Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 13, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | Cosmos Holdings Inc. | |
Entity Central Index Key | 0001474167 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Sep. 30, 2020 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Entity Common Stock Shares Outstanding | 12,840,059 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 1,081,631 | $ 38,537 |
Accounts receivable, net | 17,448,886 | 7,348,945 |
Accounts receivable - related party | 2,277,571 | 1,919,043 |
Marketable securities | 211,248 | 238,940 |
Inventory | 4,202,180 | 3,474,220 |
Prepaid expenses and other current assets | 6,826,508 | 1,553,436 |
Prepaid expenses and other current assets - related party | 3,227,853 | 5,940,124 |
Operating lease right-of-use asset | 385,522 | 498,180 |
Financing lease right-of-use asset | 215,075 | 167,310 |
TOTAL CURRENT ASSETS | 35,876,474 | 21,178,735 |
Property and equipment, net | 1,699,730 | 1,734,781 |
Goodwill and intangible assets, net | 238,845 | 263,681 |
Other assets | 754,275 | 702,439 |
TOTAL ASSETS | 38,569,324 | 23,879,636 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 10,193,033 | 8,561,681 |
Accounts payable and accrued expenses - related party | 123,427 | 240,302 |
Customer advances | 18,752 | 247,318 |
Convertible notes payable, net of unamortized discount of $0 and $29,509, respectively | 1,087,000 | 1,470,491 |
Notes payable | 22,863,422 | 12,029,724 |
Notes payable - related party | 494,945 | 1,375,532 |
Lines of credit | 4,253,439 | 2,750,992 |
Loans payable - related party | 1,525,485 | 1,026,264 |
Taxes payable | 183,711 | 175,939 |
Operating lease liability, current portion | 69,816 | 139,556 |
Financing lease liability, current portion | 75,602 | 58,185 |
Other current liabilities | 320,090 | 165,271 |
TOTAL CURRENT LIABILITIES | 41,208,722 | 28,241,255 |
Share settled debt obligation | 1,554,590 | 1,554,590 |
Operating lease liability, net of current portion | 315,746 | 353,024 |
Financing lease liability, net of current portion | 146,376 | 82,523 |
Other liabilities | 113,892 | 109,073 |
TOTAL LIABILITIES | 43,339,326 | 30,340,465 |
Commitments and Contingencies (see Note 13) | 0 | 0 |
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, $0.001 par value; 100,000,000 shares authorized; 0 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively | 0 | 0 |
Common stock, $0.001 par value; 300,000,000 shares authorized; 13,225,387 and 13,225,387 shares issued and 12,840,059 and 12,860,059 outstanding as of September 30, 2020 and December 31, 2019, respectively | 13,225 | 13,225 |
Additional paid-in capital | 13,525,749 | 13,525,749 |
Treasury stock, 385,328 and 365,328 shares as of September 30, 2020 and December 31, 2019, respectively | (491,854) | (411,854) |
Accumulated deficit | (17,919,743) | (19,571,610) |
Accumulated other comprehensive loss | 102,621 | (16,339) |
TOTAL STOCKHOLDERS' DEFICIT | (4,770,002) | (6,460,829) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 38,569,324 | $ 23,879,636 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
CURRENT LIABILITIES: | ||
Convertible notes payable, net of unamortized discount | $ 0 | $ 29,509 |
STOCKHOLDERS' DEFICIT | ||
Common stock, shares par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 13,225,387 | 13,225,387 |
Common stock, shares outstanding | 12,840,059 | 12,860,059 |
Preferred stock, shares par value | $ 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 |
Treasury stock | 385,328 | 365,328 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) | ||||
REVENUE | $ 14,352,098 | $ 9,685,850 | $ 39,105,318 | $ 27,883,147 |
COST OF GOODS SOLD | 11,954,788 | 8,886,084 | 33,166,706 | 25,988,226 |
GROSS PROFIT | 2,397,310 | 799,766 | 5,938,612 | 1,894,921 |
OPERATING EXPENSES | ||||
General and administrative expenses | 1,017,686 | 808,138 | 2,702,259 | 2,444,351 |
Sales and marketing expenses | 211,874 | 15,342 | 645,930 | 26,632 |
Depreciation and amortization expense | 87,747 | 92,848 | 298,543 | 240,130 |
TOTAL OPERATING EXPENSES | 1,317,307 | 916,328 | 3,646,732 | 2,711,113 |
INCOME (LOSS) FROM OPERATIONS | 1,080,003 | (116,562) | 2,291,880 | (816,192) |
OTHER INCOME (EXPENSE) | ||||
Other income (expense), net | 75,124 | (94,321) | 103,073 | 232,022 |
Interest expense | (789,426) | (366,677) | (1,853,414) | (955,791) |
Non-cash interest expense | 0 | (19,498) | (29,509) | (284,008) |
Loss on equity investments, net | (46,883) | (660,893) | (36,637) | (1,103,035) |
Gain on extinguishment of debt | 16,194 | 0 | 795,418 | 0 |
Foreign currency transaction gain (loss), net | 427,289 | (375,947) | 394,983 | (457,362) |
TOTAL OTHER EXPENSE, NET | (317,702) | (1,517,336) | (626,086) | (2,568,174) |
INCOME (LOSS) BEFORE INCOME TAXES | 762,301 | (1,633,898) | 1,665,794 | (3,384,366) |
INCOME TAX (EXPENSE) BENEFIT | (4,435) | 549 | (13,927) | (6,189) |
NET INCOME (LOSS) | 757,866 | (1,633,349) | 1,651,867 | (3,390,555) |
OTHER COMPREHENSIVE INCOME (LOSS) | ||||
Foreign currency translation adjustment, net | 79,882 | 89,563 | 118,960 | 118,625 |
TOTAL COMPREHENSIVE INCOME (LOSS) | $ 837,748 | $ (1,543,786) | $ 1,770,827 | $ (3,271,930) |
BASIC NET INCOME (LOSS) PER SHARE | $ 0.06 | $ (0.12) | $ 0.12 | $ (0.26) |
DILUTED NET INCOME (LOSS) PER SHARE | $ 0.06 | $ (0.12) | $ 0.12 | $ (0.26) |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | ||||
Basic | 13,225,387 | 13,225,387 | 13,225,387 | 13,289,843 |
Diluted | 13,263,944 | 13,225,387 | 13,260,518 | 13,289,843 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited) - USD ($) | Total | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated other comprehensive loss |
Balance, shares at Dec. 31, 2018 | 13,878,757 | (193,690) | ||||
Balance, amount at Dec. 31, 2018 | $ (3,317,450) | $ 13,879 | $ (225,494) | $ 13,133,982 | $ (16,272,645) | $ 32,828 |
Foreign currency translation adjustment, net | 61,629 | $ 0 | $ 0 | 0 | 0 | 61,629 |
Cancellation of pre-delivery shares issued in connection with convertible debentures, shares | (573,742) | |||||
Cancellation of pre-delivery shares issued in connection with convertible debentures, amount | 0 | $ (574) | $ 0 | 574 | 0 | 0 |
Purchase of treasury stock from third party, shares | (23,847) | |||||
Purchase of treasury stock from third party, amount | (71,541) | $ 0 | $ (71,541) | 0 | 0 | 0 |
Net loss | (217,173) | $ 0 | $ 0 | 0 | (217,173) | 0 |
Balance, shares at Mar. 31, 2019 | 13,305,015 | (217,537) | ||||
Balance, amount at Mar. 31, 2019 | (3,544,535) | $ 13,305 | $ (297,035) | 13,134,556 | (16,489,818) | 94,457 |
Balance, shares at Dec. 31, 2018 | 13,878,757 | (193,690) | ||||
Balance, amount at Dec. 31, 2018 | (3,317,450) | $ 13,879 | $ (225,494) | 13,133,982 | (16,272,645) | 32,828 |
Net loss | (3,390,555) | |||||
Balance, shares at Sep. 30, 2019 | 13,225,387 | (365,328) | ||||
Balance, amount at Sep. 30, 2019 | (6,384,627) | $ 13,225 | $ (411,854) | 13,525,749 | (19,663,200) | 151,453 |
Balance, shares at Mar. 31, 2019 | 13,305,015 | (217,537) | ||||
Balance, amount at Mar. 31, 2019 | (3,544,535) | $ 13,305 | $ (297,035) | 13,134,556 | (16,489,818) | 94,457 |
Foreign currency translation adjustment, net | (32,567) | $ 0 | $ 0 | 0 | 0 | (32,567) |
Purchase of treasury stock from third party, shares | (348,380) | |||||
Purchase of treasury stock from third party, amount | (716,586) | $ 0 | $ (716,586) | 0 | 0 | 0 |
Net loss | (1,540,033) | $ 0 | $ 0 | 0 | (1,540,033) | 0 |
Conversion of related party debt to common stock, shares | 140,001 | |||||
Conversion of related party debt to common stock, amount | 520,875 | $ 140 | $ 0 | 520,735 | 0 | 0 |
Gain on conversion of related party debt to common stock | 529,125 | $ 0 | $ 0 | 529,125 | 0 | 0 |
Cancellation of treasury shares, shares | (219,629) | 219,629 | ||||
Cancellation of treasury shares, amount | 0 | $ (220) | $ 658,887 | (658,667) | 0 | 0 |
Balance, shares at Jun. 30, 2019 | 13,225,387 | (346,288) | ||||
Balance, amount at Jun. 30, 2019 | (4,783,721) | $ 13,225 | $ (354,734) | 13,525,749 | (18,029,851) | 61,890 |
Net loss | (1,633,349) | $ 0 | $ 0 | 0 | (1,633,349) | 0 |
Foreign currency translation adjustment, net, shares | (19,040) | |||||
Foreign currency translation adjustment, net, amount | 32,443 | $ 0 | $ (57,120) | 0 | 0 | 89,563 |
Balance, shares at Sep. 30, 2019 | 13,225,387 | (365,328) | ||||
Balance, amount at Sep. 30, 2019 | (6,384,627) | $ 13,225 | $ (411,854) | 13,525,749 | (19,663,200) | 151,453 |
Balance, shares at Dec. 31, 2019 | 13,225,387 | (365,328) | ||||
Balance, amount at Dec. 31, 2019 | (6,460,829) | $ 13,225 | $ (411,854) | 13,525,749 | (19,571,610) | (16,339) |
Foreign currency translation adjustment, net | (143,762) | 0 | 0 | 0 | 0 | (143,762) |
Net loss | (483,310) | $ 0 | $ 0 | 0 | (483,310) | 0 |
Balance, shares at Mar. 31, 2020 | 13,225,387 | (365,328) | ||||
Balance, amount at Mar. 31, 2020 | (7,087,901) | $ 13,225 | $ (411,854) | 13,525,749 | (20,054,920) | (160,101) |
Balance, shares at Dec. 31, 2019 | 13,225,387 | (365,328) | ||||
Balance, amount at Dec. 31, 2019 | (6,460,829) | $ 13,225 | $ (411,854) | 13,525,749 | (19,571,610) | (16,339) |
Net loss | 1,651,867 | |||||
Balance, shares at Sep. 30, 2020 | 13,225,387 | (385,328) | ||||
Balance, amount at Sep. 30, 2020 | (4,770,002) | $ 13,225 | $ (491,854) | 13,525,749 | (17,919,743) | 102,621 |
Balance, shares at Mar. 31, 2020 | 13,225,387 | (365,328) | ||||
Balance, amount at Mar. 31, 2020 | (7,087,901) | $ 13,225 | $ (411,854) | 13,525,749 | (20,054,920) | (160,101) |
Foreign currency translation adjustment, net | 182,840 | 0 | 0 | 0 | 0 | 182,840 |
Net loss | 1,377,311 | $ 0 | $ 0 | 0 | 1,377,311 | 0 |
Balance, shares at Jun. 30, 2020 | 13,225,387 | (365,328) | ||||
Balance, amount at Jun. 30, 2020 | (5,527,750) | $ 13,225 | $ (411,854) | 13,525,749 | (18,677,609) | 22,739 |
Foreign currency translation adjustment, net | 79,882 | $ 0 | $ 0 | 0 | 0 | 79,882 |
Purchase of treasury stock from third party, shares | (20,000) | |||||
Purchase of treasury stock from third party, amount | (80,000) | $ 0 | $ (80,000) | 0 | 0 | 0 |
Net loss | 757,866 | $ 0 | $ 0 | 0 | 757,866 | 0 |
Balance, shares at Sep. 30, 2020 | 13,225,387 | (385,328) | ||||
Balance, amount at Sep. 30, 2020 | $ (4,770,002) | $ 13,225 | $ (491,854) | $ 13,525,749 | $ (17,919,743) | $ 102,621 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 1,651,867 | $ (3,390,555) |
Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities: | ||
Depreciation and amortization expense | 207,992 | 240,130 |
Amortization of right-of-use assets | 90,551 | 284,008 |
Amortization of debt discounts | 29,509 | 204,396 |
Lease expense | 148,218 | 0 |
Interest on finance leases | 9,197 | 0 |
Loss on disposal of fixed asset | 21,624 | 0 |
Gain on extinguishment of debt | (779,224) | 0 |
(Gain) loss on change in fair value of equity investments | 19,798 | 1,090,886 |
Changes in Assets and Liabilities: | ||
Accounts receivable, net | (10,099,941) | (1,028,844) |
Accounts receivable - related party | (358,528) | (233,404) |
Inventory | (727,960) | (276,887) |
Prepaid expenses and other current assets | (5,273,072) | 534,680 |
Prepaid expenses and other current assets - related party | 2,712,271 | (730,385) |
Other assets | (51,836) | (140,281) |
Accounts payable and accrued expenses | 2,356,249 | 594,323 |
Accounts payable and accrued expenses - related party | (116,875) | 263,029 |
Customer advances | (228,566) | (866,596) |
Other current liabilities | 154,819 | (36,557) |
Lease liabilities | (120,799) | (105,564) |
Taxes payable | 7,772 | 0 |
Other liabilities | 4,819 | 24,809 |
NET CASH USED IN OPERATING ACTIVITIES | (10,342,115) | (3,572,812) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of fixed assets | (113,845) | (594,632) |
Proceeds from sale of investments | 0 | 1,211,348 |
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES | (113,845) | 616,716 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment of convertible note payable | (413,000) | (365,514) |
Proceeds from convertible note payable | 0 | 1,380,000 |
Payment of related party note payable | (941,357) | (36,532) |
Payment of note payable | (5,253,918) | |
Proceeds from note payable | 15,926,295 | 2,000,000 |
Payment of related party loan | (109,024) | (212,176) |
Proceeds from related party loan | 594,836 | 508,085 |
Payment of lines of credit | (13,270,971) | (7,980,910) |
Proceeds from lines of credit | 14,588,466 | 9,045,285 |
Payments of finance lease liability | (57,316) | (27,086) |
Purchase of treasury stock | (80,000) | (845,247) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 10,984,011 | 3,465,905 |
Effect of exchange rate changes on cash | 515,043 | (193,945) |
NET CHANGE IN CASH | 1,043,094 | 315,864 |
CASH AT BEGINNING OF PERIOD | 38,537 | 864,343 |
CASH AT END OF PERIOD | 1,081,631 | 1,180,207 |
Cash paid during the period: | ||
Interest | 124,178 | 447,731 |
Income tax | 11,605 | 11,605 |
Supplemental Disclosure of Non-Cash Investing and Financing Activities | ||
Cancellation of pre-delivery shares issued for conversion of convertible notes payable | 0 | 574 |
Discounts related to beneficial conversion features of convertible debentures | $ 0 | 120,000 |
Conversion of convertible notes payable to common stock | $ 1,050,000 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2020 | |
BASIS OF PRESENTATION | |
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 condensed consolidated balance sheet as of September 30, 2020 and unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2020 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 three and nine months ended September 30, 2020, are not necessarily indicative of the results that may be expected for the year ending December 31, 2020, 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, 2019 and 2018, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (“Form 10-K”). The accompanying consolidated balance sheet as of December 31, 2019 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. |
ORGANIZATION, NATURE OF BUSINES
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN | 9 Months Ended |
Sep. 30, 2020 | |
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN | |
NOTE 2 - ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN | Overview Cosmos Holdings, Inc. is an international pharmaceutical wholesaler. The Company imports, exports and distributes brand-name and generic pharmaceuticals, over-the-counter (“OTC”) medicines, a variety of vitamins, and dietary supplements. Through September 30, 2020, we operated our business through three wholly owned subsidiaries: (i) SkyPharm S.A. (“SkyPharm”), headquartered in Thessaloniki, Greece; (ii) Decahedron Ltd. (“Decahedron”), headquartered in Harlow, United Kingdom (“UK”); and (iii) Cosmofarm Ltd. (“Cosmofarm”), headquartered in Athens, Greece. Our business is primarily comprised of cross-border sales of brand-name pharmaceutical products in the European Union (“EU”). Our cross-border pharmaceutical wholesale business serves wholesale pharmaceutical distributors and independent retail pharmacies across the EU through a network of three strategic distribution centers, as well as an additional warehousing facility. Pharmaceutical manufacturers generally implement variable pricing strategies within the EU market. Identifying and evaluating price spreads between EU member states enables us to source brand-name pharmaceuticals from countries where ex-factory prices are comparatively low and export to countries where the same products are priced higher. We remain focused on leveraging our growing purchasing scale and supplier relationships to secure discounts and provide pharmaceuticals at reduced prices and continuing to drive organic growth at attractive margins for our cross-border pharmaceutical wholesale business. We regularly evaluate and undertake strategic initiatives to expand our distribution reach, improve our profit margins, and strengthen our competitive position. In 2018, we entered the vitamins and dietary supplements segment and in the fourth quarter of 2018 we posted the first sales of our own brand of nutraceuticals; SkyPremium Life We make use of analytics and customer feedback from our EU-wide network of wholesale pharmaceutical distributors and independent retail pharmacies to identify and evaluate which nutraceutical product codes to develop to add to our SkyPremium Life SkyPremium Life We are also closely monitoring the legal framework for prescription and non-prescription derivatives of cannabis products as it develops in Europe. As the legal framework and processes are developed and implemented in each respective EU country, we intend to utilize our existing network to distribute both prescription and non-prescription derivatives of cannabis products to our current customer base. We currently intend to only distribute prescription and non-prescription derivatives of cannabis products to approved EU countries and not in the US. We regularly evaluate acquisition targets that would allow us to expand our distribution reach and/or vertically integrate into the supply chain of the products that we currently distribute. We believe that the demand for reasonably priced medicines, delivered on time and in the highest quality is set to increase in the years to come, as the population’s life expectancy increases. With our product portfolio of patented and