(Exact Name of Registrant as Specified in its Charter) |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
OTCQX |
Large accelerated filer | o | Accelerated filer | o | ||||||||
x | Smaller reporting company | ||||||||||
Emerging growth company |
Page | ||||||||
June 30, 2022 | December 31, 2021 | ||||||||||
(Unaudited) | |||||||||||
ASSETS | |||||||||||
Current Assets: | |||||||||||
Cash | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Inventory, net | |||||||||||
Prepaid expenses and other assets | |||||||||||
Notes receivable | |||||||||||
Current assets held for sale | |||||||||||
Total current assets | |||||||||||
Property, equipment and leasehold improvements, net | |||||||||||
Intangible assets, net | |||||||||||
Goodwill | |||||||||||
Other assets | |||||||||||
Investments | |||||||||||
Long-term assets held for sale | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
LIABILITIES: | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued expenses | $ | $ | |||||||||
Short-term debt | |||||||||||
Income taxes payable | |||||||||||
Current liabilities held for sale | |||||||||||
Total current liabilities | |||||||||||
Long-term liabilities: | |||||||||||
Long-term debt, net of discounts | |||||||||||
Deferred tax liabilities | |||||||||||
Long-term lease liabilities | |||||||||||
Long-term liabilities held for sale | |||||||||||
Total long-term liabilities | |||||||||||
Total liabilities | |||||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||
Common stock, par value $ | |||||||||||
Additional paid-in capital | |||||||||||
Treasury stock: | ( | ( | |||||||||
Accumulated deficit | ( | ( | |||||||||
Total Unrivaled Brands, Inc. Stockholders’ Equity | |||||||||||
Non-controlling interest | |||||||||||
Total stockholders’ equity | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Total revenues | $ | $ | $ | $ | |||||||||||||||||||
Cost of goods sold | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Impairment of assets | |||||||||||||||||||||||
Loss on sale of assets | |||||||||||||||||||||||
Loss from operations | ( | ( | ( | ( | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Gain (loss) on extinguishment of debt | ( | ||||||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
Unrealized gain on investments | |||||||||||||||||||||||
Other income | |||||||||||||||||||||||
Gain (loss) on investments | ( | ||||||||||||||||||||||
Total other income (expense) | ( | ( | |||||||||||||||||||||
Loss from continuing operations, before provision for income taxes | ( | ( | ( | ( | |||||||||||||||||||
Provision for income tax benefit for continuing operations | |||||||||||||||||||||||
Net loss from continuing operations | ( | ( | ( | ( | |||||||||||||||||||
Income (loss) from discontinued operations, before provision for income taxes | ( | ( | |||||||||||||||||||||
Provision for income tax benefit for discontinued operations | |||||||||||||||||||||||
Net income (loss) from discontinued operations | ( | ( | |||||||||||||||||||||
NET LOSS | ( | ( | ( | ( | |||||||||||||||||||
Less: Loss attributable to non-controlling interest from continuing operations | ( | ( | |||||||||||||||||||||
Less: Income attributable to non-controlling interest from discontinued operations | |||||||||||||||||||||||
NET LOSS ATTRIBUTABLE TO UNRIVALED BRANDS, INC. | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Loss from continuing operations per common share attributable to Unrivaled Brands, Inc. common stockholders – basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net Loss per common share attributable to Unrivaled Brands, Inc. common stockholders – basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted-average number of common shares outstanding – basic and diluted |
Six Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Less: Net income (loss) from discontinued operations | ( | ||||||||||
Net loss from continuing operations | ( | ( | |||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Provision for income taxes | ( | ||||||||||
Bad debt expense | |||||||||||
Depreciation and amortization | |||||||||||
Gain on sale of assets | |||||||||||
Gain on debt forgiveness | ( | ||||||||||
Gain on sale of investments | ( | ||||||||||
Amortization of operating lease right-of-use asset | |||||||||||
Gain (loss) on extinguishment of debt | ( | ||||||||||
Non-cash interest expense | |||||||||||
Non-cash portion of severance expense | |||||||||||
Stock-based compensation | |||||||||||
Unrealized gain on investments | ( | ||||||||||
Impairment expense | |||||||||||
Change in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ||||||||||
Inventory | |||||||||||
Prepaid expenses and other current assets | ( | ( | |||||||||
Other assets | ( | ( | |||||||||
Accounts payable and accrued expenses | |||||||||||
Operating lease liabilities | ( | ||||||||||
Net cash used in operating activities - continuing operations | ( | ( | |||||||||
Net cash used in operating activities - discontinued operations | ( | ( | |||||||||
NET CASH USED IN OPERATING ACTIVITIES | ( | ( | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Purchase of property, equipment and leasehold improvements | ( | ( | |||||||||
Repayment of notes receivable | |||||||||||
Proceeds from sale of investments | |||||||||||
Proceeds from sales of assets | |||||||||||
Net cash (used in) / provided by investing activities - continuing operations | ( | ||||||||||
Net cash provided by investing activities - discontinued operations | |||||||||||
NET CASH PROVIDED BY INVESTING ACTIVITIES | |||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Proceeds from issuance of notes payable | |||||||||||
Payments of debt principal | ( | ( | |||||||||
Cash paid for debt discount | ( | ||||||||||
Proceeds from issuance of common stock | |||||||||||
Net cash (used in) / provided by financing activities - continuing operations | ( | ||||||||||
NET CASH (USED IN) / PROVIDED BY FINANCING ACTIVITIES | ( | ||||||||||
NET CHANGE IN CASH | |||||||||||
Cash at beginning of period | |||||||||||
Cash reclassified to discontinued operations | ( | ||||||||||
CASH AT END OF PERIOD | $ | $ | |||||||||
SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITIES: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
SUPPLEMENTAL DISCLOSURE FOR NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||||||||||
Debt principal and accrued interest converted into common stock | $ | $ | |||||||||
Net assets transferred to held for sale | $ | $ | |||||||||
Stock options exercised on a net share basis | $ | $ | |||||||||
Promissory note issued for severance | $ | $ | |||||||||
Additional Paid-In Capital | Treasury | Accumulated Deficit | Non- Controlling Interest | Total | |||||||||||||||||||||||||||||||||||||
Common Stock | Stock | ||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Amount | |||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Stock compensation - employees | — | — | — | ||||||||||||||||||||||||||||||||||||||
Stock compensation - directors | 0 | — | — | — | |||||||||||||||||||||||||||||||||||||
Stock compensation - services expense | — | — | — | ||||||||||||||||||||||||||||||||||||||
Stock option expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Disposition of non-controlling interest | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Net loss attributable to Unrivaled Brands, Inc. | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Additional Paid-In Capital | Treasury | Accumulated Deficit | Non- Controlling Interest | Total | |||||||||||||||||||||||||||||||||||||
Common Stock | Stock | ||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Amount | |||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Stock compensation - employees | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Stock compensation - directors | — | — | — | ||||||||||||||||||||||||||||||||||||||
Stock option exercises | ( | — | — | — | |||||||||||||||||||||||||||||||||||||
Stock option expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss attributable to non-controlling interest | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Net loss attributable to Unrivaled Brands, Inc. | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Preferred Stock | Additional Paid-In Capital | Treasury | Accumulated Deficit | Non- Controlling Interest | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Series A | Common Stock | Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | — | $ | — | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Warrants exercise | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Stock compensation - employees | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock compensation - directors | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock compensation - services expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock option exercise | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Debt conversion - common stock | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Stock issued for cash | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock option expense | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Disposition of non-controlling interest | — | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to non-controlling interest | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to Unrivaled Brands, Inc. | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | — | $ | — | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Additional Paid-In Capital | Treasury | Accumulated Deficit | Non- Controlling Interest | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Series A | Common Stock | Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | — | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Debt conversion - common stock | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Warrants issued to Dominion | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock compensation - employees | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Stock compensation - directors | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock compensation - services expense | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Stock option exercises | — | — | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of A shares | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Elimination of Preferred Stock | ( | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Stock option expense | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to non-controlling interest | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to Unrivaled Brands, Inc. | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | $ | — | $ | $ | $ | ( | $ | ( | $ | $ |
Buildings | |||||
Furniture and equipment | |||||
Computer and software | |||||
Vehicles | |||||
Leasehold improvements | Shorter of lease term or economic life |
Customer relationships | |||||
Trademark and patent | |||||
Dispensary licenses |
(in thousands) | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
California | $ | $ | $ | $ | |||||||||||||||||||
Oregon | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Six Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Common stock warrants | |||||||||||
Common stock options | |||||||||||
(in thousands) | |||||
December 31, 2021 | |||||
Current assets: | |||||
Cash | $ | ||||
Accounts receivable, net | |||||
Inventory | |||||
Prepaid expenses and other current assets | |||||
Total current assets | |||||
Property, equipment and leasehold improvements, net | |||||
Other assets | |||||
TOTAL ASSETS | $ | ||||
Liabilities: | |||||
Total current liabilities | $ | ||||
Total long-term liabilities | |||||
TOTAL LIABILITIES | $ |
(in thousands) | |||||||||||
June 30, 2022 | |||||||||||
Cash | $ | ||||||||||
Accounts receivable, net | |||||||||||
Inventory | |||||||||||
Prepaid expenses and other assets | |||||||||||
Total current assets held for sale | |||||||||||
Property, equipment and leasehold improvements, net | |||||||||||
Other assets | |||||||||||
Total long-term assets held for sale | |||||||||||
TOTAL ASSETS OF SUBSIDIARIES CLASSIFIED AS HELD FOR SALE | $ | ||||||||||
Accounts payable and accrued expenses | $ | ||||||||||
Total current liabilities held for sale | |||||||||||
Long-term lease liabilities | |||||||||||
Total long-term liabilities held for sale | |||||||||||
TOTAL LIABILITIES OF SUBSIDIARIES CLASSIFIED AS HELD FOR SALE | $ | ||||||||||
(in thousands) | |||||||||||
June 30, 2022 | December 31, 2021 | ||||||||||
Raw materials | $ | $ | |||||||||
Work-in-progress | |||||||||||
Finished goods | |||||||||||
Total inventory | $ | $ |
(in thousands) | |||||||||||
June 30, 2022 | December 31, 2021 | ||||||||||
Land and building | $ | $ | |||||||||
Furniture and equipment | |||||||||||
Computer hardware | |||||||||||
Leasehold improvements | |||||||||||
Vehicles | |||||||||||
Construction in progress | |||||||||||
Subtotal | |||||||||||
Less accumulated depreciation | ( | ( | |||||||||
Property, equipment and leasehold improvements, net | $ | $ |
(in thousands) | |||||||||||||||||||||||||||||||||||||||||
June 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||
Estimated Useful Life in Years | Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | |||||||||||||||||||||||||||||||||||
Amortizing Intangible Assets: | |||||||||||||||||||||||||||||||||||||||||
Customer Relationships | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
Trademarks and Patent | ( | ( | |||||||||||||||||||||||||||||||||||||||
Operating Licenses | ( | ( | |||||||||||||||||||||||||||||||||||||||
Total Amortizing Intangible Assets | ( | ( | |||||||||||||||||||||||||||||||||||||||
Non-Amortizing Intangible Assets: | |||||||||||||||||||||||||||||||||||||||||
Trade Name | Indefinite | — | — | ||||||||||||||||||||||||||||||||||||||
Total Non-Amortizing Intangible Assets | — | — | |||||||||||||||||||||||||||||||||||||||
Total Intangible Assets, Net | $ | $ | ( | $ | $ | $ | ( | $ |
(in thousands) | |||||||||||
June 30, 2022 | December 31, 2021 | ||||||||||
Accounts Payable | $ | $ | |||||||||
Tax Liabilities | |||||||||||
Accrued Payroll and Benefits | |||||||||||
Current Lease Liabilities | |||||||||||
Other Accrued Expenses | |||||||||||
Total Accounts Payable and Accrued Expenses | $ | $ |
(in thousands) | |||||||||||
June 30, 2022 | December 31, 2021 | ||||||||||
Promissory note dated January 18, 2018, issued for the purchase of real property. The promissory note was collateralized by the land and building purchased and matured January 18, 2022. The promissory note bears interest at | $ | $ | |||||||||
Promissory note dated May 4, 2020, issued to Harvest Small Business Finance, LLC, an unaffiliated third party. Loan was part of the Paycheck Protection Program ("PPP Loan") offered by the U.S. Small Business Administration. The interest rate on the note was 1.0%. The note required interest and principal payments seven months from July 2020. The note matures in February 2025. | |||||||||||
Unsecured promissory note dated January 22, 2021, issued to Michael Nahass (a related party), which matured January 25, 2022, and bore interest at a rate of | |||||||||||
Convertible promissory note dated January 25, 2021, issued to accredited investors, which matured July 22, 2022 and bears interest at a rate of | |||||||||||
Promissory note dated July 27, 2021, issued to Arthur Chan which matures July 26, 2024, and bears interest at a rate of | |||||||||||
Senior Secured Promissory Note dated November 22, 2021 issued to Dominion Capital LLC, which matured on February 22, 2022 and bore interest at a rate of | |||||||||||
Unsecured promissory note without interest from a related party. The loan is paid in 20 equal installments and matured on August 1, 2022. | |||||||||||
