UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|
x |
QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 |
For the quarterly period ended September 30,
2020
|
o |
TRANSITION REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period
from
to
Commission file number: 000-27039
MARIJUANA COMPANY OF AMERICA, INC.
(Exact name of registrant as specified in its charter)
Utah |
|
98-1246221 |
(State
or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
1340 West Valley Parkway
Suite 205
Escondido, CA 92029
(Address of principal executive offices) (zip code)
(888) 777-4362
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See
definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in
Rule 12b-2 of the Exchange Act.
Large accelerated
filer |
☐ |
|
Accelerated filer |
☐ |
Non-accelerated
filer |
☐ |
|
Smaller reporting
company |
☒ |
Emerging growth
company |
☒ |
|
|
|
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (17
CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934
(17 CFR §240.12b-2). ☒
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act. ☒
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes ☐
No ☒
As of September 30, 2020, and November 16, 2020, there were
1,913,880,887 and 2,053,481,896 shares of registrant’s common stock
issued and outstanding respectively.
TABLE OF CONTENTS
PART I. FINANCIAL
INFORMATION |
|
|
|
|
|
|
ITEM
1. |
Financial Statements |
|
|
|
|
|
|
|
Condensed consolidated balance sheets as of
September 30, 2020 (unaudited)
and December 31, 2019
(audited) |
3 |
|
|
|
|
|
|
Condensed consolidated statements of operations
for the three and nine months ended
September 30, 2020 and 2019
(unaudited) |
4 |
|
|
|
|
|
|
Condensed consolidated statement of
stockholders’ deficit for the nine months ended September 30,
2020 and 2019 (unaudited) |
5 |
|
|
|
|
|
|
Condensed consolidated statements of cash flows
for the nine months ended
September 30, 2020 and 2019
(unaudited) |
7 |
|
|
|
|
|
|
Notes
to condensed consolidated financial statements
(unaudited) |
8 |
|
|
|
|
|
ITEM
2. |
Management’s Discussion and Analysis of Financial
Condition and Results of Operations |
34 |
|
ITEM
3. |
Quantitative and Qualitative Disclosures about
Market Risk |
41 |
|
ITEM
4. |
Controls and Procedures |
41 |
|
|
|
|
PART II. OTHER INFORMATION |
|
|
|
|
|
|
ITEM
1. |
Legal
Proceedings |
42 |
|
ITEM
1A. |
Risk
Factors |
42 |
|
ITEM
2. |
Unregistered Sales of Equity Securities and Use
of Proceeds |
50 |
|
ITEM
3. |
Defaults Upon Senior Securities |
53 |
|
ITEM
4. |
Mine
Safety Disclosures |
53 |
|
ITEM
5. |
Other
Information |
53 |
|
ITEM
6. |
Exhibits |
53 |
|
|
|
|
|
SIGNATURES |
54 |
ITEM 1. FINANCIAL STATEMENTS
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
Sept 30, 2020 |
|
Dec 31, 2019 |
|
|
|
(Unaudited) |
|
|
|
(Audited) |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
149,477 |
|
|
$ |
211,765 |
|
Short-term
Investments |
|
|
130,060 |
|
|
|
27,403 |
|
Accounts receivable,
net |
|
|
8,563 |
|
|
|
18,317 |
|
Inventory |
|
|
145,523 |
|
|
|
149,175 |
|
Prepaid
Insurance |
|
|
66,131 |
|
|
|
— |
|
Investment
receivable |
|
|
54,940 |
|
|
|
— |
|
Notes receivable |
|
|
75,000 |
|
|
|
— |
|
Other current assets |
|
|
22,508 |
|
|
|
11,034 |
|
Total current
assets |
|
|
652,202 |
|
|
|
417,694 |
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net |
|
|
3,028 |
|
|
|
7,512 |
|
|
|
|
|
|
|
|
|
|
Other assets: |
|
|
|
|
|
|
|
|
Long-term
Investments |
|
|
1,343,915 |
|
|
|
693,915 |
|
Right-of-use-assets |
|
|
11,642 |
|
|
|
22,101 |
|
Security deposit |
|
|
2,500 |
|
|
|
2,500 |
|
|
|
|
|
|
|
|
|
|
Total
assets |
|
|
2,013,287 |
|
|
|
1,143,722 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
|
696,010 |
|
|
|
797,789 |
|
Accrued
compensation |
|
|
125,738 |
|
|
|
4,875 |
|
Accrued
liabilities |
|
|
522,014 |
|
|
|
522,258 |
|
Notes payable,
related parties |
|
|
40,000 |
|
|
|
40,000 |
|
Loans payable PPP
Stimulus |
|
|
35,500 |
|
|
|
— |
|
Convertible notes
payable, net of debt discount of $334,980 and $808,980,
respectively |
|
|
2,181,571 |
|
|
|
3,193,548 |
|
Right-of-use
liabilities - current portion |
|
|
3,784 |
|
|
|
14,361 |
|
Warrant liability to
be settled |
|
|
— |
|
|
|
192,115 |
|
Contingency
Liability |
|
|
— |
|
|
|
956,251 |
|
Subscriptions
payable |
|
|
650,000 |
|
|
|
330,797 |
|
Derivative liability |
|
|
3,426,888 |
|
|
|
5,693,071 |
|
Total current liabilities |
|
|
7,681,505 |
|
|
|
11,745,065 |
|
|
|
|
|
|
|
|
|
|
Non-Current
Liabilities |
|
|
|
|
|
|
|
|
Right-of-use liabilities |
|
|
7,858 |
|
|
|
7,858 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
7,689,363 |
|
|
|
11,752,923 |
|
|
|
|
|
|
|
|
|
|
Stockholders'
deficit: |
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value,
50,000,000 shares authorized |
|
|
|
|
|
|
|
|
Class A preferred stock, $0.001 par
value, 10,000,000 shares designated, 10,000,000 shares issued and
outstanding as of September 30, 2020 and December 31, 2019 |
|
|
10,000 |
|
|
|
10,000 |
|
Class B preferred stock, $0.001 par
value, 5,000,000 shares designated, 0 shares issued and outstanding
as of September 30, 2020 and December 31, 2019 |
|
|
— |
|
|
|
— |
|
Common stock, $0.001 par value;
5,000,000,000 shares authorized; 1,913,880,887 and 77,958,081
shares issued and outstanding as of September 30, 2020 and December
31, 2019, respectively |
|
|
1,913,881 |
|
|
|
77,958 |
|
Common stock to be
issued, 1,000,000 and 0 shares, respectively |
|
|
1,000 |
|
|
|
— |
|
Additional paid in
capital |
|
|
70,740,648 |
|
|
|
63,467,054 |
|
Accumulated deficit |
|
|
(78,341,604 |
) |
|
|
(74,164,213 |
) |
Total stockholders' deficit |
|
|
(5,676,075 |
) |
|
|
(10,609,201 |
) |
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' deficit |
|
$ |
2,013,287 |
|
|
$ |
1,143,722 |
|
See the accompanying notes to these
unaudited condensed consolidated financial statements
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 and
2019
(UNAUDITED)
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
REVENUES: |
|
|
|
|
|
|
|
|
Sales |
|
$ |
49,933 |
|
|
$ |
225,356 |
|
|
$ |
206,407 |
|
|
$ |
540,398 |
|
Related party Sales |
|
|
3,262 |
|
|
|
4,015 |
|
|
|
11,565 |
|
|
|
12,363 |
|
Total Revenues |
|
|
53,195 |
|
|
|
229,371 |
|
|
|
217,972 |
|
|
|
552,761 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
37,170 |
|
|
|
90,843 |
|
|
|
110,563 |
|
|
|
159,859 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
16,025 |
|
|
|
138,528 |
|
|
|
107,409 |
|
|
|
392,902 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
1,374 |
|
|
|
1,696 |
|
|
|
4,702 |
|
|
|
5,087 |
|
Selling and
marketing |
|
|
125,942 |
|
|
|
376,342 |
|
|
|
326,608 |
|
|
|
1,462,104 |
|
Payroll and
related |
|
|
62,000 |
|
|
|
90,000 |
|
|
|
258,842 |
|
|
|
310,000 |
|
Stock-based
compensation |
|
|
123,000 |
|
|
|
— |
|
|
|
665,767 |
|
|
|
100,350 |
|
General and administrative |
|
|
294,921 |
|
|
|
295,113 |
|
|
|
710,094 |
|
|
|
1,353,757 |
|
Total
operating expenses |
|
|
607,237 |
|
|
|
763,151 |
|
|
|
1,966,013 |
|
|
|
3,231,298 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from
operations |
|
|
(591,212 |
) |
|
|
(624,623 |
) |
|
|
(1,858,604 |
) |
|
|
(2,838,396 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSES): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net |
|
|
(688,090 |
) |
|
|
(1,559,720 |
) |
|
|
(2,460,185 |
) |
|
|
(3,001,972 |
) |
Legal Contingency
expense |
|
|
— |
|
|
|
(1,497,674 |
) |
|
|
— |
|
|
|
(1,497,674 |
) |
Gain (Loss) on joint
venture |
|
|
238,296 |
|
|
|
— |
|
|
|
(22,658 |
) |
|
|
— |
|
Gain (Loss) on equity
investment |
|
|
240,198 |
|
|
|
122,864 |
|
|
|
106,305 |
|
|
|
(107,961 |
) |
Loss on change in
fair value of derivative liabilities |
|
|
(1,454,903 |
) |
|
|
(1,668,112 |
) |
|
|
(312,631 |
) |
|
|
(2,148,262 |
) |
Unrealized Loss on
trading securities |
|
|
— |
|
|
|
(362,625 |
) |
|
|
(13,945 |
) |
|
|
(647,625 |
) |
Loss on sale of
trading securities |
|
|
— |
|
|
|
(24,698 |
) |
|
|
(2,603 |
) |
|
|
(24,698 |
) |
Gain on settlement of
joint venture |
|
|
383,440 |
|
|
|
— |
|
|
|
386,930 |
|
|
|
— |
|
Loss on settlement of debt |
|
|
— |
|
|
|
(612,034 |
) |
|
|
— |
|
|
|
(612,034 |
) |
Total other income
(expense) |
|
|
(1,281,059 |
) |
|
|
(5,601,999 |
) |
|
|
(2,318,787 |
) |
|
|
(8,040,226 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss before
income taxes |
|
|
(1,872,271 |
) |
|
|
(6,226,622 |
) |
|
|
(4,177,391 |
) |
|
|
(10,878,622 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes (benefit) |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME (LOSS) |
|
$ |
(1,872,271 |
) |
|
$ |
(6,226,622 |
) |
|
$ |
(4,177,391 |
) |
|
($ |
10,878,622 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per
common share, basic and diluted |
|
$ |
(0.00 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.26 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares outstanding, basic and diluted
(after stock-split) |
|
|
1,178,860,134 |
|
|
|
49,686,994 |
|
|
|
518,261,567 |
|
|
|
41,726,239 |
|
See the accompanying notes to these
unaudited condensed consolidated financial statements
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS'
DEFICIT
FOR THE NINE MONTHS SEPTEMBER 30, 2020 AND
2019 (UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Preferred
Stock |
|
Class B Preferred
Stock |