non-patented medicines, we contribute to the optimization of efficient medicinal care, and thereby lowering cost for health insurance funds, companies, and patients. We also believe that the demand for non-prescription wellness products such as food and dietary supplements will continue to increase as individuals are increasingly supplementing their nutritional intake. We believe the EU pharmaceutical import/export market will continue to grow. We continue to encounter competition in the market as we grow. The competition comes in the form of level of service, reliability, and product quality. On the procurement side, we continue to expand our vendor base. In order to minimize business risks, we diversify our sources of supply. We maintain our high-quality standards by carefully selecting and qualifying our suppliers as well as actively ensuring that our suppliers meet our standard of quality control on an ongoing basis. On July 22, 2015, the Hellenic Ministry of Health and more specifically the National Organization for Medicines granted SkyPharm a license for the wholesale of pharmaceutical products for human use. The license is valid for a period of five years and pursuant to the EU directive of (2013/C343/01). Decahedron received its Wholesale Distribution Authorization for human use on November 7, 2013, from the UK Medicines and Healthcare Products Regulatory Agency (MHRA) in accordance with Regulation 18 of the Human Medicines Regulations 2012 (SI 2012/1916) and it is subject to the provision of those Regulations and the Medicines Act 1971. This license will continue to remain in force from the date of issue by the Licensing Authority unless cancelled, suspended, revoked or varied as to the period of its validity or relinquished by the authorization holder. On February 1, 2019, the Hellenic Ministry of Health and the National Organization for Medicines extended the validity of Cosmofarm’s license for the wholesale of pharmaceutical products for human use for a period of five years and pursuant to the EU directive of (2013/C 343/01). Corporate History and Structure Cosmos Holdings, Inc. was incorporated in the State of Nevada under the name Prime Estates and Developments, Inc. on July 21, 2009. On November 14, 2013, we changed our name to Cosmos Holdings, Inc. On September 27, 2013, the Company, closed a reverse merger 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 between the Registrant and Amplerissimo Ltd., a company incorporated in Cyprus (“Amplerissimo”), the Company acquired 100% of Amplerissimo’s issued and outstanding common stock. As a result of the reverse take-over transaction, Amplerissimo became a wholly owned subsidiary of the Company. On August 1, 2014, the Company, through its Cypriot subsidiary Amplerissimo, formed SkyPharm S.A., a Greek corporation (“SkyPharm”), a subsidiary that focuses on the trading, sourcing and distribution of pharmaceutical products. In February 2017, the Company completed the acquisition of Decahedron Ltd., a UK corporation (“Decahedron”) consummating 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 170,000 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. Decahedron is a fully licensed wholesaler of pharmaceutical products and its primary activity is the distribution, import and export of pharmaceuticals. On November 21, 2017, the Company effected 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. Proportional adjustments for the reverse stock split were made to the Company’s outstanding stock options, and warrants including all share and per-share data, for all amounts and periods presented in the consolidated financial statements. On September 29, 2018, Amplerissimo transferred its remaining 22% investment in SkyPharm to the Company. The Company now holds 100% of the capital of SkyPharm as a wholly-owned subsidiary of the Company. On September 30, 2018, the Company entered into a Share Purchase Agreement with an unaffiliated third party and sold 100% of the issued capital of its subsidiary, Amplerissimo. On December 19, 2018, the Company completed the purchase of all of the capital stock of Cosmofarm Ltd., a pharmaceutical wholesaler based in Athens, Greece. The principal of the selling shareholder is Panagiotis Kozaris, who remained with Cosmofarm as a director and chief operating officer once it became a wholly owned subsidiary of the Company. Grigorios Siokas, the Company’s CEO, became the new CEO of Cosmofarm. Mr. Kozaris had no prior relationship to the Company other than as an independent shareholder. The purchase price payable is €200,000 evidenced by a promissory note. Going Concern The Company’s condensed consolidated financial statements are prepared in conformity with U.S. GAAP which contemplates the continuation of the Company as a going concern. For the nine months ended September 30, 2020, the Company had revenue of $39,105,318, net income of $1,651,867 and net cash used in operations of $10,342,115. Additionally, as of September 30, 2020, the Company had an accumulated deficit of $17,919,743 a working capital deficit of $5,332,248 and stockholders’ deficit of $4,770,002. It is management’s opinion that these conditions raise doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date of this filing. The condensed consolidated financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of this uncertainty. The Company does not have adequate cash from operations 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. Management’s plans to continue as a going concern include raising additional capital through increased sales of product and by sale of equity and/or debt. 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 herein and eventually secure other sources of financing and attain profitable operations. Summary of Significant Accounting Policies Basis of Financial Statement Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with principles generally accepted in the United States of America. Principles of Consolidation Our condensed consolidated accounts include our accounts and the accounts of our wholly-owned subsidiaries, SkyPharm S.A., Decahedron Ltd. and Cosmofarm Ltd. All significant intercompany balances and transactions have been eliminated. Use of Estimates The preparation of the condensed 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. Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of November 13, 2020, the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change, as new events occur, and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. 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, 2020, and December 31, 2019, there were no cash equivalents. The Company maintains bank accounts in the United States denominated in U.S. Dollars and 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 Pounds (British Pounds Sterling). Reclassifications to Prior Period Financial Statements and Adjustments Certain reclassifications have been made in the Company’s financial statements of the prior period to conform to the current year presentation. $4,381 in other investments for the year ended December 31, 2019 was reclassified to other current assets. For the three and nine months ended September 30, 2019, $66, and $198, respectively in interest expense – related parties $66 and $198, respectively was reclassified to interest expense. Additionally, for the three and nine months ended September 30, 2019, $15,342 and $26,632, respectively in sales and marketing expenses were reclassified from general and administrative expenses. These reclassifications have no impact on previously reported net income. 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. As of September 30, 2020, and December 31, 2019, the Company’s allowance for doubtful accounts was $587,292 and $562,444, respectively. Tax Receivables The Company pays Value Added Tax (“VAT”) or similar taxes (“input VAT”), income taxes, and other taxes within the normal course of its business in most of the countries in which it operates related to the procurement of merchandise and/or services it acquires and/or on sales and taxable income. The Company also collects VAT or similar taxes on behalf of the government (“output VAT”) for merchandise and/or services it sells. If the output VAT exceeds the input VAT, this creates a VAT payable to the government. If the input VAT exceeds the output VAT, this creates a VAT receivable from the government. The VAT tax return is filed on a monthly basis offsetting the payables against the receivables. In observance of EU regulations for intra-EU cross-border sales, our subsidiaries in Greece, SkyPharm and Cosmofarm, do not charge VAT for sales to wholesale drug distributors registered in other European Union member states. The net VAT receivable is recorded in prepaid expense and other current assets on the condensed consolidated balance sheets. Inventory Inventory is stated at net realizable 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. The Company writes-down inventories to net realizable value based on physical condition, expiration date, current market conditions, as well as forecasted demand. The Company’s inventories are not highly susceptible to obsolescence. Many of the Company’s inventory items are eligible for return to our suppliers when pre-agreed product requirements, including, but not limited to, physical condition and expiration date, are not met. Property and Equipment, net Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated 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 Leasehold improvements and technical works Lesser of lease term or 40 years Vehicles 6 years Machinery 20 years Furniture, fixtures and equipment 5–10 years Computers and software 3-5 years Depreciation expense was $183,156 and $219,281 for the nine months ended September 30, 2020 and 2019, respectively. Impairment of Long-Lived Assets In accordance with ASC 360-10, long-lived assets, 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 asset’s expected future discounted cash flows or market value, if readily determinable Goodwill and Intangibles, net 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 Company’s 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 unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s 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 recorded goodwill value. As a result of the acquisition of Decahedron, the Company tested and expensed 100% of the goodwill allocated to the purchase price, an amount equal to $1,949,884 for the year ended December 31, 2017. On December 19, 2018, as a result of the acquisition of Cosmofarm, the Company recorded $49,697 of goodwill. 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 asset’s remaining useful life is changed, the remaining carrying amount of the intangible asset will be amortized prospectively over that revised remaining useful life. As of September 30, 2020, no revision to the remaining amortization period of the intangible assets was made. Amortization expense was $24,836 and $20,849 for the nine months ended September 30, 2020 and 2019, respectively. Equity Method Investment For those investments in common stock or in-substance common stock in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, the investment is accounted for under the equity method. The Company will record its share in the earnings of the investee and will include it within the condensed consolidated statement of operations. The Company assesses its investment for other-than-temporary impairment when events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable and recognizes an impairment loss to adjust the investment to its then current fair value. Investments in Equity Securities Effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2016-01, and accordingly, investments in equity securities are accounted for at fair value with changes in fair value recognized in net income (loss). Equity securities are classified as short-term or long-term based on the nature of the securities and their availability to meet current operating requirements. Equity securities that are readily available for use in current operations are reported as a component of current assets in the accompanying consolidated balance sheets. Equity securities that are not considered available for use in current operations would be reported as a component of long-term assets in the accompanying consolidated balance sheets. For equity securities with no readily determinable fair value, the Company elects a measurement alternative to fair value. Under this alternative, the Company measures the investments at cost, less any impairment, and adjusted for changes resulting from observable price changes in transactions for identical or similar investments of the investee. The election to use the measurement alternative is made for each eligible investment. As of September 30, 2020, investments consisted of 3,000,000 shares, which traded at a closing price of $0 per share or a value of $0 of ICC International Cannabis Corp, 40,000 shares which traded at a closing price of $5.23 per share, or value of $209,138 of Diversa S.A. and 16,666 shares which traded at a closing price of $0.13 per share or value of $2,110 of National Bank of Greece. Additionally, the Company has $4,574 in equity securities of Pancreta bank, which are not publicly traded and recorded at cost. See Note 3, for additional investments in equity securities. Fair Value Measurement The Company applies FASB ASC 820, Fair Value Measurements and Disclosures, (“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. 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 following tables presents assets that are measured and recognized at fair value as of September 30, 2020 and December 31, 2019, on a recurring basis: September 30, 2020 Total Carrying Level 1 Level 2 Level 3 Value Marketable securities – ICC International Cannabis Corp. $ - - - $ - Marketable securities – Divsersa S.A. 209,138 - - 290,138 Marketable securities – National Bank of Greece 2,110 - - 2,110 $ 211,248 $ 211,248 December 31, 2019 Total Carrying Level 1 Level 2 Level 3 Value Marketable securities – ICC International Cannabis Corp. $ 33,000 - - $ 33,000 Marketable securities – Divsersa S.A. 200,290 - - 200,290 Marketable securities – National Bank of Greece 5,650 - - 5,650 $ 238,940 $ 238,940 In addition, FASB ASC 825-10-25, Fair Value Option, (“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. Customer Advances The Company receives prepayments from certain customers for pharmaceutical products prior to those customers taking possession of the Company’s products; the Company records these receipts as customer advances until it has met all the criteria for recognition of revenue including passing control of the products to its customer, at such point the Company will reduce the customer and deposits balance and credit the Company’s revenues. Revenue Recognition The Company adopted the modified retrospective adoption in accordance with ASC 606, Revenue from Contracts with Customers, on January 1, 2018. The new guidance introduces a five-step model for recognizing revenue by applying the following steps: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the performance obligations are satisfied by transferring the promised goods to the customer. Once these steps are met, revenue is recognized upon delivery of the product. Adoption of ASC 606 has not changed the timing and nature of the Company’s revenue recognition and there has been no material effect on the Company’s condensed consolidated financial statements. Stock-based Compensation The Company records stock-based compensation in accordance with ASC 718, Stock Compensation (“ASC 718”) and Staff Accounting Bulletin 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 ASU 2018-07, Compensation-Stock Compensation. 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’ deficit until the entity is sold or substantially liquidated. Gains or losses from foreign currency transactions (transactions denominated in a currency other than the entity’s 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 Greece and the United Kingdom of England. The corporate income tax rate is 24% 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. As of September 30, 2020, the Company has maintained a valuation allowance against all net deferred tax assets in each jurisdiction in which it is subject to income tax. The Company periodically reviews the uncertainties and judgments related to the application of complex income tax regulations to determine income tax liabilities in several jurisdictions. The Company uses a “more likely than not” criterion for recognizing the income tax benefit of uncertain tax positions and establishing measurement criteria for income tax benefits. The Company has evaluated the impact of these positions and due to the fact that the fiscal years 2013 - 2014 are unaudited by the Greek tax authorities, a potential tax liability has been identified, which may arise from a prospective tax audit from tax authorities, based on the tax settlement note of years 2007 - 2009. The amount of the liability as of September 30, 2020, and December 31, 2019, was $83,238 and $79,716, respectively, and has been recorded as a long-term liability within the condensed consolidated balance sheets. Retirement and Termination Benefits Under Greek labor law, employees are entitled to lump-sum compensation in the event of termination or retirement. The amount depends on the employee’s work experience and renumeration as of the day of termination or retirement. If an employee remains with the company until full-benefit retirement, the employee is entitled to a lump-sum equal to 40% of the compensation to be received if the employee were to be dismissed on the same day. The Company periodically reviews the uncertainties and judgments related to the application of the relevant labor law regulations to determine retirement and termination benefits obligations of its Greek subsidiaries. The Company has evaluated the impact of these regulations and has identified a potential retirement and termination benefits liability. The amount of the liability as of September 30, 2020, and December 31, 2019, was $80,579 and $77,170 respectively, and has been recorded as a long-term liability within the condensed consolidated balance sheets. Basic and Diluted Net Loss per Common Share Basic income per share is calculated by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted income per share is calculated by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period and, when dilutive, po |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 9 Months Ended |
