the Company”) was formed as a California corporation on August 28, 2017 and began operating in September 2017.

On July 10, 2019, Grapefruit closed the Share Exchange after the completion of all conditions subsequent contemplated by the Share Exchange Agreement among the parties thereto ( “SEA”), by which Imaging3, Inc. (“IGNG”) was acquired in a reverse acquisition (the “Acquisition”) by the former shareholders of Grapefruit, the accounting acquirer. Under the terms of the SEA executed on May 31, 2019, IGNG became obligated to issue to Grapefruit’s existing shareholders that number of newly issued restricted IGNG common shares such that the former Grapefruit shareholders (now new IGNG shareholders) will own approximately 81% of the post-Acquisition IGNG common shares and the current IGNG shareholders will retain 19% of the post-Acquisition IGNG common shares. At the time of the execution of the SEA, IGNG had approximately 85,218,249 outstanding shares of common stock. Therefore, IGNG issued to Grapefruit’s shareholders 362,979,114 IGNG common shares to Grapefruit’s current shareholder on a pro rata basis with their then-current ownership of Grapefruit of which Bradley Yourist and Daniel J. Yourist own a combined 72.26%, or approximately 259,967,136 shares. Accordingly, the financial statements are prepared using the acquisition method of accounting with GBI as the accounting acquirer and IGNG treated as the legal acquirer and accounting acquiree. Because Imaging3, Inc. did not meet the accounting definition of an operating business, having only nominal assets, the reverse merger transaction was treated as a recapitalization and no goodwill was recognized.

The Company has applied for and received our provisional distribution renewal licensure which allows us to operate through May 13, 2021. Our annual manufacturing license has been renewed by the California Department of Health. Grapefruit has not yet applied for a license to cultivate and will not until construction has begun on our cultivation facility. We own two acres of fully entitled cannabis real property located in the Coachillin’ Industrial Cultivation and Ancillary Canna-Business Park. The location within Coachillin’ allows the Company to apply for and hold every cannabis license available under the California Cannabis laws.

We intend to buildout out the real property into a distribution, manufacturing and high-tech cultivation facility to facilitate our goal to become a seed to sale, fully vertically integrated Cannabis and CBD product Company. Grapefruit’s plans include an indoor 22,000 square foot multi-tiered canopy and adjoining tissue culture rooms.

We became members of the Indian Canyon and 18th Property Association on September 19, 2017 and have an ownership interest of 1.46% based upon the 77,156 gross parcel square foot of our property located in an approximately 5.3 million square foot facility. As of December 31, 2020, the common areas continue to be built throughout the entire canna-business park and are not complete.

XML

Basis of Presentation and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”).

The unaudited financial statements as of March 31, 2021 and December 31, 2020, and for the three months ended March 31, 2021 and March 31, 2020, have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. They do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company’s audited financial statements and notes filed with the SEC for the year ended December 31, 2020.

Use of Estimates – The preparation of our financial statements in conformity with U.S. GAAP requires us to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our financial statements and the reported amounts of revenues and expenses during the periods presented.

We make our estimate of the ultimate outcome for these items based on historical trends and other information available when our financial statements are prepared. We recognize changes in estimates in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Our actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term. The company’s most significant estimates related to useful life for depreciation, the value of long-lived assets and related impairment, and provision for income taxes of property and equipment.

Inventory – Inventory is comprised of raw material, work in process and finished goods. The following sets forth selected items from our inventory as of March 31, 2021 and December 31, 2020:

	March 31, 2021		December 31, 2020
Raw material	$	62,862	$	16,891
Work in process		13,144		23,566
Finished goods		414,810		461,659
	$	490,816	$	502,116

We periodically review the value of our inventory and provide a write-down of inventory based on our assessment of the market conditions. Any write-down is charged to cost of goods sold.

Property, Plant and Equipment, net – Our property and equipment are recorded at cost. Assets held under capital leases are capitalized at the commencement of the lease at the lower of the present value of minimum lease payments at the inception of the lease or fair value. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over estimated useful lives of four to seven years, and amortization is computed using the straight-line method over the life of the applicable lease. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from our accounts and any resulting gain or loss is reflected in our consolidated statements of operations.

Land Improvements – Our land improvements are recorded at cost provided by our property association. These costs will continue to be capitalized until construction has been completed. Land improvements will not be depreciated after the construction has been completed by the property association.

Long-Lived Assets Impairment Assessment – Our long-lived assets are subject to an impairment test if there is an indicator of impairment. The carrying value and ultimate realization of these assets is dependent upon our estimates of future earnings and benefits that we expect to generate from their use. If our expectations of future results and cash flows are significantly diminished, other long-lived assets may be impaired and the resulting charge to operations may be material. When we determine that the carrying value of intangibles or other long-lived assets may not be recoverable based upon the existence of one or more indicators of impairment, we use the projected undiscounted cash flow method or realizable value to determine whether an impairment exists, and then measure the impairment using discounted cash flows.

Revenue Recognition – The Company derives revenues from the sale of product in accordance to ASC Topic 606. Revenues are recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods or services.

Revenue is recognized based on the following five step model:

- Identification of the contract with a customer

- Identification of the performance obligations in the contract

- Determination of the transaction price

- Allocation of the transaction price to the performance obligations in the contract

- Recognition of revenue when, or as, the Company satisfies a performance obligation

Performance Obligations

Sales of products are recognized when all the following criteria are satisfied: (i) a contract with an end user exists which has commercial substance; (ii) it is probable the Company will collect the amount charged to the end user; and (iii) the Company has completed its performance obligation whereby the end user has obtained control of the product. A contract with commercial substance exists once the Company receives and accepts a purchase order or once it enters into a contract with an end user. If collectability is not probable, the sale is deferred and not recognized until collection is probable or payment is received. Control of products typically transfers when title and risk of ownership of the product has transferred to the customer. For contracts with multiple performance obligations, the Company allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. The Company uses an observable price to determine the stand-alone selling price for separate performance obligations or a cost-plus margin approach when one is not available. Historically the Company’s contracts have not had multiple performance obligations. The large majority of the Company’s performance obligations are recognized at a point in time related to the sale of products.

Cost of Goods Sold – Our cost of goods sold includes the costs directly attributable to revenue recognized and includes expenses related to the production, packaging and labelling of cannabis products; personnel-related costs, fees for third-party services, such as testing and transportation costs related to our distribution services.

Basic and Diluted Net Income Per Share – Basic net income per share is based upon the weighted average number of common shares outstanding. Diluted net income per share assumes that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. During 2019, potentially dilutive securities were excluded from the computation of weighted average shares outstanding-diluted because their effect was anti-dilutive.

	March 31, 2021			December 31, 2020
Numerator:
Net income attributable to common shareholders	$	(1,416,701	)		(4,229,851	)
Denominator:
Weighted-average number of common shares outstanding during the period		508,357,473			498,230,051
Dilutive effect of stock options, warrants, and convertible promissory notes		-			-
Common stock and common stock equivalents used for diluted earnings per share	$	(0.00	)	$	(0.00	)

Derivative Financial Instruments - The Company generally does not use derivative financial instruments to hedge exposures to cash-flow risks or market-risks that may affect the fair values of its financial instruments. The Company utilizes various types of financing to fund its business needs, including convertible notes and warrants and other instruments not indexed to our stock. The Company is required to record its derivative instruments at their fair value. Changes in the fair value of derivatives are recognized in earnings in accordance with ASC 815. The Company’s only asset or liability measured at fair value on a recurring basis is its derivative liability associated with warrants to purchase common stock and convertible notes.

Fair Value of Financial Instruments – We value our financial assets and liabilities using fair value measurements. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

Level 2: Observable inputs other than prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated with observable market data.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.

The carrying amount of our cash and cash equivalents approximates fair value because of the short-term nature of the instruments. The carrying amount of our notes payable at December 31, 2019, approximates their fair values based on comparable borrowing rates available to the company. The Company evaluated the fair market value of LVCA using Level 3 inputs. From that measurement, the Company recorded an impairment of LVCA.

There have been no changes in Level 1, Level 2, and Level 3 categorizations and no changes in valuation techniques for these assets or liabilities for the three months ended March 31, 2021 and year ended December 31, 2020.

	Level 1		Level 2		Level 3		Total
Derivative Liabilities March 31, 2021	$	-	$	-	$	118,641	$	118,641
Derivative Liabilities December 31, 2020	$	-	$	-	$	118,641	$	118,641

Income Taxes – Income tax assets and liabilities are recorded using the asset and liability method. Under the asset and liability method, tax assets and liabilities are recognized for the tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as net operating loss and tax credit carryovers. Future tax assets and liabilities are measured using the enacted tax rates expected to apply when the asset is realized, or the liability settled. The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period that enactment occurs. To the extent that we do not consider it more likely than not that a future tax asset will be recovered, we will provide a valuation allowance against the excess.

We follow the provisions of ASC 740, Income Taxes. Because of ASC 740, we make a comprehensive review of our portfolio of tax positions in accordance with recognition standards established by ASC 740.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in our consolidated financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

We have created our tax provision leveraging known tax court cases involving various marijuana dispensaries and other cannabis related businesses, including the section of the IRS Tax code of 280E. The U.S. Tax Code Section 280E is the federal statute that states that a business engaging in the trafficking of a Schedule I or II controlled substance, which includes cannabis and cannabis related products, are barred from taking the tax deductions or credits in their federal tax returns which are not considered as part of the business’ cost of goods sold. Given the guidance offered by the Tax code 280E we have prepared our tax provision according to this tax code.