|
Common Stock |
|
Common Stock to be
issued |
|
Common
Stock
|
|
Additional
Paid In
|
|
Accumulated |
|
|
|
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Subscriptions |
|
Capital |
|
Deficit |
|
Total |
Balance, December 31, 2018 |
|
|
10,000,000 |
|
|
$ |
10,000 |
|
|
|
— |
|
|
$ |
— |
|
|
|
42,687,301 |
|
|
$ |
42,687 |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
90,000 |
|
|
$ |
50,707,103 |
|
|
$ |
(53,983,895 |
) |
|
$ |
(3,134,105 |
) |
Common
stock issued for services rendered |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
552,054 |
|
|
|
552 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
553,815 |
|
|
|
— |
|
|
|
554,367 |
|
Common
stock issued in settlement of convertible notes payable and accrued
interest |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,208,063 |
|
|
|
5,208 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,551,615 |
|
|
|
— |
|
|
|
3,556,823 |
|
Reclassification of derivative liabilities to
additional paid in capital |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
462,714 |
|
|
|
— |
|
|
|
462,714 |
|
Conversion of related party notes
payable |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,394,565 |
|
|
|
2,395 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,730,119 |
|
|
|
— |
|
|
|
1,732,514 |
|
Common
stock issued in exchange for exercise of warrants on a cashless
basis |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
655,556 |
|
|
|
656 |
|
|
|
27,778 |
|
|
|
28 |
|
|
|
(40,000 |
) |
|
|
95,139 |
|
|
|
— |
|
|
|
55,823 |
|
Sale of
common stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
531,699 |
|
|
|
532 |
|
|
|
— |
|
|
|
— |
|
|
|
(50,000 |
) |
|
|
203,522 |
|
|
|
— |
|
|
|
154,054 |
|
Net Loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(10,878,622 |
) |
|
|
(10,878,622 |
) |
Balance, September 30, 2019 |
|
|
10,000,000 |
|
|
$ |
10,000 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
52,029,238 |
|
|
$ |
52,029 |
|
|
|
27,778 |
|
|
$ |
28 |
|
|
$ |
— |
|
|
$ |
57,304,027 |
|
|
$ |
(64,862,517 |
) |
|
$ |
(7,496,433 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Preferred
Stock |
|
Class B Preferred
Stock |
|
Common Stock |
|
Common Stock to be
issued |
|
Common
Stock
|
|
Additional
Paid In
|
|
Accumulated |
|
|
|
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Subscriptions |
|
Capital |
|
Deficit |
|
Total |
Balance, December 31, 2019 |
|
|
10,000,000 |
|
|
$ |
10,000 |
|
|
|
— |
|
|
$ |
— |
|
|
|
77,958,081 |
|
|
$ |
77,958 |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
63,467,054 |
|
|
$ |
(74,164,213 |
) |
|
$ |
(10,609,201 |
) |
Common stock issued to settle amounts previously
accrued |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,333 |
|
|
|
8 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,692 |
|
|
|
— |
|
|
|
6,700 |
|
Common
stock issued for services rendered |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
156,444,047 |
|
|
|
156,444 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
509,323 |
|
|
|
— |
|
|
|
665,767 |
|
Common
stock issued in settlement of convertible notes payable and accrued
interest |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,469,725,298 |
|
|
|
1,469,725 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,165,922 |
|
|
|
— |
|
|
|
2,635,647 |
|
Conversion of related party notes
payable |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
21,384,103 |
|
|
|
21,384 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
29,229 |
|
|
|
— |
|
|
|
50,613 |
|
Common
stock issued in exchange for exercise of warrants on a cashless
basis |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
51,054,214 |
|
|
|
51,054 |
|
|
|
1,000,000 |
|
|
|
1,000 |
|
|
|
— |
|
|
|
375,446 |
|
|
|
— |
|
|
|
427,500 |
|
Sale of
common stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
127,012,847 |
|
|
|
127,013 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
26,673 |
|
|
|
— |
|
|
|
153,686 |
|
Common
shares issued in settlement of legal case |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,293,843 |
|
|
|
10,294 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,273,338 |
|
|
|
— |
|
|
|
1,283,632 |
|
Reclassification of derivative liabilities to
additional paid in capital |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,886,971 |
|
|
|
— |
|
|
|
3,886,971 |
|
Net Loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,177,391 |
) |
|
|
(4,177,391 |
) |
Balance, September 30, 2020 |
|
|
10,000,000 |
|
|
$ |
10,000 |
|
|
|
— |
|
|
$ |
— |
|
|
|
1,913,880,766 |
|
|
$ |
1,913,881 |
|
|
|
1,000,000 |
|
|
$ |
1,000 |
|
|
$ |
— |
|
|
$ |
70,740,648 |
|
|
$ |
(78,341,604 |
) |
|
$ |
(5,676,075 |
) |
See the accompanying notes to these
unaudited condensed consolidated financial statements
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019
(UNAUDITED)
|
|
2020 |
|
2019 |
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
$ |
(4,177,391 |
) |
|
$ |
(10,878,622 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
Amortization of debt discount |
|
|
1,373,575 |
|
|
|
2,172,936 |
|
Depreciation and amortization |
|
|
4,702 |
|
|
|
5,087 |
|
Bad debt expense |
|
|
— |
|
|
|
15,000 |
|
Non cash interest |
|
|
— |
|
|
|
1,886,837 |
|
Impairment Loss on equity method investee |
|
|
22,658 |
|
|
|
|
|
(Gain) Loss on equity investment, net of debt settlement |
|
|
(106,305 |
) |
|
|
107,961 |
|
Loss on change in fair value of derivative liability |
|
|
312,631 |
|
|
|
2,148,262 |
|
Loss on share inducement and settlement of warrant liability |
|
|
427,500 |
|
|
|
— |
|
Stock-based compensation |
|
|
665,767 |
|
|
|
100,350 |
|
Unrealized Loss on trading securities |
|
|
13,945 |
|
|
|
647,625 |
|
Realized Loss on trading securities |
|
|
— |
|
|
|
41,667 |
|
Gain on settlement of joint venture |
|
|
(386,930 |
) |
|
|
|
|
Loss on settlement of debt |
|
|
— |
|
|
|
612,034 |
|
Changes in operating
assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
9,754 |
|
|
|
(31,597 |
) |
Inventories |
|
|
3,652 |
|
|
|
(17,052 |
) |
Prepaid expenses and other current assets |
|
|
(77,605 |
) |
|
|
(17,707 |
) |
Accounts payable |
|
|
205,061 |
|
|
|
206,926 |
|
Accrued expenses and other current liabilities |
|
|
325,883 |
|
|
|
(348 |
) |
Right-of-use assets |
|
|
10,459 |
|
|
|
— |
|
Right-of-use liabilities |
|
|
(10,577 |
) |
|
|
— |
|
Accrued compensation |
|
|
120,863 |
|
|
|
(381,038 |
) |
Contingency liability |
|
|
— |
|
|
|
1,497,675 |
|
Net cash provided by (used in) operating activities |
|
|
(1,262,358 |
) |
|
|
(1,884,004 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(1,271 |
) |
|
|
(2,703 |
) |
Investment in joint venture |
|
|
125,000 |
|
|
|
(685,049 |
) |
Net cash provided by (used in) investing activities |
|
|
123,729 |
|
|
|
(687,752 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
Proceeds from issuance of notes payable |
|
|
876,302 |
|
|
|
2,257,000 |
|
Proceeds from PPP loan payable |
|
|
35,500 |
|
|
|
— |
|
Proceeds from sales of trading securities |
|
|
10,854 |
|
|
|
— |
|
Proceeds from sale of common stock |
|
|
153,685 |
|
|
|
— |
|
Net cash provided by (used in) financing activities |
|
|
1,076,342 |
|
|
|
2,257,000 |
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash |
|
|
(62,288 |
) |
|
|
(314,756 |
) |
|
|
|
|
|
|
|
|
|
Cash at beginning
of period |
|
|
211,765 |
|
|
|
359,577 |
|
|
|
|
|
|
|
|
|
|
Cash at
end of period |
|
$ |
149,477 |
|
|
$ |
44,821 |
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
|
— |
|
|
|
— |
|
Cash paid for taxes |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Non cash transactions: |
|
|
|
|
|
|
|
|
Common
stock issued in settlement of convertible notes payable |
|
$ |
2,635,647 |
|
|
$ |
3,556,823 |
|
Common
stock issued in settlement of related party notes payable and
accrued compensation |
|
$ |
50,613 |
|
|
$ |
1,732,514 |
|
Reclassification of derivative liabilities to additional paid-in
capital |
|
$ |
3,886,971 |
|
|
$ |
462,714 |
|
Investment in joint venture |
|
$ |
— |
|
|
$ |
2,650,000 |
|
Gain on
settlement of JV investment |
|
|
386,930 |
|
|
|
— |
|
Common
shares issued in settlement of legal case |
|
$ |
1,283,632 |
|
|
$ |
— |
|
See the accompanying notes to these
unaudited condensed consolidated financial statements
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(unaudited)
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF
PRESENTATION
Marijuana Company of America,
Inc. (The “Company”) was incorporated under the laws of the State
of Utah in October 1985 under the name Mormon Mint, Inc. The
corporation was originally a startup company organized to
manufacture and market commemorative medallions related to the
Church of Jesus Christ of Latter Day Saints. On January 5, 1999,
Bekam Investments, Ltd. acquired one hundred percent of the common
shares of the Company and spun the Company off changing its name
Converge Global, Inc. From August 13, 1999 until November 20, 2002,
the Company focused on the development and implementation of
Internet web content and e-commerce applications. In October 2009,
in a 30 for 1 exchange, the Company merged with Sparrowtech, Inc.
for the purpose of exploration and development of commercially
viable mining properties. From 2009 to 2014, we operated primarily
in the mining exploration business.
