Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 20, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Cosmos Holdings Inc. | |
Entity Central Index Key | 1,474,167 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 126,867,038 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 1,352,172 | $ 716,590 |
Accounts receivable | 2,858,518 | 661,850 |
Inventory | 2,096,818 | 464,219 |
Prepaid deferred financing fees | 361,289 | 131,900 |
Prepaid expenses and other current assets | 2,904,989 | 646,530 |
Prepaid expenses and other current assets - related party | 481,450 | 15,523 |
TOTAL CURRENT ASSETS | 10,055,236 | 2,636,612 |
Other assets | 656,382 | 429,203 |
Property and equipment, net | 79,521 | 52,715 |
Intangible assets, net | 44,012 | |
TOTAL ASSETS | 10,835,151 | 3,118,530 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 2,338,047 | 577,932 |
Accounts payable and accrued expenses - related party | 981 | 13,759 |
Notes payable, net of unamortized discount of $154,949 and $110,561, respectively | 9,274,201 | 2,872,472 |
Notes payable - related party | 116,358 | 160,391 |
Loans payable | 17,938 | |
Loans payable - related party | 559,557 | 148,250 |
Taxes payable | 1,313,030 | 1,080,590 |
TOTAL CURRENT LIABILITIES | 13,602,174 | 4,871,332 |
TOTAL LIABILITIES | 13,602,174 | 4,871,332 |
Commitments and Contingencies (see Note 9) | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, $0.001 par value; 100,000,000 shares authorized; 0 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | ||
Common stock, $0.001 par value; 300,000,000 shares authorized; 128,253,932 and 125,870,532 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | 128,254 | 125,871 |
Additional paid-in capital | 2,409,735 | 174,009 |
Accumulated other comprehensive loss | (1,228,614) | (1,050,463) |
Accumulated deficit | (4,076,398) | (1,002,219) |
TOTAL STOCKHOLDERS' DEFICIT | (2,767,023) | (1,752,802) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 10,835,151 | $ 3,118,530 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
CURRENT LIABILITIES: | ||
Notes payable, net of unamortized discount | $ 154,949 | $ 110,561 |
SHAREHOLDERS' EQUITY | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 128,253,932 | 125,870,532 |
Common stock, shares, outstanding | 128,253,932 | 125,870,532 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
REVENUE | ||||
Revenue | $ 9,546,951 | $ 1,414,503 | $ 19,775,398 | $ 3,506,804 |
COST OF REVENUE | 8,772,138 | 1,269,553 | 18,156,795 | 3,192,472 |
GROSS PROFIT | 774,813 | 144,950 | 1,618,603 | 314,332 |
OPERATING EXPENSES | ||||
General and administrative expenses | 752,198 | 173,498 | 2,416,540 | 466,293 |
Depreciation and amortization expense | 6,167 | 2,421 | 17,199 | 6,956 |
Impairment of goodwill | 1,949,884 | |||
TOTAL OPERATING EXPENSES | 758,365 | 175,919 | 4,383,623 | 473,249 |
GAIN (LOSS) FROM OPERATIONS | 16,448 | (30,969) | (2,765,020) | (158,917) |
OTHER INCOME (EXPENSE) | ||||
Other income | 19 | |||
Interest expense - related party | (66) | (919) | (198) | (2,741) |
Interest expense | (291,224) | (53,794) | (572,679) | (103,803) |
Other expense | (13,295) | (3,388) | (26,529) | (4,539) |
Foreign currency transaction gain (loss) | 89,966 | (5,555) | 292,937 | (7,043) |
TOTAL OTHER INCOME (EXPENSE) | (214,619) | (63,656) | (306,469) | (118,107) |
LOSS BEFORE INCOME TAXES | (198,171) | (94,625) | (3,071,489) | (277,024) |
INCOME TAX EXPENSE | 12 | (2,690) | (773) | |
NET LOSS | (198,171) | (94,613) | (3,074,179) | (277,797) |
OTHER COMPREHENSIVE LOSS | ||||
Foreign currency translation loss | (51,474) | (16,622) | (178,151) | (38,185) |
TOTAL OTHER COMPREHENSIVE LOSS | $ (249,645) | $ (111,235) | $ (3,252,330) | $ (315,982) |
BASIC AND DILUTED NET LOSS PER SHARE | $ 0 | $ 0 | $ (0.02) | $ 0 |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | ||||
Basic and Diluted | 128,236,217 | 125,630,532 | 127,647,201 | 125,630,532 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (3,074,179) | $ (277,797) |
Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities: | ||
Depreciation and amortization expense | 17,199 | 6,956 |
Amortization of debt discount | 87,677 | 5,885 |
Stock-based compensation | 265,529 | |
Issuance of common stock for services | 401,800 | |
Loss on goodwill impairment | 1,949,884 | |
Changes in Assets and Liabilities: | ||
Accounts receivable | (2,137,831) | (316,012) |
Inventory | (1,627,085) | (189,435) |
Prepaid expenses | (2,242,785) | (198,627) |
Prepaid expenses - related party | (465,927) | (119,796) |
Other assets | (166,896) | (55,880) |
Accounts payable and accrued expenses | 1,056,165 | 70,681 |
Accounts payable and accrued expenses - related party | (12,778) | (135,117) |
Taxes payable | 209,667 | 36,331 |
Deferred revenue | (62,210) | |
NET CASH USED IN OPERATING ACTIVITIES | (5,739,560) | (1,235,021) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of fixed assets | (13,925) | (11,880) |
Cash received from acquisition | 40,858 | |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 26,933 | (11,880) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment of related party note payable | (63,200) | (44,952) |
Payment of note payable | (461,888) | (148,904) |
Proceeds from note payable | 6,891,203 | 1,968,940 |
Payment of related party loan | (232,051) | (21,914) |
Proceeds from related party loan | 625,641 | 51,127 |
Payment of loans payable | (20,082) | (33,714) |
Sale of common stock and warrants | 91,780 | |
Deferred financing fees | (213,626) | (140,475) |
Capital contribution | 140 | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 6,617,777 | 1,630,248 |
Effect of exchange rate changes on cash | (269,568) | 38,377 |
NET INCREASE IN CASH | 635,582 | 421,724 |
CASH AT BEGINNING OF PERIOD | 716,590 | 198,049 |
CASH AT END OF PERIOD | 1,352,172 | 619,773 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid during the period: Interest | 127,157 | |
Cash paid during the period: Income Tax | ||
Supplemental Disclosure of Non-Cash Investing and Financing Activities | ||
Acquisition of Decahedron | 1,479,000 | |
Reversal of proceeds due from noteholder due to repayment of note | $ 11,813 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 1- BASIS OF PRESENTATION | The terms COSM, we, the Company, and us as used in this report refer to Cosmos Holdings Inc. The accompanying unaudited consolidated balance sheet as of September 30, 2017 and unaudited consolidated statements of operations for the three and nine months ended September 30, 2017 have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management of COSM, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2017, are not necessarily indicative of the results that may be expected for the year ending December 31, 2017, or any other period. These unaudited consolidated financial statements and notes should be read in conjunction with the financial statements for each of the two years ended December 31, 2016 and 2015, included in the Companys Annual Report on Form 10-K. The accompanying consolidated balance sheet as of December 31, 2016 has been derived from the audited financial statements filed in our Form 10-K and is included for comparison purposes in the accompanying balance sheet. Certain prior year amounts have been reclassified to conform to current year presentation. |
ORGANIZATION, NATURE OF BUSINES
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 2 - ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN | Cosmos Holdings, Inc. (Cosmos, The Company, we, or us) was incorporated in the State of Nevada under the name Prime Estates and Developments, Inc. on July 21, 2009 for the purpose of acquiring and operating commercial real estate and real estate related assets. On September 27, 2013 (the Closing), Cosmos Holding Inc. a Nevada corporation (Cosmos Holdings, Inc. or the Registrant), closed a reverse take-over transaction by which it acquired a private company whose principal activities are the trading of products, providing representation, and provision of consulting services to various sectors. Pursuant to a Share Exchange Agreement (the Exchange Agreement) between the Registrant and Amplerissimo Ltd, a company incorporated in Cyprus (Amplerissimo), the Registrant acquired 100% of Amplerissimos issued and outstanding common stock. On August 1, 2014, we, through our Cypriot subsidiary Amplerissimo, formed SkyPharm S.A. a Greek corporation (SkyPharm) whose principal activities and operations are the development, marketing and sales of pharmaceutical, wellness and cosmetic products. On February 10, 2017, the Company and Decahedron Ltd, a UK Corporation (Decahedron) consummated the transactions contemplated by the Stock Purchase Agreement, dated November 17, 2016 as amended (the Decahedron SPA). Pursuant to the terms of the Decahedron SPA, the shareholders of Decahedron received an aggregate of 1,700,000 shares of common stock of the Company (the Stock Consideration), which were delivered following the closing in exchange for all of the Ordinary Shares of Decahedron for the Stock Consideration. In accordance with the terms of the SPA, Mr. Lazarou remained as a director and officer of Decahedron. We are currently focusing our existing operations on expanding the business of SkyPharm and our new subsidiary Decahedron, we have concentrated our efforts on becoming an international pharmaceutical company. The Companys focus will be on Branded Pharmaceuticals, Over-the-Counter (OTC) medicines, and Generic Pharmaceuticals. The Company also intends to expand into Cosmetic-Beauty Products as well as Food Supplements and we target areas where we can build and maintain a strong position. The Company uses a differentiated operating model based on a lean, nimble and decentralized structure, an emphasis on low risk license acquisition as well as Research & Development and our ability to be better owners of pharmaceutical assets than others. This operating model and the execution of our corporate strategy are enabling the Company to achieve sustainable growth and create shareholder value. We regularly evaluate and, where appropriate, execute on opportunities to expand through the acquisition of branded pharmaceutical products and pharmaceutical companies in areas that will serve patients that we believe will offer above average growth characteristics and attractive margins. In particular, we look to continue to enhance our pharmaceutical and over the counter product lines by acquiring or licensing rights to additional products and regularly evaluate selective acquisition opportunities. Going Concern The Companys consolidated financial statements are prepared using U.S. GAAP applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company generated a net loss of $3,074,179 for the nine months ended September 30, 2017, and has a working capital deficit of $3,546,938 and an accumulated deficit of $4,076,398 as of September 30, 2017. These conditions raise substantial doubt of the Companys ability to continue as a going concern. The Company has not yet established an adequate ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease development of operations. In order to continue as a going concern, develop a reliable source of revenues, and achieve a profitable level of operations the Company will need, among other things, additional capital resources. Managements plans to continue as a going concern include raising additional capital through increased sales of product and by sale of common shares. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Summary of Significant Accounting Policies Basis of Financial Statement Presentation The accompanying consolidated financial statements have been prepared in accordance with principles generally accepted in the United States of America. Principles of Consolidation Our consolidated accounts include our accounts and the accounts of our wholly-owned subsidiaries, Amplerissimo Ltd, SkyPharm S.A. and Decahedron Ltd. All significant intercompany balances and transactions have been eliminated. Reclassifications to Prior Period Financial Statements and Adjustments Certain reclassifications have been made in the Companys financial statements of the prior year to conform to the current year presentation. These reclassifications have no impact on previously reported net income. Use of Estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of September 30, 2017 and December 31, 2016, there were no cash equivalents. The Company maintains bank accounts in the United States denominated in U.S. Dollars and in the Republic of Cyprus, in Greece and in Bulgaria all of them denominated in Euros. The Company also maintains bank accounts in the United Kingdom of Great Britain, dominated in Euros and Great Britain Pound (British Pounds Sterling). Account Receivable Accounts receivable are stated at their net realizable value. The allowance for doubtful accounts against gross accounts receivable reflects the best estimate of probable losses inherent in the receivables portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available information. Inventory Inventory is stated at the lower of cost or market value using the weighted average method. Inventory consists primarily of finished goods and packaging materials, i.e. packaged pharmaceutical products and the wrappers and containers they are sold in. A periodic inventory system is maintained by 100% count. Inventory is replaced periodically to maintain the optimum stock on hand available for immediate shipment. We write-down inventories to net realizable value based on forecasted demand and market conditions, which may differ from actual results. Fixed Assets Fixed assets are stated at cost, less accumulated depreciation. Depreciation is provided on a straight-line basis over the useful lives (except for leasehold improvements which are depreciated over the lesser of the lease term or the useful life) of the assets as follows: Estimated Useful Life Furniture and fixtures 5-7 years Office and computer equipment 3-5 years Depreciation expense was $10,831 and $6,956 for the nine months ended September 30, 2017 and 2016, respectively. Intangible Assets Intangible assets with definite useful lives are recorded on the basis of cost and are amortized on a straight-line basis over their estimated useful lives. The Company uses a useful life of 5 years for an import/export license. The Company evaluates the remaining useful life of intangible assets annually to determine whether events and circumstances warrant a revision to the remaining amortization period. If the estimate of the intangible assets remaining useful life is changed, the remaining carrying amount of the intangible asset will be amortized prospectively over that revised remaining useful life. At September 30, 2017, no revision to the remaining amortization period of the intangible assets was made. Amortization expense was $6,368 and $0 for the nine months ended September 30, 2017 and 2016, respectively. Impairment of Long-Lived Assets In accordance with ASC 360-10, Long-lived assets, which include property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the assets expected future discounted cash flows or market value, if readily determinable. Goodwill and Intangibles The Company periodically reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist. Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. Specifically, goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses level 3 inputs and a discounted cash flow methodology to estimate the fair value of a reporting unit. A discounted cash flow analysis requires one to make various judgmental assumptions including assumptions about future cash flows, growth rates, and discount rates. The assumptions about future cash flows and growth rates are based on the Companys budget and long-term plans. Discount rate assumptions are based on an assessment of the risk inherent in the respective reporting units. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting units goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting units goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. Prior to the acquisition of Decahedron, the Company had no record goodwill value. As a result of the acquisition of Decahedron, the Company tested and expensed 100% of the goodwill allocated to the acquisition costs, an amount equal to $1,949,884 for the period ending September 30, 2017. Fair Value Measurement The Company adopted FASB ASC 820-Fair Value Measurements and Disclosures, or ASC 820, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Companys financial position or operating results, but did expand certain disclosures. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. The Company did not have any Level 2 or Level 3 assets or liabilities as of September 30, 2017. Cash is considered to be highly liquid and easily tradable as of September 30, 2017 and therefore classified as Level 1 within our fair value hierarchy. In addition, FASB ASC 825-10-25 Fair Value Option, or ASC 825-10-25, was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments. Revenue Recognition We consider revenue recognizable when persuasive evidence of an arrangement exists, the price is fixed or determinable, goods or services have been delivered, and collectability is reasonably assured. These criteria are assumed to have been met if a customer orders an item, the goods or services have been shipped or delivered to the customer, and we have sufficient evidence of collectability, such a payment history with the customer. Revenue that is billed and received in advance such as recurring weekly or monthly services are initially deferred and recognized as revenue over the period the services are provided. Stock-based Compensation The Company records stock based compensation in accordance with ASC section 718, Stock Compensation and Staff Accounting Bulletin (SAB) No. 107 (SAB 107) issued by the SEC in March 2005 regarding its interpretation of ASC 718. ASC 718 requires the fair value of all stock-based employee compensation awarded to employees to be recorded as an expense over the related requisite service period. The Company values any employee or non-employee stock based compensation at fair value using the Black-Scholes Option Pricing Model. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASC 505-50 Equity-Based Payments to Non-Employees. Foreign Currency Translations and Transactions Assets and liabilities of all foreign operations are translated at year-end rates of exchange, and the statements of operations are translated at the average rates of exchange for the year. Gains or losses resulting from translating foreign currency financial statements are accumulated in a separate component of stockholders equity until the entity is sold or substantially liquidated. Gains or losses from foreign currency transactions (transactions denominated in a currency other than the entitys local currency) are included in net earnings. Income Taxes The Company accounts for income taxes under the asset and liability method, as required by the accounting standard for income taxes ASC 740. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as net operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company is liable for income taxes in the Republic of Cyprus, Greece and the United Kingdom of England. The corporate income tax rate in Cyprus is 12.5%, 29% in Greece (tax losses are carried forward for five years effective January 1, 2013) and 20% in United Kingdom of England. Losses may also be subject to limitation under certain rules regarding change of ownership. We regularly review deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if we do not consider it to be more likely than not that the deferred tax assets will be realized. Our review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets. At September 30, 2017 the Company has maintained a valuation allowance against all net deferred tax assets in each jurisdiction in which it is subject to income tax. We recognize the impact of an uncertain tax position in our financial statements if, in managements judgment, the position is not more-likely-then-not sustainable upon audit based on the positions technical merits. This involves the identification of potential uncertain tax positions, the evaluation of applicable tax laws and an assessment of whether a liability for an uncertain tax position is necessary. As of September 30, 2017 the Company has no uncertain tax positions recorded in any jurisdiction where it is subject to income tax. Basic and Diluted Net Income (Loss) per Common Share Basic and diluted net loss per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the periods presented. The per share amounts include the dilutive effect of common stock equivalents in periods with net income. Basic and diluted loss per share for each of the periods ended September 30, 2017 and 2016 is the same due to the anti-dilutive nature of potential common stock equivalents. Recent Accounting Pronouncements In January 2017, the FASB issued ASU 2017-04, Intangibles Goodwill and Other (Topic 350), which simplifies the measurement of goodwill by eliminating Step 2 from the current goodwill impairment test in the event that there is evidence of an impairment based on qualitative or quantitative assessments. ASU 2017-04 does not change how the goodwill impairment is identified, and the Company will continue to perform a qualitative assessment annually to determine whether the two step impairment test is required. Until the adoption, current accounting standards require the impairment loss to be recognized under Step 2 of the impairment test. This requires the Company to calculate the implied fair value of goodwill by assigning fair value to the reporting units assets and liabilities as if the reporting unit has been acquired in a business combination, then subsequently subtracting the implied goodwill from the carrying amount of the goodwill. The new standard would require the Company to determine the fair value of the reporting unit and subtract the carrying value from the fair value of the reporting unit to determine if there is an impairment. ASU 2017-04 is effective for the Company for fiscal years after December 15, 2019, and early adoption is permitted. ASU 2017-04 is required to be adopted prospectively, and the adoption is effective for annual goodwill impairment tests performed in the year of adoption. The Company does not believe that the adoption of ASU No. 2017-4 will have a material effect on the Companys consolidated financial position or the Companys consolidated results of operations In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business, with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as an acquisition of assets or a business. ASU No. 2017-01 is effective for the Companys fiscal year commencing on January 1, 2018. The effect of this guidance is to be applied prospectively and early adoption is permitted. The Company does not believe that the adoption of ASU No. 2017-01 will have a material effect on the Companys consolidated financial position or the Companys consolidated results of operations. In February 2016, the FASB issued ASU 2016-02, Leases, which will require lessees to recognize assets and liabilities for the rights and obligations created by most leases on the balance sheet. The changes become effective for the Companys fiscal year beginning July 1, 2019. Modified retrospective adoption for all leases existing at, or entered into after, the date of initial application, is required with an option to use certain transition relief. The Company expects this ASU will increase its current assets and current liabilities, but have no net material impact on its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09--Revenue from Contracts with Customers (Topic 606). The guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The FASB delayed the effective date to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. In addition, in March and April 2016, the FASB issued new guidance intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. Both amendments permit the use of either a retrospective or cumulative effect transition method and are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early application permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its financial statements. Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Companys financial statements. |
ACQUISITION OF DECAHEDRON, LTD.
ACQUISITION OF DECAHEDRON, LTD. | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 3- ACQUISITION OF DECAHEDRON, LTD. | On February 10, 2017, the Company completed the acquisition pursuant to the Decahedron SPA acquiring 100% of the outstanding shares of Decahedron, a United Kingdom company. Decahedron is a pharmaceuticals wholesaler which specializes in imports and exports of branded and generic pharmaceutical products within the EEA and around the world. At closing, the Company acquired 100% of Decahedrons outstanding shares in exchange for 1,700,000 shares of Cosmos common stock valued at $1,479,000 (the Acquisition). The Company recognized the Decahedron assets acquired and liabilities assumed based upon the fair value of such assets and liabilities measured as of the date of acquisition. The aggregate purchase price for Decahedron has been allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the purchase price over the fair value of the acquired net assets represents cost and revenue synergies specific to the Company, as well as non-capitalizable intangible assets, such as the license held by Decahedron for the wholesale of pharmaceuticals in the United Kingdome and Europe, the remainder has been allocated to goodwill, none of which is tax deductible. During the nine months ended September 30, 2017, we recorded an adjustment of $28,002 primarily related to other assets and an adjustment of the accounts payable associated with the Decahedron acquisition. We finalized our allocation of the purchase price during the nine months ended September 30, 2017. The final unaudited allocation of purchase price as of September 30, 2017, is as follows: Preliminary Allocation as of February 10, Allocation Final 2017 Adjustments Allocation Current assets $ 6,537 $ - $ 6,537 Intangible assets 50,000 - 50,000 Other assets 305,400 (216,562 ) 88,838 Total assets acquired 361,937 (216,562 ) 145,375 Liabilities assumed: Debt 804,819 (188,560 ) 616,259 Total liabilities assumed 804,819 (188,560 ) 616,259 Net assets acquired (442,882 ) (28,002 ) (470,884 ) Consideration: Value of Common Stock Issued at Acquisition 1,479,000 - 1,479,000 Goodwill $ 1,921,882 $ 28,002 $ 1,949,884 The components of the acquired intangible assets were as follows (in thousands): Amount Useful Life (Years) Licenses (a) $ 50,000 5 $ 50,000 - _____________ (a) U.K Pharmaceutical Wholesale Distribution License Unaudited Supplemental Pro Forma Data The pro forma statements of operations data for the nine months ended September 30, 2017, below, give effect to the Decahedron Acquisition, described above, as if it had occurred at January 1, 2017. These amounts have been calculated after applying our accounting policies and adjusting the results of Decahedron intangible amortization that would have been charged assuming the fair value adjustments had been applied and incurred since January 1, 2017. This pro forma data is presented for informational purposes only and does not purport to be indicative of our future results of operations. Revenue of $2,622,547 and net loss of $255,672 since the acquisition date are included in the consolidated statement of operations and comprehensive income (loss) for nine months ended September 30, 2017. Unaudited proforma results of operations for the nine months ended September 30, 2017 and 2016 as though the Company acquired Decahedron on the first of each fiscal year are set forth below. Nine Months Ended September 30, 2017 2016 Revenues $ 19,968,845 $ 5,007,806 Cost of revenues 18,356,228 4,672,794 Gross profit 1,612,617 335,012 Operating expenses 4,411,620 614,515 Operating loss (2,799,003 ) (279,503 ) Other income (expense) (524,952 ) (238,528 ) Net Loss $ (3,323,955 ) $ (518,031 ) The purchase price exceeded the estimated fair value of the net assets acquired by $1,949,884 which was recorded as Goodwill. Goodwill represents the difference between the total purchase price for the net assets purchased from Decahedron and the aggregate fair values of tangible and intangible assets acquired, less liabilities assumed. At the conclusion of the acquisition, goodwill was reviewed for impairment and it was determined that indicators of impairment existed. As of September 30, 2017, after our assessment of the totality of the events that could impair goodwill, it was the Companys conclusion it is not more likely than not that the Goodwill was impaired. Therefore, the Company was not required to conduct a two-step quantitative goodwill impairment test. No events have occurred after September 30, 2017 that would affect the Companys conclusion as of the September 30, 2017 assessment date. As a result of the Companys assessment, 100% of the goodwill of $1,949,884 was recorded as an impairment of goodwill. |
PREPAID DEFERRED FINANCING COST
PREPAID DEFERRED FINANCING COSTS | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 4 - PREPAID DEFERRED FINANCING COSTS | On February 28, 2016, the Company entered into an agreement with Synthesis Management Limited (Synthesis Management) for the purpose of securing additional financing for the Company. On September 28, 2016, the Company advanced 125,000 ($133,725) to Synthesis Management. These advances are refundable if funding is not secured and if funding is secured, the amount will be applied to the note on day one as debt discount. As of September 30, 2017, the outstanding balance on the advance is 125,000 ($147,662). In August, 2017 the Company entered into an agreement with Synthesis Multi Asset Architecture (Synthesis Architecture) for the purpose of securing additional financing for the Company. On August 14, 2017, the Company advanced Synthesis Architecture 180,840 ($213,627). These advances are refundable if funding is not secured and if funding is secured, the amount will be applied to the note on day one as debt discount. As of September 30, 2017, the outstanding balance on the advance is 180,840 ($213,627). |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 5 - INCOME TAXES | At September 30, 2017, the Companys effective tax rate differs from the US federal statutory tax rate primarily due to a valuation allowance recorded against net deferred tax assets in all jurisdictions in which the Company operates. At December 31, 2016, the Companys effective tax rate differed from the US federal statutory tax rate primarily due to earnings taxed at the lower income tax rate in Cyprus. We regularly review deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if we do not consider it to be more likely than not that the deferred tax assets will be realized. Our review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets. At September 30, 2017, the Company has a maintained a valuation allowance against all net deferred tax assets in each jurisdiction in which it is subject to income tax. As of September 30, 2017 the Company has no uncertain tax positions recorded in any jurisdiction where it is subject to income tax. The Company has recorded $63,724 of interest and penalties as interest expense for the nine months ended September 30, 2017 in accordance with this policy. |