Interest and penalties associated with unrecognized tax benefits, if any, are classified as interest expense and penalties and are included in selling, general and administrative expenses in our consolidated statements of operations.

On December 22, 2017, the U.S. Tax Cuts and Jobs Act was enacted. U.S. tax reform introduced many changes, including lowering the U.S. corporate tax rate to 21 percent, changes in incentives, provisions to prevent U.S. base erosion and significant changes in the taxation of international income, including provisions which allow for the repatriation of foreign earnings without U.S. tax. The enactment of U.S. tax reform had no significant impact on our income taxes for the three months ended March 31, 2021 and 2020, respectively.

Research and Development Expenses – Research and development (“R&D”) costs are charged to expense as incurred. Our R&D expenses include, but are not limited to, consulting service fees and materials and supplies used in the development of our proprietary products and services.

General and Administrative Expenses – General and administrative expenses consist primarily of personnel-related costs, fees for professional and consulting services, travel costs, rent, bad debt expense, general corporate costs, and other costs of administration such as human resources, finance and administrative roles.

Commitments and Contingencies – Certain conditions may exist as of the date our financial statements are issued, which may result in a loss, but which will only be resolved when one or more future events occur or fail to occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of the legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

Net Loss Per Share – We compute net loss per share in accordance with ASC 260, Earnings per Share. Under the provisions of ASC 260, basic net loss per share includes no dilution and is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share takes into consideration shares of common stock outstanding (computed under basic net loss per share) and potentially dilutive securities that are not anti-dilutive.

Cash and Cash Equivalents – The Company considers all highly liquid investment securities with remaining maturities at the date of purchase of three months or less to be cash equivalents. Cash equivalents may be invested in money market funds, certificates of deposit or other interest-bearing accounts.

Concentration of Credit Risk – Financial instruments that potentially subject us to credit risk consist of cash. We maintain our cash with high credit quality financial institutions; at times, such balances with any one financial institution may not be insured by the FDIC.

Accounts Receivable and Revenue – The accounts receivable balance was $ 245,843 as of March 31,2021 and $39,480 as of December 31, 2020. As the March 31, 2021, 75% of accounts receivable was split between two customers. In 2020, 99% of accounts receivable consisted of one customer. During the three months ended March 31, 2021, we diversified our customer base, but still have 30% of the revenues from one customer. For the three months ended March 31, 2020, 95% of the net revenues generated with one customer.

Recently Issued Accounting Pronouncements – From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASCs are communicated through issuance of an Accounting Standards Update (“ASU”). Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on our condensed consolidated financial statements upon adoption.

Recently Issued Accounting Pronouncements Not Yet Adopted

Convertible Debt, and Derivatives and Hedging In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. ASU 2020-06 will be effective for the Company in the first quarter of 2022. The Company is currently evaluating the amended guidance and the impact on its consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements Adopted

Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). The amendments in ASU 2019-12 simplify the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes. The amendments also improve consistent application of and simplify U.S. GAAP for other areas of ASC Topic 740 by clarifying and amending existing guidance. ASU 2019-12 became effective for the Company in the first quarter of fiscal year 2021. The adoption of this standard did not have any impact on the Company’s condensed consolidated financial statements.

Equity Securities, Equity-method Investments and Certain Derivatives In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The guidance provides clarification of the interaction of rules for equity securities, the equity method of accounting and forward contracts and purchase options on certain types of securities. ASU 2020-01 became effective for the Company in the first quarter of 2021. The adoption of this standard did not have any impact on the Company’s condensed consolidated financial statements.

XML

Going Concern

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Going Concern

NOTE 3 – GOING CONCERN

Our consolidated financial statements have been prepared on a going concern basis which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. During the three months ended March 31, 2020, we incurred a net loss of $1,416,701, had a working capital deficit of $5,662,238 and had an accumulated deficit of $12,738,195 at March 31,2021. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and, or, obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations as they come due. There is no assurance that these events will be satisfactorily completed. As a result, there is doubt about our ability to continue as a going concern for one year from the issuance date of these financial statements

Management’s plan regarding this matter is to, amongst other things, seek additional equity financing by selling our equity securities and obtaining funds through the issuance of debt. We cannot be certain that funds from these sources will be available when needed or, if available, will be on terms favorable to us or to our stockholders. If we raise additional funds or settle liabilities by issuing equity securities, the percentage ownership of our stockholders may be reduced, stockholders may experience additional dilution, or such equity securities may provide for rights, preferences and/or privileges senior to those of the holders of our common stock. Our ability to execute our business plan and continue as a going concern may be adversely affected if we are unable to raise additional capital or operate profitably.

On May 31, 2019, the Company executed the Stock Purchase Agreement (“SPA”) with Auctus pursuant to the terms of which the Company agreed to sell $4,000,000 of the Notes and issue $6,200,000 of callable warrants (the “Warrants” and, together with the Notes, the “Securities”) to Auctus. Auctus is the Selling Security Holder. In addition, on May 31, 2019, we also entered into a registration rights agreement with Auctus (the “Registration Rights Agreement”) whereby we are obligated to file a registration statement to register the resale of the shares underlying the Securities. On July 25, 2019 (as amended on January 17, 2020), a registration statement was filed to comply with the Registration Rights Agreement . Pursuant to the SPA, Auctus became obligated to purchase the $4,000,000 of Notes from Grapefruit in four tranches as follows: $600,000 at the SPA closing, which was funded on June 6, 2019; the second tranche of $1,422,750 on the day IGNG filed the registration statement, which was funded on August 16, 2019; the third tranche of $1,030,000 was funded the day the SEC declares the registration statement effective and the fourth tranche of $1 million was funded 90 days after effectiveness. As of December 31, 2020, all tranches of this financing were completed. The Company has received gross proceeds of $4,052,750.

In the first quarter of 2021, Auctus exercised 2,000,000 warrants at $0.125, for proceeds to the Company of $250,000 and issued a $450,000 convertible note to Auctus.

XML

Right of Use Asset and Liability

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Right of Use Asset and Liability

NOTE 4 – RIGHT OF USE ASSET AND LIABILITY

During 2018 we reviewed various facilities and identified a suitable, compliant cannabis facility located in the city of Dessert Hot Springs, to build our manufacturing and distribution facility. This commercial park is owned and operated by Coachillin’ Holding LLC and we purchased land rights from Coachillin’ Holding LLC on December 21, 2017 to secure our specific location within their commercial park.

Construction of our facility has not been completed, and we have been provided an estimated completion date of September 2022. In order for us to obtain California cannabis licensing from state and local officials we entered into an operating lease with Coachillin’ Holdings to temporarily occupy an area near the location of our permanent location within the Coachillin’ commercial park.

We entered into this operating land lease agreement with Coachillin’ Holdings LLC on September 1, 2018 to rent approximately 2,268 square feet of leasable land area. The operating lease renews annually and has a base rent of $0.50 square foot of leasable area of the designated premise assigned by Coachillin’ Holdings LLC. We paid an initial non-refundable prepaid rent of $3,402 which was expensed during the three months following the signed agreement, and we will continue to pay $1,134 monthly. We entered into this operating agreement in order to obtain our provisional cannabis licenses for manufacturing and distribution during 2020.

The Company entered into a 36-month lease agreement for office space in July 2019 at $6,963 a month, with an approximate 2% increase annually.

The Company utilizes the incremental borrowing rate in determining the present value of lease payments unless the implicit rate is readily determinable. The Company used an estimated incremental borrowing rate of 6% to estimate the present value of the right of use liability.

The Company has right-of-use assets of $108,839, right-of-use liability of $112,025 as of March 31, 2021. Operating lease expense for the three months ended March 31, 2020 was $24,932.

The following table provides the maturities of lease liabilities at March 31, 2021:

Maturity of Lease Liabilities
2021		71,748
2022		44,756
2023		-
2024		-
2025
2026 and thereafter		-
Total future undiscounted lease payments		116,504
Less: Interest		(4,479	)
Present value of lease liabilities	$	112,025

XML

Inventory

3 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

Inventory

NOTE 5 – INVENTORY

At March 31, 2021 and December 31, 2020, our inventory was, as follows:

	March 31, 2021		December 31, 2020
Raw material	$	62,862	$	16,891
Work in process		13,144		23,566
Finished goods		414,810		461,659
	$	490,816	$	502,116

We periodically review the value of our inventory and provide a write-down of inventory based on our assessment of the market conditions. Any write-down is charged to cost of goods sold.

XML

Property, Plant and Equipment, Net

3 Months Ended

Mar. 31, 2021

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment, Net

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net of accumulated depreciation and amortization, at March 31, 2021 and December 31, 2020 was as follows:

	March 31, 2021			December 31, 2020
Vehicle	$	41,142		$	41,142
Extraction equipment		296,748			287,028
Extraction laboratory		126,707			126,707
Warehouse facility		50,158			50,158
Land and land improvement/development		1,476,996			1,456,194
Accumulated depreciation and amortization		(192,928	)		(170,299	)
Property, plant and equipment	$	1,798,823		$	1,790,930

The Company acquired the extraction equipment, laboratory, and warehouse facility during 2018 and 2019 and made preparations and final testing for future production. Final preparations for certain extraction and warehouse work were completed, and these related assets were placed in service on April 1, 2019, at which time we commenced depreciating this asset.