In 2015, the Company changed
its business model to a marketing and distribution company for
medical marijuana. In conjunction with the change, the Company
changed its name to Marijuana Company of America, Inc. At the time
of the transition in 2015, there were no remaining assets,
liabilities or operating activities of the mining
business.
On September 21, 2015, the
Company formed H Smart, Inc., a Delaware corporation as a wholly
owned subsidiary for the purpose of operating the hempSMART™
brand.
On February 1, 2016, the
Company formed MCOA CA, Inc., a California corporation as a wholly
owned subsidiary to facilitate mergers, acquisitions and the
offering of investments or loans to the Company.
On May
3, 2017, the Company formed Hempsmart Limited, a United Kingdom
corporation as a wholly owned subsidiary for the purpose of future
expansion into the European market.
The
consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries: H Smart, Inc., Hempsmart
Limited and MCOA CA, Inc. All significant intercompany balances and
transactions have been eliminated in consolidation.
The unaudited condensed interim financial statements of the Company
have been prepared in accordance with accounting principles
generally accepted in the United States (“GAAP”) for interim
financial information and the instructions to Form 10-Q and Rule
8-03 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by GAAP for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for
a fair presentation have been included.
The condensed balance sheet as of December 31, 2019 has been
derived from audited financial statements.
Operating results for the three and nine months ended September 30,
2020 are not necessarily indicative of results that may be expected
for the year ending December 31, 2020. These condensed financial
statements should be read in conjunction with the audited financial
statements for the year ended December 31, 2019.
NOTE 2 – GOING CONCERN AND
MANAGEMENT’S LIQUIDITY PLANS
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. As
shown in the accompanying financial statements for nine months
ended September 30, 2020, the Company had a net loss of $4,177,391
and used cash in operations of $1,263,358. These factors among
others may indicate that the Company will be unable to continue as
a going concern for a reasonable period of time.
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(unaudited)
The Company's primary source of operating funds in 2020 has been
from funds generated from proceeds from the issuance of convertible
and other debt and issuance of stock through private placements.
With the exception of the current quarter, the Company has
experienced net losses from operations since inception, but expects
these conditions to improve as its business develops. The Company
has stockholders' deficiencies at September 30, 2020 and requires
additional financing to fund future operations.
The Company’s existence is
dependent upon management’s ability to develop profitable
operations and to obtain additional funding sources. There can be
no assurance that the Company’s financing efforts will result in
profitable operations or the resolution of the Company’s liquidity
problems discussed in this filing. The accompanying statements do
not include any adjustments that might result, should the Company
be unable to continue as a going concern.
NOTE 3 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition
For annual reporting periods after December 15, 2017, the Financial
Accounting Standards Board (“FASB”) made effective ASU 2014-09
“Revenue from Contracts with Customers,” to supersede previous
revenue recognition guidance under current U.S. GAAP. Revenue is
now recognized in accordance with FASB ASC Topic 606, Revenue
Recognition. The objective of the guidance is to establish the
principles that an entity shall apply to report useful information
to users of financial statements about the nature, amount, timing,
and uncertainty of revenue and cash flows arising from a contract
with a customer. The core principal is to recognize revenue to
depict the transfer of promised goods or services to customers in
an amount that reflects the consideration to which the Company
expects to be entitled in exchange for those goods or services. Two
options were made available for implementation of the standard: the
full retrospective approach or modified retrospective approach. The
guidance became effective for annual reporting periods beginning
after December 15, 2017, including interim periods within that
reporting period, with early adoption permitted. We adopted FASB
ASC Topic 606 for our reporting period as of the year ended
December 31, 2017, which made our implementation of FASB ASC Topic
606 effective in the first quarter of 2018. We decided to implement
the modified retrospective transition method to implement FASB ASC
Topic 606, with no restatement of the comparative periods
presented. Using this transition method, we applied the new
standards to all new contracts initiated on/after the effective
date. We also decided to apply this method to any incomplete
contracts we determine are subject to FASB ASC Topic 606
prospectively. For the year ended December 31, 2018, and for the
quarter ended September 30, 2019, there were no incomplete
contracts. As is more fully discussed below, we are of the opinion
that none of our contracts for services or products contain
significant financing components that require revenue adjustment
under FASB ASC Topic 606.
Identification of Our Contracts with Our Customers.
Contracts included in our application of FASB ASC Topic 606,
consist completely of sales contracts between us and our customers
that create enforceable rights and obligations. For the year ended
December 31, 2019, and for the three and nine months ended
September 30, 2020, our sales contracts included the following
parties: us, our sales associates and our customers. Our sales
contracts were offered by us and our sales associates to our
customers directly through our web site. Our sales contracts, and
those formalized by our sales associates, are represented by an
electronic order form, which contains the contractual elements of
offer for sale, acceptance and the provision of consideration
consisting of the buyer’s payment, and the concurrent delivery of
our hempSMART™ product. Since our hempSMART™ product sales
contracts are consummated upon (i) receipt of the customer’s
acceptance of our offer; (ii) our concurrent receipt of our
customers payment; and, (iii) our delivery of the agreed to
hempSMART™ product, all parties are equally committed to fulfilling
their respective obligations under the sales contracts. Further,
the sales contracts specifically identify (i) parties; (ii)
quantity and type of hempSMART™ product ordered; (iii) price; and,
(iv) subject, and so each respective party’s rights are
identifiable and the payment terms are defined. Since the sales
contracts are consummated concurrent with offer, acceptance,
payment and delivery of the hempSMART™ product ordered, we
recognize principal revenue and cash flows as the respective sales
contract transactions are completed. Further, because our sales
contracts are offered, accepted and consummated concurrently, our
ability to collect revenue is immediate. We receive no payments for
agreements that do not qualify as a contract. If customers agree to
multiple sales contracts when they are entered into at or near the
same time, our policy is to combine those contracts if: (i) the
sales contracts are negotiated as a single package; (ii) the
payment amount of one sales contract is dependent upon another
sales contract; (iii) our performance obligations of delivering
multiple hempSMART™ products can be determined to be part of a
single transaction. Since the nature of the entry into and
consummation of our sales contracts occurs concurrently, there are
no changes or modifications to the terms of the sales contracts
that would modify the enforceable rights and performance
obligations of the parties, and/or materially alter the timing of
our receipt of revenue from our sales contracts.
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(unaudited)
Identifying the Performance Obligations in Our Sales Contracts.
In analyzing our sales contracts, our policy is to identify the
distinct performance obligations in a sales contract arrangement.
In determining our performance obligations under our sales
contracts, we consider that the terms and conditions of sales are
explicitly outlined in our sales contracts, and are so distinct and
identifiable within the context of each sales contract, and so are
not integrated with other goods, or constitute a modification or
customization of other goods in our contracts, or are highly
dependent or highly integrated with other goods in our sales
contracts. Thus, our performance obligations are singularly related
to our promise to provide the hempSMART™ products upon receipt of
payment. We offer an assurance warranty on our hempSMART™ products
that allows a customer to return any hempSMART™ products within
thirty days if not satisfied for any reason. Assurance warranties
are not identifiable performance obligations, since they are
electable at the whim of the customer for any reason. However, we
do account for returns of purchase prices if made.
Determination of the Price in Our Sales Contracts.
The transaction prices in our sales contract is the amount of
consideration we expect to be entitled to for transferring promised
hempSMART™ products. The consideration amount is fixed and not
variable. The transaction price is allocated to the identified
performance obligations in the contract. These allocated amounts
are recognized as revenue when or as the performance obligations
are fulfilled, which is concurrently upon receipt of payment. There
are no future options for a contract when considering and
determining the transaction price. We exclude amounts third parties
will eventually collect, such as sales tax, when determining the
transaction price. Since the timing between receiving consideration
and transferring goods or services is immediate, our sales
contracts do not have significant financing components, i.e.,
recognizing revenue at the amount that reflects the cash payment
that the customer would have made at the time the goods or services
were transferred to them (cash selling price), rather than
significantly before or after the goods or services are
provided.
Allocation of the Transaction Price of Our Sales Contracts.
Our sales contracts are not considered multi-element arrangements
which require the fulfillment of multiple performance obligations.
Rather, our sales contracts include one performance obligation in
each contract. As such, from the outset, we allocate the total
consideration to each performance obligation based on the fixed and
determinable standalone selling price, which we believe is an
accurate representation of what the price is in each
transaction.
Recognition of Revenue when the Performance Obligation is
Satisfied.