CAPITAL STRUCTURE
CAPITAL STRUCTURE | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 6 - CAPITAL STRUCTURE | Preferred Stock The Company is authorized to issue 100 million shares of preferred stock, which have liquidation preference over the common stock and are non-voting. As of September 30, 2017 and December 31, 2016, no preferred shares have been issued. Common Stock The Company is authorized to issue 300 million shares of common stock and had issued 100,000,000 in connection with the merger with Amplerissimo and had 25,585,532 shares issued prior to the merger. Under the Exchange Agreement, the Registrant completed the acquisition of all of the issued and outstanding shares of Amplerissimo through the issuance of 100,000,000 restricted shares of Common Stock to Dimitrios Goulielmos, the sole shareholder of Amplerissimo. Immediately prior to the Exchange Agreement transaction, the Registrant had 25,585,532 shares of Common Stock issued and outstanding. Immediately after the issuance of the shares the Registrant had 125,585,532 shares of Common Stock issued and outstanding. The consideration provided pursuant to the Exchange Agreement was the issuance of 100,000,000 shares of our common stock. On February 10, 2017 the Company and Decahedron consummated the acquisition of Decahedron SPA. Pursuant to the terms of the Decahedron SPA, the shareholders of Decahedron received an aggregate of 1,700,000 shares of common stock of the Company, which were delivered at closing in exchange for all of the Ordinary Shares of Decahedron for the Stock Consideration. Shares Issued for Services On March 1, 2017, the Company entered into a four-month consulting agreement with a third party investment advisory firm for consideration of 5,000 restricted shares of common stock to be issued during the period of the agreement for any introductions and related contributions the Company receives as a result of those introductions. As of September 30, 2017, no consideration has been earned and no shares have been issued related to this agreement. On May 1, 2017, the Company entered into an 8-month consulting agreement with a third party for web design services commencing on May 1, 2017 and terminating on January 1, 2018. As compensation for creating, delivering and maintaining a website, the Company issued 20,000 shares of common stock on May 24, 2017. The shares were valued at $14,400, which was fully recognized in the nine months ended September 30, 2017. On May 1, 2017, the Company entered into a five-month consulting agreement with a third party advisory firm for consideration of 20,000 shares of the Companys common stock. The stock was issued on May 25, 2017 and fair valued at $0.72 per share or $14,400, which was fully recognized in the nine months ended September 30, 2017. On May 8, 2017, the Company entered into a one-year consulting agreement for advisory services with a third party investment relations firm. On May 18, 2017, the Company issued to the consultant 300,000 shares of the Companys common stock valued at $219,000. The shares are considered to be a fully earned, nonrefundable, non-apportionable and non-ratable retainer as consideration for undertaking the agreement. In addition, the Company will pay the consultant $5,000 per month in cash for the term of the agreement. On May 25, 2017, the Company entered into a 20-month consulting agreement with a third party advisory firm for consideration of 200,000 shares of the Companys common stock. The stock was issued on May 25, 2017 and fair valued at $0.77 per share or $154,000, which will be amortized over the length of the agreement. For the nine months ending September 30, 2017, the Company has recorded $32,874 in consulting expense related to this agreement. As of September 30, 2017 and December 31, 2016, the Company had 128,253,932 and 125,870,532 shares of Common Stock issued and outstanding, respectively. Potentially Dilutive Securities On October 1, 2016 the Company granted 120,000 options to an employee of the Company as compensation for being appointed the US Finance Manager of the Company. The options have an exercise period of four years with an exercise price of $0.20. In the event that he ceases to work for the Company for any reason, he will be entitled to a pro rata portion of the annual options. The options vest monthly with 120,000 options fully vested as of September 30, 2017. (See Note 10) On January 1, 2017 the Company granted 250,000 options to an employee of the Company as compensation for being appointed the International Finance Manager of the Company. The options have an exercise period of four years with an exercise price of $0.10 per share. In the event that he ceases to work for the Company for any reason, he will be entitled to a pro rata portion of the annual options. The options vest monthly with 187,500 options fully vested as of September 30, 2017. (See Note 10) On January 3, 2017 the Company granted 120,000 options to an employee of the Company as compensation for being appointed as a consultant of the Company. The options have an exercise period of five years with an exercise price of $0.20 per share. In the event that he ceases to work for the Company for any reason, he will be entitled to a pro rata portion of the annual options. The options vest monthly with 90,000 options fully vested as of September 30, 2017. (See Note 10) Sales Pursuant to Regulation S On April 7, 2017, the Company issued shares of common stock and warrants pursuant to a private placement conducted under the exemptions from registration under Regulation S. Each unit sold to investors consists of $35,000 face value purchase price of 50,000 shares plus warrants to purchase the number of equivalent shares. The Company retains the right to accept less than the $35,000 face value from any investor at its discretion. The Company has entered into the following subscription agreements: On April 10, 2017, the Company sold 45,800 shares at $0.70 per share for a total purchase price of $32,060 to a private investor. The investor also received 45,800 warrants that were valued using the Black Scholes valuation model to have a fair value of $2,375 (See Note 10). On April 26, 2017, the Company sold 46,700 shares at $0.70 per share for a total purchase price of $32,690 to a private investor. The investor also received 46,700 warrants that were valued using the Black Scholes valuation model to have a fair value of $1,521 (See Note 10). On May 16, 2017, the Company sold 7,900 shares at $0.70 per share for a total purchase price of $5,530 to a private investor. The investor also received 7,900 warrants that were valued using the Black Scholes valuation model to have a fair value of $130 (See Note 10). On July 21, 2017, the Company sold 43,000 shares at $0.50 per share for a total purchase price of $21,500 to a private investor. The Company did not grant any warrants to the investor under this agreement. No options, warrants or other potentially dilutive securities other than those disclosed above have been issued as of September 30, 2017 and December 31, 2016. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 7 - RELATED PARTY TRANSACTIONS | On the date of our inception, we issued 20 million shares of our common stock to our three officers and directors which were recorded at no value (offsetting increases and decreases in Common Stock and Additional Paid in Capital). DOC Pharma S.A. As of September 30, 2017, the Company has a prepaid balance of 347,914 ($410,991) to DOC Pharma S.A., this comprises over 10.3% of the Companys total prepaid balance. As of December 31, 2016, the Company owed 65 ($69) to DOC Pharma S.A. On November 1, 2015, the Company entered into a 12,000 ($12,662) Loan Agreement with DOC Pharma S.A, pursuant to which DOC Pharma S.A., paid existing bills of the Company in the amount of 12,000, excluding the Vendor Bills. The loan bears an interest rate of 2% per annum and was due and payable in full on October 31, 2016. As of September 30, 2017, the Company has an outstanding principal balance under this note of 12,000 ($14,176) and accrued interest expense of $612. Grigorios Siokas On October 1, 2016, the Company borrowed 5,000 ($5,276) from Mr. Siokas related to its subsidiarys purchase of additional capital of SkyPharm. The loan is non-interest bearing and has a maturity date of October 1, 2017. During the nine months ending September 30, 2017, the Company borrowed an additional 1,000 ($1,181). The outstanding balance as of September 30, 2017 was 6,000 ($7,088). During the year ended December 31, 2016, the Company borrowed 90,500 ($95,496) as additional loans payable from Mr. Siokas. During the nine months ended September 30, 2017, the Company borrowed an additional 473,621 ($559,488) and paid back 123,000 ($145,300) of these loans. These loans have no formal agreements and bear no interest. As 1of September 30, 2017, the Company has an outstanding principal balance under these loans of 441,121 ($521,096). As of September 30, 2017, the Company has recorded 59,646 ($70,459) in prepayments to Mr. Siokas for board of directors fees. Ourania Matsouki During the year ended December 31, 2016, the Company borrowed 44,995 ($47,479) from Mrs. Matsouki. During the nine months ended September 30, 2017, the Company borrowed an additional 55,000 ($64,982) and paid back 73,437 ($86,751). These loans have no formal agreement and bear no interest. As of September 30, 2017, the Company has an outstanding principal balance under these loans of 26,558 ($31,373). Konstantinos Vassilopoulos During the year ended December 31, 2016, Konstantinos Vassilopoulos, US Finance Manager, paid $10,179 of existing bills of the Company. During the nine months ended September 30, 2017, the Company paid back $9,810. There is no formal agreement related to these transactions. As of September 30, 2017 the outstanding balance under this loan is $369. Dimitrios Goulielmos On November 21, 2014, SkyPharm entered into a Loan Agreement with Dimitrios Goulielmos, former Chief Executive Officer and a current director of the Company, pursuant to which the Borrower borrowed 330,000 ($401,115) from Mr. Goulielmos. The Loan bears an interest rate of 2% per annum and was due and payable in full on May 11, 2015. On November 4, 2015, 130,000 ($142,860) in principal and the related accrued interest of 733 ($806) was forgiven and the remaining balance of 200,000 will no longer accrue interest as part of the stock purchase agreement with Grigorios Siokas on November 4, 2015 referenced above. As of December 31, 2016, 60,000 ($63,312) of the loan was paid back. During the nine months ended September 30, 2017 an additional 53,500 ($63,200) was paid back and a principal balance of 86,500 ($102,182) and 0.00 of accrued interest remains. In connection with the Decahedron SPA, on February 9, 2017, Decahedron, Medihelm S.A. and Nikolaos Lazarou entered into a liability transfer agreement whereby the loan previously provided Decahedron to the Mr. Lazarou prior to the acquisition would be cancelled in exchange for Mr. Lazarous personal assumption of approximately £172,310 ($220,988) owed to MediHelm S.A., a creditor of Decahedron. Except as set forth above, we have not entered into any material transactions with any director, executive officer, and promoter, beneficial owner of five percent or more of our common stock, or family members of such persons. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 8 - DEBT | On March 4, 2015, the Company entered into a $9,000 Loan Agreement with Mr. Angelo Drakopoulos, pursuant to which Mr. Drakopoulos paid a $9,000 outstanding bill on behalf of the Company. The loan bears an interest rate of 8% per annum and was due and payable in full on May 5, 2016. As of September 30, 2017, the Company has an outstanding principal balance under this note of $9,000 and accrued interest expense of $1,345. On November 5, 2015, the Company entered into a Loan Agreement pursuant to which the Company borrowed 20,000 ($21,812), of which proceeds of 10,000 ($10,906) have been received as of December 31 2016. The loan bears an interest rate of 1% per annum and was due and payable in full on November 5, 2016. The Company repaid 2,000 ($2,110) as of December 31, 2016. The Company has repaid an additional 8,000 ($9,450) as of September 30, 2017. The Company has accrued interest expense of 435 ($514) and an outstanding balance under this note of 10,000 ($11,813) as of September 30, 2017. On November 5, 2015, the Company entered into a Loan Agreement pursuant to which the Company borrowed 80,000 ($87,248) of which proceeds of 70,000 ($76,342) have been received as of December 31, 2016. The loan bears an interest rate of 5% per annum and was due and payable in full on November 5, 2016. As of December 31, 2016, the outstanding balance was 65,000 ($68,588). During the nine months ended September 30, 2017, the Company repaid 55,000 ($64,972) and reversed the 10,000 ($11,813) receivable that was never received. On November 16, 2015, the Company entered into a Loan Agreement with Panagiotis Drakopoulos, former Director and former Chief Executive Officer, pursuant to which the Company borrowed 40,000 ($43,624) as a note payable from Mr. Drakopoulos. The note bears an interest rate of 6% per annum and was due and payable in full on November 15, 2016. The Company repaid 10,000 ($11,813) during the nine months ended September 30, 2017. As of September 30, 2017, the Company has an outstanding principal balance under this note of 30,000 ($35,439) and accrued interest expense of 4,064 ($4,801). During the year ended December 31, 2015, the Company borrowed 30,000 ($32,718) as a loan payable from Mr. Panagiotis Drakopoulos, former Director and former Chief Executive Officer. The loan had no formal agreement and bore no interest. During the year ended December 31, 2016, the Company repaid 13,000 ($13,718) of the loan. During the nine months ended September 30, 2016 the Company repaid the remaining 17,000 ($20,082). As of September 30, 2017, the loan has no outstanding balance. On February 5, 2016, the Company entered into a Loan Agreement pursuant to which the Company borrowed 20,000 ($21,104). The loan bore an interest rate of 6% and had no maturity date. During the nine months ended September 30, 2017, the Company repaid the loan and accrued interest of 1,020 ($1,204) in full. On March 4, 2016, the Company entered into a Loan Agreement pursuant to which the Company borrowed 50,000 ($52,760) from a third party. On May 04, 2016, the Company entered into a Loan Agreement