The amount of related depreciation expense for the three months ended March 31, 2021 and 2020 is $22,629 and $19,622, respectively.

XML

Capital Lease Payable

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Capital Lease Payable

NOTE 7 – CAPITAL LEASE PAYABLE

Capital lease payable consists a capital lease agreement entered into in April 2018 to finance the purchase of various lab and manufacturing equipment. The outstanding balance on the 48-month installment capital lease was $148,511 and $161,570 as of March 31, 2021 and December 31, 2020, respectively. The terms of the 48-month capital lease specify monthly payments of $4,575. The interest rate implicit in the lease is about 15% and the maturity date is February 2022.

In addition, the Company entered into additional 48-month leases in May 2019 for production facilities and storage of product. Monthly payments for the facility and storage totals $1,935.

A summary of minimum lease payments on capital lease payable for future years is as follows:

	March 31, 2021
Remainder 2021	$	58,590
2022		32,337
2023		7,740
2024		-
2025		-
Thereafter		-
Total minimum lease payments		98,667
Less: amount representing interest		(8,338	)
Capital lease liability	$	90,329

XML

Notes Payable

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Notes Payable

NOTE 8 – NOTES PAYABLE

In October 2017, in connection with our purchase of two acres of fully entitled cannabis real property located in the Coachillin’ Industrial Cultivation and Ancillary Canna-Business Park, the Company issued a first and second trust deed note in the amounts of $700,000 and $200,000, respectively. The first and second trust deed notes are long-term notes and are interest only notes, at 13.0%, and mature in August 2022, with the principal payment due at maturity. For the $700,000 loan, the monthly payment is approximately $7,500. For the $200,000 loan, the monthly payment is approximately $2,200. The 1st and 2nd trust deeds are secured by the land as well as property owned by two officers of the company and three other related parties. Also, each party has personally guaranteed or pledged additional collateral. The notes include a debt discount as of March 31, 2021 of $30,600.

In April 2018, the Company issued a note due 60 days after funding with a principal amount of $250,000 and interest totaling $125,000. As of March 31, 2021, the note has not been repaid and was amended to carry an additional 10% interest rate of the total balance due, Accrued interest for this loan totals $190,625. The note is past due. Two officers of the Company have personally guaranteed the loan.

In September 2019, the Company issued another note of $102,569 to an unrelated party with 5% interest, which was repaid in full on October 20, 2020.

XML

Convertible Notes Payable

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Convertible Notes Payable

NOTE 9 – CONVERTIBLE NOTES PAYABLE

In August 2020, 9,100,380 shares were issued to settle $80,754 debt of a note and accrued interest resulting in a loss of $5,225.

Amortization of note discounts, which is included in interest expense, amounted to $353,811 during the three months ended March 31, 2021 and $278,204 for the three months ended March 31, 2020.

Grapefruit acquired convertible notes in its acquisition of Imaging3, Inc. on July 10, 2019. (See Note 15.) On May 31, 2019, the Company executed the SPA with Auctus pursuant to the terms of which the Company agreed to sell $4,000,000 of the Notes and issue $6,200,000 of callable warrants (the “Warrants” and, together with the Notes, the “Securities”) to Auctus. Auctus is the Selling Security Holder. In addition, on May 31, 2019, we also entered into a registration rights agreement with Auctus (the “Registration Rights Agreement”) whereby we are obligated to file a registration statement to register the resale of the shares underlying the Securities. On July 25, 2019 (as amended on January 17, 2020), a registration statement was filed to comply with the Registration Rights Agreement . Pursuant to the SPA, Auctus became obligated to purchase the $4,000,000 of Notes from Grapefruit in four tranches as follows: $600,000 at the SPA closing, which was funded on June 6, 2019; the second tranche of $1,422,750 on the day IGNG filed the registration statement, which was funded on August 16, 2019; the third tranche of $1,030,000 was funded the day the SEC declares the registration statement effective and the fourth tranche of $1 million was funded 90 days after effectiveness. As of December 31, 2020, all tranches of this financing were completed. The Company has received gross proceeds of $4,052,750. The Notes have a two-year term and will bear interest at 10%.

On April 15, 2021, the company renegotiated the debt agreement related to these notes modifying the convertible notes conversion price from a variable rate to a fixed rate conversion price with an effective date of December 31, 2020. As a result of the agreement, the Company recorded a noncash expense for the change in the value of derivative instruments of $40,372,883, which was simultaneously offset by a noncash gain of $39,640,477 from the extinguishment of debt, resulting a net loss of $753,699 from the renegotiation of the debt.

On February 26, 2021, the company issued a $450,000 convertible to Auctus bearing 12% interest and 1-year maturity date. Principal payments shall be made in six (6) installments each in the amount of $75,000 commencing one hundred and eighty (180) days following the Issue Date and continuing thereafter each thirty (30) days for six (6) months. Notwithstanding the forgoing, the final payment of Principal and Interest shall be due on the Maturity Date. The conversion price set at $0.075.

In addition, the Company has eleven other convertible notes comprising $296,000 outstanding and they are currently in default. The interest on these notes varies from 5-10%. As of March 12, 2021, we are in the process of converting eight of the notes amounting to $241,000.

XML

Notes Payable, Related Party Notes Payables, And Operating Lease - Related Party

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

Notes Payable, Related Party Notes Payables, And Operating Lease - Related Party

NOTE 10 – NOTES PAYABLE, RELATED PARTY NOTES PAYABLES, AND OPERATING LEASE – RELATED PARTY

Notes payable to officers and directors as of March 31, 2021 and December 31, 2020 are due on demand and consisted of the following:

	March 31, 2021		December 31, 2020
Payable to an officer and director	$	82,056	$	82,056
Payable to an individual affiliate of an officer and director		40,000		40,000
Payable to a company affiliate to an officer and director		554,169		366,377
	$	676,225	$	488,433

Notes payables bear interest at 10%.

A related party leased two eco-pods in April 2019 and May 2019, which are refurbished shipping containers, located on this specific parcel within Coachillin’. The lease is treated as an operating lease and payment responsibility is ultimately the responsibility of the related party. The Company assumed these lease payment obligations in May 2019. The monthly payments are $1,055 and $880, for the duration of the lease terms of four and five years, respectively.

XML

Equity

3 Months Ended

Mar. 31, 2021

Equity [Abstract]

Equity

NOTE 11 – EQUITY

Preferred Stock

The Company has authorized 1,000,000 shares of $0.0001 par value preferred stock. As of March 31, 2021, and December 31, 2020, there are no shares of preferred stock outstanding.

Common Stock

The Company is authorized to issue 1,000,000,000 shares of $0.0001 par value common stock.

During the three months ended March 31, 2021 the Company issued a total of 1,399,937 shares were issued for services rendered valued at $55,945; 1,666,667 shares were issued related to for a settlement valued at $51,667; and 2,000,000 shares were issued for warrant exercised at $0.125.

As of March 31, 2021, there were approximately 613 record holders of our common stock, not including shares held in “street name” in brokerage accounts which is unknown. As of March 31, 2021, there were 510,767,041 shares of our common stock outstanding on record.

Stock Option Plan

During 2014, the Board of Directors adopted, and the shareholders approved, the 2014 Stock Option Plan under which a total of 1,811,401 shares of common stock had been reserved for issuance. The 2014 Stock Option Plan will terminate in September 2024.

Stock Options

As of March 31, 2021, employees of the Company hold options to purchase 250,000 shares of common stock at an exercise price of $1.00.

Transactions in FY 2021	Quantity		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life
Outstanding, December 31, 2020		250,000	$	1.00		4.57
Granted
Exercised		-
Cancelled/Forfeited		-
Outstanding, March 31, 2021		250,000	$	1.00		4.32
Exercisable, March 31, 2021		250,000	$	1.00		4.32

The weighted average remaining contractual life of options outstanding issued under the Plan was 4.32 years at March 31, 2021.

XML

Warrants

3 Months Ended

Mar. 31, 2021

Warrants and Rights Note Disclosure [Abstract]

Warrants

NOTE 12 — WARRANTS

Following is a summary of warrants outstanding at March 31, 2021:

Number of Warrants	Exercise Price		Expiration Date
2,250,000	$	0.20	July 2023
37,500	$	0.10	April 2022
500,00	$	0.10	August 2022
575,000	$	0.10	April 2023
125,000	$	0.10	May 2023
162,500	$	0.10	August 2023
2,800,000	$	0.40	May 2022
302,776	$	0.10	January 2024
12,000,000	$	0.10	March 2021
2,160,000	$	0.10	June 2021
14,000,000	$	0.125	May 2021
15,000,000	$	0.15	May 2021
8,000,000	$	0.25	May 2021

Grapefruit recorded warrants to issue common stock upon exercise in its acquisition of Imaging3, Inc. on July 10, 2019. (See Note 15.) As part of the SEA, the Company also issued 16,000,000 warrants to purchase 16,000,000 shares of the Company’s common stock at an exercise price of $0.125 per share, 15,000,000 warrants to purchase 15,000,000 shares of the Company’s common stock at an exercise price of $0.15 per share, 8,000,000 warrants to purchase 8,000,000 shares of the Company’s common stock at an exercise price of $0.25 per share for a period of two year from the date of issuance.