A performance obligation is satisfied when or as control of the
good or service is transferred to the customer. The standard
defines control as “the ability to direct the use of, and obtain
substantially all of the remaining benefits from, the asset.” (ASC
606-10-20). For performance obligations that are fulfilled at a
point in time, revenue is recognized at the fulfillment of the
performance obligation. As noted above, our single performance
obligation sales contracts are singularly related to our promises
to provide the hempSMART™ products to the customer upon receipt of
payment, which occurs concurrently and when completed, allows us
under our revenue recognition policy to realize revenue.
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(unaudited)
Product Sales
Revenue from product sales, including delivery fees, is recognized
when (i) an order is placed by the customer; (ii) the price is
fixed and determinable when the order is placed; (iii) the customer
is required to and concurrently pays for the product upon order;
and, (iv) the product is shipped. The evaluation of our recognition
of revenue after the adoption of FASB ASC 606 did not include any
judgments or changes to judgments that affected our reporting of
revenues, since our product sales, both pre and post adoption of
FASB ASC 606, were evaluated using the same standards as noted
above, reflecting revenue recognition upon order, payment and
shipment, which all occurs concurrently when the order is placed
and paid for by the customer, and the product is shipped. Further,
given the facts that (i) our customers exercise discretion in
determining the timing of when they place their product order; and,
(ii) the price negotiated in our product sales is fixed and
determinable at the time the customer places the order, and there
is no delay in shipment, we are of the opinion that our product
sales do not indicate or involve any significant customer financing
that would materially change the amount of revenue recognized under
the sales transaction, or would otherwise contain a significant
financing component for us or the customer under FASB ASC Topic
606.
Consulting Services
We also offer professional services for financial accounting,
bookkeeping or real property management consulting services based
on consulting agreements. As of the date of this filing, we have
not entered into any contracts for any financial accounting,
bookkeeping and/or real property management consulting services
that have generated reportable revenues as of the year ended 2019
or the three and nine months ended September 30, 2020. We intend
and expect these arrangements to be entered into on an hourly fixed
fee basis.
For hourly based fixed fee service contracts, we intend to utilize
and rely upon the proportional performance method, which recognizes
revenue as services are performed. Under this method, in order to
determine the amount of revenue to be recognized, we will calculate
the amount of completed work in comparison to the total services to
be provided under the arrangement or deliverable. We will only
recognize revenues as we incur and charge billable hours. Because
our hourly fees for services are fixed and determinable and are
only earned and recognized as revenue upon actual performance, we
are of the opinion that such arrangements are not an indicator of a
vendor or customer based significant financing, that would
materially change the amount of revenue we recognize under the
contract or would otherwise contain a significant financing
component under FASB ASC Topic 606.
The Company determined that upon adoption of ASC 606 there were no
quantitative adjustments converting from ASC 605 to ASC 606
respecting the timing of our revenue recognition because product
sales revenue is recognized upon customer order, payment and
shipment, which occurs concurrently, and our consulting services
offered are fixed and determinable and are only earned and
recognized as revenue upon actual performance.
Use of
Estimates
The preparation of financial
statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Significant estimates include the fair value of the
Company’s stock, stock-based compensation, fair values relating
to derivative liabilities, debt discounts and the valuation
allowance related to deferred tax assets. Actual results may differ
from these estimates.
Cash
The Company considers cash to
consist of cash on hand and temporary investments having an
original maturity of 90 days or less that are readily convertible
into cash.
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(unaudited)
Concentrations of credit
risk
The Company’s financial
instruments that are exposed to a concentration of credit risk are
cash and accounts receivable. Occasionally, the Company’s cash and
cash equivalents in interest-bearing accounts may exceed FDIC
insurance limits. The financial stability of these institutions is
periodically reviewed by senior management.
Accounts
Receivable
Trade receivables are carried
at their estimated collectible amounts. Trade credit is generally
extended on a short-term basis; thus, trade receivables do not bear
interest. Trade accounts receivable are periodically evaluated for
collectability based on past credit history with customers and
their current financial condition.
Allowance for Doubtful
Accounts
Any charges to the allowance
for doubtful accounts on accounts receivable are charged to
operations in amounts sufficient to maintain the allowance for
uncollectible accounts at a level management believes is adequate
to cover any probable losses. Management determines the adequacy of
the allowance based on historical write-off percentages and the
current status of accounts receivable. Accounts receivable are
charged off against the allowance when collectability is determined
to be permanently impaired. As of September 30, 2020, and December
31, 2019, allowance for doubtful accounts was $0 and $0,
respectively.
Inventories
Inventories are stated at the lower of cost or market with cost
being determined on a first-in, first-out (FIFO) basis. The Company
writes down its inventory for estimated obsolescence or
unmarketable inventory equal to the difference between the cost of
inventory and the estimated market value based upon assumptions
about future demand and market conditions. If actual market
conditions are less favorable than those projected by management,
additional inventory write-downs may be required. During the
periods presented, there were no inventory write-downs.
Cost of sales
Cost of sales is comprised of cost of product sold, packaging, and
shipping costs.
Stock Based Compensation
The Company measures the cost of services received in exchange for
an award of equity instruments based on the fair value of the
award. For employees and directors, the fair value of the award is
measured on the grant date and for non-employees, the fair value of
the award is generally re-measured on vesting dates and interim
financial reporting dates until the service period is complete. The
fair value amount is then recognized over the period during which
services are required to be provided in exchange for the award,
usually the vesting period. Stock-based compensation expense is
recorded by the Company in the same expense classifications in the
statements of operations, as if such amounts were paid in cash.
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(unaudited)
Net Loss per Common Share,
basic and diluted
The Company computes earnings
(loss) per share under Accounting Standards Codification subtopic
260-10, Earnings Per Share (“ASC 260-10”). Net loss per common
share is computed by dividing net loss by the weighted average
number of shares of common stock outstanding during the
year. Diluted earnings per share, if presented,
would include the dilution that would occur upon the
exercise or conversion of all potentially dilutive securities into
common stock using the “treasury stock” and/or “if converted”
methods as applicable.
The computation of basic and
diluted income (loss) per share as of September 30, 2020 and 2019
excludes potentially dilutive securities when their inclusion would
be anti-dilutive, or if their exercise prices were greater than the
average market price of the common stock during the
period.
Potentially dilutive
securities excluded from the computation of basic and diluted net
loss per share are as follows:
|
|
September 30,
2020
|
|
September 30,
2019
|
Convertible notes payable |
|
|
5,281,668,086 |
|
|
|
52,346,160 |
|
Options
to purchase common stock |
|
|
— |
|
|
|
— |
|
Warrants
to purchase common stock |
|
|
292,054,702 |
|
|
|
3,602,160 |
|
Restricted stock units |
|
|
— |
|
|
|
— |
|
Total |
|
|
5,573,722,788 |
|
|
|
55,948,320 |
|
Property and
Equipment
Property and equipment are
stated at cost. When retired or otherwise disposed, the related
carrying value and accumulated depreciation are removed from the
respective accounts and the net difference less any amount realized
from disposition, is reflected in earnings. For financial statement
purposes, property and equipment are recorded at cost and
depreciated using the straight-line method over their estimated
useful lives of 3 to 5 years.
Investments
The Company follows
Accounting Standards Codification subtopic 321-10,
Investments-Equity Securities (“ASC 321-10”) which requires the
accounting for equity security to be measured at fair value with
changes in unrealized gains and losses are included in current
period operations. Where an equity security is without a readily
determinable fair value, the Company may elect to estimate its fair
value at cost minus impairment plus or minus changes resulting from
observable price changes.
As a smaller reporting company, the company is subject to
provisions of Rule 8-03(b)(3) of Regulation S-X which requires the
disclosure of certain financial information for equity investees
that constitute 20% of more of the Company’s consolidated net
income (loss).
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(unaudited)
Derivative Financial
Instruments
The Company classifies as
equity any contracts that (i) require physical settlement or
net-share settlement or (ii) provide the Company with a choice of
net-cash settlement or settlement in its own shares (physical
settlement or net-share settlement) providing that such contracts
are indexed to the Company's own stock. The Company classifies as
assets or liabilities any contracts that (i) require net-cash
settlement (including a requirement to net cash settle the contract
if an event occurs and if that event is outside the Company’s
control) or (ii) gives the counterparty a choice of net-cash
settlement or settlement in shares (physical settlement or
net-share settlement). The Company assesses classification of its
common stock purchase warrants and other free-standing derivatives
at each reporting date to determine whether a change in
classification between equity and liabilities is
required.
The Company’s free-standing
derivatives consisted of conversion options embedded within its
issued convertible debt and warrants with anti-dilutive (reset)
provisions. The Company evaluated these derivatives to assess their
proper classification in the balance sheet using the
applicable classification criteria enumerated under GAAP. The
Company determined that certain conversion and exercise options do
not contain fixed settlement provisions. The convertible
notes contain a conversion feature and warrants have a reset
provision such that the Company could not ensure it would have
adequate authorized shares to meet all possible conversion
demands.
As such, the Company was
required to record the conversion feature and the reset provision
which does not have fixed settlement provisions as liabilities and
mark to market all such derivatives to fair value at the end of
each reporting period.
The Company has adopted a
sequencing policy that reclassifies contracts (from equity to
assets or liabilities) with the most recent inception date first.
Thus, any available shares are allocated first to contracts with
the most recent inception dates.
Fair Value of Financial
Instruments
Fair value estimates discussed herein are based upon certain market
assumptions and pertinent information available to management as of
September 30, 2020 and December 31, 2019. The respective carrying
value of certain on-balance-sheet financial instruments
approximated their fair values. These financial instruments include
cash and accounts payable. Fair values were assumed to approximate
carrying values for cash, accounts payables and short-term notes,
as they are short term in nature.
Advertising
The Company follows the policy of charging the costs of advertising
to expense as incurred. The Company charged to operations $59,752
and $104,411 for the three and nine months ended September 30,
2020 and $159,428 and $550,544 for the three and nine
months ended September 30, 2019, respectively, as advertising
costs.