pursuant to which the Company borrowed an additional 50,000 ($52,760). The loans bore an interest rate of 6% and a maturity date of March 4, 2017 and May 4, 2017, respectively. During the nine months ended September 30, 2017, the Company repaid both loans and accrued interest of 750 ($886) in full. On April 19, 2016, the Company entered into a Loan Agreement pursuant to which the Company borrowed 100,000 ($105,520). The loan bore an interest rate of 6% and matured on April 19, 2017. During the nine months ended September 30, 2017, the Company repaid the loan and accrued interest of 3,100 ($3,662) in full. On April 22, 2016, the Company entered into a Loan Agreement pursuant to which the Company borrowed 38,000 ($40,098). The loan bore an interest rate of 6% and matured on April 22, 2017. During the nine months ended September 30, 2017, the Company repaid the loan and accrued interest of 1,777 ($2,099) in full. On May 24, 2016, the Company entered into a Loan Agreement pursuant to which the Company borrowed 50,000 ($52,760). The loan bears an interest rate of 6% and matured on May 24, 2017. During the nine months ended September 30, 2017, the Company repaid the principal balance of 50,000 ($59,065) in full. The Company has accrued interest expense of 2,798 ($3,305) as of September 30, 2017. On October 18, 2016, the Company entered into a Loan Agreement pursuant to which the Company borrowed 10,000 ($10,552). The loan bears an interest rate of 10% and will mature on October 18, 2017. During the nine months ended September 30, 2017, the Company repaid the principal balance of 10,000 ($11,813) in full. The Company has accrued interest expense of 239 ($283) as of September 30, 2017. Loan Facility Agreement On August 4, 2016, the Companys wholly owned subsidiary SkyPharm entered into a Loan Facility Agreement, guaranteed by Grigorios Siokas, with Synthesis Peer-To Peer-Income Fund (the Loan Facility the Lender). The Loan Facility initially provided SkyPharm with a credit facility of up to $1,292,769 (1,225,141). Any advance under the Loan Facility accrues interest at a rate of 10% per annum and requires quarterly interest payments commencing on September 30, 2016. The amounts owed under the Loan Facility shall be repayable upon the earlier of (i) three months following the demand of the Lender; or (ii) August 31, 2018. No prepayment is permitted pursuant to the terms of the Loan Facility. The Synthesis Facility Agreement as amended is secured by a personal guaranty of Grigorios Siokas, which is secured by a pledge of 10,000,000 shares of common stock of the Company owned by Mr. Siokas. On September 13, 2016, Sky Pharm entered into a First Deed of Amendment with the Loan Facility increasing the maximum loan amount to $1,533,020 as a result of the Lender having advanced $240,251 (227,629) to SkyPharm. On March 23, 2017, SkyPharm entered into an Amended and Restated Loan Facility Agreement (the A&R Loan Facility), with the Loan Facility which increased the loan amount to an aggregate total of $2,664,960 (2,491,083) as a result of the lender having advanced $174,000 (164,898) in September 2016, $100,000 (94,769) in October 2016, $250,000 (236,922) in November 2016, $452,471 (428,800) in December 2016, $155,516 (131,648) in January 2017 and $342,327 (289,788) in July 2017. The A&R Loan Facility amends and restates certain provisions of the Loan Facility Agreement, dated as of August 4, 2016, by and among the same parties. Advances under the A&R Loan Facility continue to accrue interest at a rate of 10% per annum from the applicable date of each drawdown and require quarterly interest payments. The A&R Facility now permits prepayments at any time. The amounts owed under the A&R Loan Facility shall be repayable upon the earlier of (i) seventy five days following the demand of the Lender; or (ii) August 31, 2018. The A&R Loan Facility is secured by a personal guaranty of Grigorios Siokas, which is secured by a pledge of 10,000,000 shares of common stock of the Company owned by Mr. Siokas (the Pledged Shares). The A&R Loan Facility was also amended to provide additional affirmative and negative covenants of Sky Pharm and the Guarantor during the term of loans remain outstanding, including, but not limited to, the consent of the Lender in connection with (i) the Company or any of its subsidiaries incurring any additional indebtedness; or (ii) in the event of any increase in the Companys issued and outstanding shares of Common Stock, the Pledged Shares shall be increased to an amount equal to a minimum of ten percent (10%) of the issued and outstanding shares of the Company. As of September 30, 2017, the outstanding balance under this note was $3,007,287 (2,545,744) and accrued interest expense of $143,761 (121,697) has been recorded. The Company recorded 120,000 ($141,756) in debt discounts related to this note. The debt discounts are being amortized over the term of the debt. During the year ended December 31, 2016 the Company amortized a total of $14,507 (13,748). Amortization of the debt discounts for the nine months ended September 30, 2017 was $52,796 (47,368). Bridge Loans On March 16, 2017 and March 20, 2017, SkyPharm entered into loan agreements with the Synthesis Peer-To Peer-Income Fund (the Bridge Loans). The Bridge Loans provided to SkyPharm loans of 42,326 ($50,000) and 100,000 ($118,130), respectively. The Bridge Loans accrue interest at a rate of 10% per annum and were repayable on April 16, 2017 and April 20, 2017, respectively together with all other amounts then accrued and unpaid. On April 16, 2017, the maturity dates were amended for no additional consideration of change in terms and conditions. The maturity dates of both loans were amended and they matured on May 16, 2017 and May 20, 2017, respectively. The Company has accrued interest expense of an aggregate total of 7,335 ($8,665) for both loans and the outstanding balances of these loans was 42,326 ($50,000) and 100,000 ($118,130), respectively, as of September 30, 2017. On May 5, 2017, SkyPharm entered into a loan agreement with Synthesis Peer-To-Peer Income Fund for 30,449 ($34,745). The loan accrues interest at a rate of 10% per annum and matures on September 30, 2017. The Company as accrued interest expense of 1,201 ($1,418) and the outstanding balance on this loan was 29,413 ($34,745) as of September 30, 2017. Trade Facility Agreements On April 10, 2017, Decahedron entered into a Trade Finance Facility Agreement (the Decahedron Facility) with Synthesis Structured Commodity Trade Finance Limited (the Lender). The Decahedron Facility provides the following material terms: · The Lender will provide Decahedron a facility of up to 2,750,000 ($2,941,950) secured against Decahedrons receivables from the sale of branded and generic pharmaceutical sales. · The total facility will be calculated as 95% of the agreed upon value of Decahedrons receivables. · The term of the Decahedron Facility will be for 12 months. · The obligations of Decahedron are guaranteed by the Company pursuant to a Cross Guarantee and Indemnity Agreement. · The Lender has the right to make payments directly to Decahedrons suppliers. · The following fees should be paid in connection with the Decahedron Facility: o 2% of the maximum principal amount as an origination fee. o A one percent (1%) monthly fee. The current draw on the Decahedron Facility is $0. On May 12, 2017, SkyPharm entered into a Trade Finance Facility Agreement (the SkyPharm Facility) with Synthesis Structured Commodity Trade Finance Limited (the Lender). The SkyPharm Facility provides the following material terms: · The Lender will provide SkyPharm a facility of up to 2,000,000 ($2,282,200) secured against SkyPharms receivables from the sale of branded and generic pharmaceutical sales. In the event that accounts receivable becomes uncollectible, the Company will be obligated to pay back the notes in full. · The total facility will be calculated as 95% of the agreed upon value of Decahedrons receivables. · The term of the SkyPharm Facility will be for 12 months. · The obligations of SkyPharm are guaranteed by the Company pursuant to a Cross Guarantee and Indemnity Agreement. · The Lender has the right to make payments directly to SkyPharms suppliers. · The following fees should be paid in connection with the SkyPharm Facility: o 2% of the maximum principal amount as an origination fee. o A one percent (1%) monthly fee. The current draw on the SkyPharm Facility is 5,216,910 ($6,162,736) and the Company has accrued 170,711 ($201,661) in monthly fees related to this agreement. The Company obtained consents from Synthesis Peer-to-Peer Income Fund in connection with obtaining the Lender. On November 16, 2017, the Company signed an amendment to the agreement for the additional proceeds borrowed. The Company has recorded a total debt discount of 104,338 in origination fees associated with these loans, which will be amortized over the term of the agreements. Amortization of debt discount for the nine months ended September 30, 2017 was 31,295 ($34,881). None of the above loans were made by any related parties. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 9 - COMMITMENTS AND CONTINGENCIES | Legal Matters From time to time, the Company may be involved in litigation relating to claims arising out of the Companys operations in the normal course of business. As of September 30, 2017, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Companys operations. Operating Leases The Company conducts its operations from an office located in Chicago, Illinois for which beginning in January 2015, the monthly rent expense is $730, which has been paid through December 31, 2015. The lease expired as of November 30, 2015, however, the Company has negotiated and entered into a new lease that commenced as of September 1, 2016 at a rate of $709 per month. Rent expense for the three and nine months ended September 30, 2017 was $2,126 and $6,377, respectively. Rent expense for the three and nine months ended September 30, 2016, was $2,126 and $2,834, respectively. The offices of Amplerissimo are located in Cyprus for which we paid approximately 110 ($122) per month on a month to month basis. Rent expense for the three and nine months ended September 30, 2017 was 330 ($368) and 990 ($1,103), respectively. Rent expense for the three and nine months ended September 30, 2016 was 330 ($368) and 990 ($1,105), respectively. The offices of SkyPharm are located in Greece, Thessaloniki, for which we paid approximately 4,325 ($4,802) per month under a six year lease that commenced September 2014. In December 2015, the lease was revised to include an additional rental of the first floor at a rate of 800 ($886) per month. The lease was further revised in March 2016 to include another additional rental of the first floor at a rate of 800 ($886) per month beginning in May 2016. On May 30, 2016, the lease was revised again to include an additional rental of space at a rate of 1,825 ($2,021) per month beginning in June 2016. On March 23, 2017, SkyPharm entered into an additional three year lease at a rate of 1,250 per month that commenced May 2017. Rent expense for the three and nine months ended September 30, 2017 was 27,000 ($30,094) and 76,000 ($84,710), respectively. Rent expense for the three and nine months ended September 30, 2016 was 23,250 ($25,961) and 57,425 ($64,127), respectively. The offices of Decahedron are located in Flex Meadow, Harlow, for which we pay approximately ₤1,908 ($2,415) per month, under a one year amendment to a lease dated October 25, 2011, which commenced on October 25, 2016. Rent expense from the date of acquisition through September 30, 2017 was ₤15,267 ($19,580). Intellectual Property Sale Agreement On October 1, 2016, the Company entered into an Intellectual Property Sale Agreement with Anastasios Tsekas and Olga Parthenea Georgatsou (the IPSA) for the purchase of certain intellectual property rights relating to proprietary pharmaceutical formulas and any related technical information arising or related thereto (the Intellectual Property). The IPSA provides that the sellers shall be entitled to an aggregate of 2,000,000 shares of common stock of the Company, none of which have been issued to date, and issuable as follows in equal parts to each seller: · 500,000 shares upon the successful conclusion of Preclinical Trials. · 500,000 shares upon the conclusion of Phase I testing. · 500,000 shares upon the conclusion of Phase II testing. · 500,000 shares upon the conclusion of Phase III testing. The Company has agreed to pay Anastasios Tsekas 1,500 per month until the first issuance of the shares referenced above. The Company has also agreed that in the event the Company disposes of the Intellectual Property prior to the periods referenced above, the sellers shall be entitled to the issuance of all the shares referenced above. The Company is in the process of locating a suitable lab to conduct the Preclincal trial phase, which has not yet begun as of the date of filing. Letter of Intent On June 21, 2017, the Company signed a new Letter of Intent (LOI) to acquire the outstanding shares of CC Pharma GmbH, a leading re-importer of EU pharmaceuticals to Germany. Under the terms of the LOI, Cosmos Holdings holds the exclusive right to complete its due diligence process and complete the transaction by October 31, 2017. In connection with the non-binding LOI, the Company is required to pay a non-refundable fee of 400,000 ($454,800) to the shareholders of CC Pharma GmbH in connection with the costs of due diligence and the exclusive right to negotiate the terms of the definitive agreements. On July 6, 2017, the Company paid the 400,000 ($454,800) to CC Pharma GmbH and the Company has recorded an expense of 400,000 ($454,800) for the nine months ended September 30, 2017. The Company did not enter into any definitive agreements by October 31, 2017 and is currently negotiating with CC Pharma for an extension. The Company makes no assurances that the parties will enter into any definitive agreements in the future. Placement Agreement On August 8, 2017, the Company entered into an agreement with a third party placement agent (the Agent) who will serve as the Companys exclusive placement agent or sole book running manager with respect to any offerings of equity or equity-linked securities as well as any debt offering with the two organizations named in the agreement (the Offering) for a period of 120 days. In the event that an Offering is agreed upon by the Agent and the Company, the Company shall provide payment as follows: (1) a cash commission of 6% of the total gross proceeds for two named investors (2) a cash commission of 4% of total gross proceeds from five named investors and (3) excluding the five named investors in (2) a cash commission equal to 8% of the total gross proceeds from the Offering and the issuance to the Agent or its designees of warrants covering 8% of the shares of common stock issued or issuable by the Company in the Offering. Additionally, the Agent will receive a cash fee of 8% payable within 5 business days, but only in the event of, the receipt by the Company of any cash proceeds from the exercise of any warrants with an expiration equal to or less than 24 months sold in the Offering. |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 10 - STOCK OPTIONS AND WARRANTS | On October 1, 2016 the Company granted 120,000 options to an employee of the Company as compensation for being appointed the US Finance Manager of the Company. The options have an exercise period of four years with an exercise price of $.20 per share. In the event that he ceases to work for the Company for any reason, he will be entitled to a pro rata portion of the annual options. The options vest monthly with 120,000 options fully vested as of September 30, 2017. The options were valued at $65,290 using the Black Scholes Option Pricing Model with the following inputs: stock price on measurement date: $0.58; Exercise price: $0.20; Option term: 4 years; Computed volatility: 159%. The Company expensed $16,636 in the year ended December 31, 2016. As of September 30, 2017 the Company has expensed an additional $48,654. On January 1, 2017 the Company entered into an agreement whereby the employee was granted compensation of 1,000 per month and an annual retainer of 250,000 stock options as compensation for being appointed the International Finance Manager of the Company. The options have an exercise period of four years with an exercise price of $0.10. In the event that he ceases to work for the Company for any reason, he will be entitled to a pro rata portion of the annual options. The options vest monthly, with a total of 187,500 options fully vested as of September 30, 2017. The options were valued at $195,307 using the Black Scholes Option Pricing Model with the following inputs: stock price on measurement date: $0.82; Exercise price: $0.10; Option term: 4 years; Computed volatility: 136.76%. The fair value of the options will be amortized over a year with $146,079 expensed during the nine months ended September 30, 2017. On January 3, 2017 the Company determined to create an advisory board and appointed Mr. Orestes Varvitsiotes as its first member. Mr. Varvitsiotes is a registered broker dealer who is currently engaged with Aegis Capital Corp. In connection therewith, the Company entered into an Advisory Board Member Consulting Agreement, dated as of January 3, 2017 whereby an annual retainer of 120,000 stock options was granted as compensation for services. The options have an exercise period of five years with an exercise price of $0.20. In the event that he ceases to work for the Company for any reason, he will be entitled to a pro rata portion of the annual options. The options vest monthly, with a total of 90,000 options fully vested as of September 30, 2017. The options were valued at $94,830 using the Black Scholes Option Pricing Model, with the following inputs: stock price on measurement date: $0.82; Exercise price: $0.20; Option term: 5 years; Computed volatility: 155.37%. The fair value of the options will be amortized over the year with $70,796 expensed during the nine months ended September 30, 2017. A summary of the Companys option activity during the nine months ended September 30, 2017 is presented below: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Shares Price Term Value Balance Outstanding, December 31, 2016 120,000 $ 0.20 3.75 $ 74,400 Granted 370,000 .13 3.58 150,800 Forfeited - - - - Exercised - - - - Expired - - - - Balance Outstanding, September 30, 2017 490,000 $ .15 3.44 191,600 Exercisable, September 30, 2017 397,500 $ .15 3.41 $ 153,900 In connection with a private placement that took place on April 7, 2017, the Company issued warrants at a 1:1 ratio for shares purchased by investors. The warrants were valued using the Black Scholes valuation model. A summary of the Companys warrant activity for the nine months ending September 30, 2017 is as follows: September 30, 2017 Volatility 76.66%-90.86 % Expected term (in years) 1 Risk-free interest rate 1.07% - 1.11 % Expected dividend yield None Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Shares Price Term Value Balance Outstanding, December 31, 2016 - $ - - $ - Granted 100,400 3.00 1 - Forfeited - - - - Exercised - - - - Expired - - - - Balance Outstanding, September 30, 2017 100,400 $ 3.00 .55 $ - Exercisable, September 30, 2017 100,400 $ 3.00 .55 $ - |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 11 - SUBSEQUENT EVENTS | Purchase of Treasury Shares Effective October 2, 2017, the Company entered into to a stock purchase agreement dated September 30, 2017, whereby for consideration of $1,387 the Company purchased 1,386,894 shares of its common stock from a third party investor. The shares were transferred to the Company on October 17, 2017 and will be held in treasury. Reverse Stock Split On October 11, 2017, the Company authorized a one-for-ten (1:10) reverse stock split whereby the Company decreased, by a ratio of one-for-ten (1:10) the number of issued and outstanding shares of Common Stock. The reverse stock split was approved and filed in the state of Nevada, and reported on Form 8-K filed on October 11, 2017; however it had not been approved by FINRA as of the date of filing, and therefore the financial statements are not retroactively restated to reflect the split. The Company anticipates that the reverse split will be effective on November 21, 2017. November 15, 2017 Securities Purchase Agreement On November 15, 2017, the Company entered into a Securities Purchase Agreement (the SPA) with certain institutional investors (the Buyers) with which it had no prior relationship, pursuant to which the Company has agreed to issue for a purchase price of $3,000,000, $3,350,000 in aggregate principal amount of Senior Convertible Notes (the Notes) to the Buyers, convertible into 6,700,000 shares of the Companys common stock, par value $.001 per share (the Common Stock) and warrants to purchase an aggregate of 5,360,003 shares of Common Stock (the Warrants.) The Notes provide that the Company will repay the principal amount of Notes in equal monthly installments beginning on January 1, 2018 and repeating on the first business day of each calendar month thereafter until the fourteenth month anniversary date of issuance (each a Installment Date), and, subject to the Blocker (as defined below), the Company shall pre-deliver up to 6,700,000 shares of Common Stock to the Buyers in connection therewith (the Pre-Delivery Shares). Eighty-five (85%) percent of any cash proceeds received by the Buyers from the sale of Pre-Delivery Shares shall be applied against the particular installment amount due on such Installment Date under the Note. No interest will accrue under the Notes unless and until an Event of Default (as defined) has occurred and is not cured. The Notes are convertible at any time by the Holder into shares of Common Stock at the rate of $0.50 per share, subject to full ratchet anti-dilution adjustment (the Conversion Price). Upon an Event of Default (as defined), the Buyers may convert at an alternative conversion price equal to the lower of the then applicable Conversion Price or seventy-five (75%) percent of the Volume-Weighted Average Price (as defined, the VWAP). The Notes are senior in right of payment to all existing and future indebtedness of the Company except Permitted Indebtedness (as defined in the Note), including $12 million of senior secured indebtedness of the Company and its subsidiaries under an existing senior loan agreement, plus defined amounts of purchase money indebtedness in connection with bona fide acquisitions. The Notes include customary Events of Default and provide that the Buyers may require the Company to redeem (regardless of whether the Event of Default has been cured) all or a portion of the Notes at a redemption premium of one hundred twenty-five (125%) percent, multiplied by the greater of the conversion rate and the then current market price. The Buyers may also require redemption of the Notes upon a Change of Control (as defined) at a premium of one hundred twenty-five (125%) percent. The Warrants have a five year term and are exercisable into a number of shares of Common Stock equal to approximately eighty (80%) percent of the number of shares of Common Stock the Buyers would receive if the Notes were fully converted upon the date of issuance of the Notes. The Warrants are exercisable at $0.75 per share (150% of the conversion price of the Notes) subject to full ratchet anti-dilution protection. The Warrants will be exercisable on a cashless basis if a registration statement is not effective covering the resale of the underlying Warrant Shares. Conversion of the Notes and exercise of the Warrants are each subject to a blocker provision which prevents any holder from converting or exercising, as applicable, the Notes or the Warrants, into shares of Common Stock if its beneficial ownership of the Common Stock would exceed 4.99% (subject to adjustment not to exceed 9.99%) of the Companys issued and outstanding Common Stock (each, a Blocker). The Company is required to file, within thirty (30) days of the Closing, a registration statement covering one hundred fifty (150%) percent of the maximum number of shares, underlying the Notes and Warrants pursuant to a registration rights agreement with the Buyers (the Registration Rights Agreement). As a condition to the closing of the Financing, each Buyer, severally, will be required to execute a leak-out agreement (each, a Leak-Out Agreement) restricting such Buyers sale of shares of Common Stock underlying the Notes and Warrants on any Trading Day to not more than such Buyers pro rata allocation of the greater of (x) sales with net proceeds of an aggregate of $20,000 or (y) twenty-five (25%) percent of the daily average trading volume of the Companys Common Stock. If after the closing of the Financing there is no Event of Default under the Notes, the VWAP of the Companys Common Stock for three (3) trading days is less than $0.15 per share, the Company may further restrict the Buyers from selling at less than $0.15 per share; provided that the portion of the Notes subject to redemption on each Installment Date shall thereafter double. Roth Capital Partners, LLC (Roth), as the Companys exclusive placement agent, will receive a cash commission for this transaction equal to eight (8%) percent of the total gross proceeds of the offering and the issuance of five-year warrants to purchase eight (8%) percent of the shares of Common Stock issued or issuable in this offering (excluding shares of Common Stock issuable upon exercise of any Warrants issued to investors); however, will receive eight (8%) percent of any cash proceeds received from the exercise of any Warrants sold in the offering with an expiration equal to or less than twenty-four (24) months. Amendment of Trade Facility Agreement On November 16, 2017, SkyPharm signed an amended agreement with Synthesis Structured Commodity Trade Finance Limited that increased the maximum aggregate facility limit from 2,000,000 to 6,000,000. All other terms of the original agreement remain the same (see Note 8). |
ORGANIZATION, NATURE OF BUSIN17
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization Nature Of Business And Going Concern Policies | |
Basis of Financial Statement Presentation | The accompanying consolidated financial statements have been prepared in accordance with principles generally accepted in the United States of America. |
Principles of Consolidation | Our consolidated accounts include our accounts and the accounts of our wholly-owned subsidiaries, Amplerissimo Ltd, SkyPharm S.A. and Decahedron Ltd. All significant intercompany balances and transactions have been eliminated. |
Reclassifications to Prior Period Financial Statements and Adjustments | Certain reclassifications have been made in the Companys financial statements of the prior year to conform to the current year presentation. These reclassifications have no impact on previously reported net income. |
Use of Estimates | The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of September 30, 2017 and December 31, 2016, there were no cash equivalents. The Company maintains bank accounts in the United States denominated in U.S. Dollars and in the Republic of Cyprus, in Greece and in Bulgaria all of them denominated in Euros. The Company also maintains bank accounts in the United Kingdom of Great Britain, dominated in Euros and Great Britain Pound (British Pounds Sterling). |
Account Receivable | Accounts receivable are stated at their net realizable value. The allowance for doubtful accounts against gross accounts receivable reflects the best estimate of probable losses inherent in the receivables portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available information. |
Inventory | Inventory is stated at the lower of cost or market value using the weighted average method. Inventory consists primarily of finished goods and packaging materials, i.e. packaged pharmaceutical products and the wrappers and containers they are sold in. A periodic inventory system is maintained by 100% count. Inventory is replaced periodically to maintain the optimum stock on hand available for immediate shipment. We write-down inventories to net realizable value based on forecasted demand and market conditions, which may differ from actual results. |
Fixed Assets | Fixed assets are stated at cost, less accumulated depreciation. Depreciation is provided on a straight-line basis over the useful lives (except for leasehold improvements which are depreciated over the lesser of the lease term or the useful life) of the assets as follows: Estimated Useful Life Furniture and fixtures 5-7 years Office and computer equipment 3-5 years Depreciation expense was $10,831 and $6,956 for the nine months ended September 30, 2017 and 2016, respectively. |
Intangible Assets | Intangible assets with definite useful lives are recorded on the basis of cost and are amortized on a straight-line basis over their estimated useful lives. The Company uses a useful life of 5 years for an import/export license. The Company evaluates the remaining useful life of intangible assets annually to determine whether events and circumstances warrant a revision to the remaining amortization period. If the estimate of the intangible assets remaining useful life is changed, the remaining carrying amount of the intangible asset will be amortized prospectively over that revised remaining useful life. At September 30, 2017, no revision to the remaining amortization period of the intangible assets was made. Amortization expense was $6,368 and $0 for the nine months ended September 30, 2017 and 2016, respectively. |
Impairment of Long-Lived Assets | In accordance with ASC 360-10, Long-lived assets, which include property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the assets expected future discounted cash flows or market value, if readily determinable. |
Goodwill and Intangibles | The Company periodically reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist. Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. Specifically, goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses level 3 inputs and a discounted cash flow methodology to estimate the fair value of a reporting unit. A discounted cash flow analysis requires one to make various judgmental assumptions including assumptions about future cash flows, growth rates, and discount rates. The assumptions about future cash flows and growth rates are based on the Companys budget and long-term plans. Discount rate assumptions are based on an assessment of the risk inherent in the respective reporting units. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting units goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting units goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. Prior to the acquisition of Decahedron, the Company had no record goodwill value. As a result of the acquisition of Decahedron, the Company tested and expensed 100% of the goodwill allocated to the acquisition costs, an amount equal to $1,949,884 for the period ending September 30, 2017. |