In addition to the Notes in connection with the SPA agreement, IGNG issued to the Investor a warrant to purchase 16,000,000 shares of its common stock at $0.125 per share, a warrant to purchase 15,000,000 shares at $0.15 per share and a warrant to purchase 8,000,000 shares at $0.25 per share (collectively, the “Warrants”). The Warrants are “cash only” and are callable if IGNG stock trades on the OTCQB at 200% or more of a given exercise price for 5 consecutive days.

On February 26, 2021, 2,250,000 warrants were issue with an exercise price of $0.20 in relation to the convertible note (See Note 9 Convertible note payable). On April 15, 2021 as part of the renegotiated terms of the convertible notes, 20,000,000 additional warrants were issued at an exercise price of $0.075.

XML

Derivative Liabilities

3 Months Ended

Mar. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Liabilities

NOTE 13 — DERIVATIVE LIABILITIES

Grapefruit recorded derivative instruments in its acquisition of Imaging3, Inc. on July 10, 2019. (See Note 15.) The Company’s only asset or liability measured at fair value on a recurring basis was its derivative liability associated with related warrants to purchase common stock and the conversion features embedded in convertible promissory notes.

In connection with financing transactions, the Company issued warrants to purchase common stock and convertible promissory notes. These instruments included provisions that could result in a reduced exercise price based on specified full-ratchet anti-dilution provisions. The “reset” provisions were triggered in the event the Company subsequently issued common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than contractually specified amounts. Upon triggering the “reset” provisions, the exercise / conversion price of the instrument will be reduced. Accordingly, pursuant to ASC 815, these instruments were not considered to be solely indexed to the Company’s own stock and were not afforded equity treatment.

On April 15, 2021, the company renegotiated conversion terms on $4,502,750 of convertible notes with Auctus. All variable conversion prices were replaced with a fixed conversion price of $0.075. In addition, the Company issued an additional 20,000,000 warrants with an exercise price of $0.075 per share.

The following table summarizes activity in the Company’s derivative liability during the three-month period ended March 31, 2021:

12-31-20 Balance	$	118,641
Creation/acquisition		-
Reclassification of equity		-
Change in Value		59,319
3-31-21 Balance	$	177,960

The Company classifies the fair value of these derivative liabilities under level 3 of the fair value hierarchy of financial instruments. The fair value of the derivative liability was calculated using a Black Scholes model. The Company’s stock price and estimates of volatility are the most sensitive inputs in validation of assets and liabilities at fair value. The liabilities were measured using the following assumptions:

Term	1-3 years
Dividend Yield		0	%
Risk-free rate		0.07% - 0.16	%
Volatility		167	%

XML

Investments

3 Months Ended

Mar. 31, 2021

Investments in and Advances to Affiliates [Abstract]

Investments

NOTE 14 – INVESTMENTS

Investment in Hemp

In September 2019, the Company invested in hemp product that was purchased and stored by a third party. The Company expects to sell the product by the third quarter of 2021.

XML

Commitments and Contingencies

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 15 – COMMITMENTS AND CONTINGENCIES

Alpha Capital Anstalt and Brio Capital Master Fund, LTD

On September 13, 2017, Alpha Capital Anstalt and Brio Capital Master Fund, LTD, two minority members of a group of investors in the Company (the “Plaintiff”) filed a lawsuit seeking damages and injunctive relief in the United States District Court for the Southern District of New York claiming that the Company breached certain Note and Warrant agreements among the parties to the action. The holders of the majority of the investment involved in the above lawsuit chose not to join in the lawsuit and have informed the Company that they believe the lawsuit to be baseless. On November 21, 2017, the Court denied the Plaintiff’s request for injunctive relief against the Company. As a result, the case essentially became an action for money damages against the Company, which the Company believed to be without merit and defended vigorously. However, on July 27, 2018 United States District Court for the Southern District of New York granted the plaintiffs motion for summary judgement, awarding them approximately $1.4 million dollars. On April 15, 2019 the Company executed a settlement agreement (the “Settlement Agreement”) with the defendants to settle the matter by agreeing to pay the defendants an aggregate of $200,000 and issuing them an aggregate of 7,705,698 of the Company’s common shares (subject to certain possible adjustments to the amount of shares to be issued to the Defendants by the Company). The Company paid this $200,000 to the defendants and issued the 7,705,698 shares to the defendants in the fourth quarter of 2019. Subsequently, the defendant’s claimed the aforementioned share adjustment had been triggered and made a demand that the Company issue additional shares pursuant to the terms of the Settlement. In April 2021, the Company issued an additional aggregate of 2,822,654 shares the Company’s stock to these defendants in final settlement of the dispute.

Galileo Surgery Center LP/Cypress Ambulatory Surgery Center LP vs Imaging3, Inc. Settlement

The Company came to a settlement with Galileo Surgery Center LP/Cypress Ambulatory Surgery Center LP (“Galileo”) for $75,572 with an interest rate of 10%, requiring payments of $2,000 per month beginning in August 2019 until paid in full. The company is currently behind on payments.

XML

Subsequent Events

3 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

NOTE 16 – SUBSEQUENT EVENTS

On April 15, 2021, the company renegotiated conversion terms on $4,502,750 of convertible notes with Auctus. All variable conversion prices were replaced with a fixed conversion price of $0.075. In addition, the Company issued an additional 20,000,000 warrants with an exercise price of $0.075 per share.

On April 19, 2021, Alpha Capital Anstalt and Brio Capital Master Fund, LTD were issued 2,822,654 shares pursuant to the true-up provision in their settlement (See Note 15 Commitments and Contingencies).

In May 2021, 3,920,865 shares were issued to Greenberg Glusker Fields Claman & Machtinger LLP pursuant to the make-whole provision (See Note 15 Commitments and Contingencies).

XML

Basis of Presentation and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates – The preparation of our financial statements in conformity with U.S. GAAP requires us to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our financial statements and the reported amounts of revenues and expenses during the periods presented.

We make our estimate of the ultimate outcome for these items based on historical trends and other information available when our financial statements are prepared. We recognize changes in estimates in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Our actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term. The company’s most significant estimates related to useful life for depreciation, the value of long-lived assets and related impairment, and provision for income taxes of property and equipment.

Inventory

Inventory – Inventory is comprised of raw material, work in process and finished goods. The following sets forth selected items from our inventory as of March 31, 2021 and December 31, 2020:

	March 31, 2021		December 31, 2020
Raw material	$	62,862	$	16,891
Work in process		13,144		23,566
Finished goods		414,810		461,659
	$	490,816	$	502,116

We periodically review the value of our inventory and provide a write-down of inventory based on our assessment of the market conditions. Any write-down is charged to cost of goods sold.

Property, Plant and Equipment, Net

Property, Plant and Equipment, net – Our property and equipment are recorded at cost. Assets held under capital leases are capitalized at the commencement of the lease at the lower of the present value of minimum lease payments at the inception of the lease or fair value. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over estimated useful lives of four to seven years, and amortization is computed using the straight-line method over the life of the applicable lease. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from our accounts and any resulting gain or loss is reflected in our consolidated statements of operations.

Land Improvements

Land Improvements – Our land improvements are recorded at cost provided by our property association. These costs will continue to be capitalized until construction has been completed. Land improvements will not be depreciated after the construction has been completed by the property association.

Long-Lived Assets Impairment Assessment

Long-Lived Assets Impairment Assessment – Our long-lived assets are subject to an impairment test if there is an indicator of impairment. The carrying value and ultimate realization of these assets is dependent upon our estimates of future earnings and benefits that we expect to generate from their use. If our expectations of future results and cash flows are significantly diminished, other long-lived assets may be impaired and the resulting charge to operations may be material. When we determine that the carrying value of intangibles or other long-lived assets may not be recoverable based upon the existence of one or more indicators of impairment, we use the projected undiscounted cash flow method or realizable value to determine whether an impairment exists, and then measure the impairment using discounted cash flows.

Revenue Recognition

Revenue Recognition – The Company derives revenues from the sale of product in accordance to ASC Topic 606. Revenues are recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods or services.

Revenue is recognized based on the following five step model:

- Identification of the contract with a customer

- Identification of the performance obligations in the contract

- Determination of the transaction price

- Allocation of the transaction price to the performance obligations in the contract

- Recognition of revenue when, or as, the Company satisfies a performance obligation

Performance Obligations

Sales of products are recognized when all the following criteria are satisfied: (i) a contract with an end user exists which has commercial substance; (ii) it is probable the Company will collect the amount charged to the end user; and (iii) the Company has completed its performance obligation whereby the end user has obtained control of the product. A contract with commercial substance exists once the Company receives and accepts a purchase order or once it enters into a contract with an end user. If collectability is not probable, the sale is deferred and not recognized until collection is probable or payment is received. Control of products typically transfers when title and risk of ownership of the product has transferred to the customer. For contracts with multiple performance obligations, the Company allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. The Company uses an observable price to determine the stand-alone selling price for separate performance obligations or a cost-plus margin approach when one is not available. Historically the Company’s contracts have not had multiple performance obligations. The large majority of the Company’s performance obligations are recognized at a point in time related to the sale of products.

Cost of Goods Sold

Cost of Goods Sold – Our cost of goods sold includes the costs directly attributable to revenue recognized and includes expenses related to the production, packaging and labelling of cannabis products; personnel-related costs, fees for third-party services, such as testing and transportation costs related to our distribution services.

Basic and Diluted Net Income Per Share

Basic and Diluted Net Income Per Share – Basic net income per share is based upon the weighted average number of common shares outstanding. Diluted net income per share assumes that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. During 2019, potentially dilutive securities were excluded from the computation of weighted average shares outstanding-diluted because their effect was anti-dilutive.