Income Taxes
Deferred income tax assets and liabilities are determined based on
the estimated future tax effects of net operating loss and credit
carry forwards and temporary differences between the tax basis of
assets and liabilities and their respective financial reporting
amounts measured at the current enacted tax rates. The Company
records an estimated valuation allowance on its deferred income tax
assets if it is not more likely than not that these deferred income
tax assets will be realized.
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(unaudited)
The Company recognizes a tax benefit from an uncertain tax position
only if it is more likely than not that the tax position will be
sustained on examination by taxing authorities, based on the
technical merits of the position. The tax benefits recognized in
the consolidated financial statements from such a position are
measured based on the largest benefit that has a greater than 50%
likelihood of being realized upon ultimate settlement. As of
September 30, 2020, and 2019, the Company has not recorded any
unrecognized tax benefits.
Segment Information
Accounting Standards Codification subtopic Segment Reporting 280-10
("ASC 280-10") establishes standards for reporting information
regarding operating segments in annual financial statements and
requires selected information for those segments to be presented in
interim financial reports issued to stockholders. ASC 280-10 also
establishes standards for related disclosures about products and
services and geographic areas. Operating segments are identified as
components of an enterprise about which separate discrete financial
information is available for evaluation by the chief operating
decision maker, or decision-making group, in making decisions how
to allocate resources and assess performance. The information
disclosed herein materially represents all of the financial
information related to the Company's only material principal
operating segment.
The following table represents the Company’s hempSMART business,
which is its sole operating segment as of September 30, 2020:
hempSMART |
|
|
|
|
|
|
|
|
STATEMENT OF
OPERATIONS |
|
|
|
|
|
|
|
|
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2020
|
|
|
|
|
For the three months ended
September 30, |
|
For the nine months ended
September 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenues |
|
$ |
53,195 |
|
|
$ |
229,371 |
|
|
$ |
217,972 |
|
|
$ |
552,761 |
|
Cost of Sales |
|
|
37,170 |
|
|
|
90,843 |
|
|
|
110,563 |
|
|
|
159,860 |
|
Gross profit |
|
|
16,025 |
|
|
|
138,528 |
|
|
|
107,409 |
|
|
|
392,901 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
expense |
|
|
1,374 |
|
|
|
1,696 |
|
|
|
4,702 |
|
|
|
5,087 |
|
Payroll and related
expenses |
|
|
26,394 |
|
|
|
— |
|
|
|
77,256 |
|
|
|
|
|
General and admin
expenses |
|
|
55,672 |
|
|
|
137,146 |
|
|
|
169,707 |
|
|
|
1,028,401 |
|
Selling and
marketing |
|
|
117,978 |
|
|
|
262,516 |
|
|
|
294,231 |
|
|
|
583,180 |
|
Total Expenses |
|
|
201,418 |
|
|
|
401,358 |
|
|
|
575,221 |
|
|
|
1,616,668 |
|
Net Loss from Operations |
|
$ |
(185,393 |
) |
|
$ |
(262,830 |
) |
|
$ |
(467,812 |
) |
|
$ |
(1,223,767 |
) |
Recent Accounting Pronouncements
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).
This ASU requires lessees to recognize a lease liability, on a
discounted basis, and a right-of-use asset for substantially all
leases, as well as additional disclosures regarding leasing
arrangements. In July 2018, the FASB issued ASU 2018-11, Leases
(Topic 842), which provides an optional transition method of
applying the new lease standard. Topic 842 can be applied using
either a modified retrospective approach at the beginning of the
earliest period presented, or as permitted by ASU 2018-11, at the
beginning of the period in which it is adopted.
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(unaudited)
We adopted this standard using a modified retrospective approach on
January 1, 2019. The modified retrospective approach includes a
number of optional practical expedients relating to the
identification and classification of leases that commenced before
the adoption date; initial direct costs for leases that commenced
before the adoption date, and the ability to use hindsight in
evaluating lessee options to extend or terminate a lease or to
purchase the underlying asset.
The Company elected the package of practical expedients permitted
under ASC 842 allowing it to account for its existing operating
lease that commenced before the adoption date as an operating lease
under the new guidance without reassessing (i) whether the contract
contains a lease; (ii) the classification of the lease; or, (iii)
the accounting for indirect costs as defined in ASC 842. The
Company negotiated a 2 year extension on its current office
lease.
On July 1, 2019, the Company entered into an amendment and
extension of its one applicable lease for office space until June
30, 2021. The extension requires the Company to pay monthly rent of
$1,308.88 from July 1, 2019 to June 30, 2020; and, $1,348.14 from
July 1, 2020 to June 30, 2021. In considering its qualitative
disclosure obligations under ASC 842-20-50-3, the Company examined
its one lease for office space that has a fixed monthly rent with
no variable lease payments. The lease is for an office space with
no right of use assets. The lease does not provide for terms and
conditions granting residual value guarantees by the Company, or
any restrictions or covenants imposed by the lease for dividends or
incurring additional financial obligations by the Company. The
Company also elected a short-term lease exception policy and an
accounting policy to not separate non-lease components from lease
components for our facility lease, as we determined our right of
use asset to be zero.
Consistent with ASC 842-20-50-4, for the Company's September 30,
2020, quarterly financial statements, the Company calculated its
total lease cost based solely on its monthly rent obligation. The
Company had no cash flows arising from its lease, no finance lease
cost, short term lease cost, or variable lease costs. Our office
lease does not produce any sublease income, or any net gain or loss
recognized from sale and leaseback transactions. As a result, the
Company did not need to segregate amounts between finance and
operating leases for cash paid for amounts included in the
measurement of lease liabilities, segregated between operating and
financing cash flows; supplemental non-cash information on lease
liabilities arising from obtaining right-of-use assets;
weighted-average calculations for the remaining lease term; or the
weighted-average discount rate.
The adoption of this guidance resulted in no significant impact to
our results of operations or cash flows.
In August 2018, the FASB issued ASU No. 2018-13, “Fair Value
Measurement (Topic 820).” This standard modifies disclosure
requirements related to fair value measurement and is effective for
all entities for fiscal years, and interim periods within those
fiscal years, beginning after December 15, 2019. Early adoption is
permitted. Implementation on a prospective or retrospective basis
varies by specific disclosure requirement. The standard also allows
for early adoption of any removed or modified disclosures upon
issuance while delaying adoption of the additional disclosures
until their effective date. The Company is currently assessing the
impact of adopting this standard on its consolidated financial
statements.
In December 2019, the FASB issued ASU No. 2019-12, “Simplifying the
Accounting for Income Taxes (Topic 740)”. This standard simplifies
the accounting for income taxes. This standard is effective for
fiscal years beginning after December 15, 2020, including interim
periods within those fiscal years. Early adoption is permitted for
all entities. The Company is currently assessing the impact of
adopting this standard on its consolidated financial
statements.
In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with
Conversion and Other Options (Subtopic 470-20) and Derivatives and
Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40)”
(“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain
financial instruments with characteristics of liabilities and
equity, including convertible instruments and contracts on an
entity’s own equity. The ASU is part of the FASB’s simplification
initiative, which aims to reduce unnecessary complexity in U.S.
GAAP. The ASU’s amendments are effective for fiscal years beginning
after December 15, 2023, and interim periods within those fiscal
years. The Company is currently evaluating the impact ASU 2020-06
will have on its financial statements.
Subsequent Events
The Company evaluates events
that have occurred after the balance sheet date but before the
financial statements are issued. Based upon the evaluation,
the Company did not identify any recognized or non-recognized
subsequent events that would have required adjustment or disclosure
in the financial statements, except as disclosed.
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(unaudited)
NOTE 4 – PROPERTY AND
EQUIPMENT
Property and equipment as of
September 30, 2020 and December 31, 2019 is summarized as
follows:
|
|
September 30,
2020
|
|
December 31,
2019
|
Computer
equipment |
|
$ |
15,398 |
|
|
$ |
16,358 |
|
Furniture and fixtures |
|
|
5,140 |
|
|
|
5,140 |
|
Subtotal |
|
|
20,538 |
|
|
|
21,498 |
|
Less accumulated depreciation |
|
|
(17,510 |
) |
|
|
(13,986 |
) |
Property and
equipment, net |
|
$ |
3,028 |
|
|
$ |
7,512 |
|
Property and equipment are
stated at cost and depreciated using the straight-line method over
their estimated useful lives of 3 years. When retired or otherwise
disposed, the related carrying value and accumulated depreciation
are
removed from the respective
accounts and the net difference less any amount realized from
disposition, is reflected in earnings.
Depreciation expense was $1,374 and $4,702 for the three and nine
months ended September 30, 2020; and $1,696 and $5,087 for the
three and nine months ended September 30, 2019, respectively.
NOTE 5 –
INVESTMENTS
MoneyTrac
We entered into a stock purchase agreement on March 13, 2017 with
MoneyTrac Technology, Inc., a California stock corporation
(“MoneyTrac”) to purchase a 15% equity position in MoneyTrac. On
July 27, 2017, we completed tender of the purchase price of
$250,000 pursuant to that stock purchase agreement. On June 12th,
2018, Global Payout, Inc. (“Global”) entered into a reverse
triangular merger business combination (the “Merger”) with
MoneyTrac and MTrac Tech Corporation, a Nevada corporation and
wholly-owned subsidiary of Global (“Merger Sub”), whereby MoneyTrac
was successfully merged into Merger Sub, the surviving corporation
of the Merger. Thereafter, the separate existence of MoneyTrac
ceased, and all rights, privileges, powers and property of
MoneyTrac were assumed by Merger Sub. Additionally, Merger Sub
assumed all of the financial obligations and liabilities of
MoneyTrac, except minute books and stock records of MoneyTrac
insofar as they relate solely to its organization and
capitalization, and the rights of MoneyTrac arising out of the
executed Merger. Pursuant to the terms of the Merger, Global issued
1,100,000,000 (one billion, one hundred million) shares of its
common stock to MoneyTrac as consideration for the acquisition of
MoneyTrac. Pursuant to the terms of the Merger, a conversion of
issued MoneyTrac stock was completed whereby each one (1) share of
MoneyTrac stock, issued and outstanding immediately prior to the
effective date of the Merger, was canceled and extinguished and
converted automatically into ten (10) shares of Global common
stock. As of the effective date of the Merger, all shares of Global
Preferred Stock issued prior to the effective date of the Merger
were canceled and extinguished without any conversion thereof. We
acquired 150,000,000 Global common shares for our purchase price of
$250,000, representing ownership of approximately fifteen percent
(15%) of the post-Merger issued and outstanding equity of Global.