Promissory note dated June 1, 2020, issued as part of the Paycheck Protection Program ("PPP Loan") offered by the U.S. Small Business Administration. The interest rate on the note is 1.0%. The note matured on June 1, 2022. | |||||||||||
Line of credit agreement entered on March 31, 2021, which matured on March 31, 2022 and bore interest of | |||||||||||
Promissory note dated October 1, 2021, issued to Sterling Harlan as part of the SilverStreak Solutions acquisition. The interest rate on the note was | |||||||||||
Promissory note dated October 1, 2021, issued to Sterling Harlan as part of the SilverStreak Solutions acquisition. The interest rate on the note is | |||||||||||
Secured promissory note dated November 22, 2021 issued to People's California, LLC, which matures on November 22, 2023 and bears interest at a rate of | |||||||||||
Promissory note dated May 1, 2019, assumed by the Company on July 1, 2021 in connection with the purchase of real property, from a related party. The note matures on May 15, 2039 and bears interest at a rate of | |||||||||||
Notes payable - promissory notes | $ | $ | |||||||||
Vehicle loans | |||||||||||
Less: Short-term debt | ( | ( | |||||||||
Less: Debt discount | ( | ( | |||||||||
Net Long-Term Debt | $ | $ |
(in thousands) | |||||||||||
June 30, 2022 | December 31, 2021 | ||||||||||
$ | $ | ||||||||||
Operating lease liabilities | $ | $ |
(in thousands) | |||||
Operating Leases | |||||
2022 (remaining) | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
Total lease payments | |||||
Less: discount | ( | ||||
Total operating lease liabilities | $ |
Six Months Ended | ||||||||
June 30, 2022 | June 30, 2021 | |||||||
Weighted average remaining lease term (years) | ||||||||
Weighted average discount rate | % | % |
Awards Reserved for Issuance | Awards Exercised | Awards Outstanding | Awards Available for Grant | ||||||||||||||||||||
2016 Equity Incentive Plan | |||||||||||||||||||||||
2018 Equity Incentive Plan | |||||||||||||||||||||||
2019 Equity Incentive Plan |
Number of Shares | Weighted- Average Exercise Price Per Share | Weighted- Average Remaining Contractual Life | Aggregate Intrinsic Value of In-the-Money Options | ||||||||||||||||||||
Options outstanding as of January 1, 2022 | $ | ||||||||||||||||||||||
Granted | — | ||||||||||||||||||||||
Exercised | ( | $ | |||||||||||||||||||||
Forfeited | ( | $ | |||||||||||||||||||||
Expired | ( | $ | |||||||||||||||||||||
Options outstanding as of June 30, 2022 | $ | $ | |||||||||||||||||||||
Options exercisable as of June 30, 2022 | $ | | $ |
(in thousands except for shares / options) | ||||||||||||||||||||||||||
For the Three Months Ended | ||||||||||||||||||||||||||
June 30, 2022 | June 30, 2021 | |||||||||||||||||||||||||
Type of Award | Number of Shares or Options Granted | Stock-Based Compensation Expense | Number of Shares or Options Granted | Stock-Based Compensation Expense | ||||||||||||||||||||||
Stock options | $ | $ | ||||||||||||||||||||||||
Stock grants: | ||||||||||||||||||||||||||
Employees (common stock) | $ | |||||||||||||||||||||||||
Directors (common stock) | $ | |||||||||||||||||||||||||
Non–employee consultants (common stock) | $ | |||||||||||||||||||||||||
Total stock–based compensation expense | $ | $ |
(in thousands except for shares / options) | ||||||||||||||||||||||||||
For the Six Months Ended | ||||||||||||||||||||||||||
June 30, 2022 | June 30, 2021 | |||||||||||||||||||||||||
Type of Award | Number of Shares or Options Granted | Stock-Based Compensation Expense | Number of Shares or Options Granted | Stock-Based Compensation Expense | ||||||||||||||||||||||
Stock options | $ | $ | ||||||||||||||||||||||||
Stock grants: | ||||||||||||||||||||||||||
Employees (common stock) | $ | |||||||||||||||||||||||||
Directors (common stock) | $ | |||||||||||||||||||||||||
Non–employee consultants (common stock) | $ | |||||||||||||||||||||||||
Total stock–based compensation expense | $ | $ |
Warrants | Weighted-Average Exercise Price | ||||||||||
Warrants outstanding as of January 1, 2022 | $ | ||||||||||
Issued | $ | ||||||||||
Exercised | ( | $ | |||||||||
Warrants outstanding as of June 30, 2022 | $ |
(in thousands) | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Total revenues | $ | $ | $ | $ | |||||||||||||||||||
Cost of goods sold | ( | ||||||||||||||||||||||
Gross profit | ( | ||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Impairment of assets | |||||||||||||||||||||||
(Gain) loss on sale of assets | ( | ( | |||||||||||||||||||||
Income (loss) from operations | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Interest expense | ( | ( | |||||||||||||||||||||
Other income | |||||||||||||||||||||||
Income tax benefit | |||||||||||||||||||||||
Net income (loss) from discontinued operations | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Loss from discontinued operations per common share attributable to Unrivaled Brands, Inc. common stockholders - basic and diluted | $ | ( | $ | ( | $ | $ | ( |
(in thousands) | |||||
December 31, 2021 | |||||
Cash | $ | ||||
Accounts receivable, net | |||||
Inventory | |||||
Prepaid expenses and other assets | |||||
Property, equipment and leasehold improvements, net | |||||
Other assets | |||||
Assets of discontinued operations | $ | ||||
Accounts payable and accrued expenses | $ | ||||
Income taxes payable | |||||
Long-term lease liabilities | |||||
Liabilities of discontinued operations | $ |
(in thousands) | (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||
Total Revenue | % of Total Revenue | Total Revenue | % of Total Revenue | ||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
Segment | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
Cannabis Retail | $ | $ | % | % | $ | $ | % | % | |||||||||||||||||||||||||||||||||||||||
Cannabis Cultivation & Distribution | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | % | % | $ | $ | % | % |
(in thousands) | (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
Cannabis Retail | Cannabis Cultivation & Distribution | Corporate & Other | Total | Cannabis Retail | Cannabis Cultivation & Distribution | Corporate & Other | Total | ||||||||||||||||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Cost of goods sold | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||||||||||||||||||||||||||
Impairment of assets | |||||||||||||||||||||||||||||||||||||||||||||||
Loss (gain) on sale of assets | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from operations | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Gain (loss) on extinguishment of debt | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Realized and unrealized gain on investments | |||||||||||||||||||||||||||||||||||||||||||||||
Other income | |||||||||||||||||||||||||||||||||||||||||||||||
Total other income (loss) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Income (loss) before provision for income taxes | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||
Total assets | $ | $ | ( | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
Cannabis Retail | Cannabis Cultivation & Distribution | Corporate & Other | Total | Cannabis Retail | Cannabis Cultivation & Distribution | Corporate & Other | Total | ||||||||||||||||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Cost of goods sold | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||||||||||||||||||||||||||
Impairment of assets | |||||||||||||||||||||||||||||||||||||||||||||||
Loss on sale of assets | |||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from operations | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Realized and unrealized gain (loss) on investments | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Other income (loss) | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Total other income (loss) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Income (loss) before provision for income taxes | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||
Total assets | $ | $ | ( | $ | $ | $ | $ | ( | $ | $ |
(in thousands) | (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | $ Change | % Change | 2022 | 2021 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||||||||||||||||||||
Continuing Operations | $ | 17,555 | $ | 2,871 | $ | 14,684 | 511.0 | % | $ | 38,280 | $ | 4,928 | $ | 33,352 | 677.0 | % | |||||||||||||||||||||||||||||||
Discontinued Operations | — | 3,391 | (3,047) | (100.0) | % | 2,605 | 6,446 | (3,841) | (60.0) | % | |||||||||||||||||||||||||||||||||||||
Total Revenue | $ | 17,555 | $ | 6,262 | $ | 11,637 | 180.0 | % | $ | 40,885 | $ | 11,374 | $ | 29,511 | 259.0 | % | |||||||||||||||||||||||||||||||
Cost of Goods Sold | |||||||||||||||||||||||||||||||||||||||||||||||
Continuing Operations | $ | 9,286 | $ | 147 | $ | 9,139 | 6,217.0 | % | $ | 23,578 | $ | 2,013 | $ | 21,565 | 1,071.0 | % | |||||||||||||||||||||||||||||||
Discontinued Operations | (23) | 3,776 | (3,799) | (101.0) | % | 520 | 4,591 | (4,071) | (89.0) | % | |||||||||||||||||||||||||||||||||||||
Total Cost of Goods Sold | $ | 9,263 | $ | 3,923 | $ | 5,340 | 136.0 | % | $ | 24,098 | $ | 6,604 | $ | 17,494 | 265.0 | % | |||||||||||||||||||||||||||||||
Gross Profit $ | |||||||||||||||||||||||||||||||||||||||||||||||
Continuing Operations | $ | 8,269 | $ | 2,724 | $ | 5,545 | 204.0 | % | $ | 14,702 | $ | 2,915 | $ | 11,787 | 404.0 | % | |||||||||||||||||||||||||||||||
Discontinued Operations | 23 | (385) | 408 | (106.0) | % | 2,085 | 1,855 | 230 | 12.0 | % | |||||||||||||||||||||||||||||||||||||
Total Gross Profit $ | $ | 8,292 | $ | 2,339 | $ | 5,953 | 255.0 | % | $ | 16,787 | $ | 4,770 | $ | 12,017 | 252.0 | % | |||||||||||||||||||||||||||||||
Gross Profit % | |||||||||||||||||||||||||||||||||||||||||||||||
Continuing Operations | 47.1 | % | 94.9 | % | (47.8) | % | 38.4 | % | 59.2 | % | (20.7) | % | |||||||||||||||||||||||||||||||||||
Discontinued Operations | n.d. | (11.4) | % | 11.4 | % | 80.0 | % | 28.8 | % | 51.3 | % | ||||||||||||||||||||||||||||||||||||
Total Gross Profit % | 47.2 | % | 37.4 | % | 9.9 | % | 41.1 | % | 41.9 | % | (0.9) | % | |||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net loss attributable to Unrivaled Brand, Inc. | $ | (63,718) | $ | (4,102) | $ | (72,592) | $ | (16,183) | |||||||||||||||
Non-GAAP adjustments: | |||||||||||||||||||||||
Amortization of intangible assets | 2,422 | 184 | 4,765 | 376 | |||||||||||||||||||
Depreciation expense | 972 | 323 | 1,918 | 660 | |||||||||||||||||||
Stock-based compensation expense | 1,553 | 803 | 3,868 | 1,198 | |||||||||||||||||||
Impairment of assets | 55,726 | — | 55,726 | — | |||||||||||||||||||
Interest expense | 443 | 39 | 2,210 | 112 | |||||||||||||||||||
Severance expense | 201 | — | 871 | 8,990 | |||||||||||||||||||
Loss (gain) on sale of investments | — | 874 | — | (5,337) | |||||||||||||||||||
Unrealized gain on investments | (963) | — | (963) | — | |||||||||||||||||||
Loss on sale of assets | 542 | — | 343 | — | |||||||||||||||||||
Gain for debt forgiveness | — | — | — | (86) | |||||||||||||||||||
Loss (gain) on extinguishment of debt | — | — | (542) | 6,161 | |||||||||||||||||||
Non-GAAP net loss attributable to Unrivaled Brands, Inc. | $ | (2,822) | $ | (1,879) | $ | (4,396) | $ | (4,109) |
(in thousands, except for shares) | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Non-GAAP net loss | $ | (2,822) | $ | (1,879) | $ | (4,396) | $ | (4,109) | |||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted average common shares - Basic | 575,973,609 | 258,897,777 | 572,176,041 | 248,066,926 | |||||||||||||||||||
Weighted average common shares - Diluted | 575,973,609 | 258,897,777 | 572,176,041 | 248,066,926 | |||||||||||||||||||
Non-GAAP loss per common share: | |||||||||||||||||||||||
Non-GAAP loss - Basic | $ | — | $ | (0.01) | $ | (0.01) | $ | (0.02) | |||||||||||||||
Non-GAAP loss - Diluted | $ | — | $ | (0.01) | $ | (0.01) | $ | (0.02) |
Exhibit | Description | |||||||
2.1 | ||||||||
2.2 | ||||||||
2.3 | ||||||||
2.4 | ||||||||
2.5 | ||||||||
2.6 | ||||||||
2.7 | ||||||||
2.8 | ||||||||
2.9 | ||||||||
2.10 | ||||||||
2.11 | ||||||||
2.12 | ||||||||
2.13 | ||||||||
2.14 | ||||||||
2.12 | ||||||||
3.1 | ||||||||
3.2 | ||||||||
3.3 | ||||||||
3.4 | ||||||||
3.5 | ||||||||
3.6 | ||||||||
3.7 | ||||||||
3.8 | ||||||||
3.9 | ||||||||
3.10 | ||||||||
3.11 | ||||||||
3.12 | ||||||||
3.13 | ||||||||
3.14 | ||||||||
3.15 | ||||||||
3.16 | ||||||||
3.17 | ||||||||
3.18 | ||||||||
4.1 | ||||||||
4.2 | ||||||||
4.3 | ||||||||
4.4 | ||||||||
4.5 | ||||||||
4.6 | ||||||||
4.7 |
4.8 | ||||||||
4.9 | ||||||||
4.10 | ||||||||
4.11 | ||||||||
4.12 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101 | The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Cash Flow, (iv) Consolidated Statements of Stockholders Equity, and (v) Notes to Unaudited Consolidated Financial Statements.* | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).* |
UNRIVALED BRANDS, INC. | ||||||||
Date: August 18, 2022 | By: | /s/ Jeffrey Batliner | ||||||
Jeffrey Batliner | ||||||||
Chief Financial Officer (Principal Accounting Officer and Principal Financial Officer) |
Date: August 18, 2022 | By: | /s/ Sabas Carrillo | ||||||
Sabas Carrillo | ||||||||
Interim Chief Executive Officer |
Date: August 18, 2022 | By: | /s/ Jeffrey Batliner | ||||||
Jeffrey Batliner | ||||||||
Chief Financial Officer |
Date: August 18, 2022 | By: | /s/ Sabas Carrillo | ||||||
Sabas Carrillo | ||||||||
Interim Chief Executive Officer |
Date: August 18, 2022 | By: | /s/ Jeffrey Batliner | ||||||
Jeffrey Batliner | ||||||||
Chief Financial Officer |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 990,000,000 | 990,000,000 |
Common stock, shares outstanding (in shares) | 532,514,791 | 498,546,291 |
Treasury stock, shares issued (in shares) | 2,308,408 | 2,308,408 |
DESCRIPTION OF BUSINESS |
6 Months Ended |
---|---|
