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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2022
or
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From ____________ to ____________
Commission File Number: 000-54258
UNRIVALED BRANDS, INC.
(Exact Name of Registrant as Specified in its Charter)
Nevada26-3062661
(State or Other Jurisdiction
of Incorporation or Organization)
(I.R.S. Employer
Identification No.)
3242 S. Halladay Street
Santa Ana, California
92705
(Address of Principal Executive Offices)(Zip Code)
(888) 909-5564
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange
on which registered
NoneUNRVOTCQX
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 and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x      No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes x      No o
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 the definitions of “large accelerated filer,”
“accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
o
Accelerated filer o
Non-accelerated filer xSmaller reporting company x
Emerging growth company
o
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. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o      No x
As of May 9, 2022, there were 530,331,383 shares outstanding, 85,826,871 shares of common stock issuable upon the exercise of all our outstanding warrants and 43,336,824 shares of common stock issuable upon the exercise of all vested options.


Table of Contents
UNRIVALED BRANDS, INC.
INDEX TO FORM 10-Q FOR THE
QUARTERLY PERIOD ENDED MARCH 31, 2022
Page
 
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UNRIVALED BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except shares)
March 31,
2022
December 31,
2021
(Unaudited)
ASSETS
Current Assets:
Cash$3,666 $6,891 
Accounts receivable, net4,026 4,677 
Inventory, net7,724 7,179 
Prepaid expenses and other assets2,195 1,272 
Notes receivable375 750 
Current assets of discontinued operations5,643 4,495 
Total current assets23,629 25,264 
Property, equipment and leasehold improvements, net23,457 23,728 
Intangible assets, net127,294 129,637 
Goodwill48,132 48,132 
Other assets22,235 26,915 
Investments239 163 
Assets of discontinued operations4,817 17,984 
TOTAL ASSETS $249,802 $271,824 
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Current liabilities:
Accounts payable and accrued expenses$36,483 $31,904 
Short-term debt29,566 45,749 
Income taxes payable8,124 7,969 
Current liabilities of discontinued operations2,210 2,087 
Total current liabilities76,383 87,708 
Long-term liabilities:
Long-term debt, net of discounts7,308 10,006 
Deferred tax liabilities4,435 6,123 
Long-term lease liabilities17,000 21,316 
Long-term liabilities of discontinued operations150 184 
Total long-term liabilities28,893 37,629 
Total liabilities 105,276 125,337 
STOCKHOLDERS’ EQUITY:
Common stock, par value $0.001:
990,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 530,330,007 shares issued and 528,021,587 shares outstanding as of March 31, 2022; 498,546,295 shares issued and 496,237,883 shares outstanding as of December 31, 2021.
552 521 
Additional paid-in capital399,536 392,930 
Treasury stock(808)(808)
Accumulated deficit(258,888)(250,015)
Total Unrivaled Brands, Inc. Stockholders’ Equity140,392 142,628 
Non-controlling interest4,134 3,859 
Total stockholders’ equity144,526 146,487 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$249,802 $271,824 
The accompanying notes are an integral part of the unaudited consolidated financial statements.
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UNRIVALED BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except for shares and per-share data)
Three Months Ended
March 31,
20222021
Total revenues$20,725 $2,057 
Cost of goods sold14,292 1,866 
Gross profit6,433 191 
Selling, general and administrative expenses18,767 12,650 
Gain on sale of assets(198) 
Loss from operations(12,136)(12,459)
Other income (expense):
Gain (loss) on extinguishment of debt542 (6,161)
Interest expense, net(1,766)(71)
Other income1,034 345 
Gain on investments 6,212 
Total other income (expense)(190)325 
Loss from continuing operations, before provision for income taxes(12,326)(12,134)
Provision for income taxes for continuing operations1,688  
Net income (loss) from continuing operations(10,638)(12,134)
Income from discontinued operations, before provision for income taxes2,135 438 
Provision for income taxes for discontinued operations(95) 
Net income (loss) from discontinued operations2,040 438 
NET LOSS(8,598)(11,696)
Less: Income (loss) attributable to non-controlling interest from continuing operations  
Less: Income (loss) attributable to non-controlling interest from discontinued operations275 381 
NET LOSS ATTRIBUTABLE TO UNRIVALED BRANDS, INC.$(8,873)$(12,077)
Loss from continuing operations per common share attributable to Unrivaled Brands, Inc. common stockholders – basic and diluted$(0.02)$(0.05)
Net Loss per common share attributable to Unrivaled Brands, Inc. common stockholders – basic and diluted$(0.02)$(0.05)
Weighted-average number of common shares outstanding – basic and diluted561,818,857 237,752,273 
The accompanying notes are an integral part of the unaudited consolidated financial statements.