	March 31, 2021			December 31, 2020
Numerator:
Net income attributable to common shareholders	$	(1,416,701	)		(4,229,851	)
Denominator:
Weighted-average number of common shares outstanding during the period		508,357,473			498,230,051
Dilutive effect of stock options, warrants, and convertible promissory notes		-			-
Common stock and common stock equivalents used for diluted earnings per share	$	(0.00	)	$	(0.00	)

Derivative Financial Instruments

Derivative Financial Instruments - The Company generally does not use derivative financial instruments to hedge exposures to cash-flow risks or market-risks that may affect the fair values of its financial instruments. The Company utilizes various types of financing to fund its business needs, including convertible notes and warrants and other instruments not indexed to our stock. The Company is required to record its derivative instruments at their fair value. Changes in the fair value of derivatives are recognized in earnings in accordance with ASC 815. The Company’s only asset or liability measured at fair value on a recurring basis is its derivative liability associated with warrants to purchase common stock and convertible notes.

Fair Value of Financial Instruments

Fair Value of Financial Instruments – We value our financial assets and liabilities using fair value measurements. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

Level 2: Observable inputs other than prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated with observable market data.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.

The carrying amount of our cash and cash equivalents approximates fair value because of the short-term nature of the instruments. The carrying amount of our notes payable at December 31, 2019, approximates their fair values based on comparable borrowing rates available to the company. The Company evaluated the fair market value of LVCA using Level 3 inputs. From that measurement, the Company recorded an impairment of LVCA.

There have been no changes in Level 1, Level 2, and Level 3 categorizations and no changes in valuation techniques for these assets or liabilities for the three months ended March 31, 2021 and year ended December 31, 2020.

	Level 1		Level 2		Level 3		Total
Derivative Liabilities March 31, 2021	$	-	$	-	$	118,641	$	118,641
Derivative Liabilities December 31, 2020	$	-	$	-	$	118,641	$	118,641

Income Taxes

Income Taxes – Income tax assets and liabilities are recorded using the asset and liability method. Under the asset and liability method, tax assets and liabilities are recognized for the tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as net operating loss and tax credit carryovers. Future tax assets and liabilities are measured using the enacted tax rates expected to apply when the asset is realized, or the liability settled. The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period that enactment occurs. To the extent that we do not consider it more likely than not that a future tax asset will be recovered, we will provide a valuation allowance against the excess.

We follow the provisions of ASC 740, Income Taxes. Because of ASC 740, we make a comprehensive review of our portfolio of tax positions in accordance with recognition standards established by ASC 740.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in our consolidated financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

We have created our tax provision leveraging known tax court cases involving various marijuana dispensaries and other cannabis related businesses, including the section of the IRS Tax code of 280E. The U.S. Tax Code Section 280E is the federal statute that states that a business engaging in the trafficking of a Schedule I or II controlled substance, which includes cannabis and cannabis related products, are barred from taking the tax deductions or credits in their federal tax returns which are not considered as part of the business’ cost of goods sold. Given the guidance offered by the Tax code 280E we have prepared our tax provision according to this tax code.

Interest and penalties associated with unrecognized tax benefits, if any, are classified as interest expense and penalties and are included in selling, general and administrative expenses in our consolidated statements of operations.

On December 22, 2017, the U.S. Tax Cuts and Jobs Act was enacted. U.S. tax reform introduced many changes, including lowering the U.S. corporate tax rate to 21 percent, changes in incentives, provisions to prevent U.S. base erosion and significant changes in the taxation of international income, including provisions which allow for the repatriation of foreign earnings without U.S. tax. The enactment of U.S. tax reform had no significant impact on our income taxes for the three months ended March 31, 2021 and 2020, respectively.

Research and Development Expenses

Research and Development Expenses – Research and development (“R&D”) costs are charged to expense as incurred. Our R&D expenses include, but are not limited to, consulting service fees and materials and supplies used in the development of our proprietary products and services.

General and Administrative Expenses

General and Administrative Expenses – General and administrative expenses consist primarily of personnel-related costs, fees for professional and consulting services, travel costs, rent, bad debt expense, general corporate costs, and other costs of administration such as human resources, finance and administrative roles.

Commitments and Contingencies

Commitments and Contingencies – Certain conditions may exist as of the date our financial statements are issued, which may result in a loss, but which will only be resolved when one or more future events occur or fail to occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of the legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

Net Loss Per Share

Net Loss Per Share – We compute net loss per share in accordance with ASC 260, Earnings per Share. Under the provisions of ASC 260, basic net loss per share includes no dilution and is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share takes into consideration shares of common stock outstanding (computed under basic net loss per share) and potentially dilutive securities that are not anti-dilutive.

Cash and Cash Equivalents

Cash and Cash Equivalents – The Company considers all highly liquid investment securities with remaining maturities at the date of purchase of three months or less to be cash equivalents. Cash equivalents may be invested in money market funds, certificates of deposit or other interest-bearing accounts.

Concentration of Credit Risk

Concentration of Credit Risk – Financial instruments that potentially subject us to credit risk consist of cash. We maintain our cash with high credit quality financial institutions; at times, such balances with any one financial institution may not be insured by the FDIC.

Accounts Receivable and Revenue

Accounts Receivable and Revenue – The accounts receivable balance was $ 245,843 as of March 31,2021 and $39,480 as of December 31, 2020. As the March 31, 2021, 75% of accounts receivable was split between two customers. In 2020, 99% of accounts receivable consisted of one customer. During the three months ended March 31, 2021, we diversified our customer base, but still have 30% of the revenues from one customer. For the three months ended March 31, 2020, 95% of the net revenues generated with one customer.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements – From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASCs are communicated through issuance of an Accounting Standards Update (“ASU”). Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on our condensed consolidated financial statements upon adoption.

Recently Issued Accounting Pronouncements Not Yet Adopted

Convertible Debt, and Derivatives and Hedging In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. ASU 2020-06 will be effective for the Company in the first quarter of 2022. The Company is currently evaluating the amended guidance and the impact on its consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements Adopted

Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). The amendments in ASU 2019-12 simplify the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes. The amendments also improve consistent application of and simplify U.S. GAAP for other areas of ASC Topic 740 by clarifying and amending existing guidance. ASU 2019-12 became effective for the Company in the first quarter of fiscal year 2021. The adoption of this standard did not have any impact on the Company’s condensed consolidated financial statements.

Equity Securities, Equity-method Investments and Certain Derivatives In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The guidance provides clarification of the interaction of rules for equity securities, the equity method of accounting and forward contracts and purchase options on certain types of securities. ASU 2020-01 became effective for the Company in the first quarter of 2021. The adoption of this standard did not have any impact on the Company’s condensed consolidated financial statements.

XML

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Schedule of Inventory

At March 31, 2021 and December 31, 2020, our inventory was, as follows:

	March 31, 2021		December 31, 2020
Raw material	$	62,862	$	16,891
Work in process		13,144		23,566
Finished goods		414,810		461,659
	$	490,816	$	502,116

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

During 2019, potentially dilutive securities were excluded from the computation of weighted average shares outstanding-diluted because their effect was anti-dilutive.

	March 31, 2021			December 31, 2020
Numerator:
Net income attributable to common shareholders	$	(1,416,701	)		(4,229,851	)
Denominator:
Weighted-average number of common shares outstanding during the period		508,357,473			498,230,051
Dilutive effect of stock options, warrants, and convertible promissory notes		-			-
Common stock and common stock equivalents used for diluted earnings per share	$	(0.00	)	$	(0.00	)

Summary of Derivative Liabilities

There have been no changes in Level 1, Level 2, and Level 3 categorizations and no changes in valuation techniques for these assets or liabilities for the three months ended March 31, 2021 and year ended December 31, 2020.

	Level 1		Level 2		Level 3		Total
Derivative Liabilities March 31, 2021	$	-	$	-	$	118,641	$	118,641
Derivative Liabilities December 31, 2020	$	-	$	-	$	118,641	$	118,641

XML

Right of Use Asset and Liability (Tables)

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Schedule of Maturities of Lease Liabilities

The following table provides the maturities of lease liabilities at March 31, 2021:

Maturity of Lease Liabilities
2021		71,748
2022		44,756
2023		-
2024		-
2025
2026 and thereafter		-
Total future undiscounted lease payments		116,504
Less: Interest		(4,479	)
Present value of lease liabilities	$	112,025

XML

Inventory (Tables)

3 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

Schedule of Inventory

At March 31, 2021 and December 31, 2020, our inventory was, as follows:

	March 31, 2021		December 31, 2020
Raw material	$	62,862	$	16,891
Work in process		13,144		23,566
Finished goods		414,810		461,659
	$	490,816	$	502,116

XML

Property, Plant and Equipment, Net (Tables)

3 Months Ended

Mar. 31, 2021

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment, Net

Property, plant and equipment, net of accumulated depreciation and amortization, at March 31, 2021 and December 31, 2020 was as follows:

	March 31, 2021			December 31, 2020
Vehicle	$	41,142		$	41,142
Extraction equipment		296,748			287,028
Extraction laboratory		126,707			126,707
Warehouse facility		50,158			50,158
Land and land improvement/development		1,476,996			1,456,194
Accumulated depreciation and amortization		(192,928	)		(170,299	)
Property, plant and equipment	$	1,798,823		$	1,790,930

XML

Capital Lease Payable (Tables)

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Summary of Minimum Lease Payments on Capital Lease

A summary of minimum lease payments on capital lease payable for future years is as follows:

	March 31, 2021
Remainder 2021	$	58,590
2022		32,337
2023		7,740
2024		-
2025		-
Thereafter		-
Total minimum lease payments		98,667
Less: amount representing interest		(8,338	)
Capital lease liability	$	90,329

XML

Notes Payable, Related Party Notes Payables, and Operating Lease - Related Party (Tables)

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

Schedule of Notes Payable to Officers and Directors

Notes payable to officers and directors as of March 31, 2021 and December 31, 2020 are due on demand and consisted of the following:

	March 31, 2021		December 31, 2020
Payable to an officer and director	$	82,056	$	82,056
Payable to an individual affiliate of an officer and director		40,000		40,000
Payable to a company affiliate to an officer and director		554,169		366,377
	$	676,225	$	488,433

XML

Equity (Tables)

3 Months Ended

Mar. 31, 2021

Equity [Abstract]

Schedule of Stock Options Activity

As of March 31, 2021, employees of the Company hold options to purchase 250,000 shares of common stock at an exercise price of $1.00.