Global’s name changed in April, 2020 to Global Trac Solutions, Inc.
Global’s common stock is traded on the OTC Markets under the symbol
“PYSC.” We realized $51,748.17 from the sales of all of our Global
securities, and as of September 30, 2020, have no remaining shares.
We have a cash balance in the amount of $12,500 held in our
brokerage account, a receivable resulting from the proceeds of our
sale of our Global shares, that we have not collected.
Benihemp
On July 19, 2017, we agreed to lend $50,000 to Convenient Hemp
Mart, LLC (“Benihemp”) based on a promissory note. The note
provided that in lieu of receiving repayment, we could elect to
exercise a right to convert the loaned amount into a payment
towards the purchase of a 25% interest in Benihemp, subject to our
payment of an additional $50,000, equaling a total purchase price
of $100,000. The Company exercised this option on November 20, 2017
and made payment to Benihemp on November 21, 2017. On May 1, 2019,
the Company and Benihemp agreed to cancel the Company’s 25%
interest in Benihemp. Benihemp issued to the Company a credit memo
equal to the Company’s $100,000 investment. The Company determined
that as of December 31, 2019, this credit was impaired and not
usable.
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(unaudited)
Global Hemp Group New Brunswick Joint Venture
On September 5, 2017, we announced our agreement to participate in
a joint venture with Global Hemp Group, Inc., a Canadian
corporation (“Global Hemp Group”), in a multi-phase industrial hemp
project on the Acadian peninsula New Brunswick, Canada. Our
participation included providing one-half, or $10,775, of the
funding for the phase one work of the multi-phase industrial hemp
project. On January 10, 2018, phase one of the project was
completed by successfully cultivating industrial hemp during the
2017 growing season for research purposes. The Company’s
project-related costs incurred according to the Company’s interest
in the industrial hemp project were $0 and $10,775 for the years
ended December 31, 2019 and 2018 respectively and was recorded as
other income/expense in the Company’s Statement of Operations in
the appropriate periods. As of December 31, 2019, and September 30,
2020, the balance of the New Brunswick industrial hemp joint
venture investment reported on the balance sheet for the year ended
December 31, 2019 was $0 as a result of the investment being deemed
fully impaired and the Company withdrawing from the joint venture
as of September 30, 2019.
Global Hemp Group Oregon Joint Venture – Scio, OR
On May 8, 2018, the Company, Global Hemp Group, and TTO
Enterprises, Ltd., an Oregon corporation (“TTO”) entered into a
joint venture agreement. The purpose of the joint venture was to
develop an Oregon-licensed industrial hemp project to commercialize
the cultivation of industrial hemp biomass on a 109-acre parcel of
farmland owned by the Company and Global Hemp Group in Scio,
Oregon. The joint venture operated through the Oregon corporation
Covered Bridges, Ltd. On May 30, 2018, the joint venture purchased
TTO’s 15% interest in the joint venture for $30,000. The Company
and Global Hemp Group then had equal interests as co-owners of the
joint venture. The joint venture agreement committed the Company to
a cash contribution of $600,000 payable on the following funding
schedule: $200,000 upon execution of the joint venture agreement;
$238,780 by July 31, 2018; $126,445 by October 31, 2018; and
$34,775 by January 31, 2019. The Company performed these payment
obligations pursuant to the joint venture agreement.
The 2018 crop of industrial hemp grown on the joint venture’s
farmland consisted of 33 acres of high-yield CBD industrial hemp
biomass grown in an orchard-style cultivation method on our
farmland. The 33-acre 2018 harvest produced approximately 37,000
high CBD content industrial hemp plants, yielding a total of 24
tons of wet harvested industrial hemp biomass that resulted in a
saleable harvest of 48,000 pounds of cured industrial hemp biomass.
The joint venture partners prepared processing samples ranging in
size from 100 to 2,000 lbs. for sample offers to licensed
industrial hemp handlers and CBD extraction companies. This
industrial hemp biomass was processed into a CBD crude oil
concentrate with the option to refine it further into CBD isolate,
or full spectrum oil, in order to increase its value on the
market.
As of December 31, 2019, the combined balance of this joint venture
investment and related farmland investment was $0, as the
investment was written off as a loss as a result of its failure to
generate any cash flow for the Company for the period ended
December 31, 2019. The debt obligation of $262,414 related to this
joint venture was also written off to $0 as of the year ended
December 31, 2019. The debt obligation related to the joint venture
for the nine months ended September 30, 2020 was $0.
On September 28, 2020, the Company and GHG entered into a
Settlement and Mutual Release Agreement (the “Agreement”), pursuant
to which the parties agreed to resolve a dispute among them
regarding the joint venture agreement. Under the Agreement, GHG
agreed to make a lump sum payment to the Company of $200,000, with
$125,000 payable no later than September 30, 2020, and $75,000
payable no later than November 15, 2020, with applicable interest,
and to issue GHG common stock to the Company equal in value to
$185,000 as of the date of the Agreement, or September 28, 2020,
subject to a non-dilutive protection provision, and additionally,
to pay the Company $10,000 to cover the Company’s legal fees
relating to the Agreement by September 30, 2020. In exchange for
the settlement consideration, the Company has agreed to relinquish
its ownership interest in the joint venture.
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(unaudited)
Bougainville Ventures, Inc. Joint Venture
On March 16, 2017, we entered into a joint venture agreement with
Bougainville Ventures, Inc., a Canadian corporation. The purpose of
the joint venture was for the Company and Bougainville to jointly
engage in the development and promotion of products in the
legalized cannabis industry in Washington State; (ii) utilize
Bougainville’s high quality cannabis grow operations in the State
of Washington, where it claimed to have an ownership interest in
real property for use within the legalized cannabis industry; (iii)
leverage Bougainville’s agreement with a I502 Tier 3 license holder
to grow cannabis on the site; provide technical and management
services
and resources including, but not limited to: sales and marketing,
agricultural procedures, operations security and monitoring,
processing and delivery, branding, capital resources and financial
management; and, (iv) optimize collaborative business
opportunities. The Company and Bougainville agreed to operate
through a Washington State Limited Liability Company, and BV-MCOA
Management, LLC was organized in the State of Washington on May 16,
2017.
As our contribution to the joint venture, the Company committed to
raise not less than $1 million dollars to fund joint venture
operations based upon a funding schedule. The Company also
committed to providing branding and systems for the representation
of cannabis related products and derivatives comprised of
management, marketing and various proprietary methodologies
directly tailored to the cannabis industry.
Bougainville represented that it had an ownership interest in real
property located in Washington State used for growing cannabis, and
possessed information primarily related to the management and
control of cannabis grow operations as conducted in Washington
State that included research, development and know how in the
cannabis industry. Bougainville also represented that it had an
agreement with a I502 Tier 3 license holder in Washington
State to operate on the land. The Company and Bougainville's
agreement provided that funding provided by the Company would go,
in part, towards the joint venture’s ultimate purchase of the land
consisting of a one-acre parcel located in Okanogan County,
Washington, for joint venture operations.
As disclosed on Form 8-K on December 11, 2017, the Company did not
comply with the funding schedule for the joint venture. On November
6, 2017, the Company and Bougainville amended the joint venture
agreement to reduce the amount of the Company's commitment to
$800,000 and also required the Company to issue Bougainville
250,000 shares of the Company's restricted common stock. The
Company completed its payments pursuant to the amended agreement on
November 7, 2017, and on November 9, 2017, issued to Bougainville
15 million shares of restricted common stock. The amended agreement
provided that Bougainville would deed the real property to the
joint venture within thirty days of its receipt of payment.
Thereafter, the Company determined that Bougainville had no
ownership interest in the property in Washington State, but rather
was a party to a purchase agreement for real property that was in
breach for non-payment. Bougainville also did not possess an
agreement with a Tier 3 I502 license holder to grow Marijuana on
the property. Nonetheless, as a result of funding arranged for by
the Company, Bougainville and an unrelated third party, Green
Ventures Capital Corp., purchased the land. The land is currently
pending the payment of delinquent property taxes that would allow
for the Okanogan County Assessor conditions to complete the
subdivision of the land by the Okanogan County Assessor. However,
Bougainville failed to cooperate or communicate with the Company in
good faith, and failed to pay the delinquent taxes on the real
property that would allow for sub-division and the deeding of the
real property to the joint venture.
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(unaudited)
On August 10, 2018, the Company advised its independent auditor
that Bougainville did not cooperate or communicate with the Company
regarding its requests for information concerning the audit of
Bougainville’s receipt and expenditures of funds contributed by the
Company in the joint venture agreement. Bougainville had a material
obligation to do so under the joint venture agreement. The Company
believes that some of the funds it paid to Bougainville were
misappropriated and that there was self-dealing with respect to
those funds. Additionally, the Company believes that Bougainville
misrepresented material facts in the joint venture agreement, as
amended, including, but not limited to, Bougainville’s
representations that: (i) it had an ownership interest in real
property that
was to be deeded to the joint venture; (ii) it had an agreement
with a Tier 3 # I502 cannabis license holder to grow cannabis on
the real property; and, (iii) that clear title to the real property
associated with the Tier 3 # I502 license would be deeded to the
joint venture thirty days after the Company made its final funding
contribution. As a result, on September 20, 2018, the Company filed
suit against Bougainville Ventures, Inc., BV-MCOA Management, LLC,
Andy Jagpal, Richard Cindric, et al. in Okanogan County Washington
Superior Court, case number 18-2- 0045324. The Company’s complaint
seeks legal and equitable relief for breach of contract, fraud,
breach of fiduciary duty, conversion, recession of the joint
venture agreement, an accounting, quiet title to real property in
the name of the Company, for the appointment of a receiver, the
return to treasury of 15 million shares issued to Bougainville,
and, for treble damages pursuant to the Consumer Protection Act in
Washington State. The registrant has filed a lis pendens on the
real property. The case is currently in litigation. The trial is
set for January 26-28, 2021.