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UNRIVALED BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
Three Months Ended
March 31,
20222021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(8,598)$(11,696)
Less: Net income (loss) from discontinued operations2,040 438 
Net loss from continuing operations(10,638)(12,134)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for income taxes(1,688) 
Bad debt expense1,220  
Depreciation and amortization3,289 529 
Gain on sale of assets(198) 
Gain on debt forgiveness (86)
Gain on sale of investments (6,212)
Amortization of operating lease right-of-use asset580 195 
Loss (gain) on extinguishment of debt(542)6,161 
Non-cash interest expense346 27 
Non-cash portion of severance expense 7,990 
Stock-based compensation2,187 398 
Change in operating assets and liabilities:
Accounts receivable(570)(148)
Inventory(544)299 
Prepaid expenses and other current assets(922)(290)
Other assets(638)(23)
Accounts payable and accrued expenses5,707 882 
Operating lease liabilities(624)(133)
Net cash provided by / (used in) operating activities - continuing operations(3,035)(2,545)
Net cash provided by / (used in) operating activities - discontinued operations(62)(366)
NET CASH PROVIDED BY / (USED IN) OPERATING ACTIVITIES(3,097)(2,911)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, equipment and leasehold improvements(926)(50)
Repayment of notes receivable375  
Proceeds from sales of assets450  
Net cash provided by / (used in) investing activities - continuing operations(101)(50)
Net cash provided by / (used in) investing activities - discontinued operations14,209  
NET CASH PROVIDED BY / (USED IN) INVESTING ACTIVITIES14,108 (50)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable 3,500 
Payments of debt principal(18,611)(6)
Cash paid for debt discount (178)
Proceeds from issuance of common stock4,375  
Net cash provided by / (used in) financing activities - continuing operations(14,236)3,316 
NET CASH PROVIDED BY / (USED IN) FINANCING ACTIVITIES(14,236)3,316 
NET CHANGE IN CASH(3,225)355 
Cash at beginning of period6,891 217 
CASH AT END OF PERIOD$3,666 $572 
SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITIES:
Cash paid for interest$1,445 $182 
SUPPLEMENTAL DISCLOSURE FOR NON-CASH INVESTING AND FINANCING ACTIVITIES:
Debt principal and accrued interest converted into common stock$52 $3,596 
Stock options exercised on a net share basis$ $1 
Promissory note issued for severance$ $2,100 
The accompanying notes are an integral part of the unaudited consolidated financial statements.
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UNRIVALED BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2022
(UNAUDITED)
(in thousands, except for shares)
Preferred StockAdditional
Paid-In Capital
Accumulated
Deficit
Non-
Controlling
Interest
Total
Convertible
Series A
Common StockTreasury Stock
SharesAmountSharesAmountSharesAmount
Balance at December 31, 2021
8 $ 496,237,883 $521 $392,930 2,308,420 $(808)$(250,015)$3,859 $146,487 
Warrants exercise  4,759,708 5 (5) — — —  
Stock compensation - employees  900,000 1 181  — — — 182 
Stock compensation - directors  683,332 1 183  — — — 184 
Stock option exercise  146,212 — —  — — — — 
Debt conversion - common stock  294,452 — 75  — — — 75 
Stock issued for cash  25,000,000 24 4,351 — — — — 4,375 
Stock option expense  — — 1,821 — — — — 1,821 
Net income attributable to non-controlling interest  — — — — — — 275 275 
Net loss attributable to Unrivaled Brands, Inc.  — — — — — (8,873)— (8,873)
Balance at March 31, 2022
8 $ 528,021,587 $552 $399,536 2,308,420 $(808)$(258,888)$4,134 $144,526 

The accompanying notes are an integral part of the unaudited consolidated financial statements.
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UNRIVALED BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2021
(UNAUDITED)
(in thousands, except for shares)
Preferred StockAdditional Paid-In CapitalAccumulated DeficitNon-
Controlling
Interest
Total
Convertible Series ACommon StockTreasury Stock
SharesAmountSharesAmountSharesAmount
Balance at December 31, 2020
 $ 194,204,459 $218 $275,060 2,308,412 $(808)$(219,803)$4,463 $59,130 
Adoption of ASU 2020-06— — — — (1,071)— — 1,059 — (12)
Debt conversion - common stock— — 20,391,774 20 3,989 — — — — 4,009 
Warrants issued to Dominion— — — — 5,978 — — — — 5,978 
Stock compensation - directors— — 541,666 1 121 — — — — 122 
Stock compensation - services expense— — 322,947 — 32 — — — — 32 
Stock option exercises— — 1,226,230 1 (1)— — — —  
Acquisition of A shares— — 16,485,714 16 5,873 8 — — — 5,889 
Stock option expense— — — — 244 — — — — 244 
Net income attributable to non-controlling interest— — — — — — — — 381 381 
Net loss attributable to Unrivaled Brands, Inc.— — — — — — — (12,077)— (12,077)
Balance at March 31, 2021
 $ 233,172,790 $256 $290,225 2,308,420 $(808)$(230,821)$4,844 $63,696 

The accompanying notes are an integral part of the unaudited consolidated financial statements
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UNRIVALED BRANDS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – DESCRIPTION OF BUSINESS
References in this document to “the Company”, “Unrivaled”, “we”, “us”, or “our” are intended to mean Unrivaled Brands, Inc., individually, or as the context requires, collectively with its subsidiaries on a consolidated basis. Effective July 7, 2021, the Company changed its corporate name from “Terra Tech Corp.” to “Unrivaled Brands, Inc.” in connection with the Company’s acquisition of UMBRLA, Inc. (“UMBRLA”).