Transactions in FY 2021	Quantity		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life
Outstanding, December 31, 2020		250,000	$	1.00		4.57
Granted
Exercised		-
Cancelled/Forfeited		-
Outstanding, March 31, 2021		250,000	$	1.00		4.32
Exercisable, March 31, 2021		250,000	$	1.00		4.32

XML

Warrants (Tables)

3 Months Ended

Mar. 31, 2021

Warrants and Rights Note Disclosure [Abstract]

Summary of Warrants Outstanding

Following is a summary of warrants outstanding at March 31, 2021:

Number of Warrants	Exercise Price		Expiration Date
2,250,000	$	0.20	July 2023
37,500	$	0.10	April 2022
500,00	$	0.10	August 2022
575,000	$	0.10	April 2023
125,000	$	0.10	May 2023
162,500	$	0.10	August 2023
2,800,000	$	0.40	May 2022
302,776	$	0.10	January 2024
12,000,000	$	0.10	March 2021
2,160,000	$	0.10	June 2021
14,000,000	$	0.125	May 2021
15,000,000	$	0.15	May 2021
8,000,000	$	0.25	May 2021

XML

Derivative Liabilities (Tables)

3 Months Ended

Mar. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Derivative Liability

The following table summarizes activity in the Company’s derivative liability during the three-month period ended March 31, 2021:

12-31-20 Balance	$	118,641
Creation/acquisition		-
Reclassification of equity		-
Change in Value		59,319
3-31-21 Balance	$	177,960

Schedule of Assumptions Used

The liabilities were measured using the following assumptions:

Term	1-3 years
Dividend Yield		0	%
Risk-free rate		0.07% - 0.16	%
Volatility		167	%

XML

Organization and Nature of Operations (Details Narrative)	Jul. 10, 2019 ft² shares	Mar. 31, 2021 shares	Dec. 31, 2020 shares	Sep. 19, 2017 ft²
Number of common stock shares outstanding		510,767,041	505,700,437
Area of land | ft²	22,000
18th Property Association [Member]
Ownership percentage				1.46%
Area of land | ft²				5,300,000
Area of gross parcel property | ft²				77,156
Grapefruit Boulevard Investments, Inc. [Member] | Share Exchange Agreement [Member] | Post-Acquisition [Member]
Number of common stock shares outstanding	85,218,249
Grapefruit Boulevard Investments, Inc. [Member] | Share Exchange Agreement [Member] | New Shareholders [Member] | Post-Acquisition [Member]
Acquisition ownership percentage	81.00%
Grapefruit Boulevard Investments, Inc. [Member] | Share Exchange Agreement [Member] | Current Shareholders [Member] | Post-Acquisition [Member]
Acquisition ownership percentage	19.00%
Grapefruit Boulevard Investments, Inc. [Member] | Share Exchange Agreement [Member] | Grapefruit's Shareholders Member | Post-Acquisition [Member]
Number of shares issued	362,979,114
Grapefruit Boulevard Investments, Inc. [Member] | Share Exchange Agreement [Member] | Bradley Yourist and Daniel J. Yourist [Member]
Number of shares issued	259,967,136
Ownership percentage	72.26%

XML

Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Income tax likelihood, description	More than 50 percent
Federal statutory income tax rate	21.00%
Accounts receivable	$ 245,843		$ 39,480
Customer Two [Member] | Accounts Receivable [Member]
Concentration risk percentage	75.00%
One Customer [Member] | Revenues [Member]
Concentration risk percentage	30.00%	95.00%
One Customer [Member] | Accounts Receivable [Member]
Concentration risk percentage		99.00%
Minimum [Member]
Property plant and equipment estimated useful lives	4 years
Maximum [Member]
Property plant and equipment estimated useful lives	7 years

XML

Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Inventory (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Inventory Disclosure [Abstract]
Raw material	$ 62,862	$ 16,891
Work in process	13,144	23,566
Finished goods	414,810	461,659
Total inventory	$ 490,815	$ 502,115

XML

Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Accounting Policies [Abstract]
Net income attributable to common shareholders	$ (1,416,701)	$ (2,772,723)	$ (4,229,851)
Weighted-average number of common shares outstanding during the period	508,357,473	394,315,293	498,230,051
Dilutive effect of stock options, warrants, and convertible promissory notes
Common stock and common stock equivalents used for diluted earnings per share	$ (0.00)	$ (0.01)	$ (0.00)

XML

Basis of Presentation and Summary of Significant Accounting Policies - Summary of Derivative Liabilities (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Derivative Liabilities	$ 118,641	$ 118,641
Level 1 [Member]
Derivative Liabilities
Level 2 [Member]
Derivative Liabilities
Level 3 [Member]
Derivative Liabilities	$ 118,641	$ 118,641

XML

Going Concern (Details Narrative) - USD ($)				1 Months Ended	3 Months Ended		12 Months Ended
	Dec. 31, 2020	Jun. 06, 2019	May 31, 2019	Aug. 16, 2019	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Apr. 15, 2021	Feb. 26, 2021
Net loss					$ (1,416,701)	$ (2,772,723)	$ (4,229,851)
Working capital deficit					5,662,238
Accumulated deficit	$ (11,321,494)				$ (12,738,195)		(11,321,494)
Debt instrument description					As of April 15, 2020, the company has, for the past six weeks, been in the process of renegotiating certain key terms of its approximately $4,500,000 of convertible notes (the "Notes") issued to its sole institutional investor in 2019, 2020 and 2021.
Proceeds from convertible notes payable					$ 398,000	$ 250,000
Exercise price per share								$ 0.075
Convertible Notes [Member]
Exercise price per share									$ 0.20
Debt instrument face amount									$ 450,000
Securities Purchase Agreement [Member] | Auctus Fund, LLC [Member]
Number of warrants exercised					2,000,000
Exercise price per share					$ 0.125
Proceeds from warrants					$ 250,000
Securities Purchase Agreement [Member] | Auctus Fund, LLC [Member] | Convertible Notes [Member]
Debt instrument face amount					450,000
Securities Purchase Agreement [Member] | Auctus Fund, LLC [Member] | Investor [Member]
Issuance of callable warrants			$ 6,200,000
Debt instrument description			Pursuant to the SPA, Auctus became obligated to purchase the $4,000,000 of Notes from Grapefruit in four tranches as follows: $600,000 at the SPA closing, which was funded on June 6, 2019; the second tranche of $1,422,750 on the day IGNG filed the registration statement, which was funded on August 16, 2019; the third tranche of $1,030,000 was funded the day the SEC declares the registration statement effective and the fourth tranche of $1 million was funded 90 days after effectiveness.
Proceeds from convertible notes payable	$ 4,052,750		$ 4,000,000				$ 4,052,750
Securities Purchase Agreement [Member] | Auctus Fund, LLC [Member] | Investor [Member] | First Tranche [Member]
Proceeds from convertible notes payable		$ 600,000
Securities Purchase Agreement [Member] | Auctus Fund, LLC [Member] | Investor [Member] | Second Tranche [Member]
Proceeds from convertible notes payable				$ 1,422,750
Securities Purchase Agreement [Member] | Auctus Fund, LLC [Member] | Investor [Member] | Third Tranche [Member]
Proceeds from convertible notes payable					1,030,000
Securities Purchase Agreement [Member] | Auctus Fund, LLC [Member] | Investor [Member] | Fourth Tranche [Member] | 90 Days After Effectiveness [Member]
Proceeds from convertible notes payable					$ 1,000,000
Grapefruit Boulevard Investments, Inc. [Member] | Securities Purchase Agreement [Member] | Auctus Fund, LLC [Member]
Convertible notes			4,000,000
Issuance of callable warrants			$ 6,200,000
Debt instrument description			Pursuant to the SPA, Auctus became obligated to purchase the $4,000,000 of Notes from Grapefruit in four tranches as follows: $600,000 at the SPA closing, which was funded on June 6, 2019; the second tranche of $1,422,750 on the day IGNG filed the registration statement, which was funded on August 16, 2019; the third tranche of $1,030,000 was funded the day the SEC declares the registration statement effective and the fourth tranche of $1 million was funded 90 days after effectiveness.
Proceeds from convertible notes payable			$ 4,000,000