Sep. 30, 2020 | |
MARKETABLE SECURITIES | |
NOTE 3 - MARKETABLE SECURITIES | Distribution and Equity Agreement On March 19, 2018, the Company entered into a Distribution and Equity Acquisition Agreement (the “Distribution and Equity Acquisition Agreement”) with Marathon Global Inc. (“Marathon”), a company incorporated in the Province of Ontario, Canada. Marathon was formed to be a global supplier of cannabis, cannabidiol (CBD) and/or any cannabis extract products, extracts, ancillaries and derivatives (collectively, the “Products”). The Company was appointed the exclusive distributor of the Products initially throughout Europe and on a non-exclusive basis wherever else lawfully permitted. The Company has no present intention to distribute any Products under this Agreement in the United States or otherwise participate in cannabis operations in the United States. The Company intends to await further clarification from the U.S. Government on cannabis regulation prior to determining whether to enter the domestic market. The Distribution and Equity Acquisition Agreement is to remain in effect indefinitely unless Marathon fails to provide Market Competitive (as defined) product pricing and Marathon has not become profitable within five (5) years of the agreement. The transaction closed on May 22, 2018 after the due diligence period, following which the Company received: (a) a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services; and (b) received cash of CAD $2,000,000, subject to repayment in common shares of the Company if it fails to meet certain performance milestones. The Company is entitled to receive an additional CAD $2,750,000 upon the Company’s receipt of gross sales of CAD $6,500,000 and an additional CAD $2,750,000 upon receipt of gross sales of CAD $13,000,000. The Company was also given the right to nominate one director to the Marathon board of directors. Since Marathon was a newly formed entity with no assets and no activity, the Company attributed no value to the 5 million shares in Marathon which was received as consideration for the distribution services. As described below, the Company exchanged the Marathon shares in May and July 2018. Share Exchange Agreements On May 17, 2018, the Company entered into a Share Exchange Agreement (the “SEA”) with Marathon, ICC International Cannabis Corp (“ICC”) formerly known as Kaneh Bosm Biotechnology Inc. (“KBB”) and certain other sellers of Marathon capital stock. Under the SEA, the Company transferred 2.5 million shares in Marathon to ICC, a corporation incorporated under the laws of the Province of British Columbia and a public reporting issuer on the Canadian Securities Exchange, in exchange for 5 million shares of ICC. The Company accounted for the exchange at fair value and recognized a gain on exchange of its investment in Marathon of $1,953,000 in the year ended December 31, 2018. On July 16, 2018, the Company completed a Share Exchange Agreement (the “New SEA”) with Marathon, ICC, and certain other sellers of Marathon capital stock whereby the Company transferred its remaining one-half interest (2.5 million shares) in Marathon to KBB for an additional 5 million shares of ICC. The Company accounted for the exchange at fair value and recognized a gain on exchange of its investment in Marathon of $2,092,200 in the year ended December 31, 2018. The ten million shares of ICC owned by the Company constituted approximately 7% of the 141,219,108 shares of capital stock of KBB then issued and outstanding. The Company does not have the ability to exercise significant influence over ICC. The Company determined the fair value of both exchanges based on an actively quoted stock price of ICC received in exchange for the Marathon shares. The Company continues to fair value its investment in ICC with changes recognized in earnings each period and was recorded as an unrealized gain on exchange of investment during the nine months ended September 30, 2020 of $13,500. The value of the investments as of September 30, 2020 and December 31, 2019, was $0 and $33,000, respectively. Since no value was attributed to the 33 1/3% equity ownership interest in Marathon received as consideration for the distribution services, the Company would receive variable consideration in future for its services under the Distribution and Equity Acquisition Agreement, if certain milestones are achieved. Refer to Note 11 for the accounting associated with the cash of CAD $2 million received upfront. Variable consideration to be received in the future upon achieving the gross sales milestones described above, is constrained as the Company estimates that it is probable that a significant reversal of revenue could occur. In assessing the constraint, the Company considered its limited experience with the Products, new geographic markets and similar transactions, which affect the Company’s ability to estimate the likelihood of a probable revenue reversal. Therefore, no revenue has been recognized for the period ended September 30, 2020. The Company will continue to reassess variable consideration at each reporting period and update the transaction price when it becomes probable that a significant revenue reversal would not occur. As of September 30, 2020, in addition to the 3,000,000 ICC shares valued at $0, as noted above, marketable securities also consisted of the following: 40,000 shares which traded at a closing price of $5.23 per share, or value of $209,138 of Diversa S.A. and 16,666 shares which traded at a closing price of $0.13 per share or value of $2,110 of National Bank of Greece. The Company recorded a net unrealized loss on the fair value of these investments of $7,894 during the nine months ended September 30, 2020. CosmoFarmacy LP In June 2019, the Company entered into an agreement with an unaffiliated third party to incorporate CosmoFarmacy L.P. for the purpose of providing strategic management consulting services and the retail trade of pharmaceutical products, and OTC to pharmacies. CosmoFarmacy was incorporated with a 30-year term through May 31, 2049. The unaffiliated third party is the general partner (the “GP”) of the limited partnership and is responsible for management and decision-making associated with CosmoFarmacy. The initial share capital was set to EUR 150,000 which was later increased to EUR 500,000. The GP contributed the pharmacy license (the “License”) valued at EUR 350,000 (30-year term) to operate the business of CosmoFarmacy in exchange for a 70% equity ownership. The Company is a limited partner and contributed cash of EUR 150,000 for the remaining 30% equity ownership. CosmoFarmacy is not publicly traded and the Company’s investment has been recorded using the equity method of accounting. The value of the investment as of September 30, 2020 was $175,845 and is included in “Other assets” on the Company’s condensed consolidated balance sheet. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2020 | |
PROPERTY AND EQUIPMENT, NET | |
NOTE 4 - PROPERTY AND EQUIPMENT, NET | Property and equipment, net consists of the following: September 30, 2020 December 31, 2019 Leasehold improvements $ 537,389 $ 548,000 Vehicles 120,138 115,055 Furniture, fixtures and equipment 1,515,228 1,439,839 Computers and software 141,975 85,052 2,314,730 2,187,946 Less: Accumulated depreciation and amortization (615,000 ) (453,165 ) Total $ 1,699,730 $ 1,734,781 |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 9 Months Ended |
Sep. 30, 2020 | |
INTANGIBLE ASSETS, NET | |
NOTE 5 - INTANGIBLE ASSETS, NET | Intangible assets, net consist of the following at: September 30, 2020 December 31, 2019 License $ 50,000 $ 50,000 Trade name / mark 36,997 36,997 Customer base 176,793 176,793 263,790 263,790 Less: Accumulated amortization (74,642 ) (49,806 ) Subtotal 179,180 213,984 Goodwill 49,697 49,697 Total $ 238,845 $ 263,681 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2020 | |
INCOME TAXES | |
NOTE 6 - INCOME TAXES | The Company is incorporated in the United States of America and is subject to United States federal taxation. No provisions for income taxes have been made as the Company had no U.S. taxable income for the nine months ended September 30, 2020 and 2019. The Company’s Greece subsidiaries are governed by the income tax laws of Greece. The corporate tax rate in Greece is 29% on income reported in the statutory financial statements after appropriate tax adjustments. The Company’s United Kingdom subsidiaries are governed by the income tax laws of the United Kingdom. The corporate tax rate in the United Kingdom is 19% on income reported in the statutory financial statements after appropriate tax adjustments. As of September 30, 2020, and 2019, the Company’s 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. 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. As of September 30, 2020, and December 31, 2019, the Company has 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, 2020, and December 31, 2019, the Company has a provision for tax charges recorded in any jurisdiction where it is subject to income tax, in the amount of $83,238 and $79,716, respectively, which is included in Other Liabilities on the condensed consolidated balance sheets. |
CAPITAL STRUCTURE
CAPITAL STRUCTURE | 9 Months Ended |
Sep. 30, 2020 | |
CAPITAL STRUCTURE | |
NOTE 7 - CAPITAL STRUCTURE | Preferred Stock The Company is authorized to issue 100 million shares of preferred stock, which may be issued from time to time in one or more series authorized by the Board of Directors. As of September 30, 2020, no preferred shares have been issued. Common Stock The Company is authorized to issue 300 million shares of common stock. As of September 30, 2020, and December 31, 2019, the Company had 13,225,387 shares of our common stock issued and 12,840,059 shares outstanding, respectively. Purchase of Treasury Shares On February 18, 2019, the Company entered into a Stock Purchase Agreement (the “SPA”) with an institutional noteholder. The SPA provides for the Company’s purchase of 83,341 shares of the Company’s common stock at $3.00 per share or an aggregate of $250,023. Payment was scheduled over a five-month period, subject to acceleration, if the Company effects an eligible equity offering. As of December 31, 2019, the Company had made $250,023 in payments. As of the date of this filing, 26,221 shares have been transferred back to the Company and subsequently cancelled. An additional 57,120 have been transferred to the Company, have not yet been cancelled and are recorded in treasury. On July 31, 2020, the Company entered into a Stock Purchase Agreement (the “July SPA”) with a shareholder. The July SPA provides for the Company’s purchase of 10,000 shares of the Company’s common stock at $4.00 per share or an aggregate of $40,000. As of September 30, 2020, the Company made $40,000 in payments and no shares have been transferred back. On August 31, 2020, the Company entered into two Stock Purchase Agreements (the “August SPAs”) with a shareholder. The August SPAs provide for the Company’s purchase of an aggregate total of 10,000 shares of the Company’s common stock at $4.00 per share or an aggregate of $40,000. As of September 30, 2020, the Company made $40,000 in payments and no shares have been transferred back. Potentially Dilutive Securities No options, warrants or other potentially dilutive securities have been issued as of September 30, 2020. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2020 | |
RELATED PARTY TRANSACTIONS | |
NOTE 8 - RELATED PARTY TRANSACTIONS | On the date of our inception, we issued 2 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, 2020, the Company has a prepaid balance of €2,753,436 ($3,227,853) to Doc Pharma S.A. related to purchases of inventory. Additionally, the Company has a receivable balance of €581,234 and £1,235,346 ($2,277,571). As of December 31, 2019, the Company had a prepaid balance of €2,181,780 ($2,449,484) and an accounts payable balance of €22,576 ($25,346), resulting in a net prepaid balance of €2,158,434 ($2,424,138) to Doc Pharma S.A. related to purchases of inventory. Additionally, the Company had a receivable balance of €546,240 ($613,264). During the nine months ended September 30, 2020 and 2019, the Company has purchased a total of €3,551,650 ($3,994,896) and €1,976,673 ($2,155,561) of products from Doc Pharma, respectively. During the nine months ended September 30, 2020 and 2019, the Company had revenue of €117,708 ($132,398), £1,230,925 ($1,564,506) and €347,147 ($389,985) from Doc Pharma, respectively. Doc Pharma S.A is considered a related party to the Company due to the fact that the CEO of Doc Pharma is the wife of Grigorios Siokas, the Company’s CEO and principal shareholder, who also served as a principal of Doc Pharma SA in the past. Notes Payable – Related Party A summary of the Company’s related party notes payable during the nine months ended September 30, 2020 and the year ended December 31, 2019 is presented below: 2020 2019 Beginning Balance $ 1,375,532 $ 1,793,437 Payments (941,357 ) (382,055 ) Foreign currency translation 60,770 (35,850 ) Ending Balance $ 494,945 $ 1,375,532 Grigorios Siokas On December 20, 2018, the €1,500,000 ($1,718,400) note payable, originally borrowed pursuant to a Loan Agreement with a third-party lender, dated March 16, 2018, was transferred to Grigorios Siokas. The note bears an interest rate of 4.7% per annum and matured on March 18, 2019. The note is not in default and the Company is in the process of extending the maturity date. Grigorios Siokas is the Company’s CEO and principal shareholder. Dimitrios Goulielmos On November 21, 2014, the Company entered into an agreement with Dimitrios Goulielmos, as amended on November 4, 2016. Pursuant to the amendment, this loan is non-interest bearing. During the year ended December 31, 2019, the Company repaid €40,300 ($45,245) and a principal balance of €13,200 ($14,820) remained as of December 31, 2019. During the nine months ended September 30, 2020, the Company repaid €3,000 ($3,517) and a principal balance of €10,200 ($11,957) remained as of September 30, 2020. Dimitrios Goulielmos is a current director and former CEO of the Company. DOC Pharma 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 ($12,662), 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 December 31, 2019, the Company has an outstanding principal balance of €12,000 ($13,472) and accrued interest expense of $1,100. As of September 30, 2020, the Company has an outstanding principal balance of €12,000 ($14,067) and accrued interest expense of $1,298. The above balances are adjusted for the foreign currency rate as of the balance sheet date. For the nine months ended September 30, 2020 the Company recorded a gain of $60,770. Loans Payable – Related Party A summary of the Company’s related party loans payable during the nine months ended September 30, 2020, and the year ended December 31, 2019 is presented below: 2020 2019 Beginning Balance $ 1,026,264 $ 1,775,251 Proceeds 594,836 585,915 Payments (109,024 ) (262,226 ) Conversion of debt - (1,050,000 ) Reclassification of receivable - 2,547 Foreign currency translation 13,409 (25,223 ) Ending Balance $ 1,525,485 $ 1,026,264 Grigorios Siokas From time to time Grigorios Siokas loans the Company funds in the form of non-interest bearing, no-term loans. As of December 31, 2019, the Company had an outstanding principal balance under these loans of $1,026,264 consisting of €297,314 ($303,502) and $722,762, in loans payable to Grigorios Siokas. During the nine months ended September 30, 2020, the Company borrowed additional proceeds of €166,200 ($194,836) and $400,000 and repaid €93,000 ($109,024) of these loans. As of September 30, 2020, the Company had an outstanding balance under these loans of $1,525,485. The above balances are adjusted for the foreign currency rate as of the balance sheet date. For the nine months ended September 30, 2020 the Company recorded a gain of $13,409. 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. |