Unrivaled is a holding company with the following subsidiaries:
620 Dyer LLC, a California corporation (“Dyer”)
1815 Carnegie LLC, a California limited liability company (“Carnegie”)
Black Oak Gallery, a California corporation (“Black Oak”)
Blüm San Leandro, a California corporation (“Blüm San Leandro”)
MediFarm, LLC, a Nevada limited liability company (“MediFarm”)
MediFarm I, LLC, a Nevada limited liability company (“MediFarm I”)
121 North Fourth Street, LLC, a Nevada limited liability company ("121 North Fourth")
OneQor Technologies, Inc., a Delaware corporation ("OneQor")
UMBRLA, Inc., a Nevada corporation ("UMBRLA")
Halladay Holding, LLC, a California limited liability company (“Halladay”)
People's First Choice, LLC, a California limited liability company ("People's")
Silverstreak Solutions, Inc., a California corporation ("Silverstreak")
The Company is a multi-state operator ("MSO") with retail, production, distribution, and cultivation operations, with an emphasis on providing the highest quality of medical and adult use cannabis products. From the acquisition of UMBRLA, the Company has multiple cannabis lifestyle brands. The Company is home to Korova, a brand of high potency products across multiple product categories, currently available in California, Oregon, Arizona, and Oklahoma. Other Company brands include Cabana, a boutique cannabis flower brand, and Sticks, a mainstream value-driven cannabis brand, active in California and Oregon. With the acquisition of People’s First Choice, the Company operates a premier cannabis dispensary in Orange County, California. The Company also owns dispensaries in California which operate as People's in Los Angeles, The Spot in Santa Ana, Blum in Oakland and Silverstreak in San Leandro. The Company also has licensed distribution facilities in Portland, OR, Los Angeles, CA, and Sonoma County, CA.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and with the instructions to U.S. Securities and Exchange Commission (“SEC”) Form 10-Q and Article 10 of Regulation S-X of the Securities Act of 1933 and reflect the accounts and operations of the Company and those of our subsidiaries in which we have a controlling financial interest. In accordance with the provisions of FASB or ASC 810, “Consolidation,” we consolidate any variable interest entity (“VIE”) of which we are the primary beneficiary. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. ASC 810 requires a variable interest holder to consolidate a VIE if that party has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. We do not consolidate a VIE in which we have a majority ownership interest when we are not considered the primary beneficiary. We evaluate our relationships with all the VIEs on an ongoing basis to reassess if we continue to be the primary beneficiary.
All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial position of the Company as of March 31, 2022 and December 31, 2021, and the consolidated results of operations and cash flows for the quarters ended March 31, 2022 and 2021 have been included. These interim unaudited condensed consolidated financial statements do not include all disclosures required by GAAP for complete financial
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statements and, therefore, should be read in conjunction with the more detailed audited consolidated financial statements for the year ended December 31, 2021. The December 31, 2021 balances reported herein are derived from the audited consolidated financial statements for the year ended December 31, 2021. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year.
Going Concern
The accompanying financial statements have been prepared assuming that we will continue as a going concern. In an effort to achieve liquidity that would be sufficient to meet all of our commitments, we have undertaken a number of actions, including minimizing capital expenditures and reducing recurring expenses. However, we believe that even after taking these actions, we will not have sufficient liquidity to satisfy all of our future financial obligations. The risks and uncertainties surrounding our ability to raise capital, our limited capital resources, and the weak industry conditions impacting our business raise substantial doubt as to our ability to continue as a going concern. See Note 19, "Going Concern" of the Notes to Consolidated Financial Statements for additional information.
Non-Controlling Interest
Non-controlling interest is shown as a component of stockholders’ equity on the consolidated balance sheets and the share of net income (loss) attributable to non-controlling interest is shown as a component of net income (loss) in the consolidated statements of operations.
Use of Estimates
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of total net revenue and expenses in the reporting periods. The Company regularly evaluates estimates and assumptions related to revenue recognition, allowances for doubtful accounts, sales returns, inventory valuation, stock-based compensation expense, goodwill and purchased intangible asset valuations, derivative liabilities, deferred income tax asset valuation allowances, uncertain tax positions, tax contingencies, litigation and other loss contingencies. These estimates and assumptions are based on current facts, historical experience and various other factors that the Company believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue, costs and expenses that are not readily apparent from other sources. The actual results the Company experiences may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.
Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications did not affect net loss, revenues or stockholders’ equity. See Note 16, "Discontinued Operations" for further discussion regarding discontinued operations.
Trade and Other Receivables
The Company extends non-interest bearing trade credit to its customers in the ordinary course of business which is not collateralized. Accounts receivable are shown on the face of the consolidated balance sheets, net of an allowance for doubtful accounts. The Company analyzes the aging of accounts receivable, historical bad debts, customer creditworthiness and current economic trends, in determining the allowance for doubtful accounts. The Company does not accrue interest receivable on past due accounts receivable. The allowance for doubtful accounts was $4.76 million and $3.68 million as of March 31, 2022 and December 31, 2021, respectively.
Investments
Investments in unconsolidated affiliates are accounted for under the cost or the equity method of accounting, as appropriate. The Company accounts for investments in limited partnerships or limited liability corporations, whereby the Company owns a minimum of 5% of the investee’s outstanding voting stock, under the equity method of accounting. These investments are recorded at the amount of the Company’s investment and adjusted each period for the Company’s share of the investee’s income or loss, and dividends paid. As investments accounted for under the cost method do not have readily
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determinable fair values, the Company only estimates fair value if there are identified events or changes in circumstances that could have a significant adverse effect on the investment’s fair value.
Publicly held equity securities are recorded at fair value with unrealized gains or losses resulting from changes in fair value reflected as unrealized gains or losses on equity securities in our consolidated statements of operations.
Inventory
Inventory is stated at the lower of cost or net realizable value, with cost being determined on the first-in, first-out (“FIFO”) method of accounting. The Company periodically reviews physical inventory for excess, obsolete, and potentially impaired items and reserves. The reserve estimate for excess and obsolete inventory is based on expected future use. The reserve estimates have historically been consistent with actual experience as evidenced by actual sale or disposal of the goods.
Prepaid Expenses and Other Current Assets
Prepaid expenses consist of various payments that the Company has made in advance for goods or services to be received in the future. These prepaid expenses include advertising, insurance, and service or other contracts requiring upfront payments.
