UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(Amendment No. 1)

 

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

 

For the quarterly period ended June 30, 2021

 

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number: 000-56155

 

CRYOMASS TECHNOLOGIES INC.

(Exact name of registrant as specified in its charter)

 

Nevada   82-5051728
(State of incorporation)   (IRS Employer Identification No.)
     
3531 South Logan St, Suite D-357, Englewood, CO   80113
(Address of principal executive offices)   (Zip Code)

 

303-416-7208

(Registrant’s telephone number, including area code)

 

ANDINA GOLD CORP.

(Former name, former address and former fiscal year, if changed since last report)

 

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, or a small reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer Accelerated filer 
Non-accelerated filer    Smaller reporting company
  Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to 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 August 17, 2021, the registrant had 118,749,474 shares of its common stock, par value $0.001 per share, outstanding.

 

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

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
         

 

 

 

 

 

CRYOMASS TECHNOLOGIES INC.

EXPLANATORY NOTE

 

The purpose of this Amendment No. 1 on Form 10-Q/A (“Amendment No. 1”) to the Quarterly Report on Form 10-Q of Cryomass Technologies Inc(the “Company,” “we,” “our” or “us”) for the quarter ended June 30, 2021, filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 23, 2021 (the “Quarterly Report”), is to adjust previously reported balances and activity included in our consolidated financial statements. As part of year-end audit procedures, we identified certain warrant contracts requiring independent fair value calculation, as well as additional beneficial conversion value to be attributed to convertible notes issued during the second quarter of 2021.

 

No other changes have been made to the Quarterly Report, except for the information disclosed in Part I Item 1 below. This Form 10-Q/A speaks as of the original filing date of the Quarterly Report and has not been updated to reflect events occurring subsequent to the original filing date.

 

 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements 

  

ANDINA GOLD CORP.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

    June 30,
2021
    December 31,
2020
 
ASSETS   As restated,
see Note 1
       
Current assets:            
Cash and cash equivalents (Note 2)   $ 431,306     $ 329,839  
Accounts receivable, net (Note 2)     540,000       540,000  
Prepaid expenses     20,000       60,475  
Related party note receivable     281,771          
Assets held for sale, current     7,171,434       6,867,840  
Total current assets     8,444,511       7,798,154  
                 
Intangible assets, net     4,082,263       -  
Goodwill     1,190,000          
Total assets   $ 13,716,774     $ 7,798,154  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY                
                 
Current liabilities:                
Accounts payable and accrued expenses (Note 2)   $ 2,430,809     $ 2,248,235  
Loans payable    
-
      412,560  
Taxes payable     771       771  
Liabilities held for sale, current     735,746       1,464,285  
Total current liabilities     3,167,326       4,125,851  
Notes payable     4,933,115       52,083  
Deferred tax liability     14,926       14,926  
Total liabilities     8,115,367       4,192,860  
                 
Commitments and contingencies (Note 16)    
 
     
 
 
                 
Shareholders’ equity:                
Preferred stock, $0.001 par value, 100,000 shares authorized, no shares issued and outstanding respectively    
-
     
-
 
Common stock, $0.001 par value, 500,000,000 shares authorized, 118,533,933 and 97,005,817 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively     118,534       97,006  
Additional paid-in capital     25,028,633       19,138,947  
Common stock to be issued    
-
      98,535  
Accumulated deficit     (19,545,760 )     (15,729,194 )
Total shareholders’ equity     5,601,407       3,605,294  
Total liabilities and shareholders’ equity   $ 13,716,774     $ 7,798,154  

 

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

 

1

 

 

ANDINA GOLD CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

    Three Months Ended
June 30,
    Six Months Ended
June 30,
 
    2021     2020     2021     2020  
    As restated,
see Note 1
          As restated,
see Note 1
       
Net sales   $
-
    $ 769,555     $
-
    $ 781,455  
Cost of goods sold, inclusive of provision for inventory loss of $0 and $400,787 for the three and six months, respectively, ended June 30, 2020    
-
      310,695      
-
      744,279  
Gross profit    
-
      458,860      
-
      37,176  
                                 