Fair Value Measurement | The Company adopted FASB ASC 820-Fair Value Measurements and Disclosures, or ASC 820, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Companys financial position or operating results, but did expand certain disclosures. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. The Company did not have any Level 2 or Level 3 assets or liabilities as of September 30, 2017. Cash is considered to be highly liquid and easily tradable as of September 30, 2017 and therefore classified as Level 1 within our fair value hierarchy. In addition, FASB ASC 825-10-25 Fair Value Option, or ASC 825-10-25, was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments. |
Revenue Recognition | We consider revenue recognizable when persuasive evidence of an arrangement exists, the price is fixed or determinable, goods or services have been delivered, and collectability is reasonably assured. These criteria are assumed to have been met if a customer orders an item, the goods or services have been shipped or delivered to the customer, and we have sufficient evidence of collectability, such a payment history with the customer. Revenue that is billed and received in advance such as recurring weekly or monthly services are initially deferred and recognized as revenue over the period the services are provided. |
Stock-based Compensation | The Company records stock based compensation in accordance with ASC section 718, Stock Compensation and Staff Accounting Bulletin (SAB) No. 107 (SAB 107) issued by the SEC in March 2005 regarding its interpretation of ASC 718. ASC 718 requires the fair value of all stock-based employee compensation awarded to employees to be recorded as an expense over the related requisite service period. The Company values any employee or non-employee stock based compensation at fair value using the Black-Scholes Option Pricing Model. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASC 505-50 Equity-Based Payments to Non-Employees. |
Foreign Currency Translations and Transactions | Assets and liabilities of all foreign operations are translated at year-end rates of exchange, and the statements of operations are translated at the average rates of exchange for the year. Gains or losses resulting from translating foreign currency financial statements are accumulated in a separate component of stockholders equity until the entity is sold or substantially liquidated. Gains or losses from foreign currency transactions (transactions denominated in a currency other than the entitys local currency) are included in net earnings. |
Income Taxes | The Company accounts for income taxes under the asset and liability method, as required by the accounting standard for income taxes ASC 740. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as net operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company is liable for income taxes in the Republic of Cyprus, Greece and the United Kingdom of England. The corporate income tax rate in Cyprus is 12.5%, 29% in Greece (tax losses are carried forward for five years effective January 1, 2013) and 20% in United Kingdom of England. Losses may also be subject to limitation under certain rules regarding change of ownership. We regularly review deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if we do not consider it to be more likely than not that the deferred tax assets will be realized. Our review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets. At September 30, 2017 the Company has maintained a valuation allowance against all net deferred tax assets in each jurisdiction in which it is subject to income tax. We recognize the impact of an uncertain tax position in our financial statements if, in managements judgment, the position is not more-likely-then-not sustainable upon audit based on the positions technical merits. This involves the identification of potential uncertain tax positions, the evaluation of applicable tax laws and an assessment of whether a liability for an uncertain tax position is necessary. As of September 30, 2017 the Company has no uncertain tax positions recorded in any jurisdiction where it is subject to income tax. |
Basic and Diluted Net Income (Loss) per Common Share | Basic and diluted net loss per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the periods presented. The per share amounts include the dilutive effect of common stock equivalents in periods with net income. Basic and diluted loss per share for each of the periods ended September 30, 2017 and 2016 is the same due to the anti-dilutive nature of potential common stock equivalents. |
Recent Accounting Pronouncements | In January 2017, the FASB issued ASU 2017-04, Intangibles Goodwill and Other (Topic 350), which simplifies the measurement of goodwill by eliminating Step 2 from the current goodwill impairment test in the event that there is evidence of an impairment based on qualitative or quantitative assessments. ASU 2017-04 does not change how the goodwill impairment is identified, and the Company will continue to perform a qualitative assessment annually to determine whether the two step impairment test is required. Until the adoption, current accounting standards require the impairment loss to be recognized under Step 2 of the impairment test. This requires the Company to calculate the implied fair value of goodwill by assigning fair value to the reporting units assets and liabilities as if the reporting unit has been acquired in a business combination, then subsequently subtracting the implied goodwill from the carrying amount of the goodwill. The new standard would require the Company to determine the fair value of the reporting unit and subtract the carrying value from the fair value of the reporting unit to determine if there is an impairment. ASU 2017-04 is effective for the Company for fiscal years after December 15, 2019, and early adoption is permitted. ASU 2017-04 is required to be adopted prospectively, and the adoption is effective for annual goodwill impairment tests performed in the year of adoption. The Company does not believe that the adoption of ASU No. 2017-4 will have a material effect on the Companys consolidated financial position or the Companys consolidated results of operations In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business, with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as an acquisition of assets or a business. ASU No. 2017-01 is effective for the Companys fiscal year commencing on January 1, 2018. The effect of this guidance is to be applied prospectively and early adoption is permitted. The Company does not believe that the adoption of ASU No. 2017-01 will have a material effect on the Companys consolidated financial position or the Companys consolidated results of operations. In February 2016, the FASB issued ASU 2016-02, Leases, which will require lessees to recognize assets and liabilities for the rights and obligations created by most leases on the balance sheet. The changes become effective for the Companys fiscal year beginning July 1, 2019. Modified retrospective adoption for all leases existing at, or entered into after, the date of initial application, is required with an option to use certain transition relief. The Company expects this ASU will increase its current assets and current liabilities, but have no net material impact on its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09--Revenue from Contracts with Customers (Topic 606). The guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The FASB delayed the effective date to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. In addition, in March and April 2016, the FASB issued new guidance intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. Both amendments permit the use of either a retrospective or cumulative effect transition method and are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early application permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its financial statements. Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Companys financial statements. |
ORGANIZATION, NATURE OF BUSIN18
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Organization Nature Of Business And Going Concern Tables | |
Schedule of Calculation of Fixed Assets | Estimated Useful Life Furniture and fixtures 5-7 years Office and computer equipment 3-5 years |
ACQUISITION OF DECAHEDRON, LTD
ACQUISITION OF DECAHEDRON, LTD (Table) | 9 Months Ended |
Sep. 30, 2017 | |
Acquisition Of Decahedron Ltd Table | |
Unaudited allocation of purchase price | Preliminary Allocation as of February 10, Allocation Final 2017 Adjustments Allocation Current assets $ 6,537 $ - $ 6,537 Intangible assets 50,000 - 50,000 Other assets 305,400 (216,562 ) 88,838 Total assets acquired 361,937 (216,562 ) 145,375 Liabilities assumed: Debt 804,819 (188,560 ) 616,259 Total liabilities assumed 804,819 (188,560 ) 616,259 Net assets acquired (442,882 ) (28,002 ) (470,884 ) Consideration: Value of Common Stock Issued at Acquisition 1,479,000 - 1,479,000 Goodwill $ 1,921,882 $ 28,002 $ 1,949,884 |
Intangible assets | Amount Useful Life (Years) Licenses (a) $ 50,000 5 $ 50,000 - |
Unaudited Supplemental Pro Forma Data | Nine Months Ended September 30, 2017 2016 Revenues $ 19,968,845 $ 5,007,806 Cost of revenues 18,356,228 4,672,794 Gross profit 1,612,617 335,012 Operating expenses 4,411,620 614,515 Operating loss (2,799,003 ) (279,503 ) Other income (expense) (524,952 ) (238,528 ) Net Loss $ (3,323,955 ) $ (518,031 ) |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stock Options And Warrants Tables | |
Schedule of option activity during the year | Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Shares Price Term Value Balance Outstanding, December 31, 2016 120,000 $ 0.20 3.75 $ 74,400 Granted 370,000 .13 3.58 150,800 Forfeited - - - - Exercised - - - - Expired - - - - Balance Outstanding, September 30, 2017 490,000 $ .15 3.44 191,600 Exercisable, September 30, 2017 397,500 $ .15 3.41 $ 153,900 |
warrants were valued | September 30, 2017 Volatility 76.66%-90.86 % Expected term (in years) 1 Risk-free interest rate 1.07% - 1.11 % Expected dividend yield None |
Warrants | Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Shares Price Term Value Balance Outstanding, December 31, 2016 - $ - - $ - Granted 100,400 3.00 1 - Forfeited - - - - Exercised - - - - Expired - - - - Balance Outstanding, September 30, 2017 100,400 $ 3.00 .55 $ - Exercisable, September 30, 2017 100,400 $ 3.00 .55 $ - |
ORGANIZATION, NATURE OF BUSIN21
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Furniture and Fixtures [Member] | Minimum [Member] | |
Estimated Useful Life | 5 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Estimated Useful Life | 7 years |
Office and computer equipment [Member] | Minimum [Member] | |
Estimated Useful Life | 3 years |
Office and computer equipment [Member] | Maximum [Member] | |
Estimated Useful Life | 5 years |
ORGANIZATION, NATURE OF BUSIN22
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Feb. 10, 2017 | Dec. 31, 2016 | Sep. 27, 2013 | |
State or country of incorporation | Nevada | ||||||
Date of incorporation | Jul. 21, 2009 | ||||||
Net loss | $ (198,171) | $ (94,613) | $ (3,074,179) | $ (277,797) | |||
Working capital deficit | (3,546,938) | (3,546,938) | |||||
Accumulated deficit | $ (4,076,398) | $ (4,076,398) | $ (1,002,219) | ||||
Description for periodic inventory system maintainance | A periodic inventory system is maintained by 100% count | ||||||
Depreciation expense | $ 10,831 | 6,956 | |||||
Intangible asset, useful life | 5 years | ||||||
Amortization of intangible assets | $ 6,368 | $ 0 | |||||
Impairment of goodwill | $ 1,949,884 | ||||||
Impairment of goodwill, percent | 100.00% | ||||||
Amplerissimo Ltd [Member] | |||||||
Equity ownership percentage | 100.00% | ||||||
Stock Purchase Agreement [Member] | Decahedron Ltd [Member] | |||||||
Common stock shares reserved | 1,700,000 | ||||||
Cyprus [Member] | |||||||
Income tax rate | 12.50% | ||||||
Greece [Member] | |||||||
Income tax rate | 29.00% | ||||||
United Kingdom of England [Member] | |||||||
Income tax rate | 20.00% |
ACQUISITION OF DECAHEDRON, LT23
ACQUISITION OF DECAHEDRON, LTD. (Details) | Sep. 30, 2017USD ($) |
Intangible assets | $ 50,000 |
Decahedron Ltd [Member] | Preliminary Allocation as of February 10, 2017 [Member] | |
Current assets | 6,537 |
Intangible assets | 50,000 |
Other assets | 305,400 |
Total assets acquired | 361,937 |
Liabilities assumed: | |
Debt | 804,819 |
Total liabilities assumed | 804,819 |
Net assets acquired | (442,882) |
Consideration: | |
Value of Common Stock Issued at Acquisition | 1,479,000 |
Goodwill | 1,921,882 |
Decahedron Ltd [Member] | Allocation Adjustments [Member] | |
Current assets | |
Intangible assets | |
Other assets | (216,562) |
Total assets acquired | (216,562) |
Liabilities assumed: | |
Debt | (188,560) |
Total liabilities assumed | (188,560) |
Net assets acquired | (28,002) |
Consideration: | |
Value of Common Stock Issued at Acquisition | |
Goodwill | 28,002 |
Decahedron Ltd [Member] | Final Allocation [Member] | |
Current assets | 6,537 |
Intangible assets | 50,000 |
Other assets | 88,838 |
Total assets acquired | 145,375 |
Liabilities assumed: | |
Debt | 616,259 |
Total liabilities assumed | 616,259 |
Net assets acquired | (470,884) |
Consideration: | |
Value of Common Stock Issued at Acquisition | 1,479,000 |
Goodwill | $ 1,949,884 |
ACQUISITION OF DECAHEDRON, LT24
ACQUISITION OF DECAHEDRON, LTD. (Details 1) | 9 Months Ended | |
Sep. 30, 2017USD ($) | ||
Intangible assets | $ 50,000 | |
Useful Life (Years) | 5 years | |
Licenses [Member] | ||
Intangible assets | $ 50,000 | [1] |
[1] | (a) U.K Pharmaceutical Wholesale Distribution License |
ACQUISITION OF DECAHEDRON, LT25
ACQUISITION OF DECAHEDRON, LTD. (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Cost of revenues | $ 8,772,138 | $ 1,269,553 | $ 18,156,795 | $ 3,192,472 |
Gross profit | 774,813 | 144,950 | 1,618,603 | 314,332 |
Operating expenses | 758,365 | 175,919 | 4,383,623 | 473,249 |
Operating loss | $ 16,448 | $ (30,969) | (2,765,020) | (158,917) |
Decahedron Ltd [Member] | Proforma [Member] | ||||
Revenues | 19,968,845 | 5,007,806 | ||
Cost of revenues | 18,356,228 | 4,672,794 | ||
Gross profit | 1,612,617 | 335,012 | ||
Operating expenses | 4,411,620 | 614,515 | ||
Operating loss | (2,799,003) | (279,503) | ||
Other income (expense) | (524,952) | (238,528) | ||
Net Loss | $ (3,323,955) | $ (518,031) |
ACQUISITION OF DECAHEDRON, LT26
ACQUISITION OF DECAHEDRON, LTD. (Details Narrative) | 9 Months Ended |
Sep. 30, 2017USD ($)Integershares | |
Business acquisition, name of acquired entity | DECAHEDRON, LTD |
Business acquisition outstanding percentage | 100.00% |
Number of businesses acquired | Integer | 1 |
Business acquisition outstanding shares value | $ 1,479,000 |