Property, Equipment and Leasehold Improvements, Net
Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The approximate useful lives for depreciation of our property, equipment and leasehold improvements are as follows:
Buildings
32 years
Furniture and equipment
3 to 8 years
Computer and software
3 to 5 years
Vehicles
5 years
Leasehold improvementsShorter of lease term or economic life
Repairs and maintenance expenditures that do not extend the useful lives of related assets are expensed as incurred. Expenditures for major renewals and improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. The Company continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, “Property, Plant, and Equipment.” When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. See Note 7, “Property, Equipment and Leasehold Improvements, Net” for further information.
Intangible Assets
Intangible assets continue to be subject to amortization, and any impairment is determined in accordance with ASC 360, “Property, Plant, and Equipment,” intangible assets are stated at historical cost and amortized over their estimated useful lives. The Company uses a straight-line method of amortization unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed can be reliably determined. The approximate useful lives for amortization of our intangible assets are as follows:
Customer relationships
3 to 5 years
Trademark and patent
2 to 8 years
Dispensary licenses
14 years
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The Company reviews intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset (asset group), the Company will write the carrying value down to the fair value in the period identified.
Intangible assets that have indefinite useful lives (e.g. trade names) are tested annually for impairment and are tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount of the asset group exceeds its fair value.
Goodwill
Goodwill is measured as the excess of consideration transferred and the net of the acquisition date fair value of assets acquired, and liabilities assumed in a business acquisition. In accordance with ASC 350, “Intangibles—Goodwill and Other,” goodwill and other intangible assets with indefinite lives are no longer subject to amortization but are tested for impairment annually or whenever events or changes in circumstances indicate that the asset might be impaired.
The Company reviews the goodwill allocated to each of our reporting units for possible impairment annually as of September 30, and whenever events or changes in circumstances indicate carrying amount may not be recoverable. In the impairment test, the Company measures the recoverability of goodwill by comparing a reporting unit’s carrying amount, including goodwill, to the estimated fair value of the reporting unit.
The carrying amount of each reporting unit is determined based upon the assignment of our assets and liabilities, including existing goodwill and other intangible assets, to the identified reporting units. Where an acquisition benefits only one reporting unit, the Company allocates, as of the acquisition date, all goodwill for that acquisition to the reporting unit that will benefit. Where the Company has had an acquisition that benefited more than one reporting unit, The Company has assigned the goodwill to our reporting units as of the acquisition date such that the goodwill assigned to a reporting unit is the excess of the fair value of the acquired business, or portion thereof, to be included in that reporting unit over the fair value of the individual assets acquired and liabilities assumed that are assigned to the reporting unit.
If the carrying amount of a reporting unit is in excess of its fair value, the Company recognizes an impairment charge equal to the amount in excess.
Notes Receivable
The Company reviews all outstanding notes receivable for collectability as information becomes available pertaining to the Company’s inability to collect. An allowance for notes receivable is recorded for the likelihood of non-collectability. The Company accrues interest on notes receivable based net realizable value. The allowance for uncollectible notes was nil as of March 31, 2022 and December 31, 2021, respectively.
Assets Held for Sale and Discontinued Operations
Assets held for sale represent furniture, equipment, and leasehold improvements less accumulated depreciation as well as any other assets that are held for sale in conjunction with the sale of a business. The Company records assets held for sale in accordance with ASC 360, “Property, Plant, and Equipment,” at the lower of carrying value or fair value less costs to sell. Fair value is based on the estimated proceeds from the sale of the facility utilizing recent purchase offers, market comparables and/or data. Our estimate as to fair value is regularly reviewed and subject to changes in the commercial real estate markets and our continuing evaluation as to the facility’s acceptable sale price. The reclassification takes place when the assets are available for immediate sale and the sale is highly probable. These conditions are usually met from the date on which a letter of intent or agreement to sell is ready for signing. The Company follows the guidance within ASC 205, “Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity” when assets held for sale represent a strategic shift in the Company’s operations and financial results.
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Revenue Recognition and Performance Obligations
Revenue from our retail dispensaries is recorded at the time customers take possession of the product. Revenue from our retail dispensaries is recognized net of discounts, promotional adjustments, and returns. We collect taxes on certain revenue transactions to be remitted to governmental authorities, which may include sales, excise and local taxes. These taxes are not included in the transaction price and are, therefore, excluded from revenue. Upon purchase, the Company has no further performance obligations and collection is assured as sales are paid for at time of purchase.
The Company recognizes revenue from cultivation, manufacturing and distribution product sales when our customers obtain control of our products. Revenue is recorded when the customer is determined to have taken control of the product. This determination is based on the customer specific terms of the arrangement and gives consideration to factors including, but not limited to, whether the customer has an unconditional obligation to pay, whether a time period or event is specified in the arrangement and whether the Company can mandate the return or transfer of the products. Revenue is recorded net of taxes collected from customers that are remitted to governmental authorities with collected taxes recorded as current liabilities until remitted to the relevant government authority.
Disaggregation of Revenue
The table below includes revenue disaggregated by geographic location for the three months ended March 31, 2022 and 2021:
(in thousands)
20222021
California$18,445 $2,057 
Oregon2,280  
Total $20,725 $2,057 
Contract Balances
Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC Topic 606.
Contract Estimates and Judgments
The Company’s revenues accounted for under ASC Topic 606, generally, do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The sales prices are generally fixed at the point of sale and all consideration from contracts is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration.