Operating expenses:                                
Personnel costs     426,082       687,573       799,796       1,416,685  
Sales and marketing     14       237       14       14,854  
General and administrative     1,979,323       219,054       2,375,793       1,799,762  
Legal and professional fees     232,026       243,561       457,546       927,315  
Total operating expenses     2,637,445       1,150,425       3,633,149       4,158,616  
Loss from operations     (2,637,445 )     (691,565 )     (3,633,149 )     (4,121,440 )
                                 
Other income (expenses):                                
Interest expense     (359,648 )     -       (562,257 )    
-
 
Gain / (loss) on foreign exchange     (11,232 )     (16,011 )     23,538       (16,011 )
Total other expenses     (370,880 )     (16,011 )     (538,719 )     (16,011 )
Net loss from continuing operations, before taxes     (3,008,325 )     (707,576 )     (4,171,868 )     (4,137,451 )
Income taxes    
-
      5,117      
-
      5,117  
Net loss from continuing operations     (3,008,325 )     (712,693 )     (4,171,868 )     (4,142,568 )
Net gain / (loss) from discontinued operations, net of tax     238,686       (60,315 )     355,302       (227,749 )
Net loss   $ (2,769,639 )   $ (773,008 )   $ (3,816,566 )   $ (4,370,317 )
                                 
Comprehensive loss from discontinued operations    
-
     
-
     
-
     
-
 
Comprehensive loss   $ (2,769,639 )   $ (773,008 )   $ (3,816,566 )   $ (4,370,317 )
                                 
Net loss per common share:                                
Loss from continuing operations - basic and diluted   $ (0.03 )   $ (0.01 )   $ (0.04 )   $ (0.04 )
                                 
Gain / (loss) from discontinued operations - basic and diluted   $ 0.00     $ (0.00 )   $ 0.00     $ (0.00 )
                                 
Loss per common share - basic and diluted   $ (0.02 )   $ (0.01 )   $ (0.04 )   $ (0.04 )
                                 
Weighted average common shares outstanding—basic and diluted     106,008,685       105,243,905       102,176,247       105,957,797  

  

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

 

2

 

 

ANDINA GOLD CORP.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

 

    Common Stock     Additional
Paid-In
    Common
Stock to
    Accumulated     Total
Shareholders’
 
    Shares     Amount     Capital     Be Issued     Deficit     Equity  
Balance at December 31, 2019 (Revised)     106,216,708     $ 106,216     $ 16,894,103     $
-
    $ (3,913,287 )   $ 13,087,032  
                                                 
Issuance of common stock pursuant to separation agreement     1,175,549       1,176       763,049      
-
     
-
      764,225  
                                                 
Issuance of common stock pursuant to accelerated vesting of RSU’s     600,000       600       389,460      
-
     
-
      390,060  
                                                 
Stock-based compensation     -      
-
      159,529      
-
     
-
      159,529  
                                                 
Net loss     -      
-
     
-
     
-
      (3,597,309 )     (3,597,309 )
                                                 
Balance at March 31, 2020     107,992,257     $ 107,992     $ 18,206,141     $ -     $ (7,510,596 )   $ 10,803,537  
                                                 
Share cancellations     (15,050,000 )    
-
     
-
     
-
     
-
     
-
 
                                                 
Stock-based compensation     -      
-
      58,842      
-
     
-
      58,842  
                                                 
Net loss     -      
-
     
-
     
-
      (773,008 )     (773,008 )
                                                 
Balance at June 30, 2020     92,942,257       107,992       18,264,983      
-
      (8,283,604 )     10,089,371  
Balance at December 31, 2020     97,005,817     $ 97,006     $ 19,138,947     $ 98,535     $ (15,729,194 )   $ 3,605,294  
                                                 
Share issuance     1,491,819       1,492       207,043       (98,535 )    
-
      110,000  
                                                 