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS References in this document to “the Company”, “Unrivaled”, “we”, “us”, or “our” are intended to mean Unrivaled Brands, Inc., individually, or as the context requires, collectively with its subsidiaries on a consolidated basis. Effective July 7, 2021, the Company changed its corporate name from “Terra Tech Corp.” to “Unrivaled Brands, Inc.” in connection with the Company’s acquisition of UMBRLA, Inc. (“UMBRLA”). Unrivaled is a holding company with the following subsidiaries: •620 Dyer LLC, a California corporation (“Dyer”) •1815 Carnegie LLC, a California limited liability company (“Carnegie”) •Black Oak Gallery, a California corporation (“Black Oak”) •Blüm San Leandro, a California corporation (“Blüm San Leandro”) •MediFarm, LLC, a Nevada limited liability company (“MediFarm”) •MediFarm I, LLC, a Nevada limited liability company (“MediFarm I”) •121 North Fourth Street, LLC, a Nevada limited liability company ("121 North Fourth") •OneQor Technologies, Inc., a Delaware corporation ("OneQor") •UMBRLA, Inc., a Nevada corporation ("UMBRLA") •Halladay Holding, LLC, a California limited liability company (“Halladay”) •People's First Choice, LLC, a California limited liability company ("People's") •Silverstreak Solutions, Inc., a California corporation ("Silverstreak") The Company is a multi-state operator ("MSO") with retail, production, distribution, and cultivation operations, with an emphasis on providing the highest quality of medical and adult use cannabis products. From the acquisition of UMBRLA, the Company has multiple cannabis lifestyle brands. The Company is home to Korova, a brand of high potency products across multiple product categories, currently available in California, Oregon, Arizona, and Oklahoma. Other Company brands include Cabana, a boutique cannabis flower brand, and Sticks, a mainstream value-driven cannabis brand, active in California and Oregon. With the acquisition of People’s First Choice, the Company operates a premier cannabis dispensary in Orange County, California. The Company also owns dispensaries in California which operate as The Spot in Santa Ana, Blum in Oakland and Silverstreak in San Leandro. The Company also has licensed distribution facilities in Portland, OR, Los Angeles, CA, and Sonoma County, CA.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and with the instructions to U.S. Securities and Exchange Commission (“SEC”) Form 10-Q and Article 10 of Regulation S-X of the Securities Act of 1933 and reflect the accounts and operations of the Company and those of our subsidiaries in which we have a controlling financial interest. In accordance with the provisions of FASB or ASC 810, “Consolidation,” we consolidate any variable interest entity (“VIE”) of which we are the primary beneficiary. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. ASC 810 requires a variable interest holder to consolidate a VIE if that party has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. We do not consolidate a VIE in which we have a majority ownership interest when we are not considered the primary beneficiary. We evaluate our relationships with all the VIEs on an ongoing basis to reassess if we continue to be the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial position of the Company as of June 30, 2022 and December 31, 2021, and the consolidated results of operations and cash flows for the quarters ended June 30, 2022 and 2021 have been included. These interim unaudited condensed consolidated financial statements do not include all disclosures required by GAAP for complete financial statements and, therefore, should be read in conjunction with the more detailed audited consolidated financial statements for the year ended December 31, 2021. The December 31, 2021 balances reported herein are derived from the audited consolidated financial statements for the year ended December 31, 2021. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. Going Concern The accompanying financial statements have been prepared assuming that we will continue as a going concern. In an effort to achieve liquidity that would be sufficient to meet all of our commitments, we have undertaken a number of actions, including minimizing capital expenditures and reducing recurring expenses. However, we believe that even after taking these actions, we will not have sufficient liquidity to satisfy all of our future financial obligations. The risks and uncertainties surrounding our ability to raise capital, our limited capital resources, and the weak industry conditions impacting our business raise substantial doubt as to our ability to continue as a going concern. See Note 20, "Going Concern" of the Notes to Consolidated Financial Statements for additional information. Non-Controlling Interest Non-controlling interest is shown as a component of stockholders’ equity on the consolidated balance sheets and the share of net income (loss) attributable to non-controlling interest is shown as a component of net income (loss) in the consolidated statements of operations. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of total net revenue and expenses in the reporting periods. The Company regularly evaluates estimates and assumptions related to revenue recognition, allowances for doubtful accounts, sales returns, inventory valuation, stock-based compensation expense, goodwill and purchased intangible asset valuations, derivative liabilities, deferred income tax asset valuation allowances, uncertain tax positions, tax contingencies, litigation and other loss contingencies. These estimates and assumptions are based on current facts, historical experience and various other factors that the Company believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue, costs and expenses that are not readily apparent from other sources. The actual results the Company experiences may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications did not affect net loss, revenues or stockholders’ equity. See Note 17, "Discontinued Operations" for further discussion regarding discontinued operations. Trade and Other Receivables The Company extends non-interest bearing trade credit to its customers in the ordinary course of business which is not collateralized. Accounts receivable are shown on the face of the consolidated balance sheets, net of an allowance for doubtful accounts. The Company analyzes the aging of accounts receivable, historical bad debts, customer creditworthiness and current economic trends, in determining the allowance for doubtful accounts. The Company does not accrue interest receivable on past due accounts receivable. The allowance for doubtful accounts was $4.76 million and $3.68 million as of June 30, 2022 and December 31, 2021, respectively. Investments Investments in unconsolidated affiliates are accounted for under the cost or the equity method of accounting, as appropriate. The Company accounts for investments in limited partnerships or limited liability corporations, whereby the Company owns a minimum of 5% of the investee’s outstanding voting stock, under the equity method of accounting. These investments are recorded at the amount of the Company’s investment and adjusted each period for the Company’s share of the investee’s income or loss, and dividends paid. As investments accounted for under the cost method do not have readily determinable fair values, the Company only estimates fair value if there are identified events or changes in circumstances that could have a significant adverse effect on the investment’s fair value. Publicly held equity securities are recorded at fair value with unrealized gains or losses resulting from changes in fair value reflected as unrealized gains or losses on equity securities in our consolidated statements of operations. Inventory Inventory is stated at the lower of cost or net realizable value, with cost being determined on the first-in, first-out (“FIFO”) method of accounting. The Company periodically reviews physical inventory for excess, obsolete, and potentially impaired items and reserves. The reserve estimate for excess and obsolete inventory is based on expected future use. The reserve estimates have historically been consistent with actual experience as evidenced by actual sale or disposal of the goods. Prepaid Expenses and Other Current Assets Prepaid expenses consist of various payments that the Company has made in advance for goods or services to be received in the future. These prepaid expenses include advertising, insurance, and service or other contracts requiring upfront payments. Property, Equipment and Leasehold Improvements, Net Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The approximate useful lives for depreciation of our property, equipment and leasehold improvements are as follows:
Repairs and maintenance expenditures that do not extend the useful lives of related assets are expensed as incurred. Expenditures for major renewals and improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. The Company continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, “Property, Plant, and Equipment.” When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. See Note 8, “Property, Equipment and Leasehold Improvements, Net” for further information. Intangible Assets Intangible assets continue to be subject to amortization, and any impairment is determined in accordance with ASC 360, “Property, Plant, and Equipment,” intangible assets are stated at historical cost and amortized over their estimated useful lives. The Company uses a straight-line method of amortization unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed can be reliably determined. The approximate useful lives for amortization of our intangible assets are as follows:
The Company reviews intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset (asset group), the Company will write the carrying value down to the fair value in the period identified. Intangible assets that have indefinite useful lives (e.g. trade names) are tested annually for impairment and are tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount of the asset group exceeds its fair value. Goodwill Goodwill is measured as the excess of consideration transferred and the net of the acquisition date fair value of assets acquired, and liabilities assumed in a business acquisition. In accordance with ASC 350, “Intangibles—Goodwill and Other,” goodwill and other intangible assets with indefinite lives are no longer subject to amortization but are tested for impairment annually or whenever events or changes in circumstances indicate that the asset might be impaired. The Company reviews the goodwill allocated to each of our reporting units for possible impairment annually as of September 30, and whenever events or changes in circumstances indicate carrying amount may not be recoverable. In the impairment test, the Company measures the recoverability of goodwill by comparing a reporting unit’s carrying amount, including goodwill, to the estimated fair value of the reporting unit. The carrying amount of each reporting unit is determined based upon the assignment of our assets and liabilities, including existing goodwill and other intangible assets, to the identified reporting units. Where an acquisition benefits only one reporting unit, the Company allocates, as of the acquisition date, all goodwill for that acquisition to the reporting unit that will benefit. Where the Company has had an acquisition that benefited more than one reporting unit, The Company has assigned the goodwill to our reporting units as of the acquisition date such that the goodwill assigned to a reporting unit is the excess of the fair value of the acquired business, or portion thereof, to be included in that reporting unit over the fair value of the individual assets acquired and liabilities assumed that are assigned to the reporting unit. If the carrying amount of a reporting unit is in excess of its fair value, the Company recognizes an impairment charge equal to the amount in excess. Notes Receivable The Company reviews all outstanding notes receivable for collectability as information becomes available pertaining to the Company’s inability to collect. An allowance for notes receivable is recorded for the likelihood of non-collectability. The Company accrues interest on notes receivable based net realizable value. The allowance for uncollectible notes was nil as of June 30, 2022 and December 31, 2021, respectively. Assets Held for Sale and Discontinued Operations Assets held for sale represent furniture, equipment, and leasehold improvements less accumulated depreciation as well as any other assets that are held for sale in conjunction with the sale of a business. The Company records assets held for sale in accordance with ASC 360, “Property, Plant, and Equipment,” at the lower of carrying value or fair value less costs to sell. Fair value is based on the estimated proceeds from the sale of the facility utilizing recent purchase offers, market comparables and/or data. Our estimate as to fair value is regularly reviewed and subject to changes in the commercial real estate markets and our continuing evaluation as to the facility’s acceptable sale price. The reclassification takes place when the assets are available for immediate sale and the sale is highly probable. These conditions are usually met from the date on which a letter of intent or agreement to sell is ready for signing. The Company follows the guidance within ASC 205, “Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity” when assets held for sale represent a strategic shift in the Company’s operations and financial results. For long-lived assets or disposals groups that are classified as held for sale but do not meet the criteria for discontinued operations, the assets and liabilities are presented separately on the balance sheet of the initial period in which it is classified as held for sale. Revenue Recognition and Performance Obligations Revenue from our retail dispensaries is recorded at the time customers take possession of the product. Revenue from our retail dispensaries is recognized net of discounts, promotional adjustments, and returns. We collect taxes on certain revenue transactions to be remitted to governmental authorities, which may include sales, excise and local taxes. These taxes are not included in the transaction price and are, therefore, excluded from revenue. Upon purchase, the Company has no further performance obligations and collection is assured as sales are paid for at time of purchase. The Company recognizes revenue from cultivation, manufacturing and distribution product sales when our customers obtain control of our products. Revenue is recorded when the customer is determined to have taken control of the product. This determination is based on the customer specific terms of the arrangement and gives consideration to factors including, but not limited to, whether the customer has an unconditional obligation to pay, whether a time period or event is specified in the arrangement and whether the Company can mandate the return or transfer of the products. Revenue is recorded net of taxes collected from customers that are remitted to governmental authorities with collected taxes recorded as current liabilities until remitted to the relevant government authority. Disaggregation of Revenue The table below includes revenue disaggregated by geographic location for the periods presented:
Contract Balances Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC Topic 606. Contract Estimates and Judgments The Company’s revenues accounted for under ASC Topic 606, generally, do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The sales prices are generally fixed at the point of sale and all consideration from contracts is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration. Cost of Goods Sold Cost of goods sold includes the costs directly attributable to product sales and includes amounts paid for finished goods, such as flower, edibles, and concentrates, as well as packaging and delivery costs. It also includes the labor and overhead costs incurred in cultivating and producing cannabis flower and cannabis-derived products. Overhead expenses include allocations of rent, administrative salaries, utilities, and related costs. Advertising Expenses The Company expenses advertising costs as incurred in accordance with ASC 720-35, “Other Expenses – Advertising Cost.” Advertising expenses from continuing operations totaled $0.77 million and $1.69 million for the three and six months ended June 30, 2022, respectively, and $0.08 million and $0.11 million for the three and six months ended June 30, 2021, respectively. Stock-Based Compensation The Company accounts for its stock-based awards in accordance with ASC Subtopic 718-10, “Compensation – Stock Compensation”, which requires fair value measurement on the grant date and recognition of compensation expense for all stock-based payment awards made to employees and directors, including restricted stock awards. For stock options, the Company estimates the fair value using a closed option valuation (Black-Scholes) model. The fair value of restricted stock awards is based upon the quoted market price of the common shares on the date of grant. The fair value is then expensed over the requisite service periods of the awards, net of estimated forfeitures, which is generally the performance period and the related amount is recognized in the consolidated statements of operations. The Black-Scholes option-pricing model requires the input of certain assumptions that require the Company’s judgment, including the expected term and the expected stock price volatility of the underlying stock. The assumptions used in calculating the fair value of stock-based compensation represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change resulting in the use of different assumptions, stock-based compensation expense could be materially different in the future. The Company accounts for forfeitures of stock-based awards as they occur. Income Taxes The provision for income taxes is determined in accordance with ASC 740, “Income Taxes”. The Company files a consolidated United States federal income tax return. The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. At June 30, 2021, such net operating losses were offset entirely by a valuation allowance. No valuation allowance remained at June 30, 2022. The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50.0% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations. Loss Per Common Share In accordance with the provisions of ASC 260, “Earnings Per Share”, net loss per share is computed by dividing net loss by the weighted-average shares of common stock outstanding during the period. During a loss period, the effect of the potential exercise of stock options, warrants, convertible preferred stock, and convertible debt are not considered in the diluted loss per share calculation since the effect would be anti-dilutive. The results of operations were a net loss for the three and six months ended June 30, 2022 and 2021. Therefore, the basic and diluted weighted-average shares of common stock outstanding were the same for all periods presented. Potentially dilutive securities that are not included in the calculation of diluted net loss per share because their effect is anti-dilutive are as follows (in common equivalent shares):