Cost of Goods Sold
Cost of goods sold includes the costs directly attributable to product sales and includes amounts paid for finished goods, such as flower, edibles, and concentrates, as well as packaging and delivery costs. It also includes the labor and overhead costs incurred in cultivating and producing cannabis flower and cannabis-derived products. Overhead expenses include allocations of rent, administrative salaries, utilities, and related costs.
Advertising Expenses
The Company expenses advertising costs as incurred in accordance with ASC 720-35, “Other Expenses – Advertising Cost.” Advertising expenses from continuing operations totaled $0.93 million and $0.03 million for the three months ended March 31, 2022 and 2021, respectively.
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Stock-Based Compensation
The Company accounts for its stock-based awards in accordance with ASC Subtopic 718-10, “Compensation – Stock Compensation”, which requires fair value measurement on the grant date and recognition of compensation expense for all stock-based payment awards made to employees and directors, including restricted stock awards. For stock options, the Company estimates the fair value using a closed option valuation (Black-Scholes) model. The fair value of restricted stock awards is based upon the quoted market price of the common shares on the date of grant. The fair value is then expensed over the requisite service periods of the awards, net of estimated forfeitures, which is generally the performance period and the related amount is recognized in the consolidated statements of operations.
The Black-Scholes option-pricing model requires the input of certain assumptions that require the Company’s judgment, including the expected term and the expected stock price volatility of the underlying stock. The assumptions used in calculating the fair value of stock-based compensation represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change resulting in the use of different assumptions, stock-based compensation expense could be materially different in the future. The Company accounts for forfeitures of stock-based awards as they occur.
Income Taxes
The provision for income taxes is determined in accordance with ASC 740, “Income Taxes”. The Company files a consolidated United States federal income tax return. The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. At March 31, 2022 and 2021, such net operating losses were offset entirely by a valuation allowance.
The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50.0% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations.
Loss Per Common Share
In accordance with the provisions of ASC 260, “Earnings Per Share”, net loss per share is computed by dividing net loss by the weighted-average shares of common stock outstanding during the period. During a loss period, the effect of the potential exercise of stock options, warrants, convertible preferred stock, and convertible debt are not considered in the diluted loss per share calculation since the effect would be anti-dilutive. The results of operations were a net loss for the three months ended March 31, 2022 and 2021. Therefore, the basic and diluted weighted-average shares of common stock outstanding were the same for all periods presented.
Potentially dilutive securities that are not included in the calculation of diluted net loss per share because their effect is anti-dilutive are as follows (in common equivalent shares):
Three Months Ended
March 31,
20222021
Common stock warrants24,945,055 16,076,556 
Common stock options87,851,618 11,937,987 
112,796,673 28,014,543 

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NOTE 3 – CONCENTRATIONS OF BUSINESS AND CREDIT RISK
The Company maintains cash balances in several financial institutions that are insured by either the Federal Deposit Insurance Corporation or the National Credit Union Association up to certain federal limitations. At times, the Company’s cash balance exceeds these federal limitations, and it maintains significant cash on hand at certain of its locations. The Company has not historically experienced any material loss from carrying cash on hand. The amount in excess of insured limitations was at $0.22 million and $5.42 million as of March 31, 2022 and December 31, 2021, respectively.
The Company provides credit in the normal course of business to customers located throughout the U.S. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts based on factors surrounding the credit risk of specific customers, historical trends, and other information. There were no customers that comprised more than 10.0% of the Company's revenue for the three months ended March 31, 2022 and 2021.
The Company sources cannabis products for retail, cultivation and production from various vendors. However, as a result of regulations in the State of California, the Company’s California retail, cultivation and production operations must use vendors licensed by the State. As a result, the Company is dependent upon the licensed vendors in California to supply products. If the Company is unable to enter into a relationship with sufficient members of properly licensed vendors, the Company’s sales may be impacted. During the three months ended March 31, 2022 and 2021, we did not have any concentration of vendors for inventory purchases. However, this may change depending on the number of vendors who receive appropriate licenses to operate in the State of California.
NOTE 4 – VARIABLE INTEREST ENTITIES
On October 26, 2017, the Company entered into operating agreements with NuLeaf, Inc. and formed NuLeaf Sparks Cultivation, LLC and NuLeaf Reno Production, LLC (collectively, “NuLeaf”) to build and operate cultivation and production facilities for our IVXX brand of cannabis products in Nevada. The agreements were subject to approval by the State of Nevada, the City of Sparks and the City of Reno in Nevada. Under the terms of the agreements, the Company remitted to NuLeaf an upfront investment of $4.50 million in the form of convertible loans bearing an interest rate of 6% per annum. On June 28, 2018, the Company received approval from the State of Nevada. The remaining required approvals from local authorities were received in July 2018. As a result, the notes receivable balance was converted into a 50% ownership interest in NuLeaf. The investment in NuLeaf was initially recorded at cost and accounted for using the equity method.
In February 2019, we amended and restated the NuLeaf agreements and obtained control of the operations of NuLeaf. The Company has determined these entities are variable interest entities in which the Company is the primary beneficiary by reference to the power and benefits criterion under ASC 810, “Consolidation.” The provisions within the amended agreement granted the Company the power to manage and make decisions that affect the operation of these entities. As the primary beneficiary of NuLeaf Sparks Cultivation, LLC and NuLeaf Reno Production, LLC, the Company began consolidating the accounts and operations of these entities on March 1, 2019. All intercompany transactions are eliminated in the consolidated financial statements. Effective March 1, 2019, we remeasured our equity method investment in NuLeaf to fair value and consolidated the results of NuLeaf within our consolidated financial statements.