LINES OF CREDIT
LINES OF CREDIT | 9 Months Ended |
Sep. 30, 2020 | |
LINES OF CREDIT | |
NOTE 9 - LINES OF CREDIT | A summary of the Company’s lines of credit as of September 30, 2020 and December 31, 2019 is presented below: September 30, 2020 December 31, 2019 National $ 2,822,030 $ 1,940,045 Alpha 1,002,669 810,947 National - COVID 428,740 - Eurobank - - Total $ 4,253,439 $ 2,750,992 The line of credit with National Bank of Greece is being renewed annually with current interest rates of 6.00%, 4.35% (“COSME 2”) and 4.35% (plus the 6-month Euribor plus any contributions currently in force by law on certain lines of credit), (“COSME 1”). The maximum borrowing allowed for the 6% line of credit was $2,579,060 and $1,684,050 at September 30, 2020 and December 31, 2019, respectively for the 6.00% line of credit. The maximum borrowing allowed was $1,172,300 and $1,122,700 at September 30, 2020 and December 31, 2019, respectively, for the 4.35% lines of credit. The maximum borrowing allowed was $586,150 and $0 at September 30, 2020 and December 31, 2019, respectively for the 4.35% COSME 1 lines of credit. The outstanding balance was $2,822,030 and $1,940,045 at September 30, 2020 and December 31, 2019, respectively. The line of credit with Alpha Bank of Greece is renewed annually with a current interest rate of 6.00%. The maximum borrowing allowed was $1,172,300 and $1,122,700 at September 30, 2020 and December 31, 2019, respectively. The outstanding balance was $1,002,669 and $810,947 at September 30, 2020 and December 31, 2019, respectively. Interest expense for the nine months ended September 30, 2020 and 2019, was $141,979 and $85,394, respectively. Under the agreements, the Company is required to maintain certain financial ratios and covenants. These lines of credit were assumed in the Company’s acquisition of Cosmofarm. During the nine months ended September 30, 2020 and 2019, the Company was in compliance with these ratios and covenants. COVID-19 Government Funding On June 23, 2020, the Company’s subsidiary Cosmofarm M.S. entered into an agreement with the “National Bank of Greece SA” (the “Bank”) to borrow a maximum of €500,000 ($561,850) under a proposed plan which will operate the same as the line of credit above. The proposed plan has a maturity date of sixty (60) months from the date of the first disbursement, which includes a grace period of nine months. The total amount of the initial proceeds were paid in 3 equal monthly installments. The Company received the first disbursement of €390,790 ($483,243) on July 10, 2020, the second disbursement in the amount of €42,385 ($48,639) was received on July 28, 2020 and the final disbursement of €66,825 ($75,091) on August 11, 2020. The line of credit is interest bearing from the date of receipt and is payable every three (3) months at an interest rate of 2.7%. The outstanding balance was $428,740 and $0 at September 30, 2020 and December 31, 2019, respectively. Interest expense for the nine months ended September 30, 2020 was $0. |
CONVERTIBLE DEBT
CONVERTIBLE DEBT | 9 Months Ended |
Sep. 30, 2020 | |
CONVERTIBLE DEBT | |
NOTE 10 - CONVERTIBLE DEBT | A summary of the Company’s convertible debt during the nine months ended September 30, 2020 and the year ended December 31, 2019 is presented below: 2020 2019 Beginning balance notes 1,500,000 365,513 New notes - 1,500,000 Payments (413,000 ) (365,513 ) Subtotal notes 1,087,000 1,500,000 Debt discount at year end - (29,509 ) Note payable net of discount 1,087,000 1,470,491 Securities Purchase Agreement executed on May 15, 2019 On May 15, 2019, the Company entered into a Securities Purchase Agreement with an institutional investor (the “Buyer”). Upon the closing of this financing, on May 17, 2019, the Company issued for a purchase price of $1,500,000 in principal amount a Senior Convertible Note (the “May 2019 Note”) to the Buyer. The May 2019 Note provided that the Company will repay the principal amount of the May 2019 Note on or before March 15, 2020. On March 23, 2020, the Company entered into a Forbearance and Amendment Agreement (the “Agreement”) with an institutional investor (the “Buyer”). The Agreement provides that the Buyer will (a) forbear (i) from taking any action with respect to the Existing Default and (ii) from issuing any demand for redemption of the Note on the basis of the Existing Default until the earlier of: (1): (September 16, 2020 (or, if earlier, such date when all amounts outstanding under the Note shall be paid in full or converted into shares of Common Stock in accordance therewith) and (2) the time of any breach by the Company of the Agreement or the occurrence of an Event of Default that is not an Existing Default (the “Forbearance Expiration Date”), (b) during the Forbearance Period waive the prepayment premium to any Company Optional Redemption, and (c) during the Forbearance Period, waive the repayment in full of the Note other than the Required Payments (as defined) prior to September 16, 2020. The Scheduled Required Prepayments are $100,000 upon signing the Agreement and five (5) monthly payments thereafter aggregating $200,000 with all amounts outstanding under the Note due on September 16, 2020. In addition, there are mandatory prepayments in the event the Company completes a Subsequent Placement (as defined) or long-term debt (other than from the Buyer or from officers and directors and advisors of the Company) or factoring and purchase order indebtedness, the Company shall effect a Company Optional Redemption amount equal to 50% of the gross proceeds (less reasonable expenses of counsel and any investment bank) together with all Scheduled Required Payments. On September 23, 2020, the Company entered into a Second Forbearance and Amendment Agreement (the “Agreement”) with an institutional investor (the “Buyer”). The Company entered into a Securities Purchase Agreement (the “SPA”) with the Buyer on May 15, 2019, pursuant to which the Company issued a Convertible Note (the “Note”) in the principal amount of $1,500,000. On March 23, 2020, the Company entered into a Forbearance and Amendment Agreement. The Note was due to be paid in full on or before September 16, 2020 and was not paid (the “Existing Default”). The Note provides that upon an Event of Default, the Buyer may, among other things, require the Company to redeem all or a portion of the Note at a redemption premium of 120%, multiplied by the product of the conversion rate ($6.00 per share) and the then current market price. The Agreement provides that the Buyer will (a) forbear (i) from taking any action with respect to the Existing Default and (ii) from issuing any demand for redemption of the Note on the basis of the Existing Default until the earlier of: (1): June 16, 2021 (or, if earlier, such date when all amounts outstanding under the Note shall be paid in full or converted into shares of Common Stock in accordance therewith) and (2) the time of any breach by the Company of the Agreement or the occurrence of an Event of Default that is not an Existing Default (the “Forbearance Expiration Date), (b) during the Forbearance Period (as defined) waive the prepayment premium to any Company Optional Redemption (which will result in the 120% redemption premium effectively replaced with 100%), and (c) during the Forbearance Period, waive the repayment in full of the Note other than the Required Payments (as defined) prior to June 16, 2021. The Scheduled Required Prepayments are $63,000 upon signing the Agreement and eight (8) monthly payments thereafter aggregating $480,000 with the remaining $607,000 outstanding under the Note due on June 16, 2021. In addition, there are mandatory prepayments in the event the Company completes a Subsequent Placement (as defined) or long-term debt (other than from the Buyer or from officers, directors and 10% or greater shareholders of the Company) or factoring and purchase order indebtedness, the Company shall effect a Company Optional Redemption amount equal to 50% of the gross proceeds (less reasonable expenses of counsel and any investment bank) together with all Scheduled Required Payments. The May 2019 Note is convertible at any time by the Holder into 250,000 shares of common stock, par value $0.001 per share at the rate of $6.00 per share, subject to adjustment (the “Conversion Price”). Upon an Event of Default (regardless of whether such event has been cured), the Buyer may convert at an alternative conversion price equal to the lower of the then applicable Conversion Price or seventy-five (75%) percent of the then Volume-Weighted Average Price (as defined, the “VWAP”). The Company considered the need for the conversion feature to be bifurcated under ASC 815 and determined that it does not meet the requirements. Additionally, the Company determined the effective conversion rate under ASC 470-20 and determined that the instrument is out of the money and no beneficial conversion feature was recorded. The May 2019 Note is senior in right of payment to all other existing and future indebtedness of the Company except Permitted Senior Indebtedness (as defined in the May 2019 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 May 2019 Note includes customary Events of Default and provides that the Buyer may require the Company to redeem (regardless of whether the Event of Default has been cured) all or a portion of the Note at a redemption premium equal to the greater of: (i) the product of the redemption premium of one hundred twenty-five (125%) percent, multiplied by the conversion amount, and (ii) the product of the conversion rate ($6.00 per share) multiplied by the product of 125% multiplied by the then current market price. The Buyer may also require redemption of the May 2019 Note upon a Change of Control (as defined) at a premium of one hundred twenty-five (125%) percent. The Company has the right to redeem the May 2019 Note at any time, in whole or in part, in cash at a price equal to 120% of the then outstanding conversion amount. Conversion of the May 2019 Note is subject to a blocker provision which prevents any holder from converting the May 2019 Note into shares of common stock if its beneficial ownership of the common stock would exceed 9.99% of the Company’s issued and outstanding common stock. During the nine months ended September 30, 2020, the Company repaid $413,000 such that as of September 30, 2020, the Company had a principal balance $1,087,000 on the May 2019 Note and the Company had accrued $18,700 in interest expense. Roth Capital Partners, LLC (“Roth”), as the Company’s exclusive placement agent, received a cash commission for this transaction equal to six (6%) percent of the total gross proceeds of the offering. This 6% fee or $90,000 was recorded as debt discount along with the $30,000 in legal fees associated with the May 2019 Note. These fees will be amortized over the term of the note. The Company amortized $90,491 in the year ended December 31, 2019 and the remaining $29,509 was amortized during the nine months ended September 30, 2020. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2020 | |
DEBT | |
NOTE 11 - DEBT | A summary of the Company’s third-party debt during the nine months ended September 30, 2020 and the year ended December 31, 2019 is presented below: September 30, 2020 Loan Facility Bridge Loans Trade Facility Third Party COVID Loans Total Beginning balance 3,078,442 191,287 6,245,400 2,514,595 - 12,029,724 Proceeds - - - 15,510,000 416,295 15,926,295 Payments (82,061 ) (165,995 ) - (5,005,862 ) - (5,253,918 ) Debt extinguishment (29,035 ) (25,292 ) - - - (54,327 ) Foreign currency translation 115,803 - 99,200 645 - 215,648 Ending Balance 3,083,149 - 6,344,600 13,019,378 398,955 22,863,422 December 31, 2019 Loan Facility Bridge Loans Trade Facility Third Party Total Beginning balance $ 3,078,442 $ 191,287 $ 6,291,199 $ 242,805 $ 9,803,733 Proceeds - - - 2,500,000 2,500,000 Payments - - - (227,912 ) (227,912 ) Foreign currency translation - - (45,799 ) (298 ) (46,097 ) Ending Balance $ 3,078,442 $ 191,287 $ 6,245,400 $ 2,514,595 $ 12,029,724 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 ($42,832) 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. As of December 31, 2019, the Company had an outstanding principal balance of €13,000 ($14,595) and accrued interest of €4,166 ($4,677). During the nine months ended September 30, 2020, the Company repaid €5,000 ($5,862) of this loan. As of September 30, 2020, the Company had an outstanding principal balance of €8,000 ($9,378) and accrued interest of €4,636 ($5,435). Loan Facility Agreement and Bridge Loans Loan Facility On August 4, 2016, the Company’s 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 1,000,000 shares of common stock of the Company owned by Mr. Siokas. On September 13, 2016, SkyPharm 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 (€2,216,736) 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 (€129,360) in January 2017, $382,327 (€318,023) in July 2017 and $70,000 (€58,227) in December 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 were 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 1,000,000 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 Company’s 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 December 31, 2019, the outstanding balance under the A&R Loan Facility was $3,078,442 (€2,741,999) and accrued interest expense of $609,607 (€542,983) had been recorded. On April 18, 2018, the Company entered into an amendment with the Lender that was effective as of January 1, 2018, pursuant to which the maturity dates for all advances was extended to December 31, 2021. Additionally, the interest rate was amended such that the interest rate for all advances is 4% plus the 3-Month Libor rate. The Loan Facility also forgave €35,060 ($40,000) in fees related to the July 6, 2017 advance. As a result, the Company reduced the unamortized portion of debt discount that related to those fees and recorded a gain on debt settlement of €19,763 ($23,354). Bridge Loans In 2017, the Company entered into loan agreements with Synthesis Peer-To-Peer Income Fund (the “Bridge Loans”) in the amounts of €41,590 ($50,000), €100,000 ($120,220) and €31,388 ($34,745). The Company had accrued interest expense of an aggregate total of €24,608 ($27,627) for both loans and the outstanding balances of these loans was €45,809 ($50,000), €83,333 ($106,542), €31,388 ($34,745), respectively, as of December 31, 2019. On June 30, 2020, the Company entered into a settlement agreement whereby the Company agreed to make certain payments to the creditor and the creditor will accept such payments as full discharge of the outstanding debt of the Loan Facility and Bridge Loans. In accordance with the settlement agreement, interest will accrue from June 30, 2020 until repayment in full at a rate of 6% per annum for the first year and 5.25% per annum for the second year calculated on the balance outstanding from day to day during such period. Interest is due on the 10 th The debt is subject to acceleration in an Event of Default (as defined in the Notes). This agreement is secured by a personal guaranty of Grigorios Siokas, which is secured by a pledge of 1,000,000 shares of common stock of the Company owned by Mr. Siokas, as described above under A&R Loan Facility. 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 ($3,222,825) secured against Decahedron’s receivables from the sale of branded and generic pharmaceutical sales. · The total facility will be calculated as 95% of the agreed upon value of Decahedron’s 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 Decahedron’s 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 ($2,344,600) secured against SkyPharm’s receivables from the sale of branded and generic pharmaceutical sales. In the event that accounts receivable become 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 Decahedron’s 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 SkyPharm’s 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 Company obtained consents from Synthesis Peer-to-Peer Income Fund in connection with obtaining the Lender. 