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CONCENTRATIONS OF BUSINESS AND CREDIT RISK |
6 Months Ended |
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Jun. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF BUSINESS AND CREDIT RISK | CONCENTRATIONS OF BUSINESS AND CREDIT RISK The Company maintains cash balances in several financial institutions that are insured by either the Federal Deposit Insurance Corporation or the National Credit Union Association up to certain federal limitations. At times, the Company’s cash balance exceeds these federal limitations, and it maintains significant cash on hand at certain of its locations. The Company has not historically experienced any material loss from carrying cash on hand. The amount in excess of insured limitations was at $0.89 million and $5.42 million as of June 30, 2022 and December 31, 2021, respectively. The Company provides credit in the normal course of business to customers located throughout the U.S. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts based on factors surrounding the credit risk of specific customers, historical trends, and other information. There were no customers that comprised more than 10.0% of the Company's revenue for the three and six months ended June 30, 2022 and 2021. The Company sources cannabis products for retail, cultivation and production from various vendors. However, as a result of regulations in the State of California, the Company’s California retail, cultivation and production operations must use vendors licensed by the State. As a result, the Company is dependent upon the licensed vendors in California to supply products. If the Company is unable to enter into a relationship with sufficient members of properly licensed vendors, the Company’s sales may be impacted. During the three and six months ended June 30, 2022 and 2021, we did not have any concentration of vendors for inventory purchases. However, this may change depending on the number of vendors who receive appropriate licenses to operate in the State of California.
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VARIABLE INTEREST ENTITIES |
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES On October 26, 2017, the Company entered into operating agreements with NuLeaf, Inc. and formed NuLeaf Sparks Cultivation, LLC and NuLeaf Reno Production, LLC (collectively, “NuLeaf”) to build and operate cultivation and production facilities for our IVXX brand of cannabis products in Nevada. The agreements were subject to approval by the State of Nevada, the City of Sparks and the City of Reno in Nevada. Under the terms of the agreements, the Company remitted to NuLeaf an upfront investment of $4.50 million in the form of convertible loans bearing an interest rate of 6% per annum. On June 28, 2018, the Company received approval from the State of Nevada. The remaining required approvals from local authorities were received in July 2018. As a result, the notes receivable balance was converted into a 50% ownership interest in NuLeaf. The investment in NuLeaf was initially recorded at cost and accounted for using the equity method. In February 2019, we amended and restated the NuLeaf agreements and obtained control of the operations of NuLeaf. The Company has determined these entities are variable interest entities in which the Company is the primary beneficiary by reference to the power and benefits criterion under ASC 810, “Consolidation.” The provisions within the amended agreement granted the Company the power to manage and make decisions that affect the operation of these entities. As the primary beneficiary of NuLeaf Sparks Cultivation, LLC and NuLeaf Reno Production, LLC, the Company began consolidating the accounts and operations of these entities on March 1, 2019. All intercompany transactions are eliminated in the consolidated financial statements. Effective March 1, 2019, we remeasured our equity method investment in NuLeaf to fair value and consolidated the results of NuLeaf within our consolidated financial statements. In November 2021, Nuleaf entered a definitive agreement with Jushi Holdings Inc. to acquire NuLeaf, Inc., together with its subsidiaries and affiliated companies and the Company classified the Nuleaf operations as classified as held for sale as of December 31, 2021. The transaction closed in April 2022 and the Nuleaf operations are classified as discontinued operations for all periods presented. See Note 17, "Discontinued Operations" for further information. During the three and six months ended June 30, 2022, revenue attributed to NuLeaf was $— million and $2.81 million, respectively, and net loss attributed to NuLeaf was $8.12 million and $8.19 million, respectively. During the three and six months ended June 30, 2021, revenue attributed to NuLeaf was $3.39 million and $6.45 million, respectively, and net loss attributed to NuLeaf was $1.73 million and $0.97 million, respectively. The aggregate carrying values of Sparks Cultivation, LLC and NuLeaf Reno Production, LLC assets and liabilities, after elimination of any intercompany transactions and balances, in the consolidated balance sheets were as follows:
During the six months ended June 30, 2022, the Company sold its interest in NuLeaf and no assets and liabilities remained as of June 30, 2022. See Note 17, "Discontinued Operations" for further discussions.
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ASSETS HELD FOR SALE |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ASSETS HELD FOR SALE | ASSETS HELD FOR SALE Assets held for sale consist of those classified as discontinued operations and those that do not meet the criteria for discontinued operations under ASC 205. See Note 17, "Discontinued Operations" for further information. Subsidiaries classified as held for sale that do not qualify as discontinued operations as of June 30, 2022 consist of the following:
During the fiscal second quarter of 2022, the Company decided to divest two operating dispensaries in the state of California. In June 2022, the Company permanently closed Blüm San Leandro and is actively marketing the retail location for sale. The transaction is expected to close within the next year. The assets are classified as held for sale as of June 30, 2022 but do not meet the criteria for discontinued operation. On June 18, 2022, the Company entered into a settlement agreement and transferred 100% of the membership interests in the People's dispensary in Los Angeles, CA wherein all operational control and risk of loss was transferred to the Buyer and the Company had no further obligations except for the operating lease payments. As consideration received, a promissory note of $1.4 million with the Buyer was forgiven. The Company recognized a loss upon sale of assets of $0.54 million for the difference between the aggregate consideration and the book value of the assets as of the disposition date which is recognized in the consolidated statements of operations during the three months ended June 30, 2022. All assets and liabilities related to the dispensary are excluded from the consolidated balance sheet as of June 30, 2022, except for the lease related assets and liabilities. All profits or losses subsequent to June 18, 2022 are excluded from the consolidated statements of operations. DISCONTINUED OPERATIONSNuLeaf On November 17, 2021, Medifarm III, LLC (“Medifarm”), a wholly-owned subsidiary of the Company, entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with NuLeaf, Inc., a Nevada corporation (“NuLeaf”). Upon the terms and subject to the satisfaction of the conditions described in the Purchase Agreement, Medifarm will sell its fifty percent (50%) of the outstanding membership interests of each of NuLeaf Reno Production, LLC (“NuLeaf Reno”) and NuLeaf Sparks Cultivation, LLC (“NuLeaf Sparks”) to NuLeaf, which currently owns the remaining fifty percent (50%) of the membership interests of NuLeaf Reno and NuLeaf Sparks, for aggregate consideration of $6.50 million in cash. The transaction closed in April 2022 and the Company recognized a gain of $2.05 million for the difference between the aggregate consideration and the book value of the assets as of the disposition date, less direct costs to sell, for the three and six months ended June 30, 2022. Nevada Dispensaries During fiscal year 2019 and 2020, the Company entered into Asset Purchase Agreements with unrelated third parties to sell substantially all of the assets of the Company related to the Company's dispensaries located at: •1130 East Desert Inn Road, Las Vegas, NV 89109 •1085 S. Virginia St., Suite A, Reno, NV 89502 •3650 S. Decatur Blvd., Las Vegas, NV The dispensaries are collectively referred to as the "Nevada dispensaries". The transactions for the sale of the Nevada dispensaries closed upon receiving all required government approvals during the fiscal fourth quarter ended December 31, 2021. Real Estate On December 7, 2021, 620 Dyer LLC, a wholly-owned subsidiary of the Company, entered into a Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate (the “PSA”) with FRO III/SMA Acquisitions, LLC (the “Buyer”) to sell the real property located at 620 East Dyer Road, Santa Ana, CA (the “Dyer Property”) for $13.40 million in cash. On February 10, 2022, the Company announced the closing of the sale of the Dyer Property, resulting in the Company retiring $9.00 million of outstanding debt on the Dyer Property as disclosed in Note 11, "Notes Payable". The Company is continuing to evaluate its options with respect to the license originally connected to the Dyer property, including consideration of the retail density in the area. If the city of Santa Ana grants approval to relocate licenses elsewhere in the city, the Company may consider using the dispensary license to open a dispensary in an underserved part of Santa Ana. During fiscal year 2020, the Company classified real property in Las Vegas, NV and Santa Ana, CA as available-for-sale as it met the criteria of ASC 360-10-45-0. In August 2021, the Company sold the properties. OneQor During fiscal year 2020, management suspended the operations of OneQor Technologies due to (i) a lack of proper growth in customer acquisition and revenue for this CBD operation during the COVID-19 pandemic and (ii) the overall financial health of the Company as a result of COVID-19 and social unrest. The Company plans to focus its attention and resources on growing its THC business. Edible Garden On March 30, 2020, the Company entered into and closed an Asset Purchase Agreement with Edible Garden AG Inc. (the "Purchaser") pursuant to which the Company sold substantially all of the assets of Edible Garden Corp. As part of the consideration received, the Company entered into two option agreements to purchase up to a 20% interest in the Purchaser. During the year ended December 31, 2021, the Company exercised both options and acquired 5,000,000 common shares of the Purchaser for a nominal fee. The completed sales of our NuLeaf operations and Nevada dispensaries, completed sales of real estate assets, and assets divested during the periods presented represent a strategic shift that will have a major effect on the Company’s operations and financial results. As a result, management determined the results of these components qualified for discontinued operations presentation in accordance with ASC 205, “Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity". Operating results for the discontinued operations were comprised of the following:
The carrying amounts of the major classes of assets and liabilities for the discontinued operations are as follows:
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INVESTMENTS IN UNCONSOLIDATED AFFILIATES |
6 Months Ended |
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Jun. 30, 2022 | |
Investments [Abstract] | |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | INVESTMENTS IN UNCONSOLIDATED AFFILIATESOn March 30, 2020, Edible Garden Corp. (“Edible Garden”), a wholly-owned subsidiary of Terra Tech Corp. (the “Company”), entered into and closed an Asset Purchase Agreement (the “Purchase Agreement”) with Edible Garden Incorporated (the “Purchaser”), pursuant to which Edible Garden Corp. sold and the Purchaser purchased substantially all of the assets of Edible Garden (the “Business”). The consideration paid for the Business included two option agreements to purchase up to a 20% interest in the Purchaser for a nominal fee. The first option gives the Company the right to purchase a 10% interest in the Purchaser for one dollar at any time between the On May 3, 2022, Edible Garden completed a 1-for-5 reverse stock split of its outstanding common stock. As a result, the Company held 1,000,000 shares in Edible Garden. On May 5, 2022, Edible Garden announced the pricing of its initial public offering of 2,930,000 shares of its common stock and accompanying warrants to purchase up to 2,930,000 shares of common stock for an exercise price of $5.00 per share. Each share of common stock is being sold together with one warrant at a combined offering price of $5.00, for gross proceeds of approximately $14.70 million. The Company holds a 20% interest in Edible Garden. As a result of the initial public offering, the Company reassessed its write down on the investment and recorded a write up to its fair value, which is categorized within the fair value hierarchy as Level 2. As a result, the Company recorded a gain on investment of $0.96 million for the three and six months ended June 30, 2022. | and five-year anniversary of the transaction, or at any time should a change in control event or public offering occur. The second option gives the Company the right to purchase an additional 10% interest in the Purchaser for one dollar at any point prior to the five-year anniversary of the transaction. During the year ended December 31, 2021, the Company exercised its options and acquired 5,000,000 shares of Edible Garden's common stock for a nominal fee. During the fourth quarter of 2021, management concluded that the investment was impaired and recorded an impairment charge of $0.33 million, representing the total amount of the investment.