In November 2021, Nuleaf entered a definitive agreement with Jushi Holdings Inc to acquire NuLeaf, Inc. together with its subsidiaries and affiliated companies with an expected closing in 2022. Nuleaf operations are considered held for sale as of March 31, 2022 and are therefore included in Discontinued Operations as of and for the three months ended March 31, 2022 and 2021.
During the three months ended March 31, 2022, revenue and net loss attributed to NuLeaf was $2.81 million and $0.07 million, respectively. During the three months ended March 31, 2021, revenue and net loss attributed to NuLeaf was $3.06 million and $0.76 million, respectively. The aggregate carrying values of Sparks Cultivation, LLC and NuLeaf Reno
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Production, LLC assets and liabilities, after elimination of any intercompany transactions and balances, in the consolidated balance sheets were as follows:
(in thousands)
March 31,
2022
December 31,
2021
Current assets:  
Cash$863 $1,544 
Accounts receivable, net2,261 1,553 
Inventory1,718 1,359 
Prepaid expenses and other current assets85 39 
Total current assets4,927 4,495 
 
Property, equipment and leasehold improvements, net4,516 5,099 
Other assets262 295 
TOTAL ASSETS $9,705 $9,889 
 
Liabilities:
Total current liabilities$378 $350 
Total long-term liabilities150 184 
TOTAL LIABILITIES$528 $534 
NOTE 5 – INVESTMENTS IN UNCONSOLIDATED AFFILIATES
On March 30, 2020, Edible Garden Corp. (“Edible Garden”), a wholly-owned subsidiary of Terra Tech Corp. (the “Company”), entered into and closed an Asset Purchase Agreement (the “Purchase Agreement”) with Edible Garden Incorporated (the “Purchaser”), pursuant to which Edible Garden sold and the Purchaser purchased substantially all of the assets of Edible Garden (the “Business”). The consideration paid for the Business included two option agreements to purchase up to a 20% interest in the Purchaser for a nominal fee. The first option gives the Company the right to purchase a 10% interest in the Purchaser for one dollar at any time between the one and five-year anniversary of the transaction, or at any time should a change in control event or public offering occur. The second option gives the Company the right to purchase an additional 10% interest in the Purchaser for one dollar at any point prior to the five-year anniversary of the transaction. During the year ended December 31, 2021, the Company exercised its options and acquired 5,000,000 shares of Edible Garden's common stock for a nominal fee. During the fourth quarter of 2021, management concluded that the investment was impaired and recorded an impairment charge of $0.33 million, representing the total amount of the investment.
NOTE 6 – INVENTORY
Raw materials consist of materials and packaging for manufacturing of products owned by Unrivaled Brands. Work-in-progress consists of cultivation materials and live plants grown at Black Oak Gallery and Hegenberger. Finished goods consists of cannabis products sold in retail and distribution. Inventory as of March 31, 2022 and December 31, 2021 consisted of the following:
(in thousands)
March 31,
2022
December 31,
2021
Raw materials$2,371 $2,258 
Work-in-progress340 1,077 
Finished goods5,013 3,844 
Total inventory $7,724 $7,179 
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NOTE 7 – PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET
Property, equipment, and leasehold improvements as of March 31, 2022 and December 31, 2021 consisted of the following:
March 31,
2022
December 31,
2021
  
Land and building$7,581 $7,787 
Furniture and equipment4,508 3,873 
Computer hardware407 348 
Leasehold improvements14,518 14,409 
Vehicles1,142 1,142 
Construction in progress1,910 1,832 
Subtotal30,066 29,391 
Less accumulated depreciation(6,609)(5,663)
Property, equipment and leasehold improvements, net $23,457 $23,728 
Depreciation expense related to property, equipment and leasehold improvements for the three months ended March 31, 2022 and March 31, 2021 was $0.95 million and $0.34 million, respectively.
On January 21, 2022, the Company sold its land in Spanish Springs, Nevada for $0.45 million to an unrelated third party.
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NOTE 8 – INTANGIBLE ASSETS AND GOODWILL
Intangible Assets, Net
Intangible assets, net consisted of the following as of March 31, 2022 and December 31, 2021:
(in thousands)
March 31, 2022December 31, 2021
Estimated
Useful
Life in
Years
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Value
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Value
Amortizing Intangible Assets:
Customer Relationships
3 to 5
$7,400 $(7,400)$ $7,400 $(7,400)$ 
Trademarks and Patent
2 to 8
4,500 (1,303)3,197 4,500 (750)3,750 
Operating Licenses14100,701 (8,654)92,047 100,701 (6,864)93,837 
Total Amortizing Intangible Assets 112,601 (17,357)95,244 112,601 (15,014)97,587 
Non-Amortizing Intangible Assets:
Trade NameIndefinite32,050 — 32,050 32,050 — 32,050 
Total Non-Amortizing Intangible Assets 32,050  32,050 32,050  32,050 
Total Intangible Assets, Net$144,651 $(17,357)$127,294 $144,651 $(15,014)$129,637 
Amortization expense for the three months ended March 31, 2022 and 2021 was $2.34 million and $0.19 million, respectively.
Goodwill
Goodwill arises from the purchase price for acquired businesses exceeding the fair value of tangible and intangible assets acquired less assumed liabilities.
The Company conducts its annual goodwill impairment assessment on September 30, and between annual tests if the Company becomes aware of an event or a change in circumstances that would indicate the carrying value may be impaired. Management did not identify any impairment triggers during the first quarter of 2022 and concluded there was no impairment of goodwill.