Stock-based compensation     -      
-
      250,817      
-
     
-
      250,817  
                                                 
Net loss     -      
-
     
-
     
-
      (1,046,927 )     (1,046,927 )
                                                 
Balance at March 31, 2021     98,497,636     $ 98,498     $ 19,596,807     $
-
    $ (16,776,121 )   $ 2,919,184  
                                                 
Share issuance     201,586       202      
-
     
-
     
-
      202  
                                                 
Share issuance related to Cryocann asset purchase     10,000,000       10,000       1,794,500      
-
     
-
      1,804,500  
                                                 
Share issuance pursuant to employment agreements     6,701,586       6,701       894,000      
-
     
-
      900,701  
                                                 
Share issuance in exchange for extinguishment of debt     2,500,000       2,500       505,902      
-
     
-
      508,402  
                                                 
Share issuance in exchange for services     633,125       633       56,867      
-
     
-
      57,500  
                                                 
Stock-based compensation     -      
-
      190,026      
-
     
-
      190,026  
                                                 
Stock options issued and outstanding     -      
-
      710,202      
-
     
-
      710,202  
                                                 
Beneficial Conversion Feature of Note Payable     -      
-
      391,958      
-
     
-
      391,958  
                                                 
Warrants issued in conjunction with Convertible Notes Payable     -      
-
      888,371      
-
     
-
      888,371  
Net loss     -      
-
     
-
     
-
      (2,769,639 )     (2,769,639 )
                                                 
Balance at June 30, 2021 (As restated, see Note 1)     118,533,933     $ 118,534     $ 25,028,633     $
-
    $ (19,545,760 )   $ 5,601,407  

 

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

3

 

 

ANDINA GOLD CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

    For the Six Months Ended
June 30,
 
    2021     2020  
    As restated,
see Note 1
       
CASH FLOWS FROM OPERATING ACTIVITIES:            
Net loss   $ (4,171,868 )   $ (4,142,568 )
Adjustments to reconcile net loss to net cash used in operating activities from continuing operations:                
Amortization of debt discount     251,282      
-
 
Provision for inventory loss    
-
      400,787  
Stock-based compensation expense     2,074,547       1,372,656  
Deferred income tax expense    
-
      426  
Fair value of common stock issued pursuant to service agreements     27,200      
-
 
Change in operating assets and liabilities:                
Accounts receivable    
-
      (720,000 )
Prepaid expenses     40,475       (76,285 )
Inventory, net    
-
      (60,787 )
Assets held for sale    
-
      7,134  
Accounts payable and accrued expenses     182,574       848,553  
Taxes payable    
-
      771  
Net cash used in operating activities from continuing operations     (1,595,790 )     (2,369,313 )
Net cash provided by / (used in) operating activities from disc ops     (452,828 )     (41,332 )
Net cash used in operating activities     (2,048,618 )     (2,410,645 )
CASH FLOWS FROM INVESTING ACTIVITIES:                
Cash payment for Cryocann asset purchase     (1,000,000 )    
-
 
Issuance of other payable related to Cryocann asset purchase     (1,247,684 )    
-
 
Net cash used in investing activities from continuing operations     (2,247,684 )    
-
 
Net cash used in investing activities from discontinued operations     (224,003 )     (451,262 )
Net cash used in investing activities     (2,471,687 )     (451,262 )
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from issuance of common stock     120,000      
-
 
Repayment of loans payable, current     (412,359 )    
-
 
Proceeds from notes payable     4,690,000      
-
 
Related party note disbursement     (281,771 )    
-
 
Net cash provided by financing activities from continuing operations     4,115,870      
-
 
Net cash provided by financing activities from discontinued operations     505,902      
-
 
Net cash provided by financing activities     4,621,772      
-
 
Net increase / (decrease) in cash from continuing operations     272,396       (2,369,313 )
Net increase / (decrease) in cash from discontinued operations     (170,929 )     (492,594 )
Cash at beginning of period     329,839       3,473,770  
Cash at end of period   $ 431,306     $ 611,863  
Supplemental disclosure of cash flow information:                
Cash paid for interest   $ 171,604     $ 6,855  
Supplemental disclosure of non-cash investing and financing activities:                
Common stock issued pursuant to separation agreement   $
-
    $ 764,225  
Common stock issued pursuant to vesting of restricted stock units   $ 2,940,603     $ 390,060  