INVENTORY |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORY | INVENTORY Raw materials consist of materials and packaging for manufacturing of products owned by Unrivaled Brands. Work-in-progress consists of cultivation materials and live plants grown at Black Oak Gallery and Hegenberger. Finished goods consists of cannabis products sold in retail and distribution. Inventory as of June 30, 2022 and December 31, 2021 consisted of the following:
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PROPERTY EQUIPMENT AND LEASEHOLD IMPROVEMENTS NET |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET Property, equipment, and leasehold improvements as of June 30, 2022 and December 31, 2021 consisted of the following:
Depreciation expense related to property, equipment and leasehold improvements for the three months ended June 30, 2022 and June 30, 2021 was $0.97 million and $0.32 million, respectively, and for the six months ended June 30, 2022 and June 30, 2021 was $1.92 million and $0.66 million, respectively On January 21, 2022, the Company sold its land in Spanish Springs, Nevada for $0.45 million to an unrelated third party.
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INTANGIBLE ASSETS AND GOODWILL |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Intangible Assets, Net Intangible assets, net consisted of the following as of June 30, 2022 and December 31, 2021:
Amortization expense for the three months ended June 30, 2022 and 2021 was $2.42 million and $0.18 million, respectively, and for the six months ended June 30, 2022 and 2021 was $4.77 million and $0.38 million, respectively. During the second quarter of 2022, management noted indicators of impairment of its indefinite-lived assets of certain asset groups. Specifically, changes in circumstances resulted in significant differences in actual revenue compared to projections. The Company used a discount rate under current market conditions to determine a preliminary estimate, noting an impairment of $22.10 million which is included as a component of impairment expense for the three and six months ended June 30, 2022. The Company will conduct its annual impairment assessment on September 30 that may result in additional impairment. Goodwill Goodwill arises from the purchase price for acquired businesses exceeding the fair value of tangible and intangible assets acquired less assumed liabilities. Goodwill is assigned to the reporting unit, which is the operating segment level or one level below the operating segment. The Company conducts its annual goodwill impairment assessment on September 30, and between annual tests if the Company becomes aware of an event or a change in circumstances that would indicate the carrying value may be impaired. For the purpose of the goodwill impairment assessment, the Company has the option to perform a qualitative assessment (commonly referred to as “step zero”) to determine whether further quantitative analysis for impairment of goodwill or indefinite-lived intangible assets is necessary or a quantitative assessment (“step one”) where the Company estimates the fair value of each reporting unit using a discounted cash flow method (income approach). During the second quarter of 2022, the Company identified changes in circumstances that would indicate the carrying value of certain reporting units may be impaired. Management performed a preliminary quantitative assessment using a comparison of actual revenues to projections and applied a current discount rate, which resulted in a goodwill impairment loss of $33.63 million for the three and six months ended June 30, 2022. The Company will conduct its annual impairment assessment on September 30 that may result in additional impairment. The balance of goodwill at June 30, 2022 and December 31, 2021 was $14.51 million and $48.13 million, respectively.
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ACCOUNTS PAYABLE AND ACCRUED EXPENSES |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following:
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NOTES PAYABLE |
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NOTES PAYABLE | NOTES PAYABLE Notes payable as of June 30, 2022 and December 31, 2021 consisted of the following:
During the six months ended June 30, 2022, the Company converted debt and accrued interest into 294,452 shares of the Company’s common stock. See Note 13, "Stockholders' Equity" for further information. Series A Preferred Stock Purchase Agreement On January 22, 2021, the Company entered into an unsecured promissory note in the amount of $1.05 million in connection with the Series A Preferred Stock Purchase Agreement with Michael A. Nahass. The promissory note bears interest at the rate of 3% and matured on or about January 25, 2022. On February 8, 2022, the Company paid the outstanding principal and interest on the $1.05 million promissory note held by Mr. Nahass. This payment satisfied the obligation and retired the note. Debt Related to Dyer Property On January 18, 2018, the Company entered into a $6.50 million promissory note for the purchase of land and building in Santa Ana, CA (the "Dyer Property"). On November 22, 2021, the Company issued a senior secured promissory note to Dominion Capital LLC in the amount of $2.50 million, which matured on February 22, 2022 and bore interest at a rate of 12% per annum. As a result of the sale of the Dyer Property on February 10, 2022, the Company retired a total of $9.00 million in outstanding debt related to the Dyer Property. See Note 17, "Discontinued Operations" for further information. Forgiveness of PPP Note On May 4, 2020, OneQor Technologies, Inc entered into a promissory note (the “PPP Note”) with Harvest Small Business Finance, LLC (the “Lender”), pursuant to which the Lender agreed to make a loan to the Company under the Paycheck Protection Program (“PPP”) offered by the U.S. Small Business Administration in a principal amount of $0.56 million. The PPP Note incurs interest at a fixed rate of 1% per annum and matured on May 4, 2022. On February 16, 2022, the Company received notice of forgiveness of approximately $0.54 million of the PPP Note. The remainder is to be paid off over the next three years. Debt Assumed in the UMBRLA Acquisition On July 1, 2021, upon the closing of the UMBRLA acquisition, the Company assumed a line of credit agreement with Bespoke Financial, Inc. for the lesser of a maximum draw amount of $4.50 million and a borrowing base consisting of eligible accounts receivable inventory and cash that serves as collateral. The line of credit accrues interest at a rate of 2.9% every 30 days and expires on March 31, 2022. On March 9, 2022, the Company paid the outstanding principal and interest due on the line of credit facility. The payment satisfied the obligation and retired the debt. Amendment of People's Secured Promissory Note On April 8, 2022, the Company and People's California, LLC agreed to amend a portion of the November 22, 2021 Closing Documents (Primary Membership Interest Purchase Agreement, Secondary Membership Interest Purchase Agreement, Secured Promissory Note, and other ancillary agreements). On April 11, 2022, the Company paid $3.00 million upon execution of the amendment and was to pay $5.00 million by June 1, 2022, or June 30, 2022 if the Company obtained debt financing approved by People’s, to satisfy all financial obligations that would be owing as of June 30, 2022. People’s declined to approve the debt financing obtained by the Company, and the Company did not make the $5.00 million payment. Management is renegotiating terms of the promissory note as of the date of these consolidated financial statements.
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LEASES |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASESA lease provides the lessee the right to control the use of an identified asset for a period of time in exchange for consideration. Operating lease right-of-use assets are included in other assets while lease liabilities are a line item on the Company’s Consolidated Balance Sheets. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company determines if an arrangement is a lease at inception. Right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Most operating leases contain renewal options that provide for rent increases based on prevailing market conditions. The terms used to calculate the right-of-use assets for certain properties include the renewal options that the Company is reasonably certain to exercise. The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, the Company utilizes its secured borrowing rate. Right-of-use assets include any lease payments required to be made prior to commencement and exclude lease incentives. Both right-of-use assets and lease liabilities exclude variable payments not based on an index or rate, which are treated as period costs. The Company’s lease agreements do not contain significant residual value guarantees, restrictions or covenants. The Company occupies office facilities under lease agreements that expire at various dates. In addition, office, production and transportation equipment is leased under agreements that expire at various dates. The Company does not have any significant finance leases. Total operating lease costs for the three months ended June 30, 2022 and June 30, 2021 were $1.50 million and $0.34 million, respectively, and for the six months ended June 30, 2022 and June 30, 2021 were $2.71 million and $0.75 million, respectively. Short-term lease costs during the 2022 and 2021 fiscal quarters ended June 30 were not material. As of June 30, 2022 and December 31, 2021, short term lease liabilities of $1.94 million and $3.12 million are included in “ ” on the consolidated balance sheets, respectively. The table below presents total operating lease right-of-use assets and lease liabilities as of June 30, 2022 and December 31, 2021:
The table below presents the maturities of operating lease liabilities as of June 30, 2022:
The table below presents the weighted average remaining lease term for operating leases and weighted average discount rate used in calculating operating lease right-of-use assets:
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EQUITY |
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Jun. 30, 2022 | |
Equity [Abstract] | |
EQUITY | EQUITY Common Stock The Company authorized 990,000,000 shares of common stock with $0.001 par value per share. As of June 30, 2022 and December 31, 2021, 532,514,791 and 498,546,291 shares of common stock were outstanding, respectively. On February 1, 2022 the Company granted 294,452 shares Common Stock to Apollo Management Group, Inc. in exchange for the $0.05 million Convertible Promissory Note that Apollo Management Group, Inc. held and the related accrued interest. The fair value of the shares was $0.08 million. On February 28, 2022, the Company sold 25,000,000 shares for an aggregate sales price of $4.35 million to Arthur Chan, an unrelated party. The shares were restricted. During the six months ended June 30, 2022 , the Company issued 4,759,708 and 146,212 common shares for the cashless exercise of warrants and options, respectively. During the six months ended June 30, 2022, the Company issued 2,100,000 and 943,128 common shares to employees and directors, respectively. As a result, the Company recorded stock compensation of $0.35 million and $0.21 million, respectively. During the three and six months ended June 30, 2022, the Company issued 725,000 common shares to third party service providers. As a result, the Company recorded stock compensation of $0.13 million.
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STOCK-BASED COMPENSATION |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Equity Incentive Plans In the first quarter of 2016, the Company adopted the 2016 Equity Incentive Plan. In the fourth quarter of 2018, the Company adopted the 2018 Equity Incentive Plan. In July 2021, the Company assumed the 2019 Equity Incentive Plan as part of the acquisition of UMBRLA. The following table contains information about the Company's equity incentive plans as of June 30, 2022:
Stock Options The following table summarizes the Company’s stock option activity and related information for the six months ended June 30, 2022:
As of June 30, 2022, there was $5.44 million total unrecognized stock-based compensation. Such costs are expected to be recognized over a weighted-average period of approximately 1.6 years. The Company recognizes compensation expense for stock option awards on a straight-line basis over the applicable service period of the award. The service period is generally the vesting period. The Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Hence, the Company uses the “simplified method” described in Staff Accounting Bulletin 107 to estimate the expected term of share option grants. The expected stock price volatility assumption was determined by examining the historical volatilities for the Company’s common stock. The Company will continue to analyze the historical stock price volatility and expected term assumptions as more historical data for the Company’s common stock becomes available. The risk-free interest rate assumption is based on the U.S. treasury instruments whose term was consistent with the expected term of the Company’s stock options. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has never paid dividends on its common stock and does not anticipate paying dividends on its common stock in the foreseeable future. Accordingly, the Company has assumed no dividend yield for purposes of estimating the fair value of the Company stock-based compensation. Stock-Based Compensation Expense The following table sets forth the total stock-based compensation expense resulting from stock options and restricted grants of common stock to employees, directors and non-employee consultants in the consolidated statement of operations which are included in selling, general and administrative expenses:
On March 10, 2022, the Company terminated the employment of Oren Schauble, the Company’s President. On March 13, 2022, the Company terminated the employment of Francis Knuettel II, the Company’s Chief Executive Officer. The Company entered into separation agreements with each of Mr. Knuettel and Mr. Schauble regarding the compensation to be granted to each of them regarding their separation from the Company. In addition, on March 17, 2022 the Company entered into a consulting agreement with Mr. Schauble pursuant to which he will continue to provide certain services to the Company through a future agreed upon date. The Company granted Mr. Schauble 910,623 restricted shares of the Company's Common Stock in four monthly installments. On April 12, 2022, the Company and Francis Knuettel, formerly the Company's Chief Executive Officer, agreed to terms on a separation agreement. The Company agreed to pay Mr. Knuettel 50% of his annual base salary and continue his medical benefits for a period of six months. Mr. Knuettel's unvested shares and options vested immediately. As part of this separation agreement Mr. Knuettel resigned as a director of the Company. On April 14, 2022, the Company and Dallas Imbimbo, an advisor to the Company and a director of the Company, agreed to terms on a separation agreement. The Company agreed to vest 100% of Mr. Imbimbo's restricted common stock granted pursuant to the advisor agreement with Mr. Imbimbo. The Company agreed to vest 100% of the options to purchase shares of the Company's common stock granted as part Mr. Imbimbo's Independent Director Agreement. The Company will pay Mr. Imbimbo $0.08 million in cash compensation. As part of this separation agreement, Mr. Imbimbo resigned as a director of the Company and as an Advisor to the Company.