For the purpose of the goodwill impairment assessment, the Company has the option to perform a qualitative assessment (commonly referred to as “step zero”) to determine whether further quantitative analysis for impairment of goodwill or indefinite-lived intangible assets is necessary or a quantitative assessment (“step one”) where the Company estimates the fair value of each reporting unit using a discounted cash flow method (income approach). Goodwill is assigned to the reporting unit, which is the operating segment level or one level below the operating segment. The balance of goodwill at March 31, 2022 and December 31, 2021 remained unchanged at $48.13 million.
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NOTE 9 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consisted of the following:
(in thousands)
March 31,
2022
December 31,
2021
Accounts Payable$19,185 $16,804 
Tax Liabilities7,452 5,147 
Accrued Payroll and Benefits1,283 1,409 
Current Lease Liabilities2,200 3,120 
Other Accrued Expenses6,363 5,424 
Total Accounts Payable and Accrued Expenses$36,483 $31,904 
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NOTE 10 – NOTES PAYABLE
Notes payable as of March 31, 2022 and December 31, 2021 consisted of the following:
(in thousands)
March 31,
2022
December 31,
2021
Promissory note dated January 18, 2018, issued for the purchase of real property. The promissory note was collateralized by the land and building purchased and matured January 18, 2022. The promissory note bears interest at 12.0% for year one and escalates 0.5% per year thereafter. The full principal balance and accrued interest are due at maturity. In the event of default, the note is convertible at the holder's option.
$ $6,500 
Promissory note dated May 4, 2020, issued to Harvest Small Business Finance, LLC, an unaffiliated third party.   Loan was part of the Paycheck Protection Program ("PPP Loan") offered by the U.S. Small Business Administration.   The interest rate on the note was 1.0%.   The note required interest and principal payments seven months from July 2020.   The note matured in two years on May 4, 2022.20 562 
Unsecured promissory note dated January 22, 2021, issued to Michael Nahass (a related party), which matured January 25, 2022, and bore interest at a rate of 3% per annum.
 1,050 
Convertible promissory note dated January 25, 2021, issued to accredited investors, which matures July 22, 2022 and bears interest at a rate of 8% per annum. The conversion price is $0.175 per share.
3,450 3,500 
Promissory note dated July 27, 2021, issued to Arthur Chan which matures July 26, 2024, and bears interest at a rate of 12% per annum.
2,500 2,500 
Senior Secured Promissory Note dated November 22, 2021 issued to Dominion Capital LLC, which matured on February 22, 2022 and bore interest at a rate of 12% per annum.
 2,500 
Unsecured promissory note without interest from a related party. The loan is paid in 20 equal installments and matures on August 1, 2022.60 90 
Promissory note dated June 1, 2020, issued as part of the Paycheck Protection Program ("PPP Loan") offered by the U.S. Small Business Administration. The interest rate on the note is 1.0%. The note matures on June 1, 2022.297 297 
Line of credit agreement entered on March 31, 2021, which matured on March 31, 2022 and bore interest of 2.9% per 30 days.
 4,500 
Promissory note dated October 1, 2021, issued to Sterling Harlan as part of the SilverStreak Solutions acquisition. The interest rate on the note was 3.0%. The note matured on April 1, 2022.
2,000 2,000 
Promissory note dated October 1, 2021, issued to Sterling Harlan as part of the SilverStreak Solutions acquisition. The interest rate on the note is 3.0%. The note matures on October 1, 2022.
2,500 2,500 
Secured promissory note dated November 22, 2021 issued to People's California, LLC, which matures on November 22, 2023 and bears interest at a rate of 8.0% per annum. Payments due include $2.00 million plus accrued interest for the first twelve months followed by payments of $1.00 million plus accrued interest until maturity.
24,569 28,569 
Promissory note dated May 1, 2019, assumed by the Company on July 1, 2021 in connection with the purchase of real property, from a related party. The note matures on May 15, 2039 and bears interest at a rate of 9.89% per year.
2,944 2,954 
Notes payable - promissory notes$38,340 $57,522 
Vehicle loans184 204 
Less: Short-term debt(29,566)(45,749)
Less: Debt discount(1,650)(1,971)
Net Long-Term Debt$7,308 $10,006 
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During the three months ended March 31, 2022, the Company converted debt and accrued interest into 294,452 shares of the Company’s common stock. See Note 12, "Stockholders' Equity" for further information.
Series A Preferred Stock Purchase Agreement
On January 22, 2021, the Company entered into an unsecured promissory note in the amount of $1.05 million in connection with the Series A Preferred Stock Purchase Agreement with Michael A. Nahass. The promissory note bears interest at the rate of 3% and matures on or about January 25, 2022. On February 8, 2022, the Company paid the outstanding principal and interest on the $1.05 million promissory note held by Mr. Nahass. This payment satisfied the obligation and retired the note.
Debt Related to Dyer Property
On January 18, 2018, the Company entered into a $6.50 million promissory note for the purchase of land and building in Santa Ana, CA (the "Dyer Property"). On November 22, 2021, the Company issued a senior secured promissory note to Dominion Capital LLC in the amount of $2.50 million, which matures on February 22, 2022 and bears interest at a rate of 12% per annum. As a result of the sale of the Dyer Property on February 10, 2022, the Company retired a total of $9.00 million in outstanding debt related to the Dyer Property. See Note 16, "Discontinued Operations" for further information.