 

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

 

4

 

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

1. Revision

 

During Q2 2021, the Company executed two tranches of convertible term note agreements in aggregate principal value of $3.0 million and $1.9 million, respectively that bear interest at a rate of 12% per annum. The notes mature on March 31, 2022 and September 30, 2022, respectively. In conjunction with the notes, the Company entered into certain warrant purchase agreements to purchase common shares of the Company. The Company offered 24,500,000 of warrant shares in conjunction with the issuance of the notes with an exercise price of $0.40. The warrants from each tranche of convertible notes shall be exercisable from the issuance date through March 31, 2023 and April 30, 2023, respectively.

 

As part of year-end audit procedures, the Company discovered these warrant contracts would require an independent fair value calculation, as well as beneficial conversion value to be attributed to the convertible notes. The Company engaged an independent valuation firm to perform a fair value calculation of the warrants and associated beneficial conversion feature. As a result of the fair value analysis, additional paid-in capital was allocated to beneficial conversion feature and to warrants, resulting in debt discount and associated amortization expense as of and for the period ended June 30, 2021.

 

Fair Value Measurements

 

Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

 

Level 1 — Quoted prices in active markets for identical assets or liabilities.
   
Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.
   
Level 3 — Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

 

5

 

 

The carrying values reported in the consolidated balance sheets for cash, prepaid expenses, inventories, accounts payable, notes payable, and taxes payable approximate fair values because of the immediate or short-term maturities of these financial instruments. There were no other assets or liabilities that require fair value to be recalculated on a recurring basis.

 

The fair value of beneficial conversion features associated with convertible notes and the fair value of warrants are calculated utilizing level 2 inputs.

 

When multiple instruments are issued in a single transaction, the total proceeds from the transaction should be allocated among the individual freestanding instruments identified. The allocation occurs after identifying (1) all the freestanding instruments and (2) the subsequent measurement basis for those instruments. The subsequent measurement basis helps inform how the proceeds should be allocated. After the proceeds are allocated to the freestanding instruments, those instruments should be further evaluated for embedded features that may need to be bifurcated or separated.

 

If debt or stock is issued with detachable warrants, the guidance in ASC 470-20-25-2 (applied by analogy to stock) requires that the proceeds be allocated to the two instruments based on their relative fair values. This method is generally appropriate if debt or stock is issued with any other freestanding instrument that is classified in equity (such as a detachable forward contract) or as a liability but not subject to subsequent fair value accounting.

 

Given that the Notes and Warrants that were issued in the singular transaction are both not subject to subsequent fair value accounting treatment, Management determined the relative fair value method shall be used for allocating the proceeds of the transaction. Under the relative fair value method, the instrument being analyzed is allocated a portion of the proceeds based on its fair value to the sum of the fair value of all the instruments covered int the allocation.

 

Management additionally evaluated the facts and circumstances to determine whether the principal balance of the Notes ($4.9 million and $250K) approximated their fair value. The Notes were issued entirely to unrelated third parties which were deemed to be arm’s length transactions. In addition, the comparable interest rates for loans of similar companies as of the date of the Note issuances range from 10-15% given the liquidity concerns of the Company. The term of the Notes issued range from 8-15 months, which would support the conclusion that the principal balance approximates their fair value given the short-term maturities of each Note. Finally, the Warrants issued in connection with the Notes were included akin to a “sweetener” in the offering as opposed to compensation for adjusting the interest rate or other key terms within the Convertible Term Loan Agreements. As such, the Company concluded that the principal balance of the Notes approximated their fair value.

 

The Warrants were initially measured at fair value and subsequent fair value measurement is not required as long as the instrument continues to be classified in equity. The proceeds from the transaction will be allocated between the Notes and Warrants based on the relative fair value method.