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WARRANTS |
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Warrants and Rights Note Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WARRANTS | WARRANTS The following table summarizes warrant activity for the six months ended June 30, 2022:
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COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES California Operating Licenses The Company’s subsidiaries have operated compliantly and have been eligible for applicable licenses and renewals of those licenses. Litigation and Claims The Company is the subject of lawsuits and claims arising in the ordinary course of business from time to time. The Company reviews any such legal proceedings and claims on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and it discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued if such disclosure is necessary for the Company’s financial statements to not be misleading. To estimate whether a loss contingency should be accrued by a charge to income, the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss. The Company does not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated. Based upon present information, the Company determined that there was one matter that required an accrual as of June 30, 2022. We have accrued $0.50 million for the Magee litigation detailed below. Magee v. UMBRLA, Inc. et al. - The company is currently involved in a breach of contract action brought by former LTRMN, Inc. (“LTRMN”) employee, Kurtis Magee, which was filed by Mr. Magee in the Superior Court of the State of California, County of Orange, on July 21, 2020. Mr. Magee alleges breach of contract in connection with Mr. Magee’s separation agreement with LTRMN. Trial in this matter is set for December 5, 2022. Terra Tech Corp. v. National Fire & Marine Ins. Co., et al. - On or about December 6, 2021, the Company initiated an action in California Superior Court, County of Alameda, against National Fire & marine Insurance Company (“National Fire”), Woodruff-Sawyer & Co., and R-T Specialty, LLC in connection with the denial of an insurance claim by National Fire following the vandalism and looting of the Company’s Bay Area dispensaries in May 2020. The Company alleges that coverage levels for the Company were changed after the policy was bound, in a manner inconsistent with the binder, which prevented the Company from fully recovering its losses in connection with the incidents. Trial in this matter has not yet been set. Unrivaled Brands, Inc. et al v. Mystic Holdings, Inc., et al. - On May 11, 2022, Unrivaled and its wholly-owned subsidiary, Medifarm I, LLC (“Plaintiffs”) initiated an action in the Second Judicial District of the State of Nevada, County of Washoe, against Mystic Holdings, Inc. (“Mystic”) and Picksy Reno LLC (collectively with Mystic, “Defendants”) in connection with Defendants’ failure to honor Plaintiffs’ exercise of a put option entitling Plaintiffs to the repurchase of approximately 8,332,096 shares of Mystic at a price of $1.00 per share. No proceedings have yet been held in this matter and a trial date has not been scheduled. Fusion LLF, LLC v. Unrivaled Brands, Inc. - On June 27, 2022, Fusion LLF, LLC filed an action against the Company, Fusion LLF, LLC v. Unrivaled Brands, Inc., Superior Court for the State of California, County of Orange Case No. 30-2022-01266856-CU-BC-CJC alleging claims for breach of contract, account stated, and right to attach order and writ of attachment. The Complaint claims at least $4.55 million in damages. Company has not yet responded to the Complaint and is evaluating the claims.
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DISCONTINUED OPERATIONS |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS | ASSETS HELD FOR SALE Assets held for sale consist of those classified as discontinued operations and those that do not meet the criteria for discontinued operations under ASC 205. See Note 17, "Discontinued Operations" for further information. Subsidiaries classified as held for sale that do not qualify as discontinued operations as of June 30, 2022 consist of the following:
During the fiscal second quarter of 2022, the Company decided to divest two operating dispensaries in the state of California. In June 2022, the Company permanently closed Blüm San Leandro and is actively marketing the retail location for sale. The transaction is expected to close within the next year. The assets are classified as held for sale as of June 30, 2022 but do not meet the criteria for discontinued operation. On June 18, 2022, the Company entered into a settlement agreement and transferred 100% of the membership interests in the People's dispensary in Los Angeles, CA wherein all operational control and risk of loss was transferred to the Buyer and the Company had no further obligations except for the operating lease payments. As consideration received, a promissory note of $1.4 million with the Buyer was forgiven. The Company recognized a loss upon sale of assets of $0.54 million for the difference between the aggregate consideration and the book value of the assets as of the disposition date which is recognized in the consolidated statements of operations during the three months ended June 30, 2022. All assets and liabilities related to the dispensary are excluded from the consolidated balance sheet as of June 30, 2022, except for the lease related assets and liabilities. All profits or losses subsequent to June 18, 2022 are excluded from the consolidated statements of operations. DISCONTINUED OPERATIONSNuLeaf On November 17, 2021, Medifarm III, LLC (“Medifarm”), a wholly-owned subsidiary of the Company, entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with NuLeaf, Inc., a Nevada corporation (“NuLeaf”). Upon the terms and subject to the satisfaction of the conditions described in the Purchase Agreement, Medifarm will sell its fifty percent (50%) of the outstanding membership interests of each of NuLeaf Reno Production, LLC (“NuLeaf Reno”) and NuLeaf Sparks Cultivation, LLC (“NuLeaf Sparks”) to NuLeaf, which currently owns the remaining fifty percent (50%) of the membership interests of NuLeaf Reno and NuLeaf Sparks, for aggregate consideration of $6.50 million in cash. The transaction closed in April 2022 and the Company recognized a gain of $2.05 million for the difference between the aggregate consideration and the book value of the assets as of the disposition date, less direct costs to sell, for the three and six months ended June 30, 2022. Nevada Dispensaries During fiscal year 2019 and 2020, the Company entered into Asset Purchase Agreements with unrelated third parties to sell substantially all of the assets of the Company related to the Company's dispensaries located at: •1130 East Desert Inn Road, Las Vegas, NV 89109 •1085 S. Virginia St., Suite A, Reno, NV 89502 •3650 S. Decatur Blvd., Las Vegas, NV The dispensaries are collectively referred to as the "Nevada dispensaries". The transactions for the sale of the Nevada dispensaries closed upon receiving all required government approvals during the fiscal fourth quarter ended December 31, 2021. Real Estate On December 7, 2021, 620 Dyer LLC, a wholly-owned subsidiary of the Company, entered into a Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate (the “PSA”) with FRO III/SMA Acquisitions, LLC (the “Buyer”) to sell the real property located at 620 East Dyer Road, Santa Ana, CA (the “Dyer Property”) for $13.40 million in cash. On February 10, 2022, the Company announced the closing of the sale of the Dyer Property, resulting in the Company retiring $9.00 million of outstanding debt on the Dyer Property as disclosed in Note 11, "Notes Payable". The Company is continuing to evaluate its options with respect to the license originally connected to the Dyer property, including consideration of the retail density in the area. If the city of Santa Ana grants approval to relocate licenses elsewhere in the city, the Company may consider using the dispensary license to open a dispensary in an underserved part of Santa Ana. During fiscal year 2020, the Company classified real property in Las Vegas, NV and Santa Ana, CA as available-for-sale as it met the criteria of ASC 360-10-45-0. In August 2021, the Company sold the properties. OneQor During fiscal year 2020, management suspended the operations of OneQor Technologies due to (i) a lack of proper growth in customer acquisition and revenue for this CBD operation during the COVID-19 pandemic and (ii) the overall financial health of the Company as a result of COVID-19 and social unrest. The Company plans to focus its attention and resources on growing its THC business. Edible Garden On March 30, 2020, the Company entered into and closed an Asset Purchase Agreement with Edible Garden AG Inc. (the "Purchaser") pursuant to which the Company sold substantially all of the assets of Edible Garden Corp. As part of the consideration received, the Company entered into two option agreements to purchase up to a 20% interest in the Purchaser. During the year ended December 31, 2021, the Company exercised both options and acquired 5,000,000 common shares of the Purchaser for a nominal fee. The completed sales of our NuLeaf operations and Nevada dispensaries, completed sales of real estate assets, and assets divested during the periods presented represent a strategic shift that will have a major effect on the Company’s operations and financial results. As a result, management determined the results of these components qualified for discontinued operations presentation in accordance with ASC 205, “Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity". Operating results for the discontinued operations were comprised of the following:
The carrying amounts of the major classes of assets and liabilities for the discontinued operations are as follows:
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SEGMENT INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATIONThe Company operates in two segments: (i) cannabis retail and (ii) cannabis cultivation and distribution. Our reportable segments are as follows:
Cannabis Retail Either independently or in conjunction with third parties, we operate medical marijuana and adult use cannabis dispensaries in California. All our retail dispensaries offer a broad selection of medical and adult use cannabis products including flower, concentrates and edibles. Cannabis Cultivation and Distribution We operate distribution centers in California and Oregon that distribute our own branded products as well as third party products to our own dispensaries and to other non-affiliated medical marijuana and/or adult use cannabis dispensaries.
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RELATED PARTY TRANSACTIONS |
6 Months Ended |
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Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Refer to Note 11, "Notes Payable" for related party transactions and balances during the current period. All related party transactions are monitored quarterly by the Company and approved by the Audit Committee of the Board of Directors.
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GOING CONCERN |
6 Months Ended |
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Jun. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
GOING CONCERN | GOING CONCERN We have incurred significant losses in prior periods. For the three and six months ended June 30, 2022, we incurred a pre-tax net loss from continuing operations of $66.10 million and $78.43 million, respectively, and, as of that date, we had an accumulated deficit of $323.71 million. For the three and six months ended June 30, 2021, we incurred a net loss from continuing operations of $2.87 million and $15.01 million, respectively. As of December 31, 2021, we had an accumulated deficit of $250.02 million. We expect to experience further significant net losses in 2022 and the foreseeable future. At June 30, 2022, we had a consolidated cash balance of approximately $7.26 million. We have not been able to generate sufficient cash from operating activities to fund our ongoing operations. Our future success is dependent upon our ability to achieve profitable operations and generate cash from operating activities. There is no guarantee that we will be able to generate enough revenue and/or raise capital to support our operations. We will be required to raise additional funds through public or private financing, additional collaborative relationships or other arrangements until we are able to raise revenues to a point of positive cash flow. We are evaluating various options to further reduce our cash requirements to operate at a reduced rate, as well as options to raise additional funds, including obtaining loans and selling common stock. There is no guarantee that we will be able to generate enough revenue and/or raise capital to support our operations, or if we are able to raise capital, that it will be available to us on acceptable terms, on an acceptable schedule, or at all. The issuance of additional securities may result in a significant dilution in the equity interests of our current stockholders. Obtaining loans, assuming these loans would be available, will increase our liabilities and future cash commitments. There is no assurance that we will be able to obtain further funds required for our continued operations or that additional financing will be available for use when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease our operations. The risks and uncertainties surrounding our ability to continue to raise capital and our limited capital resources raise substantial doubt as to our ability to continue as a going concern for twelve months from the issuance of these financial statements.
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SUBSEQUENT EVENTS |
6 Months Ended |
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Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On July 19, 2022, People’s California, LLC, the sellers of Peoples First Choice, filed an action against Unrivaled Brands, Inc. (the “Company”), styled, People’s California, LLC v. Unrivaled Brands, Inc., in the Superior Court for the State of California, County of Orange Case No. 30-2022-01270747-CU-BC-CJC, bringing claims for breach of contract and breach of the covenant of good faith and fair dealing stemming from the Company’s alleged breach of certain agreements with People’s California, LLC. The Complaint claims at least $23.00 million in damages. The Company has not yet responded to the Complaint and is evaluating the claims. On August 1, 2022, People’s California, LLC filed an action against certain current and former officers and directors of the Company, styled People’s California, LLC v. Nicholas Kovacevich, et al, in the Superior Court for the State of California, County of Orange Case No. 30-2022-01272843-CU-MC-CJC, derivatively on behalf of the Company and listing the Company as a nominal defendant alleging claims for breach of fiduciary duty, abuse of control, self-dealing, corporate waste, and unjust enrichment based on a series of corporate transactions and management decisions. The Complaint does not state a specific claim for damages. The Company and the individual defendants have not yet responded to the Complaint and the Company is evaluating the claims. On July 21, 2022, Tiffany Davis resigned as Interim Chief Executive Officer and as a member of the Company’s Board of Directors effective immediately. On August 12, 2022, the Board of Directors appointed Sabas Carrillo as Interim Chief Executive Officer. Mr. Carrillo is the Founder and CEO of Adnant, LLC, an accounting and consulting firm advising cannabis companies on technical and operational accounting, strategic transactions, and the public offering process. On August 12, 2022, the Company entered into an engagement letter with Adnant, LLC (“Adnant”). Pursuant to the engagement letter, Adnant will provide executive level consulting and related business support and services related to the Company’s present and future challenges and opportunities. Specifically, Adnant will provide a team of restructuring focused executives that may include, but not be limited to, CEO support, chief restructuring officer, executive vice president of finance, Financial Planning and Analysis (“FP&A”) professional, and/or legal consulting. Adnant is expected to work closely with the Company and its internal teams, existing management, existing consultants and advisors, lenders, attorneys, and other relevant parties in connection with the implementation of the strategies most appropriate to achieve the Company's objectives and as directed and authorized by the Company’s Board of Directors (the “Board”). Adnant’s fees for the services will be a flat fee of $0.15 million monthly. The payment of the monthly fee shall be subject to the Company having available a cash balance greater than or equal to $1.2 million (the “Cash Threshold”) following the payment of the monthly fee. Should cash not be sufficient when the fee becomes due and payable, the Company shall accrue such fee(s) until such time as the Cash Threshold is achieved or, at the election of Adnant, and as mutually agreed by the Company, such fees may be paid in an equivalent value of shares of the Company’s common stock. In addition to the monthly fee described above, a Performance Bonus Award in the aggregate amount of $2,000,000 shall be payable to Adnant in shares of the Company’s common stock (“Performance Bonus Award Shares”) based upon the achievement of the Performance Bonus Award Objectives set forth in the Engagement Letter and the continued performance of Adnant towards obtaining such Performance Bonus Award Objectives.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
6 Months Ended |
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Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and with the instructions to U.S. Securities and Exchange Commission (“SEC”) Form 10-Q and Article 10 of Regulation S-X of the Securities Act of 1933 and reflect the accounts and operations of the Company and those of our subsidiaries in which we have a controlling financial interest. In accordance with the provisions of FASB or ASC 810, “Consolidation,” we consolidate any variable interest entity (“VIE”) of which we are the primary beneficiary. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. ASC 810 requires a variable interest holder to consolidate a VIE if that party has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. We do not consolidate a VIE in which we have a majority ownership interest when we are not considered the primary beneficiary. We evaluate our relationships with all the VIEs on an ongoing basis to reassess if we continue to be the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial position of the Company as of June 30, 2022 and December 31, 2021, and the consolidated results of operations and cash flows for the quarters ended June 30, 2022 and 2021 have been included. These interim unaudited condensed consolidated financial statements do not include all disclosures required by GAAP for complete financial statements and, therefore, should be read in conjunction with the more detailed audited consolidated financial statements for the year ended December 31, 2021. The December 31, 2021 balances reported herein are derived from the audited consolidated financial statements for the year ended December 31, 2021. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year.