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 ($2,291,200) to €6,000,000 ($6,736,200). All other terms of the original agreement remain the same. The Company also obtained consents from Synthesis Peer-to-Peer Income Fund in connection with obtaining the November 2017 convertible debt financing. On May 12, 2018, the Company borrowed an additional €270,000 ($247,117) in funds. On May 16, 2018, SkyPharm S.A., as Commodity Buyer, entered into a Supplemental Deed of Amendment (the “Deed”) relating to a Trade Finance Facility dated May 12, 2017, as amended, with Synthesis Structured Commodity Trade Finance Limited (“Synthesis”), as Loan Receivables Originator. Under the Trade Finance Facility (the “TFF”) first entered into on May 12, 2017, as amended, there was a principal balance of €5,866,910 ($5,369,678) outstanding as of March 31, 2018. SkyPharm made a payment of €1,000,000 ($1,123,600) of interest and principal on May 31, 2018 under the terms and conditions of the Deed. Additionally, the maturity date for the facility has been amended such that, the full principal amount is to be repaid no later than May 31, 2021, subject to a repayment schedule to be agreed upon by SkyPharm and Synthesis Structure Commodity Trade Finance Limited. Synthesis Structure Commodity Trade Finance Limited may extend this final repayment date at its sole discretion. The TFF was amended to provide, among other things: · A listing of approved purchasers; · To permit SkyPharm to request Synthesis to make payments under the TFF directly to SkyPharm so that SkyPharm can discharge its obligations to a commodity seller directly; · To prohibit SkyPharm from entering into a commodity contract which grants more than seventy-five (75) days delay between the payment for products and receipt of the purchase price and placed other limitations on terms of commodity contracts; · If Grigorios Siokas, CEO of Cosmos Holdings Inc. (“Cosmos”), ceases to own or control at least fifty-one (51%) percent of the shares of Cosmos, or SkyPharm ceases to be a wholly-owned subsidiary of Cosmos, either event shall constitute an Event of Default (as defined); · The maximum aggregate amount of the TFF is €15,000,000, although there is no commitment for any future loans under the TFF; · The interest rate on the TFF for: (i) all lending in U.S. dollars is the one-month LIBOR plus six (6%) percent margin; and (ii) for all lending in Euro, the one-month Euribor Rate plus six (6%) percent per annum, commencing June 1, 2018. · Synthesis is permitted to terminate the TFF at any time and demand repayment of all outstanding principal and interest in full within six (6) months from the date of notification. The Deed is conditioned upon, among other things, execution and perfection of a Bulgarian Amended Pledge (“BAP”) having priority over the Bulgarian Pledge Accounts with Unicredit Bulbank AD; and the Approved Purchasers are to make all payments to SkyPharm directly to the BAP. On May 16, 2018, SkyPharm and Synthesis also entered into an Account Merge Agreement (the “Pledge”) as a requirement under the above-described Deed. Under the Pledge, Synthesis is to receive a first ranking securities interest in SkyPharm’s outstanding receivables under the Bulgarian bank account. On October 17, 2018, the Company entered into a further amended agreement with Synthesis whereby the current balance on the TFF as of October 1, 2018, which was €4,866,910 ($5,629,555) and related accrued interest of €453,094 ($524,094) would be split into two principal balances of Euro €2,000,000 and USD $4,000,000. Interest on the new balances commenced on October 1, 2018 at 6% per annum plus one-month Euribor, when it is positive, on the Euro balance and 6% per annum plus one-month Libor on the USD balance. The Company will repay the principal amounts of each balance beginning no later than August 31, 2018 in quarterly installments of €125,000 and US $150,000. The loan matures on August 31, 2021. The Company evaluated the amended agreement under ASC 470-50 and concluded that it did not meet the 10% cash flow test and recorded debt modification expense of $138,110. As of December 31, 2019, the Company had a principal balance of €2,000,000 ($2,245,400) and $4,000,000 under the TFF and the Company had accrued $10,000 and $12,661, respectively in interest expense related to this agreement. As of September 30, 2020, the Company had principal balances of €2,000,000 ($2,344,600) and $4,000,000 under the TFF and the Company had accrued $11,819 and $1,563 respectively, in interest expense related to this agreement. Distribution and Equity Agreement As discussed in Note 4 above, the Company entered into a Distribution and Equity Acquisition Agreement with Marathon. The Company was appointed the exclusive distributor of the Products (as defined) initially throughout Europe and on a non-exclusive basis wherever else lawfully permitted. As consideration for its services, Company received: (a) a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services; and (b) received cash of CAD $2,000,000, subject to repayment in Common Shares of the Company if it fails to meet certain performance milestones. The Company is entitled to receive an additional CAD $2,750,000 upon the Company’s receipt of gross sales of CAD $6,500,000 and an additional CAD $2,750,000 upon receipt of gross sales of CAD $13,000,000. As discussed in Note 4, the Company attributed no value to the shares received in Marathon pursuant to (a) above. In relation to the CAD $2 million cash received noted in (b) above, the Company accounted for its obligation to issue a variable number of the Company’s Common Shares as Share-settled debt obligation in accordance with ASC 480 measured at fair value or the settlement amount of $1,554,590 (CAD $2 million). If settlement were to occur on December 31, 2019, the Company would be required to issue 444,876 common shares to settle its debt obligation. The Company could be obligated to potentially issue an unlimited number of common shares to settle its Share-settled debt obligation. If such events were to occur, the Company would be required to increase its authorized share capital and since increasing the authorized share capital is within the control of the Company, as our CEO controls greater than 50% of the outstanding common stock of the Company, the original classification of equity-classified financial instruments issued by the Company were not affected. Senior Promissory Notes executed on April 1 and 3, 2019 On April 1 and 3, 2019, the Company executed Senior Promissory Notes (the “Notes”) each in the principal amount of $250,000 payable to an unaffiliated third-party lender. The Notes bear interest at the rate of fifteen (15%) percent per annum, paid quarterly in arrears. The Notes originally matured on April 1 and 3, 2020 unless prepaid or in default. On April 1, 2020, the Company entered into an allonge with the lender pursuant to which the new maturity date for both notes is April 1, 2021. Additionally, pursuant to the allonge, the Company may now prepay the Notes at any time without penalty. The Notes are subject to acceleration in an Event of Default (as defined in the Notes). Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the Notes. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection. As of December 31, 2019, the Company had a principal balance $250,000 and $250,000 on these notes and the Company had accrued $9,452 and $28,098, respectively, in interest expense. As of September 30, 2020, the Company had a principal balance $250,000 and $250,000 on these notes and the Company had accrued $37,910 and $56,248 respectively, in interest expense. Senior Promissory Note executed on April 9, 2019 On April 9, 2019, the Company executed a Senior Promissory Note (the “Note”) in the principal amount of $250,000 payable to an unaffiliated third-party lender who had previously loaned the Company $500,000. The Note bears interest at the rate of fifteen (15%) percent per annum, paid quarterly in arrears. The Note originally matured on April 9, 2020, unless prepaid or in default. As of April 9, 2020, the Company entered into an allonge with the lender pursuant to which the new maturity date for the note is now April 9, 2021 and the Company may now prepay the loan without penalty at any time. The Note is subject to acceleration in an Event of Default (as defined in the Note). Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection. As of December 31, 2019, the Company had a principal balance $250,000 on this Note and the Company had accrued $27,431 in interest expense. As of September 30, 2020, the Company had a principal balance $250,000 on this Note and the Company had accrued $55,581 in interest expense. July 24, 2019 Senior Promissory Note On July 24, 2019, the Company executed a Senior Promissory Note (the “July Note”) in the principal amount of $750,000 payable to an unaffiliated third-party lender who had previously loaned the Company $750,000. The funds represented by the July Note were advanced between July 19 and 24, 2019. The July Note bears interest at the rate of fifteen (15%) percent per annum, paid quarterly in arrears. The July Note originally matured on July 24, 2020. On July 24, 2020, the Company entered into an allonge with the lender pursuant to which the new maturity date for the note is now July 24, 2021 and the Company may now prepay the loan without penalty at any time (See Note 16). The July Note is subject to acceleration in an Event of Default. Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the July Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection. As of December 31, 2019, the Company had a principal balance $750,000 on this note and the Company had accrued $49,625 in interest expense. As of September 30, 2020, the Company had a principal balance $750,000 on this note and the Company had accrued $134,079 in interest expense. August 1, 2019 Senior Promissory Note On August 1, 2019, the Company executed a Senior Promissory Note (the “August Note”) in the principal amount of $500,000 payable to an unaffiliated third-party lender who had previously loaned the Company $1,500,000. The August Note bears interest at the rate of fifteen (15%) percent per annum, paid quarterly in arrears. The August Note originally matured on August 1, 2020. On August 1, 2020, the Company entered into an allonge with the lender pursuant to which the new maturity date for the note is now August 1, 2021 and the Company may now prepay the loan without penalty at any time. The August Note is subject to acceleration in an Event of Default. Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the August Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection. As of December 31, 2019, the Company had a principal balance $500,000 on this note and the Company had accrued $31,438 in interest expense. As of September 30, 2020, the Company had a principal balance $500,000 on this note and the Company had accrued $87,739 in interest expense. October 23, 2019 Senior Promissory Note On October 23, 2019, the Company executed a Senior Promissory Note (the “October Note”) in the principal amount of $250,000 payable to an unaffiliated third-party lender who had previously loaned the Company $2,000,000. The October Note bears interest at the rate of fifteen (15%) percent per annum, paid quarterly in arrears. The October Note originally matured on October 23, 2020, unless prepaid or in default. As of October 23, 2020, the Company entered into an allonge with the lender pursuant to which the new maturity date for the note is now October 23, 2021 and the Company may prepay the October Note at any time without penalty The October Note is subject to acceleration in an Event of Default. Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the October Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection. As of December 31, 2019, the Company had a principal balance $250,000 on this note and the Company had accrued $7,705 in interest expense. As of September 30, 2020, the Company had a principal balance $250,000 on this note and the Company had accrued $35,855 in interest expense. December 6, 2019 Senior Promissory Note On December 6, 2019, the Company executed a Senior Promissory Note (the “December Note”) in the principal amount of $250,000 payable to an unaffiliated third-party lender who had previously loaned the Company $2,250,000. The December Note originally bore interest at the rate of fifteen (15%) percent per annum, paid quarterly in arrears. The Note originally matured on March 31, 2020, unless prepaid or in default. As of March 31, 2020, the Company entered into an allonge with the lender pursuant to which the new maturity date for the note is now December 31, 2020. Additionally, the interest rate changed to 10% per annum from March 31, 2020 through maturity and the Company may now prepay the December Note at any time without penalty. The December Note is subject to acceleration in an Event of Default. Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the December Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection. As of December 31, 2019, the Company had a principal balance $250,000 on this note and the Company had accrued $890 in interest expense. As of September 30, 2020, the Company had a principal balance $250,000 on this note and the Company had accrued $16,541 in interest expense. January 27, 2020 Senior Promissory Note On January 27, 2020, the Company executed a Senior Promissory Note (the “January Note”) in the principal amount of $250,000 payable to an unaffiliated third-party lender who had previously loaned the Company $2,500,000. The January Note bore interest at the rate of five (5%) percent per annum, paid quarterly in arrears. The January Note originally matured on May 15, 2020 unless in default. On May 15, 2020, the Company entered into an allonge with the lender pursuant to which the new maturity date for the note is now December 31, 2020.Additionally, the interest rate was changed to 10% per annum and the Company may now prepay the January Note at any time without penalty. The January Note is subject to acceleration in an Event of Default (as defined). Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the January Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection. As of September 30, 2020, the Company had a principal balance of $250,000 on this note and the Company had accrued $13,047 in interest expense. February 25, 2020 Senior Promissory Note On February 25, 2020, the Company executed a Senior Promissory Note (the “February Note”) in the principal amount of $1,000,000 payable to an unaffiliated third-party lender. The February Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The February Note matured on April 30, 2020 unless in default. The February Note is subject to acceleration in an Event of Default (as defined). Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the February Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection. In July 2020, the Company used a portion of the proceeds from the July 3, 2020 senior promissory note to repay the principal of the February Note. The Company also repaid all accrued interest related to the February Note. February and March 2020 Notes On February 27, 2020 and March 23,2020, the Company executed two Senior Promissory Notes (the “Quarter-1 Notes”) in the principal amounts of $25,000 and $35,000, respectively, payable to an unaffiliated third-party lender. The Quarter-1 Notes originally bore interest at the rate of five (5%) percent per annum, paid quarterly in arrear and mature on December 31, 2020 unless in default. On June 1, 2020 the Company entered into an allonge pursuant to which the interest rate was changed to 10% per annum and the Company may now prepay the Quarter-1 Notes at any time without penalty. The Quarter-1 Notes are subject to acceleration in an Event of Default (as defined). Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the Quarter-1 Notes. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection. As of September 30, 2020, the Company had a principal balance of $25,000 and $35,000, respectively, on these notes and the Company had accrued an aggregate of $2,665 in interest expense. April 23, 2020 Senior Promissory Note On April 23, 2020, the Company executed a Senior Promissory Note (the “April Note”) in the principal amount of $200,000 payable to an unaffiliated third-party lender who had previously loaned the Company $2,750,000. The April Note bears interest at the rate of five (5%) percent per annum through May 31, 2020 and then shall change to 1% per annum effective June 1, 2020 paid quarterly in arrears. The April Note matures on December 31, 2020 unless in default. The Company may prepay the April Note within the first six (6) months by payment of unpaid interest for the first six (6) months and, after six (6) months, with a two (2%) percent ($4,000) premium. The April Note is subject to acceleration in an Event of Default (as defined). Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the April Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection. As of September 30, 2020, the Company had a principal balance of $200,000 on this note and the Company had accrued $2,339 in interest expense. May 5, 2020 Senior Promissory Note On May 5, 2020, the Company executed a Senior Promissory Note (the “May 5 Note”) in the principal amount of $2,000,000 payable to an unaffiliated third-party lender who had previously loaned the Company $1,000,000. The May 5 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The May 5 Note matures on December 31, 2020 unless in default. The May 5 Note is subject to acceleration in an Event of Default (as defined). Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the May 5 Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection. In July 2020, the Company used a portion of the proceeds from the July 3, 2020 senior promissory note to repay the principal of the May 5 Note. The Company also repaid the accrued interest related to this note. May 8, 2020 Senior Promissory Note On May 8, 2020, the Company executed a Senior Promissory Note (the “May 8 Note”) in the principal amount of $2,000,000 payable to an unaffiliated third-party lender who had previously loaned the Company $3,000,000. The May 8 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The May 8 Note matured on June 8, 2020 unless in default. The May 8 Note is subject to acceleration in an Event of Default (as defined). Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the May 8 Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection. In July 2020, the Company used a portion of the proceeds from the July 3, 2020 senior promissory note to repay the principal of the May 8 Note. The Company also repaid the accrued interest related to this note. May 18, 2020 and July 3, 2020 Senior Promissory Notes May 18, 2020 Senior Promissory Note On May 18, 2020, the Company executed a Senior Promissory Note (the “May 18 Note”) in the principal amount of $2,000,000 payable to an unaffiliated third-party lender. The May 18 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The May 18 Note matures on December 31, 2020 unless in default. The May 18 Note is subject to acceleration in an Event of Default (as defined). Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the May 18 Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection. As of September 30, 2020, the Company had a principal balance of $2,000,000 on this note July 3, 2020 Senior Promissory Note On July 3, 2020, the Company executed a Senior Promissory Note (the “July 3 Note”) in the principal amount of $5,000,000 payable to an unaffiliated third-party lender. The July 3 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The July 3 Note matures on June 30, 2022 unless in default. The July 3 Note is subject to acceleration in an Event of Default (as defined). Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the July 3 Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection. The Company used the proceeds from the July 3 Note to repay the principal outstanding on the May 5 Note ($2,000,000), the May 8 Note ($2,000,000), and the February Note ($1,000,000). As of September 30, 2020, the Company had a principal balance of $5,000,000 on this note As of September 30, 2020, the Company has accrued an aggregate total of $41,672 in interest expense related to these loans. August 4, 2020 Senior Promissory Note On August 4, 2020, the Company executed a Senior Promissory Note (the “August 4 Note”) in the principal amount of $3,000,000 payable to an unaffiliated third-party lender. The August 4 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The August 4 Note matures on December 31, 2020 unless in default. The August 4 Note is subject to acceleration in an Event of Default (as defined). Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the August 4 Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection. As of September 30, 2020, the Company had a principal balance of $3,000,000 on this note and prepaid interest of $37,352. COVID-19 Government Loans On May 12, 2020 , the Company was granted and on May 22, 2020 the Company received a €300,000 ($337,110) loan from the Greek government. The loan will be repaid in 40 equal monthly instalments beginning on January 1, 2022 and bears an interest rate of 0.94% per annum. As a condition to the loan, the company is required to retain the same number of employees until October 31, 2020. On June 24, 2020 the Company received a loan £50,000 ($61,845) from the Greek governme |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2020 | |
LEASES | |
NOTE 12 - LEASES | The Company has various lease agreements with terms up to 10 years, comprising leases of office space. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised. The assets and liabilities from operating and finance leases are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet. The Company’s operating leases do not provide an implicit rate that can readily be determined. Therefore, we use a discount rate based on our incremental borrowing rate, which is determined using the interest rate of our long-term debt as of January 1, 2019. The Company’s weighted-average remaining lease term relating to its operating leases is 7.3 years, with a weighted-average discount rate of 6.74%. The Company incurred lease expense for its operating leases of $148,218 and $195,564 which was included in “General and administrative expenses,” for the nine months ended September 30, 2020 and 2019, respectively. The Company had operating cash flows used in operating leases of $148,218 for the nine months ended September 30, 2020. The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of September 30, 2020. Maturity of Lease Liability Remainder of 2020 $ 25,060 2021 85,041 2022 56,270 2023 56,270 2024 56,270 Thereafter 210,982 Total undiscounted operating lease payments $ 489,894 Less: Imputed interest 104,332 Present value of operating lease liabilities $ 385,562 The Company’s weighted-average remaining lease term relating to its finance leases is 2.21 years, with a weighted-average discount rate of 6.74%. The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s finance leases as of September 30, 2020. Maturity of Lease Liability Remainder of 2020 $ 22,789 2021 82,746 2022 57,954 2023 45,664 2024 32,675 Thereafter 8,072 Total undiscounted finance lease payments $ 249,900 Less: Imputed interest 27,922 Present value of finance lease liabilities $ 221,978 The Company had operating cash flows used in finances leases of $9,197 for the nine months ended September 30, 2020. The Company had financing cash flows used in finances leases of $57,316 for the nine months ended September 30, 2020. The Company incurred interest expense on its finance leases of $9,197 which was included in “Interest expense,” for the nine months ended September 30, 2020. The Company incurred amortization expense on its finance leases of $90,550 which was included in “Depreciation and amortization expense,” for the nine months ended September 30, 2020. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
NOTE 13 - COMMITMENTS AND CONTINGENCIES | Legal Matters From time to time, the Company may be involved in litigation relating to claims arising out of the Company’s operations in the normal course of business. As of September 30, 2020, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s operations. 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 200,000 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: · 50,000 shares upon the successful conclusion of Preclinical Trials. · 50,000 shares upon the conclusion of Phase I testing. · 50,000 shares upon the conclusion of Phase II testing. · 50,000 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 has not received yet the formula from Tseka as of today and therefore the Company was not able to proceed with any of the above cases or any preclinical trials phases . Placement Agreement On August 8, 2017, the Company entered into an agreement with a third-party placement agent (the “Agent”) who served serve as the Company’s 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. In connection with the Company’s November 16, 2017 Note offering, the Agent received a cash commission of $240,000, 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 the offering (excluding shares of common stock issuable upon exercise of any warrants issued to investors, or 53,600 shares); 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. The warrants are exercisable six (6) months after the date of issuance, or as of May 16, 2018. In connection with the Company’s September 4, 2018 Note offering, the Agent received a cash commission for this transaction of $140,000, equal to seven (7%) percent of the total gross proceeds of the offering and the issuance of five-year warrants to purchase seven (7%) 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, or 26,056 shares); however, will receive seven (7%) 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. The warrants are exercisable six (6) months after the date of issuance, or March 4, 2019. Advisory Agreement On April 18, 2018, SkyPharm S.A. entered into a ten-year Advisory Agreement with Synthesis Management Limited (the “Advisor”). The Advisor was retained to assist SkyPharm to secure corporate finance capital. The Advisor shall be paid €104,000 per year during the ten-year term. |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 9 Months Ended |
Sep. 30, 2020 | |
STOCK OPTIONS AND WARRANTS | |
NOTE 14 - STOCK OPTIONS AND WARRANTS | As of September 30, 2020, there were 74,000 options outstanding and 74,000 options exercisable with expiration dates commencing October 2020 and continuing through January 2022. A summary of the Company’s option activity during the nine months ended September 30, 2020 is presented below: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Shares Price Term Value Balance Outstanding, December 31, 2019 74,000 $ 1.32 2.47 $ 198,000 Granted - - - - Forfeited - - - - Exercised - - - - Expired - - - - Balance Outstanding, September 30, 2020 74,000 $ 1.32 0.71 $ 162,480 Exercisable, September 30, 2020 74,000 $ 1.32 0.71 $ 162,480 As of September 30, 2020, there were 1,164,673 warrants outstanding and 1,164,673 warrants exercisable with expiration dates from May 2023 through March 2024. A summary of the Company’s warrant activity during the nine months ended September 30, 2020 is presented below: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Shares Price Term Value Balance Outstanding, December 31, 2019 1,164,673 $ 6.41 5.01 $ - Granted - - - - Forfeited - - - - Exercised - - - - Expired - - - - Balance Outstanding, September 30, 2020 1,164,673 $ 6.41 3.26 $ - Exercisable, September 30, 2020 1,164,673 $ 6.41 3.26 $ - |
DISAGGREGATION OF REVENUE
DISAGGREGATION OF REVENUE | 9 Months Ended |
Sep. 30, 2020 | |
DISAGGREGATION OF REVENUE | |
NOTE 15 - DISAGGREGATION OF REVENUE | ASC 606-10-50-5 requires that entities disclose disaggregated revenue information in categories (such as type of good or service, geography, market, type of contract, etc.). ASC 606-10-55-89 explains that the extent to which an entity’s revenue is disaggregated depends on the facts and circumstances that pertain to the entity’s contracts with customers and that some entities may need to use more than one type of category to meet the objective for disaggregating revenue. The Company disaggregates revenue by country to depict the nature and economic characteristics affecting revenue. The following table presents our revenue disaggregated by country for the nine months ended: Country September 30, 2020 September 30, 2019 Croatia $ 8,796 $ 5,338 Cyprus 5,343 - Denmark 229,929 89,580 France 1,113 142,919 Georgia 5,320 Germany 948,282 5,350,465 Greece 36,062,729 17,688,527 Hungary 36,881 261,092 Indonesia - 7,197 Iraq - 2,134 Ireland 35,833 376,380 Italy 27,265 157,398 Jordan 19,710 20,216 Libya 42,844 - Netherlands 156,392 763,889 Poland 28,941 270,306 Turkey - 24,434 UK 1,501,261 2,717,952 Total $ 39,105,318 $ 27,833,147 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
SUBSEQUENT EVENTS | |
NOTE 16 - SUBSEQUENT EVENTS | On October 5, 2020, Grigorios Siokas, Chief Executive Officer of the Company entered into a 12-month advisory agreement with PGS Ventures B.V. (the “Advisor”) to provide advisory and consulting services to Mr. Siokas and assist with strategic analysis of the Company’s business objectives for the North American capital markets. Mr. Siokas will pay the Advisor $8,000 per month payable in shares of common stock until such time as the Company completes a listing on the NEO Exchange in Canada. Thereafter, the monthly fee shall be $10,000, payable $5,000 in cash by the Company and $5,000 in stock and other considerations by Mr. Siokas Additionally, Peter Goldstein, the Director and principal of the Advisor, was appointed Executive Director to the Company’s Board of Directors effective October 15,2020. Peter Goldstein’s compensation is described above under the advisory agreement. |
ORGANIZATION, NATURE OF BUSIN_2
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN | |
Basis of Financial Statement Presentation | The accompanying condensed consolidated financial statements have been prepared in accordance with principles generally accepted in the United States of America. |
Principles of Consolidation | Our condensed consolidated accounts include our accounts and the accounts of our wholly-owned subsidiaries, SkyPharm S.A., Decahedron Ltd. and Cosmofarm Ltd. All significant intercompany balances and transactions have been eliminated. |
Use of Estimates | The preparation of the condensed 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. Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of November 13, 2020, the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change, as new events occur, and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. |
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, 2020, and December 31, 2019, there were no cash equivalents. The Company maintains bank accounts in the United States denominated in U.S. Dollars and 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 Pounds (British Pounds Sterling). |
Reclassifications to Prior Period Financial Statements and Adjustments | Certain reclassifications have been made in the Company’s financial statements of the prior period to conform to the current year presentation. $4,381 in other investments for the year ended December 31, 2019 was reclassified to other current assets. For the three and nine months ended September 30, 2019, $66, and $198, respectively in interest expense – related parties $66 and $198, respectively was reclassified to interest expense. Additionally, for the three and nine months ended September 30, 2019, $15,342 and $26,632, respectively in sales and marketing expenses were reclassified from general and administrative expenses. These reclassifications have no impact on previously reported net income. |
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. As of September 30, 2020, and December 31, 2019, the Company’s allowance for doubtful accounts was $587,292 and $562,444, respectively. |
Tax Receivables | The Company pays Value Added Tax (“VAT”) or similar taxes (“input VAT”), income taxes, and other taxes within the normal course of its business in most of the countries in which it operates related to the procurement of merchandise and/or services it acquires and/or on sales and taxable income. The Company also collects VAT or similar taxes on behalf of the government (“output VAT”) for merchandise and/or services it sells. If the output VAT exceeds the input VAT, this creates a VAT payable to the government. If the input VAT exceeds the output VAT, this creates a VAT receivable from the government. The VAT tax return is filed on a monthly basis offsetting the payables against the receivables. In observance of EU regulations for intra-EU cross-border sales, our subsidiaries in Greece, SkyPharm and Cosmofarm, do not charge VAT for sales to wholesale drug distributors registered in other European Union member states. The net VAT receivable is recorded in prepaid expense and other current assets on the condensed consolidated balance sheets. |
Inventory | Inventory is stated at net realizable 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. The Company writes-down inventories to net realizable value based on physical condition, expiration date, current market conditions, as well as forecasted demand. The Company’s inventories are not highly susceptible to obsolescence. Many of the Company’s inventory items are eligible for return to our suppliers when pre-agreed product requirements, including, but not limited to, physical condition and expiration date, are not met. |
Property and Equipment, net | Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated 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 Leasehold improvements and technical works Lesser of lease term or 40 years Vehicles 6 years Machinery 20 years Furniture, fixtures and equipment 5–10 years Computers and software 3-5 years Depreciation expense was $183,156 and $219,281 for the nine months ended September 30, 2020 and 2019, respectively. |
Impairment of Long-Lived Assets | In accordance with ASC 360-10, long-lived assets, 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 asset’s expected future discounted cash flows or market value, if readily determinable. |
Goodwill and Intangibles, net | 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 Company’s 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 unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s 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 recorded goodwill value. As a result of the acquisition of Decahedron, the Company tested and expensed 100% of the goodwill allocated to the purchase price, an amount equal to $1,949,884 for the year ended December 31, 2017. On December 19, 2018, as a result of the acquisition of Cosmofarm, the Company recorded $49,697 of goodwill. 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 asset’s remaining useful life is changed, the remaining carrying amount of the intangible asset will be amortized prospectively over that revised remaining useful life. As of September 30, 2020, no revision to the remaining amortization period of the intangible assets was made. Amortization expense was $24,836 and $20,849 for the nine months ended September 30, 2020 and 2019, respectively. |
Equity Method Investment | For those investments in common stock or in-substance common stock in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, the investment is accounted for under the equity method. The Company will record its share in the earnings of the investee and will include it within the condensed consolidated statement of operations. The Company assesses its investment for other-than-temporary impairment when events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable and recognizes an impairment loss to adjust the investment to its then current fair value. |