In connection with the agreement, the Company recorded a cash
investment of $1,188,500 to the Joint Venture during 2017. This was
comprised of 49.5% ownership of BV-MCOA Management LLC, and was
accounted for using the equity method of accounting. The Company
recorded an annual impairment in 2017 of $792,500, reflecting the
Company’s percentage of ownership of the net book value of the
investment. During 2018, the Company recorded equity losses of
$37,673 and $11,043 for the first and second quarters respectively,
and recorded an annual impairment of $285,986 for the year ended
December 31, 2018, at which time the Company determined the
investment to be fully impaired due to Bougainville’s breach of
contract, including: (i) its failure to communicate and cooperate
regarding the Company’s audit; (ii) its misrepresentations
concerning its ownership interest in the real property in Okanogan
County Washington; (iii) its failure to deed the property to the
joint venture within thirty days of payment pursuant to the amended
joint venture agreement; and, (iv) its misrepresentation that it
possessed an agreement with a Tier 3 license holder to operate on
the property.
The Company was able to obtain general loans from St. George
Investments LLC, not specific to any of the company’s joint
ventures. Therefore, accordingly, the impairment of this investment
did not create any defaults to the loan agreements and covenants.
The loan agreement established the lender’s option to convert the
loans to common shares of the Company.
GateC Joint Venture
On March 17, 2017, the Company and GateC Research, Inc. (“GateC”)
entered into a Joint Venture Agreement (“Agreement”) whereby the
Company committed to raise up to one and one-half million dollars
($1,500,000) over a six-month period, with a minimum commitment of
five hundred thousand dollars ($500,000) within a three (3) month
period; and, information establishing brands and systems for the
representation of cannabis related products and derivatives
comprised of management, marketing and various proprietary
methodologies, including but not limited to its affiliate marketing
program, directly tailored to the cannabis industry.
GateC agreed to contribute its management and control services and
systems related to cannabis grow operations in Adelanto County,
California, and its permit to grow marijuana in an approved zone in
Adelanto, California. GateC did not own a physical site for its
operation in Adelanto County, California, and GateC’s permit to
grow cannabis did not contain a conditional use permit.
On or about November 28, 2017, GateC and the Registrant orally
agreed to suspend the Company’s funding commitment, pending the
finalization of California State regulations governing the growth,
cultivation and distribution of cannabis, which were expected to be
completed in 2018.
On March 19, 2018, the Company and GateC rescinded the Agreement
and concurrently released each other from any all any and all
losses, claims, debts, liabilities, demands, obligations, promises,
acts, omissions, agreements, costs and expenses, damages, injuries,
suits, actions and causes of action, of whatever kind or nature,
whether known or unknown, suspected or unsuspected, contingent or
fixed, that they may have against each other and their Affiliates,
arising out of the Agreement.
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(unaudited)
The Registrant incurred no termination penalties as the result of
its entry into the Recession and Mutual Release Agreement.
In 2017, the Company recorded a debt obligation of $1,500,000 to
the Joint Venture and a corresponding impairment charge of
$1,500,000 during for year ended December 31, 2017. Upon
termination of the material definitive agreement on March 19, 2018,
the Company realized a gain on settlement of debt obligation of
$1,500,000 during the six months ended June 30, 2018.
Natural Plant Extract (“NPE”)
On April 15, 2019, we entered into a joint venture with Natural
Plant Extract of California, Inc. (“NPE”) to operate a licensed
psychoactive cannabis distribution service in California to be
named Viva Buds. California legalized psychoactive cannabis for
medicinal and recreational use on January 1, 2018. On February 3,
2020, we terminated the NPE joint venture and entered into a
Settlement and Release of All Claims Agreement with NPE. In
exchange for that universal release, the Company and NPE (i) agreed
to reduce the Company’s interest in NPE from 20% to 5%; (ii) agreed
the Company would pay NPE a total of $85,000 as follows: $35,000
concurrent with the execution of the universal release, and $25,000
no later than the 5th calendar day for each of the two months
following execution of Settlement and Release of All Claims
Agreement; and, (iii) agreed to retire the balance of our original
valuation obligation from the material definitive agreement,
representing a shortfall of $56,085.15, in a convertible promissory
note, with terms allowing NPE to convert the note into common stock
of MCOA at a 50% discount to the closing price of MCOA’s common
stock as of the maturity date.
Cannabis Global (“CBGL”)
On September 30, 2020, the Company entered into a Share Exchange
Agreement with Cannabis Global, Inc., a Nevada corporation quoted
on OTC Markets Pink (“CBGL”) dated September 30, 2020, to acquire
the number of shares of CBGL’s common stock, par value $0.001,
equal in value to $650,000 based on the closing price for the
trading day immediately preceding the effective date, in exchange
for the number of shares of Company common stock, par value $0.001,
equal in value to $650,000 based on the closing price for the
trading day immediately preceding the effective date (the “Share
Exchange Agreement”). For both parties, the Share Exchange
Agreement contains a “true-up” provision requiring the issuance of
additional common stock in the event that a decline in the market
value of either parties’ common stock should cause the aggregate
value of the stock acquired pursuant to the Share Exchange
Agreement to fall below $650,000.
Complementary to the Share Exchange Agreement, the Company and CBGL
entered into a Lock-Up Agreement dated September 30, 2020,
providing that the shares of common stock acquired pursuant to the
Share Exchange Agreement shall be subject to a lock-up period
preventing its sale for a period of 12 months following issuance,
and limiting the subsequent sale to aggregate maximum sale value of
$20,000 per week, or $80,000 per month.
Brazil and Uruguay Joint Ventures
On October 1, 2020, the Company entered into two Joint Venture
Agreements with Marco Guerrero, a director of the Company
(“Guerrero”) dated September 30, 2020, to form joint venture
operations in Brazil and in Uruguay (the “Joint Venture
Agreements”) to produce, manufacture, market and sell the Company’s
hempSMART™ products in Latin America, and will also work to develop
and sell hempSMART™ products globally. The Joint Venture Agreements
contain equal terms for the formation of joint venture entities in
Uruguay and Brazil. The Brazilian joint venture will be
headquartered in São Paulo, Brazil, and will be named HempSmart
Produtos Naturais Ltda. (“HempSmart Brazil”). The Uruguayan joint
venture will be headquartered in Montevideo, Uruguay and will be
named Hempsmart Uruguay S.A.S. (“HempSmart Uruguay”).
Under the Joint Venture Agreements,
the Company will acquire a 70% equity interest in both HempSmart
Brazil and HempSmart Uruguay. A minority 30% equity interest in
both HempSmart Brazil and HempSmart Uruguay will be held by newly
formed entities controlled by Guerrero, a director of the Company,
who is a successful Brazilian entrepreneur. The Company will
provide capital in the amount of $50,000 to both HempSmart Brazil
and HempSmart Uruguay under the Joint Venture Agreements, for a
total capital outlay obligation of $100,000. It is expected that
the proceeds of the initial capital contribution will be used for
contracting with third-party manufacturing facilities in Brazil and
Uruguay, and related infrastructure and employment of key
personnel.
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(unaudited)
MARIJUANA COMPANY OF AMERICA,
INC.