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Going Concern | The accompanying financial statements have been prepared assuming that we will continue as a going concern. In an effort to achieve liquidity that would be sufficient to meet all of our commitments, we have undertaken a number of actions, including minimizing capital expenditures and reducing recurring expenses. However, we believe that even after taking these actions, we will not have sufficient liquidity to satisfy all of our future financial obligations. The risks and uncertainties surrounding our ability to raise capital, our limited capital resources, and the weak industry conditions impacting our business raise substantial doubt as to our ability to continue as a going concern. See Note 20, "Going Concern" of the Notes to Consolidated Financial Statements for additional information. |
Non-Controlling Interest | Non-controlling interest is shown as a component of stockholders’ equity on the consolidated balance sheets and the share of net income (loss) attributable to non-controlling interest is shown as a component of net income (loss) in the consolidated statements of operations. |
Use of Estimates | The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of total net revenue and expenses in the reporting periods. The Company regularly evaluates estimates and assumptions related to revenue recognition, allowances for doubtful accounts, sales returns, inventory valuation, stock-based compensation expense, goodwill and purchased intangible asset valuations, derivative liabilities, deferred income tax asset valuation allowances, uncertain tax positions, tax contingencies, litigation and other loss contingencies. These estimates and assumptions are based on current facts, historical experience and various other factors that the Company believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue, costs and expenses that are not readily apparent from other sources. The actual results the Company experiences may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. |
Reclassifications | Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications did not affect net loss, revenues or stockholders’ equity. See Note 17, "Discontinued Operations" for further discussion regarding discontinued operations. |
Trade and Other Receivables | The Company extends non-interest bearing trade credit to its customers in the ordinary course of business which is not collateralized. Accounts receivable are shown on the face of the consolidated balance sheets, net of an allowance for doubtful accounts. The Company analyzes the aging of accounts receivable, historical bad debts, customer creditworthiness and current economic trends, in determining the allowance for doubtful accounts. The Company does not accrue interest receivable on past due accounts receivable. The allowance for doubtful accounts was $4.76 million and $3.68 million as of June 30, 2022 and December 31, 2021, respectively. |
Investments | Investments in unconsolidated affiliates are accounted for under the cost or the equity method of accounting, as appropriate. The Company accounts for investments in limited partnerships or limited liability corporations, whereby the Company owns a minimum of 5% of the investee’s outstanding voting stock, under the equity method of accounting. These investments are recorded at the amount of the Company’s investment and adjusted each period for the Company’s share of the investee’s income or loss, and dividends paid. As investments accounted for under the cost method do not have readily determinable fair values, the Company only estimates fair value if there are identified events or changes in circumstances that could have a significant adverse effect on the investment’s fair value. Publicly held equity securities are recorded at fair value with unrealized gains or losses resulting from changes in fair value reflected as unrealized gains or losses on equity securities in our consolidated statements of operations.
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Inventory | Inventory is stated at the lower of cost or net realizable value, with cost being determined on the first-in, first-out (“FIFO”) method of accounting. The Company periodically reviews physical inventory for excess, obsolete, and potentially impaired items and reserves. The reserve estimate for excess and obsolete inventory is based on expected future use. The reserve estimates have historically been consistent with actual experience as evidenced by actual sale or disposal of the goods. |
Prepaid Expenses and Other Current Assets | Prepaid expenses consist of various payments that the Company has made in advance for goods or services to be received in the future. These prepaid expenses include advertising, insurance, and service or other contracts requiring upfront payments. |
Property, Equipment and Leasehold Improvements, Net | Repairs and maintenance expenditures that do not extend the useful lives of related assets are expensed as incurred. Expenditures for major renewals and improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. The Company continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, “Property, Plant, and Equipment.” When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. See Note 8, “Property, Equipment and Leasehold Improvements, Net” for further information. |
Intangible Assets | Intangible assets continue to be subject to amortization, and any impairment is determined in accordance with ASC 360, “Property, Plant, and Equipment,” intangible assets are stated at historical cost and amortized over their estimated useful lives. The Company uses a straight-line method of amortization unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed can be reliably determined. The Company reviews intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset (asset group), the Company will write the carrying value down to the fair value in the period identified. Intangible assets that have indefinite useful lives (e.g. trade names) are tested annually for impairment and are tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount of the asset group exceeds its fair value.
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Goodwill | Goodwill is measured as the excess of consideration transferred and the net of the acquisition date fair value of assets acquired, and liabilities assumed in a business acquisition. In accordance with ASC 350, “Intangibles—Goodwill and Other,” goodwill and other intangible assets with indefinite lives are no longer subject to amortization but are tested for impairment annually or whenever events or changes in circumstances indicate that the asset might be impaired. The Company reviews the goodwill allocated to each of our reporting units for possible impairment annually as of September 30, and whenever events or changes in circumstances indicate carrying amount may not be recoverable. In the impairment test, the Company measures the recoverability of goodwill by comparing a reporting unit’s carrying amount, including goodwill, to the estimated fair value of the reporting unit. The carrying amount of each reporting unit is determined based upon the assignment of our assets and liabilities, including existing goodwill and other intangible assets, to the identified reporting units. Where an acquisition benefits only one reporting unit, the Company allocates, as of the acquisition date, all goodwill for that acquisition to the reporting unit that will benefit. Where the Company has had an acquisition that benefited more than one reporting unit, The Company has assigned the goodwill to our reporting units as of the acquisition date such that the goodwill assigned to a reporting unit is the excess of the fair value of the acquired business, or portion thereof, to be included in that reporting unit over the fair value of the individual assets acquired and liabilities assumed that are assigned to the reporting unit. If the carrying amount of a reporting unit is in excess of its fair value, the Company recognizes an impairment charge equal to the amount in excess.
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Notes Receivable | The Company reviews all outstanding notes receivable for collectability as information becomes available pertaining to the Company’s inability to collect. An allowance for notes receivable is recorded for the likelihood of non-collectability. The Company accrues interest on notes receivable based net realizable value. The allowance for uncollectible notes was nil as of June 30, 2022 and December 31, 2021, respectively. |
Assets Held for Sale and Discontinued Operations | Assets held for sale represent furniture, equipment, and leasehold improvements less accumulated depreciation as well as any other assets that are held for sale in conjunction with the sale of a business. The Company records assets held for sale in accordance with ASC 360, “Property, Plant, and Equipment,” at the lower of carrying value or fair value less costs to sell. Fair value is based on the estimated proceeds from the sale of the facility utilizing recent purchase offers, market comparables and/or data. Our estimate as to fair value is regularly reviewed and subject to changes in the commercial real estate markets and our continuing evaluation as to the facility’s acceptable sale price. The reclassification takes place when the assets are available for immediate sale and the sale is highly probable. These conditions are usually met from the date on which a letter of intent or agreement to sell is ready for signing. The Company follows the guidance within ASC 205, “Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity” when assets held for sale represent a strategic shift in the Company’s operations and financial results. For long-lived assets or disposals groups that are classified as held for sale but do not meet the criteria for discontinued operations, the assets and liabilities are presented separately on the balance sheet of the initial period in which it is classified as held for sale. |
Revenue Recognition and Performance Obligations | Revenue from our retail dispensaries is recorded at the time customers take possession of the product. Revenue from our retail dispensaries is recognized net of discounts, promotional adjustments, and returns. We collect taxes on certain revenue transactions to be remitted to governmental authorities, which may include sales, excise and local taxes. These taxes are not included in the transaction price and are, therefore, excluded from revenue. Upon purchase, the Company has no further performance obligations and collection is assured as sales are paid for at time of purchase. The Company recognizes revenue from cultivation, manufacturing and distribution product sales when our customers obtain control of our products. Revenue is recorded when the customer is determined to have taken control of the product. This determination is based on the customer specific terms of the arrangement and gives consideration to factors including, but not limited to, whether the customer has an unconditional obligation to pay, whether a time period or event is specified in the arrangement and whether the Company can mandate the return or transfer of the products. Revenue is recorded net of taxes collected from customers that are remitted to governmental authorities with collected taxes recorded as current liabilities until remitted to the relevant government authority. Contract Balances Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC Topic 606. Contract Estimates and Judgments The Company’s revenues accounted for under ASC Topic 606, generally, do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The sales prices are generally fixed at the point of sale and all consideration from contracts is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration.
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Cost of Goods Sold | Cost of goods sold includes the costs directly attributable to product sales and includes amounts paid for finished goods, such as flower, edibles, and concentrates, as well as packaging and delivery costs. It also includes the labor and overhead costs incurred in cultivating and producing cannabis flower and cannabis-derived products. Overhead expenses include allocations of rent, administrative salaries, utilities, and related costs. |
Advertising Expenses | The Company expenses advertising costs as incurred in accordance with ASC 720-35, “Other Expenses – Advertising Cost.” Advertising expenses from continuing operations totaled $0.77 million and $1.69 million for the three and six months ended June 30, 2022, respectively, and $0.08 million and $0.11 million for the three and six months ended June 30, 2021, respectively. |
Stock-Based Compensation | The Company accounts for its stock-based awards in accordance with ASC Subtopic 718-10, “Compensation – Stock Compensation”, which requires fair value measurement on the grant date and recognition of compensation expense for all stock-based payment awards made to employees and directors, including restricted stock awards. For stock options, the Company estimates the fair value using a closed option valuation (Black-Scholes) model. The fair value of restricted stock awards is based upon the quoted market price of the common shares on the date of grant. The fair value is then expensed over the requisite service periods of the awards, net of estimated forfeitures, which is generally the performance period and the related amount is recognized in the consolidated statements of operations.The Black-Scholes option-pricing model requires the input of certain assumptions that require the Company’s judgment, including the expected term and the expected stock price volatility of the underlying stock. The assumptions used in calculating the fair value of stock-based compensation represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change resulting in the use of different assumptions, stock-based compensation expense could be materially different in the future. The Company accounts for forfeitures of stock-based awards as they occur. |
Income Taxes | The provision for income taxes is determined in accordance with ASC 740, “Income Taxes”. The Company files a consolidated United States federal income tax return. The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. At June 30, 2021, such net operating losses were offset entirely by a valuation allowance. No valuation allowance remained at June 30, 2022. The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50.0% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations.