Investments in Equity Securities | Effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2016-01, and accordingly, investments in equity securities are accounted for at fair value with changes in fair value recognized in net income (loss). Equity securities are classified as short-term or long-term based on the nature of the securities and their availability to meet current operating requirements. Equity securities that are readily available for use in current operations are reported as a component of current assets in the accompanying consolidated balance sheets. Equity securities that are not considered available for use in current operations would be reported as a component of long-term assets in the accompanying consolidated balance sheets. For equity securities with no readily determinable fair value, the Company elects a measurement alternative to fair value. Under this alternative, the Company measures the investments at cost, less any impairment, and adjusted for changes resulting from observable price changes in transactions for identical or similar investments of the investee. The election to use the measurement alternative is made for each eligible investment. As of September 30, 2020, investments consisted of 3,000,000 shares, which traded at a closing price of $0 per share or a value of $0 of ICC International Cannabis Corp, 40,000 shares which traded at a closing price of $5.23 per share, or value of $209,138 of Diversa S.A. and 16,666 shares which traded at a closing price of $0.13 per share or value of $2,110 of National Bank of Greece. Additionally, the Company has $4,574 in equity securities of Pancreta bank, which are not publicly traded and recorded at cost. See Note 3, for additional investments in equity securities. |
Fair Value Measurement | The Company applies FASB ASC 820, Fair Value Measurements and Disclosures, (“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. 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 following tables presents assets that are measured and recognized at fair value as of September 30, 2020 and December 31, 2019, on a recurring basis: September 30, 2020 Total Carrying Level 1 Level 2 Level 3 Value Marketable securities – ICC International Cannabis Corp. $ - - - $ - Marketable securities – Divsersa S.A. 209,138 - - 290,138 Marketable securities – National Bank of Greece 2,110 - - 2,110 $ 211,248 $ 211,248 December 31, 2019 Total Carrying Level 1 Level 2 Level 3 Value Marketable securities – ICC International Cannabis Corp. $ 33,000 - - $ 33,000 Marketable securities – Divsersa S.A. 200,290 - - 200,290 Marketable securities – National Bank of Greece 5,650 - - 5,650 $ 238,940 $ 238,940 In addition, FASB ASC 825-10-25, Fair Value Option, (“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. |
Customer Advances | The Company receives prepayments from certain customers for pharmaceutical products prior to those customers taking possession of the Company’s products; the Company records these receipts as customer advances until it has met all the criteria for recognition of revenue including passing control of the products to its customer, at such point the Company will reduce the customer and deposits balance and credit the Company’s revenue. |
Revenue Recognition | The Company adopted the modified retrospective adoption in accordance with ASC 606, Revenue from Contracts with Customers, on January 1, 2018. The new guidance introduces a five-step model for recognizing revenue by applying the following steps: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the performance obligations are satisfied by transferring the promised goods to the customer. Once these steps are met, revenue is recognized upon delivery of the product. Adoption of ASC 606 has not changed the timing and nature of the Company’s revenue recognition and there has been no material effect on the Company’s condensed consolidated financial statements. |
Stock-based Compensation | The Company records stock-based compensation in accordance with ASC 718, Stock Compensation (“ASC 718”) and Staff Accounting Bulletin 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 ASU 2018-07, Compensation-Stock Compensation. |
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’ deficit until the entity is sold or substantially liquidated. Gains or losses from foreign currency transactions (transactions denominated in a currency other than the entity’s 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 Greece and the United Kingdom of England. The corporate income tax rate is 24% 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. As of September 30, 2020, the Company has maintained a valuation allowance against all net deferred tax assets in each jurisdiction in which it is subject to income tax. The Company periodically reviews the uncertainties and judgments related to the application of complex income tax regulations to determine income tax liabilities in several jurisdictions. The Company uses a “more likely than not” criterion for recognizing the income tax benefit of uncertain tax positions and establishing measurement criteria for income tax benefits. The Company has evaluated the impact of these positions and due to the fact that the fiscal years 2013 - 2014 are unaudited by the Greek tax authorities, a potential tax liability has been identified, which may arise from a prospective tax audit from tax authorities, based on the tax settlement note of years 2007 - 2009. The amount of the liability as of September 30, 2020, and December 31, 2019, was $83,238 and $79,716, respectively, and has been recorded as a long-term liability within the condensed consolidated balance sheets. |
Retirement and Termination Benefits | Under Greek labor law, employees are entitled to lump-sum compensation in the event of termination or retirement. The amount depends on the employee’s work experience and renumeration as of the day of termination or retirement. If an employee remains with the company until full-benefit retirement, the employee is entitled to a lump-sum equal to 40% of the compensation to be received if the employee were to be dismissed on the same day. The Company periodically reviews the uncertainties and judgments related to the application of the relevant labor law regulations to determine retirement and termination benefits obligations of its Greek subsidiaries. The Company has evaluated the impact of these regulations and has identified a potential retirement and termination benefits liability. The amount of the liability as of September 30, 2020, and December 31, 2019, was $80,579 and $77,170 respectively, and has been recorded as a long-term liability within the condensed consolidated balance sheets. |
Basic and Diluted Net Loss per Common Share | Basic income per share is calculated by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted income per share is calculated by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period and, when dilutive, potential shares from stock options and warrants to purchase common stock, using the treasury stock method. In accordance with ASC 260, Earnings Per Share, the following table reconciles basic shares outstanding to fully diluted shares outstanding. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Weighted average number of common shares outstanding Basic 13,225,387 13,225,387 13,225,387 13,289,843 Potentially dilutive common stock equivalents 38,557 - 35,131 - Weighted average number of common and equivalent shares outstanding - Diluted 13,263,944 13,225,387 13,260,518 13,289,843 Common stock equivalents are included in the diluted income per share calculation only when option exercise prices are lower than the average market price of the common shares for the period presented. |
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 unit’s 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 beginning 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 adoption of ASU No. 2017-04 did not have a material effect on the Company’s condensed consolidated financial position or the Company’s consolidated results of operations. |
ORGANIZATION NATURE OF BUSINESS
ORGANIZATION NATURE OF BUSINESS AND GOING CONCERN (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN | |
Schedule of Property and equipment | Estimated Useful Life Leasehold improvements and technical works Lesser of lease term or 40 years Vehicles 6 years Machinery 20 years Furniture, fixtures and equipment 5–10 years Computers and software 3-5 years |
Basic and Diluted Net Loss per Common Share | Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Weighted average number of common shares outstanding Basic 13,225,387 13,225,387 13,225,387 13,289,843 Potentially dilutive common stock equivalents 38,557 - 35,131 - Weighted average number of common and equivalent shares outstanding - Diluted 13,263,944 13,225,387 13,260,518 13,289,843 |
Fair value a measured and recognized asset | September 30, 2020 Total Carrying Level 1 Level 2 Level 3 Value Marketable securities – ICC International Cannabis Corp. $ - - - $ - Marketable securities – Divsersa S.A. 209,138 - - 290,138 Marketable securities – National Bank of Greece 2,110 - - 2,110 $ 211,248 $ 211,248 December 31, 2019 Total Carrying Level 1 Level 2 Level 3 Value Marketable securities – ICC International Cannabis Corp. $ 33,000 - - $ 33,000 Marketable securities – Divsersa S.A. 200,290 - - 200,290 Marketable securities – National Bank of Greece 5,650 - - 5,650 $ 238,940 $ 238,940 |
PROPERTY AND EQUIPMENT NET (Tab
PROPERTY AND EQUIPMENT NET (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of Property and equipment, net | September 30, 2020 December 31, 2019 Leasehold improvements $ 537,389 $ 548,000 Vehicles 120,138 115,055 Furniture, fixtures and equipment 1,515,228 1,439,839 Computers and software 141,975 85,052 2,314,730 2,187,946 Less: Accumulated depreciation and amortization (615,000 ) (453,165 ) Total $ 1,699,730 $ 1,734,781 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
INTANGIBLE ASSETS, NET | |
Schedule of Intangible assets | September 30, 2020 December 31, 2019 Leasehold improvements $ 537,389 $ 548,000 Vehicles 120,138 115,055 Furniture, fixtures and equipment 1,515,228 1,439,839 Computers and software 141,975 85,052 2,314,730 2,187,946 Less: Accumulated depreciation and amortization (615,000 ) (453,165 ) Total $ 1,699,730 $ 1,734,781 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
RELATED PARTY TRANSACTIONS | |
Schedule of related party notes payable | 2020 2019 Beginning Balance $ 1,375,532 $ 1,793,437 Payments (941,357 ) (382,055 ) Foreign currency translation 60,770 (35,850 ) Ending Balance $ 494,945 $ 1,375,532 |
Summary of related party loans payable | 2020 2019 Beginning Balance $ 1,026,264 $ 1,775,251 Proceeds 594,836 585,915 Payments (109,024 ) (262,226 ) Conversion of debt - (1,050,000 ) Reclassification of receivable - 2,547 Foreign currency translation 13,409 (25,223 ) Ending Balance $ 1,525,485 $ 1,026,264 |
LINES OF CREDIT (Tables)
LINES OF CREDIT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
LINES OF CREDIT | |
Summary of lines of credit | September 30, 2020 December 31, 2019 National $ 2,822,030 $ 1,940,045 Alpha 1,002,669 810,947 National - COVID 428,740 - Eurobank - - Total $ 4,253,439 $ 2,750,992 |
CONVERTIBLE DEBT (Tables)
CONVERTIBLE DEBT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
CONVERTIBLE DEBT | |
Summary of convertible debt | 2020 2019 Beginning balance notes 1,500,000 365,513 New notes - 1,500,000 Payments (413,000 ) (365,513 ) Subtotal notes 1,087,000 1,500,000 Debt discount at year end - (29,509 ) Note payable net of discount 1,087,000 1,470,491 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
DEBT | |
Summary of debt | September 30, 2020 Loan Facility Bridge Loans Trade Facility Third Party COVID Loans Total Beginning balance 3,078,442 191,287 6,245,400 2,514,595 - 12,029,724 Proceeds - - - 15,510,000 416,295 15,926,295 Payments (82,061 ) (165,995 ) - (5,005,862 ) - (5,253,918 ) Debt extinguishment (29,035 ) (25,292 ) - - - (54,327 ) Foreign currency translation 115,803 - 99,200 645 - 215,648 Ending Balance 3,083,149 - 6,344,600 13,019,378 398,955 22,863,422 December 31, 2019 Loan Facility Bridge Loans Trade Facility Third Party Total Beginning balance $ 3,078,442 $ 191,287 $ 6,291,199 $ 242,805 $ 9,803,733 Proceeds - - - 2,500,000 2,500,000 Payments - - - (227,912 ) (227,912 ) Foreign currency translation - - (45,799 ) (298 ) (46,097 ) Ending Balance $ 3,078,442 $ 191,287 $ 6,245,400 $ 2,514,595 $ 12,029,724 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
LEASES | |
Summary of operating leases | Maturity of Lease Liability Remainder of 2020 $ 25,060 2021 85,041 2022 56,270 2023 56,270 2024 56,270 Thereafter 210,982 Total undiscounted operating lease payments $ 489,894 Less: Imputed interest 104,332 Present value of operating lease liabilities $ 385,562 |
Summary of finance leases | Maturity of Lease Liability Remainder of 2020 $ 22,789 2021 82,746 2022 57,954 2023 45,664 2024 32,675 Thereafter 8,072 Total undiscounted finance lease payments $ 249,900 Less: Imputed interest 27,922 Present value of finance lease liabilities $ 221,978 |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
STOCK OPTIONS AND WARRANTS | |
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, 2019 74,000 $ 1.32 2.47 $ 198,000 Granted - - - - Forfeited - - - - Exercised - - - - Expired - - - - Balance Outstanding, September 30, 2020 74,000 $ 1.32 0.71 $ 162,480 Exercisable, September 30, 2020 74,000 $ 1.32 0.71 $ 162,480 |
Summary of warrant activity during year | Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Shares Price Term Value Balance Outstanding, December 31, 2019 1,164,673 $ 6.41 5.01 $ - Granted - - - - Forfeited - - - - Exercised - - - - Expired - - - - Balance Outstanding, September 30, 2020 1,164,673 $ 6.41 3.26 $ - Exercisable, September 30, 2020 1,164,673 $ 6.41 3.26 $ - |
DISAGGREGATION OF REVENUE (Tabl
DISAGGREGATION OF REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
DISAGGREGATION OF REVENUE | |
Schedule of Revenue disaggregated by country | Country September 30, 2020 September 30, 2019 Croatia $ 8,796 $ 5,338 Cyprus 5,343 - Denmark 229,929 89,580 France 1,113 142,919 Georgia 5,320 Germany 948,282 5,350,465 Greece 36,062,729 17,688,527 Hungary 36,881 261,092 Indonesia - 7,197 Iraq - 2,134 Ireland 35,833 376,380 Italy 27,265 157,398 Jordan 19,710 20,216 Libya 42,844 - Netherlands 156,392 763,889 Poland 28,941 270,306 Turkey - 24,434 UK 1,501,261 2,717,952 Total $ 39,105,318 $ 27,833,147 |
ORGANIZATION NATURE OF BUSINE_2
ORGANIZATION NATURE OF BUSINESS AND GOING CONCERN (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Furniture, fixtures and equipment [Member] | Minimum [Member] | |
Estimated Useful Life | 5 years |
Furniture, fixtures and equipment [Member] | Maximum [Member] | |
Estimated Useful Life | 10 years |
Computers and software [Member] | Minimum [Member] | |
Estimated Useful Life | 3 years |
Computers and software [Member] | Maximum [Member] | |
Estimated Useful Life | 5 years |
Machinery [Member] | |
Estimated Useful Life | 20 years |
Vehicles [Member] | |
Estimated Useful Life | 6 years |
Leasehold improvements and technical works [Member] | |
Estimated Useful Life | Lesser of lease term or 40 years |
ORGANIZATION NATURE OF BUSINE_3
ORGANIZATION NATURE OF BUSINESS AND GOING CONCERN (Details 1) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Fair value of assets and liabilities | $ 211,248 | $ 238,940 |
Marketable securities - ICC International Cannabis Corp. [Member] | ||
Fair value of assets and liabilities | 290,138 | 33,000 |
Marketable securities - Divsersa S.A. [Member] | ||
Fair value of assets and liabilities | 2,110 | 200,290 |
Marketable securities - National Bank of Greece [Member] | ||
Fair value of assets and liabilities | 211,248 | 5,650 |
Level 1 [Member] | ||
Fair value of assets and liabilities | 211,248 | 238,940 |
Level 1 [Member] | Marketable securities - ICC International Cannabis Corp. [Member] | ||
Fair value of assets and liabilities | 209,138 | 33,000 |
Level 1 [Member] | Marketable securities - Divsersa S.A. [Member] | ||
Fair value of assets and liabilities | 2,110 | 200,290 |
Level 1 [Member] | Marketable securities - National Bank of Greece [Member] | ||
Fair value of assets and liabilities | 211,248 | 5,650 |
Level 2 [Member] | Marketable securities - ICC International Cannabis Corp. [Member] | ||
Fair value of assets and liabilities | 0 | 0 |
Level 2 [Member] | Marketable securities - Divsersa S.A. [Member] | ||
Fair value of assets and liabilities | 0 | 0 |
Level 2 [Member] | Marketable securities - National Bank of Greece [Member] | ||
Fair value of assets and liabilities | 0 | 0 |
Level 3 [Member] | Marketable securities - ICC International Cannabis Corp. [Member] | ||
Fair value of assets and liabilities | 0 | 0 |
Level 3 [Member] | Marketable securities - Divsersa S.A. [Member] | ||
Fair value of assets and liabilities | 0 | 0 |
Level 3 [Member] | Marketable securities - National Bank of Greece [Member] | ||