INVESTMENT ROLL-FORWARD
AS OF SEPTEMBER 30, 2020
|
|
INVESTMENTS |
|
SHORT-TERM INVESTMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
|
|
Global Hemp |
|
|
|
Cannabis Global |
|
|
|
|
|
|
|
|
|
|
|
Bougainville Ventures, |
|
|
|
Gate C Research |
|
|
|
Natural Plant |
|
|
|
|
|
|
|
TOTAL Short-Term |
|
|
|
Global Hemp |
|
|
|
|
|
|
|
|
INVESTMENTS |
|
|
|
Group |
|
|
|
Inc. |
|
|
|
Benihemp |
|
|
|
MoneyTrac |
|
|
|
Inc. |
|
|
|
Inc. |
|
|
|
Extract |
|
|
|
Vivabuds |
|
|
|
Investments |
|
|
|
Group |
|
|
|
MoneyTrac |
|
Beginning balance @12-31-16 |
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
$ |
0 |
|
|
|
|
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments made
during 2017 |
|
|
3,049,275 |
|
|
|
10,775 |
|
|
|
|
|
|
|
100,000 |
|
|
|
250,000 |
|
|
|
1,188,500 |
|
|
|
1,500,000 |
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter 03-31-17
equity method Loss |
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter 06-30-17
equity method Loss |
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter 09-30-17
equity method Loss |
|
|
(375,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(375,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter 12-31-17
equity method accounting |
|
|
313,702 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
313,702 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of Investment in 2017 |
|
|
(2,292,500 |
) |
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(792,500 |
) |
|
|
(1,500,000 |
) |
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
|
|
|
|
0 |
|
Balances
as of 12/31/17 |
|
|
695,477 |
|
|
|
10,775 |
|
|
|
0 |
|
|
|
100,000 |
|
|
|
250,000 |
|
|
|
334,702 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments made
during 2018 |
|
|
986,654 |
|
|
|
986,654 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter 03-31-18
equity method Loss |
|
|
(37,673 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(37,673 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter 06-30-18
equity method Loss |
|
|
(11,043 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11,043 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter 09-30-18
equity method Loss |
|
|
(10,422 |
) |
|
|
|
|
|
|
|
|
|
|
(10,422 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter 12-31-18
equity method Loss |
|
|
(31,721 |
) |
|
|
(31,721 |
) |
|
|
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moneytrac investment
reclassified to Short-Term investments |
|
|
(250,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(250,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000 |
|
|
|
|
|
|
|
250,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains on
trading securities - 2018 |
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
560,000 |
|
|
|
|
|
|
|
560,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of investment in 2018 |
|
|
(933,195 |
) |
|
|
(557,631 |
) |
|
|
|
|
|
|
(89,578 |
) |
|
|
|
|
|
|
(285,986 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
Balance
@12-31-18 |
|
$ |
408,077 |
|
|
$ |
408,077 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
810,000 |
|
|
$ |
0 |
|
|
$ |
810,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments made
during quarter ended 03-31-19 |
|
|
129,040 |
|
|
|
129,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter 03-31-19
equity method Loss |
|
|
(59,541 |
) |
|
|
(59,541 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains on trading securities - quarter ended
03-31-19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(135,000 |
) |
|
|
|
|
|
$ |
(135,000 |
) |
Balance
@03-31-19 |
|
$ |
477,576 |
|
|
$ |
477,576 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
675,000 |
|
|
$ |
0 |
|
|
$ |
675,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments made
during quarter ended 06-30-19 |
|
$ |
3,157,234 |
|
|
$ |
83,646 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,000,000 |
|
|
$ |
73,588 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter 06-30-19
equity method Income (Loss) |
|
$ |
(171,284 |
) |
|
$ |
(141,870 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(6,291 |
) |
|
$ |
(23,123 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains on trading securities - quarter ended
06-30-19 |
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(150,000 |
) |
|
|
|
|
|
$ |
(150,000 |
) |
Balance
@06-30-19 |
|
$ |
3,463,526 |
|
|
$ |
419,352 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
2,993,709 |
|
|
$ |
50,465 |
|
|
$ |
525,000 |
|
|
$ |
0 |
|
|
$ |
525,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments made
during quarter ended 09-30-19 |
|
$ |
186,263 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
186,263 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter 09-30-19
equity method Income (Loss) |
|
$ |
122,863 |
|
|
$ |
262,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(94,987 |
) |
|
$ |
(44,939 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of trading
securities during quarter ended 09-30-19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(41,667 |
) |
|
|
|
|
|
$ |
(41,667 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains on trading securities - quarter ended
09-30-19 |
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(362,625 |
) |
|
|
|
|
|
$ |
(362,625 |
) |
Balance
@09-30-19 |
|
$ |
3,772,652 |
|
|
$ |
682,141 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
2,898,722 |
|
|
$ |
191,789 |
|
|
$ |
120,708 |
|
|
$ |
0 |
|
|
$ |
120,708 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments made
during quarter ended 12-31-19 |
|
$ |
392,226 |
|
|
$ |
262,414 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
129,812 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter 12-31-19
equity method Income (Loss) |
|
$ |
(178,164 |
) |
|
$ |
(75,220 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(23,865 |
) |
|
$ |
(79,079 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reversal of Equity
method Loss for 2019 |
|
$ |
272,285 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
125,143 |
|
|
$ |
147,142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of
investment in 2019 |
|
$ |
(3,175,420 |
) |
|
$ |
(869,335 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(2,306,085 |
) |
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on disposition of
investment |
|
$ |
(389,664 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(389,664 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of trading
securities during quarter ended 12-31-19 |
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(17,760 |
) |
|
|
|
|
|
$ |
(17,760 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains on trading securities - quarter ended
12-31-19 |
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(75,545 |
) |
|
|
|
|
|
$ |
(75,545 |
) |
Balance
@12-31-19 |
|
$ |
693,915 |
|
|
$ |
(0 |
) |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
693,915 |
|
|
$ |
0 |
|
|
$ |
27,403 |
|
|
$ |
0 |
|
|
$ |
27,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Loss for
Quarter ended 03-31-20 |
|
|
126,845 |
|
|
|
126,845 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recognize Joint
venture liabilities per JV agreement @03-31-20 |
|
|
394,848 |
|
|
|
394,848 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of Equity
Loss for Quarter ended 03-31-20 |
|
|
(521,692 |
) |
|
|
(521,692 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains on trading securities - quarter ended
03-31-19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13,945 |
) |
|
|
|
|
|
$ |
(13,945 |
) |
Balance
@03-31-20 |
|
$ |
693,915 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
693,915 |
|
|
$ |
0 |
|
|
$ |
13,458 |
|
|
$ |
0 |
|
|
$ |
13,458 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Loss for
Quarter ended 06-30-20 |
|
|
(7,048 |
) |
|
|
(7,048 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of Equity
Loss for Quarter ended 06-30-20 |
|
|
7,048 |
|
|
|
7,048 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of trading
securities - quarter ended 06-30-20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13,458 |
) |
|
|
|
|
|
$ |
(13,458 |
) |
Balance
@06-30-20 |
|
$ |
693,915 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
693,915 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Hemp Group
trading securities issued |
|
|
650,000 |
|
|
|
|
|
|
$ |
650,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
185,000 |
|
|
$ |
185,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Cannabis Global |
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
@09-30-20 |
|
$ |
1,343,915 |
|
|
$ |
0 |
|
|
$ |
650,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
693,915 |
|
|
$ |
0 |
|
|
$ |
185,000 |
|
|
$ |
185,000 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARIJUANA COMPANY OF AMERICA, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(unaudited)
Loan
Payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
Global
Hemp
|
|
|
|
|
|
Bougainville
Ventures, |
|
Gate
C
Research
|
|
Natural
Plant
|
|
Robert
L. Hymers |
|
|
|
General
Operating |
|
|
JV
Debt |
|
Group |
|
Benihemp |
|
MoneyTrac |
|
Inc. |
|
Inc. |
|
Extract |
|
III |
|
Vivabuds |
|
Expense |
Beginning
balance @12-31-16 |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
03-31-17 loan borrowings |
|
|
1,500,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,500,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
06-30-17 loan activity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
09-30-17 loan borrowings |
|
|
725,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
725,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
12-31-17 loan repayments |
|
|
(330,445 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(330,445 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
operational expense |
|
|
172,856 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
172,856 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances
as of 12/31/17 (a) |
|
|
2,067,411 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
394,555 |
|
|
|
1,500,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
172,856 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
03-31-18 loan borrowings (payments) |
|
|
376,472 |
|
|
|
447,430 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(70,958 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
06-30-18 cancellation of JV debt obligation |
|
|
(1,500,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,500,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
06-30-18 loan repayments |
|
|
(101,898 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(101,898 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
09-30-18 loan activity |
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
12-31-18 loan borrowings |
|
|
580,425 |
|
|
|
580,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
@12-31-18 (b) |
|
|
1,422,410 |
|
|
|
1,027,855 |
|
|
|
0 |
|
|
|
0 |
|
|
|
394,555 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
03-31-19 loan borrowings |
|
|
649,575 |
|
|
|
649,575 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
03-31-19 debt conversion to equity |
|
|
(407,192 |
) |
|
|
(407,192 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
@03-31-19 (c) |
|
|
1,664,793 |
|
|
|
1,270,238 |
|
|
|
0 |
|
|
|
0 |
|
|
|
394,555 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
03-31-19 loan borrowings |
|
|
3,836,220 |
|
|
$ |
161,220 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,000,000 |
|
|
|
|
|
|
$ |
0 |
|
|
$ |
1,675,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
03-31-19 debt conversion to equity |
|
|
(1,572,971 |
) |
|
($ |
161,220 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ |
349,650 |
) |
|
|
|
|
|
|
|
|
|
($ |
1,062,101 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
@06-30-19 (d) |
|
|
3,928,042 |
|
|
|
1,270,238 |
|
|
|
0 |
|
|
|
0 |
|
|
|
394,555 |
|
|
|
0 |
|
|
|
1,650,350 |
|
|
|
0 |
|
|
|
0 |
|
|
|
612,899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
09-30-19 loan borrowings |
|
|
582,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
582,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
09-30-19 debt conversion to equity |
|
|
(187,615 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(187,615 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
@09-30-19 (e) |
|
|
4,322,427 |
|
|
|
1,270,238 |
|
|
|
0 |
|
|
|
0 |
|
|
|
394,555 |
|
|
|
0 |
|
|
|
1,650,350 |
|
|
|
0 |
|
|
|
0 |
|
|
|
1,007,284 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
12-31-19 loan borrowings |
|
|
2,989,378 |
|
|
$ |
262,414 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
596,784 |
|
|
$ |
4,221 |
|
|
|
|
|
|
$ |
2,125,959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment
of investment in 2019 |
|
|
(4,083,349 |
) |
|
$ |
(1,532,652 |
) |
|
|
|
|
|
|
|
|
|
$ |
(394,555 |
) |
|
|
|
|
|
$ |
(2,156,142 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
on settlement of debt in 2019 |
|
|
50,093 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
50,093 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment
to reclassify amount to accrued liabilities |
|
|
(85,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(85,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
@12-31-19 (f) |
|
$ |
3,193,548 |
|
|
$ |
(0 |
) |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
56,085 |
|
|
$ |
4,221 |
|
|
$ |
0 |
|
|
$ |
3,133,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
03-31-20 loan borrowings |
|
$ |
441,638 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
441,638 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
03-31-20 debt conversion to equity |
|
$ |
(619,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(619,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recognize
Joint venture liabilities per JV agreement @03-31-20 |
|
$ |
394,848 |
|
|
$ |
394,848 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
03-31-20 Debt Discount adjustments |
|
$ |
24,138 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
24,138 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
@03-31-20 (g) |
|
$ |
3,435,172 |
|
|
$ |
394,848 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
56,085 |
|
|
$ |
28,359 |
|
|
$ |
0 |
|
|
$ |
2,955,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
06-30-20 loan borrowings, net |
|
$ |
65,091 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|