Forgiveness of PPP Note
On May 4, 2020, OneQor Technologies, Inc entered into a promissory note (the “PPP Note”) with Harvest Small Business Finance, LLC (the “Lender”), pursuant to which the Lender agreed to make a loan to the Company under the Paycheck Protection Program (“PPP”) offered by the U.S. Small Business Administration in a principal amount of $0.56 million. The PPP Note incurs interest at a fixed rate of 1% per annum and matures on May 4, 2022. On February 16, 2022, the Company received notice of forgiveness of approximately $0.54 million of the PPP Note. The remainder is to be paid off over the next three years.
Debt Assumed in the UMBRLA Acquisition
On July 1, 2021, upon the closing of the UMBRLA acquisition, the Company assumed a line of credit agreement with Bespoke Financial, Inc. for the lesser of a maximum draw amount of $4.50 million and a borrowing base consisting of eligible accounts receivable inventory and cash that serves as collateral. The line of credit accrues interest at a rate of 2.9% every 30 days and expires on March 31, 2022. On March 9, 2022, the Company paid the outstanding principal and interest due on the line of credit facility. The payment satisfied the obligation and retired the debt.
NOTE 11 – LEASES
A lease provides the lessee the right to control the use of an identified asset for a period of time in exchange for consideration. Operating lease right-of-use assets are included in other assets while lease liabilities are a line item on the Company’s Consolidated Balance Sheets. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company determines if an arrangement is a lease at inception. Right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Most operating leases contain renewal options that provide for rent increases based on prevailing market conditions. The terms used to calculate the right-of-use assets for certain properties include the renewal options that the Company is reasonably certain to exercise.
The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, the Company utilizes its secured borrowing rate. Right-of-use assets include any lease payments required to be made prior to commencement and exclude lease incentives. Both right-of-use assets and lease liabilities exclude variable payments not based on an index or rate, which are treated as period costs. The Company’s lease agreements do not contain significant residual value guarantees, restrictions or covenants.
The Company occupies office facilities under lease agreements that expire at various dates. In addition, office, production and transportation equipment is leased under agreements that expire at various dates. The Company does not have any significant finance leases. Total operating lease costs for the three months ended March 31, 2022 and March 31, 2021 were
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$1.21 million and $0.41 million, respectively. Short-term lease costs during the 2022 and 2021 fiscal quarters ended March 31 were not material.
As of March 31, 2022 and December 31, 2021, short term lease liabilities of $2.20 million and $3.12 million are included in “Accounts Payable and Accrued Expenses” on the consolidated balance sheets, respectively. The table below presents total operating lease right-of-use assets and lease liabilities as of March 31, 2022 and December 31, 2021:
March 31,
2022
December 31,
2021
Operating lease right-of-use assets$18,739 $24,448 
Operating lease liabilities$19,200 $24,436 
The table below presents the maturities of operating lease liabilities as of March 31, 2022:
(in thousands)
Operating
Leases
2022 (remaining)
$2,771 
20233,652 
20243,727 
20253,292 
20262,675 
Thereafter10,777 
Total lease payments26,894 
Less: discount(7,694)
Total operating lease liabilities$19,200 
The table below presents the weighted average remaining lease term for operating leases and weighted average discount rate used in calculating operating lease right-of-use assets:
 Three Months Ended
 March 31,
2022
March 31,
2021
Weighted average remaining lease term (years)6.38.2
Weighted average discount rate11.3 %11.6 %
NOTE 12 – EQUITY
Common Stock
The Company authorized 990,000,000 shares of common stock with $0.001 par value per share. As of March 31, 2022 and December 31, 2021, 528,021,587 and 496,237,883 shares of common stock were outstanding, respectively.

On February 1, 2022 the Company granted 294,452 shares Common Stock to Apollo Management Group, Inc. in exchange for the $0.05 million Convertible Promissory Note that Apollo Management Group, Inc. held and its’ accrued interest. The fair value of the shares was $0.08 million.

On February 28, 2022, the Company sold 25,000,000 shares for an aggregate sales price of $4.35 million to Arthur Chan, an unrelated party. The shares were restricted.

During the three months ended March 31, 2022 , the Company issued 4,759,708 and 146,212 common shares for the cashless exercise of warrants and options, respectively.

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During the three months ended March 31, 2022, the Company issued 900,000 and 683,332 common shares to employees and directors, respectively. As a result, the Company recorded stock compensation of $0.18 million and $0.18 million, respectively.
NOTE 13 – STOCK-BASED COMPENSATION
Equity Incentive Plans
In the first quarter of 2016, the Company adopted the 2016 Equity Incentive Plan. In the fourth quarter of 2018, the Company adopted the 2018 Equity Incentive Plan. In July 2021, the Company assumed the 2019 Equity Incentive Plan as part of the acquisition of UMBRLA. The following table contains information about the Company's equity incentive plans as of March 31, 2022:
Awards Reserved for IssuanceAwards ExercisedAwards OutstandingAwards Available for Grant
2016 Equity Incentive Plan999,906  499,953 499,953 
2018 Equity Incentive Plan30,159,437 4,080,088 14,009,842 12,069,507 
2019 Equity Incentive Plan101,475,719 54,383 73,014,714 28,406,622 
Stock Options
The following table summarizes the Company’s stock option activity and related information for the three months ended March 31, 2022:
Number of
Shares
Weighted-
Average Exercise
Price Per Share
Weighted-
Average
Remaining
Contractual
Life
Aggregate
Intrinsic
Value of
In-the-Money
Options
 
Options outstanding as of January 1, 202288,251,380$0.20 
Exercised(146,212)$0.08 
Forfeited(223,788)$0.15 
Expired(29,762)$0.34 
Options outstanding as of March 31, 2022
87,851,618$0.20 8.5 years$526 
Options exercisable as of March 31, 2022
41,296,676$