 

As a result of our fair value calculations, we recognized $928,779 and $515,763 of additional paid in capital associated with the value of the warrants and beneficial conversion, respectively, resulting in a total notes payable discount of $1,444,542. As such, $188,782 of debt discount amortization was recognized as interest expense during the three months ended June 30, 2021.

 

6

 

 

CRYOMASS TECHNOLOGIES INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

                   
    As of June 30, 2021  
    Previously
Reported
    Adjustments     Revised  
ASSETS                  
Current assets:                  
Cash and cash equivalents   $ 431,306     $
-
    $ 431,306  
Accounts receivable, net     540,000      
-
      540,000  
Prepaid expenses     20,000      
-
      20,000  
Related party note receivable     281,771      
-
      281,771  
Assets held for sale, current     7,171,434      
-
      7,171,434  
Total current assets     8,444,511      
-
      8,444,511  
                         
Intangible assets, net     4,082,263      
-
      4,082,263  
                         
Goodwill     1,190,000      
-
      1,190,000  
Total assets   $ 13,716,774     $
-
    $ 13,716,774  
                         
LIABILITIES AND SHAREHOLDERS’ EQUITY                        
                         
Current liabilities:                        
Accounts payable and accrued expenses   $ 2,430,809     $
-
    $ 2,430,809  
Loans payable    
-
     
-
     
-
 
Taxes payable     771      
-
      771  
Liabilities held for sale, current     735,746      
-
      735,746  
Total current liabilities     3,167,326      
-
      3,167,326  
Notes payable     6,024,662       (1,091,547 )     4,933,115  
Deferred tax liability     14,926      
-
      14,926  
Total liabilities     9,206,914       (1,091,547 )     8,115,367  
                         
Commitments and contingencies    
 
     
 
     
 
 
                         
Shareholders’ equity:                        
Preferred stock, $0.001 par value, 100,000 shares authorized, no shares issued and outstanding respectively    
-
     
-
     
-
 
Common stock, $0.001 par value, 500,000,000 shares authorized, 118,533,933 and 97,005,817 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively     118,534      
-
      118,534  
Additional paid-in capital     23,748,304       1,280,329       25,028,633  
Accumulated deficit     (19,356,978 )     (188,782 )     (19,545,760 )
Total shareholders’ equity     4,509,860       1,091,547       5,601,407  
Total liabilities and shareholders’ equity   $ 13,716,774     $
-
    $ 13,716,774  

 

7

 

 

CRYOMASS TECHNOLOGIES INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

    For the Three Months Ended
June 30, 2021
 
    Previously
Reported
    Adjustments     Revised  
                   
Operating expenses:                  
Personnel costs   $ 426,082     $
-
    $ 426,082  
Sales and marketing     14      
-
      14  
General and administrative     1,979,323      
-
      1,979,323  
Legal and professional fees     232,026      
-
      232,026  
Research and development    
-
     
-
     
-
 
Total operating expenses     2,637,445      
-
      2,637,445  
Loss from operations     (2,637,445 )    
-
      (2,637,445 )
                         
Other income (expenses):                        
Interest expense     (170,866 )     (188,782 )     (359,648 )
Gain on foreign exchange     (11,232 )    
-
      (11,232 )
Total other expenses     (182,098 )     (188,782 )     (370,880 )
Net loss from continuing operations, before taxes     (2,819,543 )     (188,782 )     (3,008,325 )
Income taxes    
-
     
-
     
-
 
Net loss from continuing operations     (2,819,543 )     (188,782 )     (3,008,325 )
Net loss from discontinued operations, net of tax     238,686      
-
      238,686  
Net loss   $ (2,580,857 )   $ (188,782 )   $ (2,769,639 )
                         
Comprehensive loss from discontinued operations    
-
     
-
     
-
 
Comprehensive loss   $ (2,580,857 )   $ (188,782 )   $ (2,769,639 )
                         