Business acquisition outstanding shares in exchange | shares | 1,700,000 |
Adjustment related to other assets and accounts payable | $ 28,002 |
Impairment of goodwill | $ 1,949,884 |
Impairment of goodwill, percent | 100.00% |
Acquisition [Member] | |
Revenues | $ 2,622,547 |
Net Loss | $ 255,672 |
PREPAID DEFERRED FINANCING CO27
PREPAID DEFERRED FINANCING COSTS (Details Narrative) - USD ($) | Sep. 30, 2017 | Aug. 30, 2017 | Feb. 28, 2016 |
Advanced for additional financing | $ 147,662 | ||
Synthesis Management Limited [Member] | |||
Advanced for additional financing | $ 213,627 | $ 213,627 | $ 133,725 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Income Taxes Details Narrative | |
Income tax, penalties and interest expense | $ 63,724 |
CAPITAL STRUCTURE (Details Narr
CAPITAL STRUCTURE (Details Narrative) - USD ($) | Apr. 10, 2017 | Apr. 07, 2017 | Mar. 01, 2017 | Jul. 21, 2017 | May 25, 2017 | May 18, 2017 | May 16, 2017 | Apr. 26, 2017 | May 25, 2017 | May 24, 2017 | Sep. 30, 2017 | Feb. 10, 2017 | Dec. 31, 2016 |
Common stock, shares issued | 128,253,932 | 125,870,532 | |||||||||||
Common stock, shares, outstanding | 128,253,932 | 125,870,532 | |||||||||||
Common stock shares authorized | 300,000,000 | 300,000,000 | |||||||||||
Preferred stock shares authorized | 100,000,000 | 100,000,000 | |||||||||||
Common stock vlaue | $ 128,254 | $ 125,871 | |||||||||||
Private investor [Member] | Subscription Arrangement [Member] | |||||||||||||
Stock options granted | 45,800 | 46,700 | |||||||||||
Price per share | $ 0.70 | $ .50 | $ 0.70 | $ 0.70 | |||||||||
Common stock value | $ 32,060 | $ 21,500 | $ 5,530 | $ 32,690 | |||||||||
Common Stock Shares Subscribed | 45,800 | 43,000 | 7,900 | 46,700 | |||||||||
Stock options granted fair value | $ 2,375 | $ 130 | $ 1,521 | ||||||||||
ArKo European Business & Services [Member] | Consulting agreement Four [Member] | |||||||||||||
Common stock, shares issued | 200,000 | 200,000 | |||||||||||
Commencing agreement date | May 25, 2017 | ||||||||||||
Consulting agreement period | 20 months | ||||||||||||
Common stock vlaue | $ 154,000 | $ 154,000 | |||||||||||
Price per share | $ .77 | $ .77 | |||||||||||
Consultant charges | $ 32,874 | ||||||||||||
ArKo European Business & Services [Member] | Consulting agreement Three [Member] | |||||||||||||
Common stock, shares issued | 300,000 | ||||||||||||
Commencing agreement date | May 8, 2017 | ||||||||||||
Consulting agreement period | 1 year | ||||||||||||
Common stock vlaue | $ 219,000 | ||||||||||||
Monthly consultant charges | $ 5,000 | ||||||||||||
ArKo European Business & Services [Member] | Consulting Agreement Two [Member] | |||||||||||||
Common stock, shares issued | 20,000 | 20,000 | |||||||||||
Commencing agreement date | May 1, 2017 | ||||||||||||
Consulting agreement period | 5 months | ||||||||||||
Common stock vlaue | $ 14,400 | $ 14,400 | |||||||||||
Price per share | $ .72 | $ .72 | |||||||||||
ArKo European Business & Services [Member] | Consulting Agreement one [Member] | |||||||||||||
Common stock, shares issued | 20,000 | ||||||||||||
Commencing agreement date | May 1, 2017 | ||||||||||||
Commencing terminating date | Jan. 1, 2018 | ||||||||||||
Consulting agreement period | 8 months | ||||||||||||
Common stock vlaue | $ 14,400 | ||||||||||||
ArKo European Business & Services [Member] | Consulting Agreement [Member] | |||||||||||||
Restricted shares of common stock | 5,000 | ||||||||||||
Decahedron Ltd [Member] | Stock Purchase Agreement [Member] | |||||||||||||
Common stock shares reserved | 1,700,000 | ||||||||||||
Potentially dilutive securities [Member] | Employee [Member] | On January 3, 2017 [Member] | |||||||||||||
Stock options granted | 120,000 | ||||||||||||
Exercise period | 5 years | ||||||||||||
Exercise price | $ 0.20 | ||||||||||||
Stock options vested | 90,000 | ||||||||||||
Potentially dilutive securities [Member] | Employee [Member] | On January 1, 2017 [Member] | |||||||||||||
Stock options granted | 250,000 | ||||||||||||
Exercise period | 4 years | ||||||||||||
Exercise price | $ 0.10 | ||||||||||||
Stock options vested | 187,500 | ||||||||||||
Potentially dilutive securities [Member] | Employee [Member] | On October 1, 2016 [Member] | |||||||||||||
Stock options granted | 120,000 | ||||||||||||
Exercise period | 4 years | ||||||||||||
Exercise price | $ 0.20 | ||||||||||||
Stock options vested | 120,000 | ||||||||||||
Potentially dilutive securities [Member] | Private Placement [Member] | |||||||||||||
Stock options granted | 50,000 | ||||||||||||
Common stock vlaue | $ 35,000 | ||||||||||||
Stock options granted fair value | $ 35,000 | ||||||||||||
Post Merger [Member] | |||||||||||||
Common stock, shares issued | 125,585,532 | ||||||||||||
Common stock, shares, outstanding | 125,585,532 | ||||||||||||
Prior to merger [Member] | |||||||||||||
Common stock, shares issued | 25,585,532 | ||||||||||||
Equity issued in merger [Member] | Restricted Stock [Member] | Amplerissimo Ltd [Member] | Exchange agreement [Member] | |||||||||||||
Common stock, shares issued | 100,000,000 | ||||||||||||
Dimitrios Goulielmos [Member] | Restricted Stock [Member] | Amplerissimo Ltd [Member] | Exchange agreement [Member] | |||||||||||||
Restricted shares of common stock | 100,000,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | Nov. 04, 2015USD ($) | Nov. 21, 2014USD ($) | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)shares | Sep. 30, 2017EUR (€)shares | Nov. 04, 2015EUR (€) | Jul. 22, 2009shares |
Shares issued | shares | 128,253,932 | 125,870,532 | 128,253,932 | |||||
Repayment of related party debt | $ 232,051 | $ 21,914 | ||||||
Officers and directors [Member] | ||||||||
Shares issued | shares | 20,000,000 | |||||||
Dimitrios Goulielmos [Member] | ||||||||
Aggregate forgiveness of related party notes | $ 142,860 | |||||||
Debt instrument decrease accrued interest forgiveness | $ 806 | |||||||
Due to related party | $ 401,115 | € 200,000 | ||||||
Debt outstanding amount | 102,182 | |||||||
Repayment of related party debt | 63,200 | $ 63,312 | ||||||
Interest rate | 2.00% | |||||||
Maturity date | May 11, 2015 | |||||||
Accrued interest | € | € 0 | |||||||
Dimitrios Goulielmos [Member] | MediHelm S.A. [Member] | ||||||||
Due to related party | 220,988 | |||||||
Konstantinos Vassilopoulos [Member] | ||||||||
Debt outstanding amount | 369 | |||||||
Repayment of related party debt | 9,810 | |||||||
Payment of miscellaneous bills | 10,179 | |||||||
Ourania Matsouki [Member] | ||||||||
Due to related party | 64,982 | 47,479 | ||||||
Debt outstanding amount | 31,373 | |||||||
Repayment of related party debt | 86,751 | |||||||
Mr. Siokas [Member] | ||||||||
Prepaid balance | 70,459 | |||||||
Grigorios Siokas [Member] | ||||||||
Debt outstanding amount | 7,088 | |||||||
Short term debt, borrowing capacity | 1,181 | |||||||
Grigorios Siokas [Member] | On October 1, 2016 [Member] | ||||||||
Due to related party | $ 5,276 | |||||||
Maturity date | Oct. 1, 2017 | |||||||
Grigorios Siokas [Member] | Loan payable [Member] | ||||||||
Due to related party | $ 559,488 | 95,496 | ||||||
Debt outstanding amount | 521,096 | |||||||
Repayment of related party debt | 145,300 | |||||||
DOC Pharma S.A. [Member] | ||||||||
Prepaid balance | $ 410,991 | |||||||
Description for prepaid balance percentage | over 10.3% of the Companys total prepaid balance | |||||||
Due to related party | $ 69 | |||||||
DOC Pharma S.A. [Member] | Loan agreement [Member] | ||||||||
Debt outstanding amount | $ 14,176 | |||||||
Accrued interest | 612 | |||||||
DOC Pharma S.A. [Member] | On November 1, 2015 [Member] | Loan agreement [Member] | ||||||||
Short term debt, borrowing capacity | 12,662 | |||||||
Payment of miscellaneous bills | $ 12,000 | |||||||
Interest rate | 2.00% | |||||||
Maturity date | Oct. 31, 2016 |
DEBT (Details Narrative)
DEBT (Details Narrative) | May 12, 2017USD ($) | May 05, 2017USD ($) | Apr. 10, 2017USD ($) | Mar. 16, 2017USD ($) | Aug. 04, 2016USD ($)shares | Mar. 04, 2016USD ($) | Feb. 05, 2016USD ($) | Nov. 05, 2015USD ($) | Mar. 04, 2015USD ($) | Mar. 23, 2017USD ($)shares | Mar. 20, 2017USD ($) | Dec. 31, 2016USD ($) | Oct. 18, 2016USD ($) | May 24, 2016USD ($) | Apr. 22, 2016USD ($) | Apr. 19, 2016USD ($) | Nov. 16, 2015USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2017EUR (€) | Dec. 31, 2016USD ($) | Jul. 31, 2017USD ($) | Jan. 31, 2017USD ($) | Nov. 30, 2016USD ($) | Oct. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 13, 2016USD ($) | May 04, 2016USD ($) | Dec. 31, 2015USD ($) |
SkyPharm [Member] | ||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 2,282,200 | $ 6,162,736 | ||||||||||||||||||||||||||
Description for the repayment | The total facility will be calculated as 95% of the agreed upon value of Decahedrons receivables. | |||||||||||||||||||||||||||
Amortization of debt discount | 34,881 | |||||||||||||||||||||||||||
Term of credit facility | 12 months | |||||||||||||||||||||||||||
Credit facilty origination fee, percentage | 2.00% | |||||||||||||||||||||||||||
Monthly credit fee, percentage | 1.00% | |||||||||||||||||||||||||||
Monthly fees | 201,661 | |||||||||||||||||||||||||||
Origination fees | € | € 104,338 | |||||||||||||||||||||||||||
Grigorios Siokas [Member] | ||||||||||||||||||||||||||||
Short term debt borrowing capacity | 1,181 | |||||||||||||||||||||||||||
Debt outstanding amount | 7,088 | |||||||||||||||||||||||||||
Bridge Loans [Member] | SkyPharm [Member] | ||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 34,745 | $ 50,000 | $ 118,130 | |||||||||||||||||||||||||
Interest rate | 10.00% | 10.00% | 10.00% | |||||||||||||||||||||||||
Maturity date | Sep. 30, 2017 | Apr. 16, 2017 | Apr. 20, 2017 | |||||||||||||||||||||||||
Amended maturity date | May 16, 2017 | May 20, 2017 | ||||||||||||||||||||||||||
Debt outstanding amount | $ 34,745 | $ 50,000 | $ 118,130 | |||||||||||||||||||||||||
Accrued interest | $ 1,418 | $ 4,518 | $ 8,665 | |||||||||||||||||||||||||
Second amendment to loan facility agreement [Member] | SkyPharm [Member] | ||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 2,664,960 | $ 452,471 | $ 452,471 | $ 342,327 | $ 155,516 | $ 250,000 | $ 100,000 | $ 174,000 | ||||||||||||||||||||
Interest rate | 10.00% | |||||||||||||||||||||||||||
Maturity date | Aug. 4, 2016 | |||||||||||||||||||||||||||
Debt outstanding amount | 3,007,287 | |||||||||||||||||||||||||||
Accrued interest | 143,761 | |||||||||||||||||||||||||||
Description for the repayment | The amounts owed under the A&R Loan Facility shall be repayable upon the earlier of (i) seventy five days following the demand of the Lender; or (ii) August 31, 2018. | |||||||||||||||||||||||||||
Common stock shares reserved | shares | 10,000,000 | |||||||||||||||||||||||||||
Debt discount | 141,756 | 141,756 | ||||||||||||||||||||||||||
Amortization of debt discount | 52,796 | 14,507 | ||||||||||||||||||||||||||
Amendment to loan facility agreement [Member] | SkyPharm [Member] | ||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 1,533,020 | |||||||||||||||||||||||||||
Debt outstanding amount | $ 240,251 | |||||||||||||||||||||||||||
Loan facility agreement [Member] | SkyPharm [Member] | ||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 1,292,769 | |||||||||||||||||||||||||||
Interest rate | 10.00% | |||||||||||||||||||||||||||
Description for the repayment | The amounts owed under the Loan Facility shall be repayable upon the earlier of (i) three months following the demand of the lender; or (ii) August 31, 2018. No prepayment is permitted pursuant to the terms of the Loan Facility | |||||||||||||||||||||||||||
Loan facility agreement [Member] | Grigorios Siokas [Member] | Synthesis facility agreement [Member] | ||||||||||||||||||||||||||||
Common stock shares reserved | shares | 10,000,000 | |||||||||||||||||||||||||||
Loan Agreement 11 [Member] | ||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 10,552 | |||||||||||||||||||||||||||
Interest rate | 10.00% | |||||||||||||||||||||||||||
Maturity date | Oct. 18, 2017 | |||||||||||||||||||||||||||
Accrued interest | 283 | |||||||||||||||||||||||||||
Repayment of debt | 11,813 | |||||||||||||||||||||||||||
Loan Agreement 10 [Member] | ||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 52,760 | |||||||||||||||||||||||||||
Interest rate | 6.00% | |||||||||||||||||||||||||||
Maturity date | May 24, 2017 | |||||||||||||||||||||||||||
Accrued interest | 3,305 | |||||||||||||||||||||||||||
Repayment of debt | 59,065 | |||||||||||||||||||||||||||
Loan Agreement 9 [Member] | ||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 40,098 | |||||||||||||||||||||||||||
Interest rate | 6.00% | |||||||||||||||||||||||||||
Maturity date | Apr. 22, 2017 | |||||||||||||||||||||||||||
Accrued interest | 2,099 | |||||||||||||||||||||||||||
Loan Agreement 8 [Member] | ||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 105,520 | |||||||||||||||||||||||||||
Interest rate | 6.00% | |||||||||||||||||||||||||||
Maturity date | Apr. 19, 2017 | |||||||||||||||||||||||||||
Accrued interest | 3,662 | |||||||||||||||||||||||||||
Loan Agreement 7 [Member] | ||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 52,760 | $ 52,760 | ||||||||||||||||||||||||||
Interest rate | 6.00% | |||||||||||||||||||||||||||
Maturity date | Mar. 4, 2017 | |||||||||||||||||||||||||||
Accrued interest | 886 | |||||||||||||||||||||||||||
Loan Agreement 6 [Member] | ||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 21,104 | |||||||||||||||||||||||||||
Interest rate | 6.00% | |||||||||||||||||||||||||||
Accrued interest | 1,204 | |||||||||||||||||||||||||||
Loan Agreement 5 [Member] | Panagiotis Drakopoulos [Member] | ||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 32,718 | |||||||||||||||||||||||||||
Repayment of debt | 20,082 | 13,718 | ||||||||||||||||||||||||||
Loan Agreement 4 [Member] | Panagiotis Drakopoulos [Member] | ||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 43,624 | |||||||||||||||||||||||||||
Interest rate | 6.00% | |||||||||||||||||||||||||||
Maturity date | Nov. 15, 2016 | |||||||||||||||||||||||||||
Debt outstanding amount | 35,439 | |||||||||||||||||||||||||||
Accrued interest | 4,801 | |||||||||||||||||||||||||||
Repayment of debt | 11,813 | |||||||||||||||||||||||||||
Loan Agreement 3 [Member] | ||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 87,248 | |||||||||||||||||||||||||||
Proceeds from debt | 76,342 | |||||||||||||||||||||||||||
Interest rate | 5.00% | |||||||||||||||||||||||||||
Maturity date | Nov. 5, 2016 | |||||||||||||||||||||||||||
Debt outstanding amount | 68,588 | $ 68,588 | ||||||||||||||||||||||||||
Repayment of debt | 64,972 | |||||||||||||||||||||||||||
Repayments of accounts receivable | 11,813 | |||||||||||||||||||||||||||
Loan Agreement 2 [Member] | ||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 21,812 | |||||||||||||||||||||||||||
Proceeds from debt | 10,906 | |||||||||||||||||||||||||||
Interest rate | 1.00% | |||||||||||||||||||||||||||
Maturity date | Nov. 5, 2016 | |||||||||||||||||||||||||||
Debt outstanding amount | 11,813 | |||||||||||||||||||||||||||
Accrued interest | 514 | |||||||||||||||||||||||||||
Repayment of debt | $ 2,110 | 9,450 | ||||||||||||||||||||||||||
Loan Agreement 1 [Member] | Angelo Drakopoulos [Member] | ||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 9,000 | |||||||||||||||||||||||||||
Repayments of outstanding bill | $ 9,000 | |||||||||||||||||||||||||||