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Loss Per Common Share | In accordance with the provisions of ASC 260, “Earnings Per Share”, net loss per share is computed by dividing net loss by the weighted-average shares of common stock outstanding during the period. During a loss period, the effect of the potential exercise of stock options, warrants, convertible preferred stock, and convertible debt are not considered in the diluted loss per share calculation since the effect would be anti-dilutive. The results of operations were a net loss for the three and six months ended June 30, 2022 and 2021. Therefore, the basic and diluted weighted-average shares of common stock outstanding were the same for all periods presented. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | The approximate useful lives for depreciation of our property, equipment and leasehold improvements are as follows:
Property, equipment, and leasehold improvements as of June 30, 2022 and December 31, 2021 consisted of the following:
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Schedule of Finite-Lived Intangible Assets | The approximate useful lives for amortization of our intangible assets are as follows:
Intangible assets, net consisted of the following as of June 30, 2022 and December 31, 2021:
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Disaggregation of Revenue | The table below includes revenue disaggregated by geographic location for the periods presented:
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Potentially dilutive securities that are not included in the calculation of diluted net loss per share because their effect is anti-dilutive are as follows (in common equivalent shares):
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VARIABLE INTEREST ENTITIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intercompany Transactions and Balances | The aggregate carrying values of Sparks Cultivation, LLC and NuLeaf Reno Production, LLC assets and liabilities, after elimination of any intercompany transactions and balances, in the consolidated balance sheets were as follows:
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ASSETS HELD FOR SALE (Tables) |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations | Subsidiaries classified as held for sale that do not qualify as discontinued operations as of June 30, 2022 consist of the following:
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INVENTORY (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory, Current | Inventory as of June 30, 2022 and December 31, 2021 consisted of the following:
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PROPERTY EQUIPMENT AND LEASEHOLD IMPROVEMENTS NET (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | The approximate useful lives for depreciation of our property, equipment and leasehold improvements are as follows:
Property, equipment, and leasehold improvements as of June 30, 2022 and December 31, 2021 consisted of the following:
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INTANGIBLE ASSETS AND GOODWILL (Tables) |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets | The approximate useful lives for amortization of our intangible assets are as follows:
Intangible assets, net consisted of the following as of June 30, 2022 and December 31, 2021:
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ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued expenses consisted of the following:
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NOTES PAYABLE (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Payable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Notes payable as of June 30, 2022 and December 31, 2021 consisted of the following:
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LEASES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operating Lease ROU Assets and Lease Liabilities | The table below presents total operating lease right-of-use assets and lease liabilities as of June 30, 2022 and December 31, 2021:
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Lessee, Operating Lease, Liability, Maturity | The table below presents the maturities of operating lease liabilities as of June 30, 2022:
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Operating Lease Costs | The table below presents the weighted average remaining lease term for operating leases and weighted average discount rate used in calculating operating lease right-of-use assets:
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STOCK-BASED COMPENSATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The following table contains information about the Company's equity incentive plans as of June 30, 2022:
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Share-based Payment Arrangement, Option, Activity | The following table summarizes the Company’s stock option activity and related information for the six months ended June 30, 2022:
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Share-based Payment Arrangement, Activity | The following table sets forth the total stock-based compensation expense resulting from stock options and restricted grants of common stock to employees, directors and non-employee consultants in the consolidated statement of operations which are included in selling, general and administrative expenses:
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WARRANTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants and Rights Note Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights | The following table summarizes warrant activity for the six months ended June 30, 2022:
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DISCONTINUED OPERATIONS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Discontinued Operations | Operating results for the discontinued operations were comprised of the following:
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Schedule of Assets and Liabilities for Discontinued Operations | The carrying amounts of the major classes of assets and liabilities for the discontinued operations are as follows:
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SEGMENT INFORMATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | Our reportable segments are as follows:
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Accounting Policies [Abstract] | |||||
Allowance for doubtful accounts | $ 4,760 | $ 4,760 | $ 3,680 | ||
Minimum ownership percentage | 5.00% | 5.00% | |||
Advertising costs | $ 770 | $ 80 | $ 1,690 | $ 110 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Equipment and Leasehold Improvements, Net (Details) |
6 Months Ended |
---|---|
Jun. 30, 2022 | |
Building | |
Property, Plant and Equipment [Line Items] | |
Property, equipment and leasehold improvements useful life | 32 years |
Furniture and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, equipment and leasehold improvements useful life | 3 years |
Furniture and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, equipment and leasehold improvements useful life | 8 years |
Computer Equipment and Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, equipment and leasehold improvements useful life | 3 years |
Computer Equipment and Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, equipment and leasehold improvements useful life | 5 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Property, equipment and leasehold improvements useful life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Finite-lived Intangible Assets Amortization Expense (Details) |
6 Months Ended |
---|---|
Jun. 30, 2022 | |
Customer relationships | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 3 years |
Customer relationships | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 5 years |
Trademark and patent | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 2 years |
Trademark and patent | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 8 years |
Dispensary licenses | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 14 years |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Revenue by Major Customers by Reporting Segments (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 17,556 | $ 2,872 | $ 38,280 | $ 4,928 |
California | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 15,608 | 2,872 | 34,053 | 4,928 |
Oregon | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 1,947 | $ 0 | $ 4,227 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 173,953,487 | 32,798,123 |
Common stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 85,826,872 | 16,076,556 |
Common stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 88,126,615 | 16,721,567 |
CONCENTRATIONS OF BUSINESS AND CREDIT RISK (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Risks and Uncertainties [Abstract] | ||
Cash, uninsured amount | $ 890 | $ 5,420 |
VARIABLE INTEREST ENTITIES - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Oct. 26, 2017 |
|
Schedule of Investments [Line Items] | |||||
Total revenues | $ 17,556 | $ 2,872 | $ 38,280 | $ 4,928 | |
Net loss | 63,718 | 4,102 | 72,592 | 16,183 | |
NuLeaf | |||||
Schedule of Investments [Line Items] | |||||
Convertible debt | $ 4,500 | ||||
Interest rate | 6.00% | ||||
Equity method investment, ownership percentage | 50.00% | ||||
Total revenues | 0 | 3,390 | 2,810 | 6,450 | |
Net loss | $ 8,120 | $ 1,730 | $ 8,190 | $ 970 |
ASSETS HELD FOR SALE - Narrative (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022
USD ($)
dispensary
|
Jun. 30, 2021
USD ($)
|
Jun. 30, 2022
USD ($)
|
Jun. 30, 2021
USD ($)
|
Jun. 18, 2022
USD ($)
|
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Loss on sale of assets | $ 542 | $ 0 | $ 343 | $ 0 | |
Peoples Dispensary Los Angeles | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of dispensaries divested | dispensary | 2 | ||||
Loss on sale of assets | $ 540 | ||||
Peoples Dispensary Los Angeles Note | Promissory Note | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Promissory note | $ 1,400 |
INVENTORY (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,848 | $ 2,258 |
Work-in-progress | 1,686 | 1,077 |
Finished goods | 2,504 | 3,844 |
Total inventory | $ 6,038 | $ 7,179 |
PROPERTY EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jan. 21, 2022 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Property, Plant and Equipment [Line Items] | ||||||
Subtotal | $ 26,925 | $ 26,925 | $ 29,391 | |||
Less accumulated depreciation | (5,509) | (5,509) | (5,663) | |||
Property, equipment and leasehold improvements, net | 21,416 | 21,416 | 23,728 | |||
Depreciation | 970 | $ 320 | 1,920 | $ 660 | ||
Land sold | $ 450 | |||||
Land and building | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Subtotal | 7,581 | 7,581 | 7,787 | |||
Furniture and equipment | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Subtotal | 3,970 | 3,970 | 3,873 | |||
Computer hardware | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Subtotal | 341 | 341 | 348 | |||
Leasehold improvements | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Subtotal | 11,454 | 11,454 | 14,409 | |||
Vehicles | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Subtotal | 1,143 | 1,143 | 1,142 | |||
Construction in progress | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Subtotal | $ 2,436 | $ 2,436 | $ 1,832 |
INTANGIBLE ASSETS AND GOODWILL - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Amortization expense | $ 2,420 | $ 180 | $ 4,770 | $ 380 | |
Impairment charge | 22,100 | 22,100 | |||
Goodwill impairment loss | 33,630 | 33,630 | |||
Goodwill | $ 14,506 | $ 14,506 | $ 48,132 |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accounts Payable | $ 19,898 | $ 16,804 |
Tax Liabilities | 7,244 | 5,147 |
Accrued Payroll and Benefits | 948 | 1,409 |
Current Lease Liabilities | 1,940 | 3,120 |
Other Accrued Expenses | 7,118 | 5,424 |
Total Accounts Payable and Accrued Expenses | $ 37,148 | $ 31,904 |
LEASES - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Leases [Abstract] | |||||
Operating lease costs | $ 1,500 | $ 340 | $ 2,710 | $ 750 | |
Current Lease Liabilities | $ 1,940 | $ 1,940 | $ 3,120 | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accounts payable and accrued expenses | Accounts payable and accrued expenses | Accounts payable and accrued expenses |
LEASES - Schedule of Operating Lease ROU Assets and Lease Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 16,111 | $ 24,448 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets |
Operating lease liabilities | $ 16,411 | $ 24,436 |
LEASES - Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Leases [Abstract] | ||
2022 (remaining) | $ 1,627 | |
2023 | 3,308 | |
2024 | 3,373 | |
2025 | 2,927 | |
2026 | 2,299 | |
Thereafter | 11,400 | |
Total lease payments | 24,934 | |
Less: discount | (8,523) | |
Total operating lease liabilities | $ 16,411 | $ 24,436 |
LEASES - Schedule of Weighted Average Number of Shares (Details) |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Leases [Abstract] | ||
Weighted average remaining lease term (years) | 5 years 8 months 12 days | 79 years |
Weighted average discount rate | 11.40% | 11.60% |
STOCK-BASED COMPENSATION - Plan Details (Details) |
Jun. 30, 2022
shares
|
---|---|
2016 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Reserved for Issuance (in shares) | 999,906 |
Awards Exercised (in shares) | 0 |
Awards Outstanding (in shares) | 499,953 |
Awards Available for Grant (in shares) | 499,953 |
2018 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Reserved for Issuance (in shares) | 30,988,982 |
Awards Exercised (in shares) | 4,022,133 |
Awards Outstanding (in shares) | 14,009,842 |
Awards Available for Grant (in shares) | 12,957,007 |
2019 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Reserved for Issuance (in shares) | 109,990,468 |
Awards Exercised (in shares) | 34,884 |
Awards Outstanding (in shares) | 73,014,714 |
Awards Available for Grant (in shares) | 36,940,870 |
WARRANTS - Schedule of Stockholders' Equity Note, Warrants or Rights (Details) - Warrants |
6 Months Ended |
---|---|
Jun. 30, 2022
$ / shares
shares
| |
Class of Warrant or Right [Line Items] | |
Warrants outstanding - beginning balance (in shares) | shares | 85,826,872 |
Warrants Granted (in shares) | shares | 0 |
Warrants Exercised (in shares) | shares | (4,759,708) |
Warrants outstanding - ending balance (in shares) | shares | 81,067,164 |
Warrants Outstanding, beginning balance (in dollars per share) | $ / shares | $ 0.22 |
Warrants Granted (in dollars per share) | $ / shares | 0 |
Warrants Exercised (in dollars per share) | $ / shares | 0 |
Warrants Outstanding, ending balance (in dollars per share) | $ / shares | $ 0.14 |
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ / shares in Units, $ in Thousands |
Jun. 27, 2022 |
May 11, 2022 |
Jun. 30, 2022 |
---|---|---|---|
Loss Contingencies [Line Items] | |||
Loss accrual | $ 500 | ||
Mystic Holdings, Inc. | |||
Loss Contingencies [Line Items] | |||
Loss contingency, repurchase of shares (in shares) | 8,332,096 | ||
Loss contingency, price per share (in dollars per share) | $ 1.00 | ||
Fusion LLF, LLC | |||
Loss Contingencies [Line Items] | |||
Contract damages | $ 4,550 |
DISCONTINUED OPERATIONS - Schedule of assets and liabilities for discontinued operations (Details) - Discontinued Operations $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Cash | $ 1,544 |
Accounts receivable, net | 1,553 |
Inventory, net | 1,359 |
Prepaid expenses and other assets | 39 |
Property, equipment and leasehold improvements, net | 17,661 |
Other assets | 323 |
Assets of discontinued operations | 22,479 |
Accounts payable and accrued expenses | 1,170 |
Income taxes payable | 917 |
Long-term lease liabilities | 184 |
Liabilities of discontinued operations | $ 2,271 |
SEGMENT INFORMATION - Narrative (Details) |
6 Months Ended |
---|---|
Jun. 30, 2022
operating_segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
SEGMENT INFORMATION - Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Revenue, Major Customer [Line Items] | ||||
Total revenues | $ 17,556 | $ 2,872 | $ 38,280 | $ 4,928 |
Revenue Benchmark | Revenue from Rights Concentration Risk | ||||
Revenue, Major Customer [Line Items] | ||||
% of Total Revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Cannabis Retail | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | $ 10,947 | $ 2,318 | $ 23,056 | $ 4,017 |
Cannabis Retail | Revenue Benchmark | Revenue from Rights Concentration Risk | ||||
Revenue, Major Customer [Line Items] | ||||
% of Total Revenue | 62.40% | 80.70% | 60.20% | 81.50% |
Cannabis Cultivation & Distribution | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | $ 6,609 | $ 554 | $ 15,224 | $ 911 |
Cannabis Cultivation & Distribution | Revenue Benchmark | Revenue from Rights Concentration Risk | ||||
Revenue, Major Customer [Line Items] | ||||
% of Total Revenue | 37.60% | 19.30% | 39.80% | 18.50% |
GOING CONCERN (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Risks and Uncertainties [Abstract] | |||||
Income (loss) before provision for income taxes | $ (66,105) | $ (2,869) | $ (78,432) | $ (15,006) | |
Accumulated deficit | (323,710) | (323,710) | $ (250,015) | ||
Cash | $ 7,260 | $ 7,260 |
SUBSEQUENT EVENTS (Details) - Subsequent Event - USD ($) $ in Thousands |
Aug. 12, 2022 |
Jul. 19, 2022 |
---|---|---|
Adnant Engagement Letter | ||
Subsequent Event [Line Items] | ||
Flat monthly fee | $ 150 | |
Cash threshold | $ 1,200 | |
Shares payable (in shares) | 2,000,000 | |
People's California | ||
Subsequent Event [Line Items] | ||
Contract damages | $ 23,000 |
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