Net loss per common share:                        
Loss from continuing operations - basic and diluted   $ (0.03 )   $ (0.00 )   $ (0.03 )
                         
Loss from discontinued operations - basic and diluted   $ 0.00     $
-
    $ 0.00  
                         
Loss per common share - basic and diluted   $ (0.02 )   $ (0.00 )   $ (0.02 )
                         
Weighted average common shares outstanding—basic and diluted     106,008,685      
-
      106,008,685  

 

8

 

 

    For the Six Months Ended
June 30, 2021
 
    Previously
Reported
    Adjustments     Revised  
                   
Operating expenses:                  
Personnel costs   $ 799,796     $
-
    $ 799,796  
Sales and marketing     14      
-
      14  
General and administrative     2,375,793      
-
      2,375,793  
Legal and professional fees     457,546      
-
      457,546  
Research and development    
-
     
-
     
-
 
Total operating expenses     3,633,149      
-
      3,633,149  
Loss from operations     (3,633,149 )    
-
      (3,633,149 )
                         
Other income (expenses):                        
Interest expense     (373,475 )     (188,782 )     (562,257 )
Gain on foreign exchange     23,538      
-
      23,538  
Total other expenses     (349,937 )     (188,782 )     (538,719 )
Net loss from continuing operations, before taxes     (3,983,086 )     (188,782 )     (4,171,868 )
Income taxes    
-
     
-
     
-
 
Net loss from continuing operations     (3,983,086 )     (188,782 )     (4,171,868 )
Net loss from discontinued operations, net of tax     355,302      
-
      355,302  
Net loss   $ (3,627,784 )   $ (188,782 )   $ (3,816,566 )
                         
Comprehensive loss from discontinued operations    
-
     
-
     
-
 
Comprehensive loss   $ (3,627,784 )   $ (188,782 )   $ (3,816,566 )
                         
Net loss per common share:                        
Loss from continuing operations - basic and diluted   $ (0.04 )   $ (0.00 )   $ (0.04 )
                         
Loss from discontinued operations - basic and diluted   $ 0.00     $
-
    $ 0.00  
                         
Loss per common share - basic and diluted   $ (0.04 )   $ (0.00 )   $ (0.04 )
                         
Weighted average common shares outstanding—basic and diluted     102,176,247      
-
      102,176,247  

  

9

 

 

CRYOMASS TECHNOLOGIES INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

 

    Common Stock     Additional
Paid-In
    Common
Stock to
    Accumulated     Total
Shareholders’
 
    Shares     Amount     Capital     Be Issued     Deficit     Equity  
                                     
Balance at March 31, 2021     98,497,636     $ 98,498     $ 19,596,807     $
-
    $ (16,776,121 )   $ 2,919,184  
                                                 
Share issuance     201,586       202      
-
     
-
     
-
      202  
                                                 
Share issuance related to Cryocann asset purchase     10,000,000       10,000       1,794,500      
-
     
-
      1,804,500  
                                                 
Share issuance pursuant to employment agreements     6,701,586       6,701       894,000      
-
     
-
      900,701  
                                                 
Share issuance in exchange for extinguishment of debt     2,500,000       2,500       505,902      
-
     
-
      508,402  
                                                 
Share issuance in exchange for services     633,125       633       56,867      
-
     
-
      57,500  
                                                 
Stock-based compensation     -      
-
      190,026      
-
     
-
      190,026  
                                                 
Stock options issued and outstanding     -      
-
      710,202      
-
     
-
      710,202  
                                                 
Net loss     -      
-
     
-
     
-
      (2,580,857 )     (2,580,857 )
                                                 
Previously reported balance at June 30, 2021     118,533,933     $ 118,534     $ 23,748,304     $
               -
    $ (19,356,978 )   $ 4,509,860  
                                                 
Adjustments:                                                
Interest expense from debt discount amortization related to Beneficial Conversion Feature     -      
-
     
-
     
-
      (188,782 )     (188,782 )
Beneficial Conversion Feature of Note Payable     -      
-
      391,958      
-
     