Interest rate | 8.00% | |||||||||||||||||||||||||||
Maturity date | May 5, 2016 | |||||||||||||||||||||||||||
Debt outstanding amount | 9,000 | |||||||||||||||||||||||||||
Accrued interest | $ 1,345 | |||||||||||||||||||||||||||
Decahedron [member] | SkyPharm [Member] | ||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 2,941,950 | |||||||||||||||||||||||||||
Description for the repayment | The total facility will be calculated as 95% of the agreed upon value of Decahedrons receivables | |||||||||||||||||||||||||||
Term of credit facility | 12 months | |||||||||||||||||||||||||||
Credit facilty origination fee, percentage | 2.00% | |||||||||||||||||||||||||||
Monthly credit fee, percentage | 1.00% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | Aug. 08, 2017 | May 31, 2017EUR (€) | Oct. 25, 2016USD ($) | Jun. 30, 2016USD ($) | May 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jan. 31, 2015USD ($) | Sep. 30, 2014USD ($) | Aug. 31, 2012USD ($) | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($) | Jun. 21, 2016USD ($) |
Operating lease periodic payment | $ 730 | $ 709 | |||||||||||||
Frequency of periodic payment | Monthly | Monthly | |||||||||||||
Operating lease rental expense | $ 2,126 | $ 2,126 | $ 6,377 | $ 2,834 | |||||||||||
Operating lease expiration date | Nov. 30, 2015 | ||||||||||||||
Decahedron [member] | |||||||||||||||
Operating lease periodic payment | $ 2,415 | ||||||||||||||
Operating lease rental expense | 19,580 | ||||||||||||||
Term of operating lease | 1 year | ||||||||||||||
Private Placement [Member] | |||||||||||||||
Commitments and contingencies description | (1) a cash commission of 6% of the total gross proceeds for two named investors (2) a cash commission of 4% of total gross proceeds from five named investors and (3) excluding the five named investors in (2) a cash commission equal to 8% of the total gross proceeds from the Offering and the issuance to the Agent or its designees of warrants covering 8% of the shares of common stock issued or issuable by the Company in the Offering. Additionally, the Agent will receive a cash fee of 8% payable within 5 business days, but only in the event of, the receipt by the Company of any cash proceeds from the exercise of any warrants with an expiration equal to or less than 24 months sold in the Offering | ||||||||||||||
CC Pharma GmbH [Member] | |||||||||||||||
Non-refundable fee | $ 454,800 | ||||||||||||||
Expense paid | 454,800 | ||||||||||||||
Anastasios Tsekas and Olga Parthenea Georgatsou [Member] | Intellectual property sale agreement [Member] | On October 1, 2016 [Member] | |||||||||||||||
Operating lease periodic payment | $ 1,500 | ||||||||||||||
Common stock shares reserved | shares | 2,000,000 | 2,000,000 | |||||||||||||
Anastasios Tsekas and Olga Parthenea Georgatsou [Member] | Intellectual property sale agreement [Member] | On October 1, 2016 [Member] | Conclusion of Phase III testing [Member] | |||||||||||||||
Common stock shares reserved | shares | 500,000 | 500,000 | |||||||||||||
Anastasios Tsekas and Olga Parthenea Georgatsou [Member] | Intellectual property sale agreement [Member] | On October 1, 2016 [Member] | Conclusion of Phase II testing [Member] | |||||||||||||||
Common stock shares reserved | shares | 500,000 | 500,000 | |||||||||||||
Anastasios Tsekas and Olga Parthenea Georgatsou [Member] | Intellectual property sale agreement [Member] | On October 1, 2016 [Member] | conclusion of Phase I testing [Member] | |||||||||||||||
Common stock shares reserved | shares | 500,000 | 500,000 | |||||||||||||
Anastasios Tsekas and Olga Parthenea Georgatsou [Member] | Intellectual property sale agreement [Member] | On October 1, 2016 [Member] | Conclusion of Preclinical Trials [Member] | |||||||||||||||
Common stock shares reserved | shares | 500,000 | 500,000 | |||||||||||||
SkyPharm [Member] | |||||||||||||||
Operating lease periodic payment | € 1,250 | $ 4,802 | |||||||||||||
Operating lease rental expense | $ 30,094 | 25,961 | $ 84,710 | 64,127 | |||||||||||
Term of operating lease | 6 years | ||||||||||||||
SkyPharm [Member] | Additional space [Member] | |||||||||||||||
Operating lease periodic payment | $ 2,021 | $ 886 | |||||||||||||
SkyPharm [Member] | First Floor [Member] | |||||||||||||||
Operating lease periodic payment | $ 886 | ||||||||||||||
Amplerissimo [Member] | |||||||||||||||
Operating lease periodic payment | $ 122 | ||||||||||||||
Frequency of periodic payment | Monthly | ||||||||||||||
Operating lease rental expense | $ 368 | $ 368 | $ 1,105 | $ 1,103 | |||||||||||
Operating lease expiration date | Jul. 31, 2013 | ||||||||||||||
Operating lease renewal date | Jul. 31, 2015 |
STOCK OPTIONS AND WARRANTS (Det
STOCK OPTIONS AND WARRANTS (Details) - Options [Member] | 9 Months Ended |
Sep. 30, 2017USD ($)$ / sharesshares | |
Number of Shares | |
Outstanding, December 31, 2016 | shares | 120,000 |
Granted | shares | 370,000 |
Forfeited | shares | |
Exercised | shares | |
Expired | shares | |
Outstanding, September 30, 2017 | shares | 490,000 |
Exercisable at September 30, 2017 | shares | 397,500 |
Weighted Average Exercise Price | |
Outstanding, December 31, 2016 | $ / shares | $ 0.20 |
Granted | $ / shares | 0.13 |
Forfeited | $ / shares | |
Exercised | $ / shares | |
Expired | $ / shares | |
Outstanding, September 30, 2017 | $ / shares | 0.15 |
Exercisable at September 30, 2017 | $ / shares | $ 0.15 |
Weighted Average Remaining Contractual Term | |
Outstanding, December 31, 2016 | 3 years 9 months |
Granted | 3 years 6 months 29 days |
Outstanding, September 30, 2017 | 3 years 5 months 9 days |
Exercisable at September 30, 2017 | 3 years 4 months 28 days |
Aggregate Intrinsic Value | |
Outstanding, December 31, 2016 | $ | $ 74,400 |
Granted | $ | 150,800 |
Forfeited | $ | |
Exercised | $ | |
Expired | $ | |
Outstanding, September 30, 2017 | $ | 191,600 |
Exercisable at September 30, 2017 | $ | $ 153,900 |
STOCK OPTIONS AND WARRANTS (D34
STOCK OPTIONS AND WARRANTS (Details 1) | 9 Months Ended |
Sep. 30, 2017 | |
Expected term (in years) | 1 year |
Expected dividend yield | |
Minimum [Member] | |
Volatility | 76.66% |
Risk-free interest rate | 1.07% |
Maximum [Member] | |
Volatility | 90.86% |
Risk-free interest rate | 1.11% |
STOCK OPTIONS AND WARRANTS (D35
STOCK OPTIONS AND WARRANTS (Details 2) - Warrant [Member] | 9 Months Ended |
Sep. 30, 2017USD ($)$ / sharesshares | |
Number of Shares | |
Outstanding, December 31, 2016 | shares | |
Granted | shares | 100,400 |
Forfeited | shares | |
Exercised | shares | |
Expired | shares | |
Outstanding, September 30, 2017 | shares | 100,400 |
Exercisable at September 30, 2017 | shares | 100,400 |
Weighted Average Exercise Price | |
Outstanding, December 31, 2016 | $ / shares | |
Granted | $ / shares | 3 |
Forfeited | $ / shares | |
Exercised | $ / shares | |
Expired | $ / shares | |
Outstanding, September 30, 2017 | $ / shares | 3 |
Exercisable at September 30, 2017 | $ / shares | $ 3 |
Weighted Average Remaining Contractual Term | |
Granted | 1 year |
Outstanding, September 30, 2017 | 6 months 18 days |
Exercisable at September 30, 2017 | 6 months 18 days |
Aggregate Intrinsic Value | |
Outstanding, December 31, 2016 | $ | |
Granted | $ | |
Forfeited | $ | |
Exercised | $ | |
Expired | $ | |
Outstanding, September 30, 2017 | $ | |
Exercisable at September 30, 2017 | $ |
STOCK OPTIONS AND WARRANTS (D36
STOCK OPTIONS AND WARRANTS (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2017 | |
Investor [Member] | |||
Warrants issued ratio description | 1:1 ratio for shares | ||
Stock Option [Member] | Aegis capital corp [Member] | |||
Amortization expense | $ 70,796 | ||
Stock Option [Member] | Mr. Orestes Varvitsiotes [member] | January 3, 2017 [Member] | |||
Stock options granted | 120,000 | ||
Exercise period | 5 years | ||
Exercise price | $ 0.20 | ||
Stock options value | $ 94,830 | ||
Stock price | $ 0.82 | ||
Exercise price | $ 0.20 | ||
Option term | 5 years | ||
Volatility rate | 155.37% | ||
Stock option periodic vesting | 90,000 | ||
Stock Option [Member] | Employee [Member] | January 1, 2017 [Member] | |||
Stock price | $ 0.82 | ||
Exercise price | $ 0.10 | ||
Stock option periodic vesting | 187,500 | ||
Share based compensation as annual retainer | 250,000 | ||
Stock Option [Member] | Employee [Member] | On January 1, 2017 [Member] | |||
Exercise period | 4 years | ||
Exercise price | $ 0.10 | ||
Stock options value | $ 195,307 | ||
Option term | 4 years | ||
Volatility rate | 136.76% | ||
Consideration under agreement | $ 1,000 | ||
Stock Option [Member] | Employee [Member] | On October 1, 2016 [Member] | |||
Stock price | $ 0.58 | ||
Exercise price | $ 0.20 | ||
Stock Option [Member] | International Finance Manager [Member] | |||
Amortization expense | $ 146,079 | ||
Stock Option [Member] | US Finance Manager [Member] | |||
Amortization expense | $ 48,654 | $ 16,636 | |
Stock option periodic vesting | 120,000 | ||
Stock Option [Member] | US Finance Manager [Member] | On October 1, 2016 [Member] | |||
Stock options granted | 120,000 | ||
Exercise period | 4 years | ||
Exercise price | $ 0.20 | ||
Stock options value | $ 65,290 | ||
Option term | 4 years | ||
Volatility rate | 159.00% | ||
Frequency of periodic vesting | Monthly |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Oct. 11, 2017 | Oct. 02, 2017 | Nov. 15, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Common stock, par value | $ 0.001 | $ 0.001 | |||
Subsequent Event [Member] | |||||
Reverse stock split | (1:10) | ||||
Subsequent Event [Member] | Trade Facility Agreement [Member] | |||||
Credit facility maximum borrowing capacity | $ 2,000,000 | ||||
Amendment to credit facility maximum borrowing capacity | $ 6,000,000 | ||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Warrants [Member] | |||||
Common stock shares issuable upon conversion of debt/convertible securities | 5,360,003 | ||||
Maturity period | 5 years | ||||
Convertible securities, terms of conversion feature | The Warrants have a five year term and are exercisable into a number of shares of Common Stock equal to approximately eighty (80%) percent of the number of shares of Common Stock the Buyers would receive if the Notes were fully converted upon the date of issuance of the Notes. The Warrants are exercisable at $0.75 per share (150% of the conversion price of the Notes) subject to full ratchet anti-dilution protection | ||||
Terms of Blocker Provision | Blocker provision which prevents any holder from converting or exercising, as applicable, the Notes or the Warrants, into shares of Common Stock if its beneficial ownership of the Common Stock would exceed 4.99% (subject to adjustment not to exceed 9.99%) of the Company's issued and outstanding Common Stock (each, a "Blocker") | ||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Warrants [Member] | Registration Rights Agreement [Member] | |||||
Terms of agreement | The Company is required to file, within thirty (30) days of the Closing, a registration statement covering one hundred fifty (150%) percent of the maximum number of shares, underlying the Notes and Warrants pursuant to a registration rights agreement with the Buyers (the "Registration Rights Agreement") | ||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Warrants [Member] | Leak-out Agreement [Member] | |||||
Terms of agreement | As a condition to the closing of the Financing, each Buyer, severally, will be required to execute a leak-out agreement (each, a "Leak-Out Agreement") restricting such Buyer's sale of shares of Common Stock underlying the Notes and Warrants on any Trading Day to not more than such Buyer's pro rata allocation of the greater of (x) sales with net proceeds of an aggregate of $20,000 or (y) twenty-five (25%) percent of the daily average trading volume of the Company's Common Stock. If after the closing of the Financing there is no Event of Default under the Notes, the VWAP of the Company's Common Stock for three (3) trading days is less than $0.15 per share, the Company may further restrict the Buyers from selling at less than $0.15 per share | ||||
Conditional proceeds from sale of common stock under the agreement | $ 20,000 | ||||
Terms of commission to placement agent | Placement agent will receive a cash commission for this transaction equal to eight (8%) percent of the total gross proceeds of the offering and the issuance of five-year warrants to purchase eight (8%) percent of the shares of Common Stock issued or issuable in this offering (excluding shares of Common Stock issuable upon exercise of any Warrants issued to investors); however, will receive eight (8%) percent of any cash proceeds received from the exercise of any Warrants sold in the offering with an expiration equal to or less than twenty-four (24) months | ||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Senior Convertible Notes [Member] | |||||
Common stock shares issuable upon conversion of debt/convertible securities | 6,700,000 | ||||
Common stock, par value | $ 0.001 | ||||
Repayment of convertible notes, description | The Notes provide that the Company will repay the principal amount of Notes in equal monthly installments beginning on January 1, 2018 and repeating on the first business day of each calendar month thereafter until the fourteenth month anniversary date of issuance | ||||
Event of default, description | The Company shall pre-deliver up to 6,700,000 shares of Common Stock to the Buyers in connection therewith (the 'Pre-Delivery Shares'). Eighty-five (85%) percent of any cash proceeds received by the Buyers from the sale of Pre-Delivery Shares shall be applied against the particular installment amount due on such Installment Date under the Note. No interest will accrue under the Notes unless and until an Event of Default (as defined) has occurred and is not cured | ||||
Conversion Price | $ 0.50 | ||||
Event of default converstion price, description | Upon an Event of Default (as defined), the Buyers may convert at an alternative conversion price equal to the lower of the then applicable Conversion Price or seventy-five (75%) percent of the Volume-Weighted Average Price (as defined, the "VWAP") | ||||
Amount of senior secured indebtness | $ 12,000,000 | ||||
Customary events of default, description | The Notes include customary Events of Default and provide that the Buyers may require the Company to redeem (regardless of whether the Event of Default has been cured) all or a portion of the Notes at a redemption premium of one hundred twenty-five (125%) percent, multiplied by the greater of the conversion rate and the then current market price. The Buyers may also require redemption of the Notes upon a Change of Control (as defined) at a premium of one hundred twenty-five (125%) percent | ||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Senior Convertible Note 1 [Member] | Institutional investors [Member] | |||||
Convertible notes payable, principal amount | $ 3,000,000 | ||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Senior Convertible Note 2 [Member] | Institutional investors [Member] | |||||
Convertible notes payable, principal amount | $ 3,350,000 | ||||
Subsequent Event [Member] | Stock Purchase Agreement [Member] | Investor [Member] | |||||
Common stock shares acquired for consideration, value | $ 1,387 | ||||
Common stock shares acquired for consideration, shares | 1,386,894 |