XML

Right of Use Asset and Liability (Details Narrative)		1 Months Ended	3 Months Ended
	Sep. 01, 2018 USD ($) ft²	Jul. 31, 2019 USD ($)	Mar. 31, 2020 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Jul. 10, 2019 ft²
Area of land | ft²						22,000
Incremental borrowing rate Percentage			6.00%
Right-of-use assets				$ 108,839	$ 131,786
Right-of-use liability				$ 112,025
Operating lease expense			$ 24,932
Operating Land Lease Agreement [Member]
Monthly rent expense		$ 6,963
Lease agreement term		36 months
Increase in office space annually, percentage		2.00%
Operating Land Lease Agreement [Member] | Coachillin Holdings LLC [Member]
Area of land | ft²	2,268
Lease agreement description	The operating lease renews annually and has a base rent of $0.50 square foot of leasable area of the designated premise assigned by Coachillin' Holdings LLC. We paid an initial non-refundable prepaid rent of $3,402 which was expensed during the three months following the signed agreement, and we will continue to pay $1,134 monthly. We entered into this operating agreement in order to obtain our provisional cannabis licenses for manufacturing and distribution during 2020.
Non-refundable prepaid rent	$ 3,402
Monthly rent expense	$ 1,134

XML

Right of Use Asset and Liability - Schedule of Maturities of Lease Liabilities (Details)	Mar. 31, 2021 USD ($)
Leases [Abstract]
2021	$ 71,748
2022	44,756
2023
2024
2025
2026 and thereafter
Total future undiscounted lease payments	116,504
Less: Interest	(4,479)
Present value of lease liabilities	$ 112,025

XML

Inventory - Schedule of Inventory (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Inventory Disclosure [Abstract]
Raw material	$ 62,862	$ 16,891
Work in process	13,144	23,566
Finished goods	414,810	461,659
Total inventory	$ 490,815	$ 502,115

XML

Property, Plant and Equipment, Net (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 22,629	$ 19,622

XML

Property, Plant and Equipment, Net - Schedule of Property, Plant and Equipment, Net (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Abstract]
Vehicle	$ 41,142	$ 41,142
Extraction equipment	296,748	287,028
Extraction laboratory	126,707	126,707
Warehouse facility	50,158	50,158
Land and land improvement/development	1,476,996	1,456,194
Accumulated depreciation and amortization	(192,928)	(170,299)
Property, plant and equipment	$ 1,798,823	$ 1,790,930

XML

Capital Lease Payable (Details Narrative) - USD ($)	1 Months Ended
	May 31, 2019	Apr. 30, 2018	Mar. 31, 2021	Dec. 31, 2020
Leases [Abstract]
Capital lease liability			$ 90,329	$ 161,570
Capital lease, term	48 months	48 months
Capital lease monthly payments	$ 1,935	$ 4,575
Capital lease, interest rate		15.00%
Capital lease, maturity date		February 2022

XML

Capital Lease Payable - Summary of Minimum Lease Payments On Capital Lease (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Leases [Abstract]
Remainder 2021	$ 58,590
2022	32,337
2023	7,740
2024
2025
Thereafter
Total minimum lease payments	98,667
Less: amount representing interest	(8,338)
Capital lease liability	$ 90,329	$ 161,570

XML

Notes Payable (Details Narrative)	1 Months Ended			3 Months Ended
	Sep. 30, 2019 USD ($)	Apr. 30, 2018 USD ($)	Oct. 31, 2017 USD ($) a	Mar. 31, 2021 USD ($)	Jul. 10, 2019 ft²
Area of real property | ft²					22,000
Debt instrument description				As of April 15, 2020, the company has, for the past six weeks, been in the process of renegotiating certain key terms of its approximately $4,500,000 of convertible notes (the "Notes") issued to its sole institutional investor in 2019, 2020 and 2021.
Unrelated Party [Member]
Note payable	$ 102,569
Note interest rate	5.00%
Note maturity date	Oct. 20, 2020
Notes Payable [Member]
Note interest rate		10.00%
Debt principal amount		$ 250,000
Interest expense debt		$ 125,000
Debt instrument term		60 days
Debt instrument description		The note has not been repaid and was amended to carry an additional 10% interest rate of the total balance due
Accrued interest		$ 190,625
Coachillin Industrial Cultivation and Ancillary Canna-Business Park [Member]
Area of real property | a			2
Debt discount				$ 30,600
Coachillin Industrial Cultivation and Ancillary Canna-Business Park [Member] | First Deed Note [Member]
Note payable			$ 700,000
Note interest rate			13.00%
Note maturity date, description			August 2022
Loan payable			$ 700,000
Monthly loan payments			7,500
Coachillin Industrial Cultivation and Ancillary Canna-Business Park [Member] | Second Deed Note [Member]
Note payable			$ 200,000
Note interest rate			13.00%
Note maturity date, description			August 2022
Loan payable			$ 200,000
Monthly loan payments			$ 2,200

XML

Convertible Notes Payable (Details Narrative) - USD ($)						1 Months Ended		3 Months Ended		12 Months Ended
	Apr. 15, 2021	Feb. 26, 2021	Dec. 31, 2020	Jun. 06, 2019	May 31, 2019	Aug. 31, 2020	Aug. 16, 2019	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Mar. 12, 2021
Shares issued related to settlement, shares						9,100,380
Shares issued related to settlement						$ 80,754
Settlement loss						$ 5,225
Amortization of debt discount								$ 237,226	$ 202,979
Proceeds from convertible notes payable								$ 398,000	250,000
Debt instrument description								As of April 15, 2020, the company has, for the past six weeks, been in the process of renegotiating certain key terms of its approximately $4,500,000 of convertible notes (the "Notes") issued to its sole institutional investor in 2019, 2020 and 2021.
Net loss								$ (1,416,701)	(2,772,723)	$ (4,229,851)
Auctus Fund, LLC [Member] | Subsequent Event [Member]
Debt instrument conversion price	$ 0.075
Securities Purchase Agreement [Member] | Auctus Fund, LLC [Member] | Investor [Member]
Proceeds from convertible notes payable			$ 4,052,750		$ 4,000,000					$ 4,052,750
Issuance of callable warrants					$ 6,200,000
Debt instrument description					Pursuant to the SPA, Auctus became obligated to purchase the $4,000,000 of Notes from Grapefruit in four tranches as follows: $600,000 at the SPA closing, which was funded on June 6, 2019; the second tranche of $1,422,750 on the day IGNG filed the registration statement, which was funded on August 16, 2019; the third tranche of $1,030,000 was funded the day the SEC declares the registration statement effective and the fourth tranche of $1 million was funded 90 days after effectiveness.
Convertible notes					$ 4,000,000
Debt instrument term					2 years
Debt interest rate					10.00%
Securities Purchase Agreement [Member] | Auctus Fund, LLC [Member] | Investor [Member] | First Tranche [Member]
Proceeds from convertible notes payable				$ 600,000
Securities Purchase Agreement [Member] | Auctus Fund, LLC [Member] | Investor [Member] | Second Tranche [Member]
Proceeds from convertible notes payable							$ 1,422,750
Securities Purchase Agreement [Member] | Auctus Fund, LLC [Member] | Investor [Member] | Third Tranche [Member]
Proceeds from convertible notes payable								1,030,000
Securities Purchase Agreement [Member] | Auctus Fund, LLC [Member] | Investor [Member] | Fourth Tranche [Member] | 90 Days After Effectiveness [Member]
Proceeds from convertible notes payable								1,000,000
Debt Agreement [Member] | Subsequent Event [Member]
Change in value of derivative instruments	$ 40,372,883
Extinguishment of debt	39,640,477
Net loss	$ 753,699
Convertible Notes [Member]
Amortization of debt discount								353,811	$ 278,204
Debt instrument term		1 year
Debt interest rate		12.00%
Debt instrument face amount		$ 450,000
Debt instrument payment term		Principal payments shall be made in six (6) installments each in the amount of $75,000 commencing one hundred and eighty (180) days following the Issue Date and continuing thereafter each thirty (30) days for six (6) months. Notwithstanding the forgoing, the final payment of Principal and Interest shall be due on the Maturity Date.
Debt instrument periodic payment		$ 75,000
Debt instrument conversion price		$ 0.075
Convertible Notes [Member] | Securities Purchase Agreement [Member] | Auctus Fund, LLC [Member]
Debt instrument face amount								$ 450,000
Eleven Other Convertible Notes [Member]
Convertible notes		$ 296,000
Eleven Other Convertible Notes [Member] | Minimum [Member]
Debt interest rate		5.00%
Eleven Other Convertible Notes [Member] | Maximum [Member]
Debt interest rate		10.00%
Eight Convertible Notes [Member]
Convertible notes											$ 241,000

XML

Notes Payable, Related Party Notes Payables, And Operating Lease - Related Party (Details Narrative) - USD ($)	1 Months Ended
	May 31, 2019	Mar. 31, 2021
Four Years [Member]
Monthly payments	$ 1,055
Five Years [Member]
Monthly payments	$ 880
Notes Payable [Member]
Debt interest rate		10.00%

XML

Notes Payable, Related Party Notes Payables, And Operating Lease - Related Party - Schedule of Notes Payable to Officers and Directors (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Notes payable to officers and directors	$ 676,225	$ 488,433
Notes Payable [Member]
Notes payable to officers and directors	676,225	488,433
Notes Payable [Member] | Payable to an Officer and Director [Member]
Notes payable to officers and directors	82,056	82,056
Notes Payable [Member] | Payable to an Individual Affiliate of an Officer and Director [Member]
Notes payable to officers and directors	40,000	40,000
Notes Payable [Member] | Payable to a Company Affiliate to an Officer and Director [Member]
Notes payable to officers and directors	$ 554,169	$ 366,377