-
      391,958  
Warrants issued in conjunction with Convertible Notes Payable     -      
-
      888,371      
-
     
-
      888,371  
Adjusted balance at June 30, 2021     118,533,933     $ 118,534     $ 25,028,633     $
-
    $ (19,545,760 )   $ 5,601,407  

  

10

 

 

CRYOMASS TECHNOLOGIES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

    For the Six Months Ended
June 30, 2021
 
    Previously
Reported
    Adjustments     Revised  
CASH FLOWS FROM OPERATING ACTIVITIES:                  
Net loss   $ (3,983,086 )   $ (188,782 )   $ (4,171,868 )
Adjustments to reconcile net loss to net cash used in operating activities from continuing operations:                        
Amortization of debt discount     62,500       188,782       251,282  
Fair value of common stock issued pursuant to service and advisory agreements     27,200      
-
      27,200  
Stock-based compensation expense     2,074,547      
-
      2,074,547  
Change in operating assets and liabilities:                        
Accounts receivable    
-
     
-
     
-
 
Prepaid expenses     40,475      
-
      40,475  
Accounts payable and accrued expenses     182,574      
-
      182,574  
Taxes payable    
-
     
-
     
-
 
Net cash used in operating activities from continuing operations     (1,595,790 )    
-
      (1,595,790 )
Net cash provided by operating activities from discontinued operations     (452,828 )    
-
      (452,828 )
Net cash used in operating activities     (2,048,618 )    
-
      (2,048,618 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES:                        
Cash Payment for CryoCann asset purchase     (1,000,000 )    
-
      (1,000,000 )
Issuance of other payable related to CryoCann asset purchase     (1,247,684 )    
-
      (1,247,684 )
Net cash used in investing activities from continuing operations     (2,247,684 )    
-
      (2,247,684 )
Net cash used in investing activities from discontinued operations     (224,003 )    
-
      (224,003 )
Net cash used in investing activities     (2,471,687 )    
-
      (2,471,687 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES:                        
Proceeds from issuance of common stock     120,000      
-
      120,000  
Repayment of loans payable, current     (412,359 )    
-
      (412,359 )
Proceeds from notes payable     4,690,000      
-
      4,690,000  
Related party note disbursement     (281,771 )    
-
      (281,771 )
Net cash provided by financing activities from continuing operations     4,115,870      
-
      4,115,870  
Net cash provided by financing activities from discontinued operations     505,902      
-
      505,902  
Net cash provided by financing activities     4,621,772      
-
      4,621,772  
                         
Net decrease in cash from continuing operations     272,396      
-
      272,396  
Net decrease in cash from discontinued operations     (170,929 )    
-
      (170,929 )
Cash at beginning of period     329,839      
-
      329,839  
Cash at end of period   $ 431,306     $
-
    $ 431,306  
                         
Supplemental disclosure of cash flow information:                        
Cash paid for interest   $ 171,604     $
-
    $ 171,604  
Supplemental disclosure of non-cash investing and financing activities:             -          
Common stock issued pursuant to vesting of restricted stock units   $ 2,940,603     $
-
    $ 2,940,603  

   

11

 

 

Item 6. Exhibits

 

Exhibit Number   Description
31.1*   Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer.
31.2*   Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting Officer.
32.1*   Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer.
32.2*   Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting Officer.
101.INS   Inline XBRL Instance Document.
101.SCH   Inline XBRL Taxonomy Extension Schema Document.
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

* Filed herewith.

 

12

 

 

SIGNATURES

 

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

 

CRYOMASS TECHNOLOGIES INC  
(Registrant)  
   
Dated: January 26, 2022  
   
/s/ Christian Noel  
Christian Noel  
Chief Executive Officer and Director  
(Principal Executive Officer)  
   
Dated: January 26, 2022  
   
/s/ Philip Mullin  
Philip Mullin  
Chief Financial Officer and Treasurer  
(Principal Financial Officer and
Principal Accounting Officer)
 

 

 

13

 

 

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