XML

Equity (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		12 Months Ended
	Aug. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2014	Apr. 15, 2021	Dec. 31, 2020
Preferred stock, shares authorized		1,000,000				1,000,000
Preferred stock, par value		$ 0.0001				$ 0.0001
Preferred stock, shares outstanding
Common stock, shares authorized		1,000,000,000				1,000,000,000
Common stock, par value		$ 0.0001				$ 0.0001
Shares issued for services		$ 55,944	$ 106,126
Shares issued related to settlement, shares	9,100,380
Shares issued related to settlement	$ 80,754
Warrant exercise price					$ 0.075
Common stock outstanding		510,767,041				505,700,437
Weighted average contractual life		4 years 3 months 26 days
Employees [Member]
Number of option to purchase of common stock		250,000
Weighted average contractual life		4 years 3 months 26 days
2014 Stock Option Plan [Member]
Number of common shares reserved for future issuance				1,811,401
Options expiration period				The 2014 Stock Option Plan will terminate in September 2024.
Warrant [Member]
Number of warrant exercised		2,000,000
Warrant exercise price		$ 0.125
Common Stock [Member]
Shares issued for services, shares		1,399,937
Shares issued for services		$ 55,945
Shares issued related to settlement, shares		1,666,667
Shares issued related to settlement		$ 51,667

XML

Equity - Schedule of Stock Options Activity (Details)	3 Months Ended
	Mar. 31, 2021 $ / shares shares
Equity [Abstract]
Quantity, Outstanding, Beginning balance	250,000
Quantity, Granted
Quantity, Exercised
Quantity, Cancelled/Forfeited
Quantity, Outstanding, Ending balance	250,000
Quantity, Exercisable, Ending balance	250,000
Weighted-Average Exercise Price Per Share, Outstanding, Beginning balance | $ / shares	$ 1.00
Weighted-Average Exercise Price Per Share, Outstanding, Ending balance | $ / shares	1.00
Weighted-Average Exercise Price Per Share, Exercisable, Ending balance | $ / shares	$ 1.00
Weighted-Average Remaining Contractual Life Outstanding, Beginning balance	4 years 6 months 25 days
Weighted-Average Remaining Contractual Life, Outstanding, Ending balance	4 years 3 months 26 days
Weighted-Average Remaining Contractual Life, Exercisable, Ending balance	4 years 3 months 26 days

XML

Warrants (Details Narrative) - $ / shares	3 Months Ended
	Mar. 31, 2021	Apr. 15, 2021	Feb. 26, 2021
Number of warrants issued to purchase common shares		20,000,000
Warrant exercise price		$ 0.075
Convertible Notes [Member]
Number of warrants issued to purchase common shares			2,250,000
Warrant exercise price			$ 0.20
Warrant [Member]
Warrant exercise price	$ 0.125
Share Exchange Agreement [Member] | Common Stock [Member]
Warrant outstanding	16,000,000
Number of warrants issued to purchase common shares	16,000,000
Warrant exercise price	$ 0.125
Share Exchange Agreement [Member] | Common Stock One [Member]
Warrant outstanding	15,000,000
Number of warrants issued to purchase common shares	15,000,000
Warrant exercise price	$ 0.15
Share Exchange Agreement [Member] | Common Stock Two [Member]
Warrant outstanding	8,000,000
Number of warrants issued to purchase common shares	8,000,000
Warrant exercise price	$ 0.25
Warrant term	2 years
Securities Purchase Agreement [Member] | Imaging3, Inc. [Member]
Warrant description	The Warrants are "cash only" and are callable if IGNG stock trades on the OTCQB at 200% or more of a given exercise price for 5 consecutive days.
Securities Purchase Agreement [Member] | Warrant [Member] | Imaging3, Inc. [Member] | Investor [Member]
Number of warrants issued to purchase common shares	16,000,000
Warrant exercise price	$ 0.125
Securities Purchase Agreement [Member] | Warrant One [Member] | Imaging3, Inc. [Member] | Investor [Member]
Number of warrants issued to purchase common shares	15,000,000
Warrant exercise price	$ 0.15
Securities Purchase Agreement [Member] | Warrant Two [Member] | Imaging3, Inc. [Member] | Investor [Member]
Number of warrants issued to purchase common shares	8,000,000
Warrant exercise price	$ 0.25

XML

Warrants - Summary of Warrants Outstanding (Details) - $ / shares	3 Months Ended
	Mar. 31, 2021	Apr. 15, 2021
Exercise Price		$ 0.075
Range One [Member]
Number of Warrants	2,250,000
Exercise Price	$ 0.20
Expiration Date	July 2023
Range Two [Member]
Number of Warrants	37,500
Exercise Price	$ 0.10
Expiration Date	April 2022
Range Three [Member]
Number of Warrants	50,000
Exercise Price	$ 0.10
Expiration Date	August 2022
Range Four [Member]
Number of Warrants	575,000
Exercise Price	$ 0.10
Expiration Date	April 2023
Range Five [Member]
Number of Warrants	125,000
Exercise Price	$ 0.10
Expiration Date	May 2023
Range Six [Member]
Number of Warrants	162,500
Exercise Price	$ 0.10
Expiration Date	August 2023
Range Seven [Member]
Number of Warrants	2,800,000
Exercise Price	$ 0.40
Expiration Date	May 2022
Range Eight [Member]
Number of Warrants	302,776
Exercise Price	$ 0.10
Expiration Date	January 2024
Range Nine [Member]
Number of Warrants	12,000,000
Exercise Price	$ 0.10
Expiration Date	March 2021
Range Ten [Member]
Number of Warrants	2,160,000
Exercise Price	$ 0.10
Expiration Date	June 2021
Range Eleven [Member]
Number of Warrants	14,000,000
Exercise Price	$ 0.125
Expiration Date	May 2021
Range Twelve [Member]
Number of Warrants	15,000,000
Exercise Price	$ 0.15
Expiration Date	May 2021
Range Thirtheen [Member]
Number of Warrants	8,000,000
Exercise Price	$ 0.25
Expiration Date	May 2021

XML

Derivative Liabilities (Details Narrative)	Apr. 15, 2021 USD ($) $ / shares shares
Warrant exercise price	$ 0.075
Subsequent Event [Member] | Auctus Fund, LLC [Member]
Renegotiated conversion terms of convertible note | $	$ 4,502,750
Conversion price per share	$ 0.075
Issued of additional warrants, shares | shares	20,000,000
Warrant exercise price	$ 0.075

XML

Derivative Liabilities - Summary of Derivative Liability (Details)	3 Months Ended
	Mar. 31, 2021 USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Beginning balance	$ 118,641
Creation/acquisition
Reclassification of equity
Change in Value	59,319
Ending balance	$ 177,960

XML

Derivative Liabilities - Schedule of Assumptions Used (Details)	3 Months Ended
	Mar. 31, 2021
Expected Term [Member] | Minimum [Member]
Fair value assumptions, term	1 year
Expected Term [Member] | Maximum [Member]
Fair value assumptions, term	3 years
Dividend Yield [Member]
Fair value assumptions, percentage	0.00
Risk-Free Rate [Member] | Minimum [Member]
Fair value assumptions, percentage	0.07
Risk-Free Rate [Member] | Maximum [Member]
Fair value assumptions, percentage	0.16
Volatility [Member]
Fair value assumptions, percentage	167

XML

Commitments and Contingencies (Details Narrative) - USD ($)			1 Months Ended		3 Months Ended
	Apr. 15, 2019	Jul. 27, 2018	Apr. 30, 2021	Aug. 31, 2019	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2020
Stock issued during period, value					$ 51,667	$ 566,293
Related party payable					676,225			$ 488,433
Common Stock [Member]
Stock issued during period, value					$ 167	$ 721
Stock issued during period, shares					1,666,667	7,213,933
Settlement Agreement [Member] | Galileo [Member]
Contingency receivable				$ 75,572
Contingency percentage				10.00%
Payment to litigation settlement				$ 2,000
Settlement Agreement [Member] | Defendants [Member]
Related party payable							$ 200,000
Settlement Agreement [Member] | Defendants [Member] | Common Stock [Member]
Stock issued during period, value	$ 200,000
Stock issued during period, shares	7,705,698						7,705,698
Settlement Agreement [Member] | Defendants [Member] | Common Stock [Member] | Subsequent Event [Member]
Stock issued during period, shares			2,822,654
Grapefruit Boulevard Investments, Inc. [Member]
Value awarded to plaintiffs		$ 1,400,000

XML

Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($)			1 Months Ended
	Apr. 19, 2021	Apr. 15, 2021	May 31, 2021
Warrant description		In addition, the Company issued an additional 20,000,000 warrants with an exercise price of $0.075 per share.
Auctus Fund, LLC [Member]
Renegotiated conversion terms of convertible note		$ 4,502,750
Debt conversion price		$ 0.075
Number of warrants exercised		20,000,000
Alpha Capital Anstalt and Brio Capital Master Fund, LTD [Member]
Stock issued during period, shares	2,822,654
Greenberg Glusker Fields Claman & Machtinger LLP [Member]
Stock issued during period, shares			3,920,865