Fair value of assets and liabilities | $ 0 | $ 0 |
ORGANIZATION NATURE OF BUSINE_4
ORGANIZATION NATURE OF BUSINESS AND GOING CONCERN (Details 2) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN | ||||
Weighted average number of common shares outstanding Basic | 13,225,387 | 13,225,387 | 13,225,387 | 13,289,843 |
Potentially dilutive common stock equivalents | 38,557 | 0 | 33,151 | 0 |
Weighted average number of common and equivalent shares outstanding - Diluted | 13,263,944 | 13,225,387 | 13,260,518 | 13,289,843 |
ORGANIZATION NATURE OF BUSINE_5
ORGANIZATION NATURE OF BUSINESS AND GOING CONCERN (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Nov. 21, 2017 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 19, 2018 | Sep. 30, 2018 | Sep. 29, 2018 | Feb. 10, 2017 | |
Reverse stock split, description | The Company effected 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. | |||||||||||||||
Other investments | $ 4,381 | |||||||||||||||
General and adminstrative expenses | $ 1,017,686 | $ 808,138 | $ 15,342 | $ 2,702,259 | $ 2,444,351 | |||||||||||
Interest expense related party | 789,426 | 366,677 | 66 | 1,853,414 | 955,791 | |||||||||||
Interest expense | 66 | 198 | ||||||||||||||
Net income (loss) | 757,866 | $ 1,377,311 | $ (483,310) | (1,633,349) | $ (1,540,033) | (217,173) | 1,651,867 | (3,390,555) | ||||||||
Working capital deficit | (5,332,248) | (5,332,248) | ||||||||||||||
Cash used in operation | 10,342,115 | |||||||||||||||
Accumulated deficit | (17,919,743) | (17,919,743) | (19,571,610) | |||||||||||||
TOTAL STOCKHOLDERS' DEFICIT | (4,770,002) | $ (5,527,750) | $ (7,087,901) | $ (6,384,627) | $ (4,783,721) | $ (3,544,535) | (4,770,002) | (6,384,627) | (6,460,829) | $ (3,317,450) | ||||||
Allowance for doubtful accounts | 587,292 | 587,292 | 562,444 | |||||||||||||
Depreciation expense | 183,156 | 219,281 | ||||||||||||||
Amortization of intangible assets | 24,836 | $ 20,849 | ||||||||||||||
Impairment of goodwill | $ 1,949,884 | |||||||||||||||
Impairment of goodwill, percent | 100.00% | |||||||||||||||
Goodwill | $ 49,697 | |||||||||||||||
Long-term liability | 83,238 | 83,238 | 79,716 | |||||||||||||
Potential retirement and termination benefits liability | 80,579 | $ 80,579 | $ 77,170 | |||||||||||||
Periodic inventory level, percentage | 100.00% | |||||||||||||||
Description of Potential retirement and termination benefits liability | If an employee remains with the company until full-benefit retirement, the employee is entitled to a lump-sum equal to 40% of the compensation to be received if the employee were to be dismissed on the same day | |||||||||||||||
Import/export license [Member] | ||||||||||||||||
Estimated Useful Life | 5 years | |||||||||||||||
Amplerissimo Ltd [Member] | Share Exchange Agreement [Member] | ||||||||||||||||
Ownership interest sold | 100.00% | |||||||||||||||
SkyPharm [Member] | ||||||||||||||||
Equity ownership percentage | 100.00% | |||||||||||||||
Decahedron Ltd [Member] | Stock Purchase Agreement [Member] | ||||||||||||||||
Common stock shares reserved | 170,000 | |||||||||||||||
Diversa S.A. [Member] | ||||||||||||||||
Equity method investment shares acquired, shares | 40,000 | |||||||||||||||
Equity method investment shares acquired, value | 209,138 | $ 209,138 | ||||||||||||||
Closing price | $ 5.23 | |||||||||||||||
National Bank of Greece [Member] | ||||||||||||||||
Equity method investment shares acquired, shares | 16,666 | |||||||||||||||
Equity method investment shares acquired, value | 2,110 | $ 2,110 | ||||||||||||||
Closing price | $ 0 | |||||||||||||||
ICC International Cannabis Corp [Member] | ||||||||||||||||
Equity method investment shares acquired, shares | 3,000,000 | |||||||||||||||
Equity method investment shares acquired, value | $ 0 | $ 0 | ||||||||||||||
Closing price | $ 0.13 | |||||||||||||||
Greece [Member] | ||||||||||||||||
Income tax rate | 24.00% | |||||||||||||||
United Kingdom Of England [Member] | ||||||||||||||||
Income tax rate | 20.00% |
MARKETABLE SECURITIES (Details
MARKETABLE SECURITIES (Details Narrative) | 1 Months Ended | 9 Months Ended | |||||
Jul. 16, 2018USD ($)shares | May 17, 2018USD ($)shares | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2020CAD ($) | Sep. 30, 2020EUR (€) | Dec. 31, 2019USD ($) | Jun. 30, 2019 | |
Net unrealized loss on fair value investment | $ 7,894 | ||||||
Marketable securities - Divsersa S.A. [Member] | |||||||
Closing price of shares | $ / shares | $ 5.23 | ||||||
Shares issued as marketable securities | shares | 40,000 | ||||||
Marketable securities - National Bank of Greece [Member] | |||||||
Closing price of shares | $ / shares | $ 0.13 | ||||||
Marketable securities | $ 2,110 | ||||||
Shares issued as marketable securities | shares | 16,666 | ||||||
Stock issued during the period, amount | $ 209,138 | ||||||
Cosmo Farmacy LP [Member] | |||||||
Investement | $ 175,845 | ||||||
Initial share capital | € | € 150,000 | ||||||
Initial share capital increased | € | 500,000 | ||||||
Pharmacy license value | € | € 350,000 | ||||||
Maturity period of license | 30 years | 30 years | 30 years | ||||
Ownership equity | 70.00% | ||||||
cash contributed to limited partner | € | € 150,000 | ||||||
Equity ownership remaining | 30.00% | ||||||
Kaneh Bosm Biotechnology Inc [Member] | Share Exchange Agreement [Member] | |||||||
Transfer of shares | shares | 2,500,000 | ||||||
Kaneh Bosm Biotechnology Inc [Member] | Share Exchange Agreement [Member] | Canadian Securities Exchange [Member] | |||||||
Exchange of shares | shares | 5,000,000 | ||||||
Share Exchange Agreement [Member] | ICC [Member] | |||||||
Net unrealized loss on fair value investment | $ 13,500 | ||||||
Upfront cash received | $ 2,000,000 | ||||||
Investement | $ 0 | $ 33,000 | |||||
Equity method investment shares acquired | shares | 5,000,000 | ||||||
Description for ownership percentage | The ten million shares of ICC owned by the Company constituted approximately 7% of the 141,219,108 shares of capital stock of KBB then issued and outstanding. The Company does not have the ability to exercise significant influence over ICC | Since no value was attributed to the 33 1/3% equity ownership interest in Marathon received as consideration for the distribution services, the Company would receive variable consideration in future for its services under the Distribution and Equity Acquisition Agreement | Since no value was attributed to the 33 1/3% equity ownership interest in Marathon received as consideration for the distribution services, the Company would receive variable consideration in future for its services under the Distribution and Equity Acquisition Agreement | Since no value was attributed to the 33 1/3% equity ownership interest in Marathon received as consideration for the distribution services, the Company would receive variable consideration in future for its services under the Distribution and Equity Acquisition Agreement | |||
Additional shares issued | shares | 3,000,000 | ||||||
Share Exchange Agreement [Member] | Marathon Global Inc [Member] | |||||||
Shares of Marathon transferred by company to KBB | shares | 2,500,000 | ||||||
Gain on exchange of investment | $ 2,092,200 | $ 1,953,000 | |||||
Distribution and Equity Acquisition Agreement [Member] | Marathon Global Inc [Member] | |||||||
Upfront cash received | $ 2,000,000 | ||||||
Equity interest acquired description | a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services | a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services | a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services | ||||
Distribution and Equity Acquisition Agreement [Member] | Marathon Global Inc [Member] | Gross Sales One [Member] | |||||||
Cash received upon gross sales | $ 2,750,000 | ||||||
Gross sales | 13,000,000 | ||||||
Distribution and Equity Acquisition Agreement [Member] | Marathon Global Inc [Member] | Gross Sales [Member] | |||||||
Cash received upon gross sales | 2,750,000 | ||||||
Gross sales | $ 6,500,000 |
PROPERTY AND EQUIPMENT NET (Det
PROPERTY AND EQUIPMENT NET (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Property and equipment | $ 314,730 | $ 2,187,946 |
Less: Accumulated depreciation | (615,000) | (453,165) |
Total | 1,699,730 | 1,734,781 |
Computers and software [Member] | ||
Property and equipment | 141,975 | 85,052 |
Vehicles [Member] | ||
Property and equipment | 120,138 | 115,055 |
Leasehold Improvements [Member] | ||
Property and equipment | 537,389 | 548,000 |
Furniture, fixtures and equipment [Member] | ||
Property and equipment | $ 515,228 | $ 1,439,839 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Intangible assets | $ 263,790 | $ 263,790 |
Less: Accumulated Amortization | (74,642) | (49,806) |
Subtotal | 179,180 | 213,984 |
Goodwill | 49,697 | 49,697 |
Total | 238,845 | 263,681 |
Trade Name / Mark [Member] | ||
Intangible assets | 36,997 | 36,997 |
Customer Base [Member] | ||
Intangible assets | 176,793 | 176,793 |
License [Member] | ||
Intangible assets | $ 50,000 | $ 50,000 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Provision for tax | $ 79,787 | $ 79,716 |
Greece [Member] | ||
Income tax rate | 29.00% | |
United Kingdom [Member] | ||
Income tax rate | 19.00% |
CAPITAL STRUCTURE (Details Narr
CAPITAL STRUCTURE (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |||
Feb. 18, 2019 | Sep. 30, 2020 | Aug. 31, 2020 | Jul. 31, 2020 | Dec. 31, 2019 | |
Common stock, shares, outstanding | 12,840,059 | 12,860,059 | |||
Common stock shares authorized | 300,000,000 | 300,000,000 | |||
Common stock value | $ 13,225 | $ 13,225 | |||
Treasury stock, shares transferred | 385,328 | 365,328 | |||
Two Stock Purchase Agreement [Member] | |||||
Common stock value | $ 40,000 | ||||
Treasury stock, shares transferred | 40,000 | ||||
Common stock per share | $ 4 | ||||
Common stock share issued | 10,000 | ||||
Stock Purchase Agreement [Member] | |||||
Common stock value | $ 40,000 | ||||
Treasury stock, shares transferred | 40,000 | ||||
Common stock per share | $ 4 | ||||
Common stock share issued | 10,000 | ||||
Stock Purchase Agreement [Member] | Institutional Noteholder One [Member] | |||||
Treasury stock, shares transferred | 250,023 | 57,120 | |||
Common stock, shares purchased | 83,341 | ||||
Cancellation of shares | 26,221 | ||||
Payment made against shares purchased | $ 250,023 | ||||
Common stock, purchase price | $ 3 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Notes Payable - Related Party [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Beginning Balance | $ 1,375,532 | $ 1,793,437 |
Payments | (941,357) | (382,055) |
Foreign currency translation | 60,770 | (35,850) |
Ending Balance | $ 494,945 | $ 1,375,532 |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details 1) - Loans Payable - Related Party [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Beginning Balance | $ 1,026,264 | $ 1,775,251 |
Proceeds | 594,836 | 585,915 |
Payments | (109,024) | (262,226) |
Conversion of debt | 0 | (1,050,000) |
Reclassification of receivable | 0 | 2,547 |
Foreign currency translation | 13,409 | (25,223) |
Ending Balance | $ 1,525,485 | $ 1,026,264 |
RELATED PARTY TRANSACTIONS (D_3
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jan. 27, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 20, 2018 | Jul. 21, 2009 | |
Interest rate | 4.35% | 4.35% | ||||||
Borrowing | $ 1,172,300 | $ 1,172,300 | $ 1,122,700 | |||||
Revenue | 14,352,098 | $ 9,685,850 | 39,105,318 | $ 27,883,147 | ||||
Officers and directors [Member] | ||||||||
Shares issued | 2,000,000 | |||||||
Grigorios Siokas Four [Member] | ||||||||
Additional proceeds from debt | 400,000 | |||||||
Loans payable | 722,762 | |||||||
Grigorios Siokas Three [Member] | ||||||||
Loans payable | 303,502 | |||||||
Outstanding principal balance | 525,485 | 525,485 | 1,026,264 | |||||
Additional proceeds from debt | 194,836 | |||||||
Repayment of loans | 93,000 | |||||||
Foreign currency translation | 13,409 | |||||||
DOC Pharma S.A. [Member] | ||||||||
Accounts receivable balance | 235,346 | 235,346 | 613,264 | |||||
Accounts payable balance | 25,346 | |||||||
Prepaid balance | 3,227,853 | 3,227,853 | 2,449,484 | |||||
Net prepaid balance | 2,424,138 | |||||||
Payments to acquire businesses | 3,551,650 | 976,673 | ||||||
Revenue | 117,708 | 1,564,506 | ||||||
Revenue from DOC Pharma | $ 347,147 | |||||||
DOC Pharma S.A. [Member] | Loan Agreement [Member] | November 1, 2015 [Member] | ||||||||
Loans payable | 12,662 | 12,662 | ||||||
Outstanding principal balance | 14,067 | 14,067 | (13,472) | |||||
Payment made for existing bills | $ 12,662 | |||||||
Interest rate | 18.00% | |||||||
Accrued interest | 1,298 | $ 1,298 | 1,100 | |||||
Foreign currency translation loss | 60,770 | |||||||
Grigorios Siokas [Member] | January 27, Note [Member] | Senior Promissory Note [Member] | ||||||||
Loans payable | 2,500,000 | 2,500,000 | ||||||
Outstanding principal balance | 468,920 | 468,920 | 1,347,240 | |||||
Interest rate | 5.00% | 18.00% | ||||||
Accrued interest | 153,540 | 153,540 | 128,447 | |||||
Borrowing | $ 1,718,400 | |||||||
Maturity date | Mar. 18, 2019 | |||||||
Dimitrios Goulielmos [Member] | ||||||||
Outstanding principal balance | $ 11,957 | 11,957 | 14,820 | |||||
Repayment of loans | $ 3,517 | $ 45,245 |
LINES OF CREDIT (Details)
LINES OF CREDIT (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Lines of credit | $ 4,253,439 | $ 2,750,992 |
National-Covid [Member] | ||
Line of credit | 428,740 | 0 |
Eurobank [Member] | ||
Lines of credit | 0 | 0 |
Alpha [Member] | ||
Lines of credit | 1,002,669 | 810,947 |
National [Member] | ||
Lines of credit | $ 2,822,030 | $ 1,940,045 |
LINES OF CREDIT (Details Narrat
LINES OF CREDIT (Details Narrative) - USD ($) | Aug. 11, 2020 | Jul. 23, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Jul. 28, 2020 | Jul. 10, 2020 | Jun. 23, 2020 |
Interest expense | $ 141,979 | $ 85,394 | ||||||
Borrowing maximum limit | $ 1,172,300 | $ 1,122,700 | ||||||
Interest rate | 4.35% | 4.35% | ||||||
Debt outstanding amount | $ 4,253,439 | $ 2,750,992 | ||||||
Line of Credit [Member] | Alpha Bank of Greece [Member] | ||||||||
Borrowing maximum limit | $ 1,172,300 | $ 1,122,700 | ||||||
Interest rate | 6.00% | 0.06% | ||||||
Debt outstanding amount | $ 1,002,669 | $ 810,947 | ||||||
Line of Credit [Member] | COSME 1 [Member] | ||||||||
Borrowing maximum limit | $ 586,150 | $ 0 | ||||||
Interest rate | 4.35% | 4.35% | ||||||
Debt outstanding amount | $ 2,822,030 | $ 1,940,045 | ||||||
National Bank of Greece One [Member] | ||||||||
Interest expense | 0 | |||||||
Debt outstanding amount | 428,740 | 0 | ||||||
First disburamountsement Amount | $ 483,243 | |||||||
First disburamountsement description | The proposed plan has a maturity date of sixty (60) months from the date of the first disbursement | |||||||
Final disburamountsement Amount | $ 75,091 | |||||||
Second disburamountsement Amount | $ 48,639 | |||||||
Second disburamountsement description | The line of credit is interest bearing from the date of receipt and is payable every three (3) months at an interest rate of 2.7%. | |||||||
National Bank of Greece One [Member] | Line of Credit [Member] | ||||||||
Borrowing maximum limit | $ 2,579,060 | $ 1,684,050 | $ 561,850 | |||||
Interest rate | 6.00% | 0.06% |
CONVERTIBLE DEBT (Details)
CONVERTIBLE DEBT (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
DEBT | |||
Beginning balance notes | $ 1,500,000 | $ 365,513 | |
New notes | 0 | $ 1,500,000 | |
Payments | (413,000) | (365,513) | |
Subtotal notes | 1,087,000 | 1,500,000 | |
Debt discount at year end | 0 | $ (29,509) | |
Note payable net of discount | $ 1,087,000 | $ 1,470,491 |
CONVERTIBLE DEBT (Details Narra
CONVERTIBLE DEBT (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Sep. 23, 2020 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Jul. 03, 2020 | May 18, 2020 | May 08, 2020 | May 05, 2020 | Apr. 23, 2020 | Feb. 27, 2020 | Feb. 25, 2020 | Dec. 06, 2019 | Oct. 23, 2019 | May 17, 2019 | |
Payment of convertible note payable | $ 413,000 | $ 365,514 | |||||||||||||
Interest expense | 18,700 | ||||||||||||||
Amortization of debt discounts | $ 229,713 | $ 29,509 | $ 204,396 | $ 90,491 | |||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||||||||||
Legal fees | $ 30,000 | ||||||||||||||
Convertible notes payable, principal amount | 1,087,000 | ||||||||||||||
Senior Promissory Notes [Member] | Unaffiliated Third Party [Member] | |||||||||||||||
Principal balance | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 | $ 200,000 | $ 2,750,000 | $ 1,000,000 | |||||||||
Senior Promissory Notes [Member] | Unaffiliated Third Party [Member] | December 6, 2019 [Member] | |||||||||||||||
Convertible notes payable, principal amount | 250,000 | $ 250,000 | $ 250,000 | ||||||||||||
Senior Promissory Notes [Member] | Unaffiliated Third Party [Member] | October 23, 2019 [Member] | |||||||||||||||
Convertible notes payable, principal amount | 250,000 | 250,000 | $ 250,000 | ||||||||||||
Senior Promissory Notes [Member] | Unaffiliated Third Party [Member] | April 1, 2019 [Member] | |||||||||||||||
Convertible notes payable, principal amount | 250,000 | 250,000 | |||||||||||||
Senior Promissory Notes [Member] | Unaffiliated Third Party [Member] | April 1 to 3, 2019 [Member] | |||||||||||||||
Convertible notes payable, principal amount | 250,000 | 250,000 | |||||||||||||
Senior Promissory Notes [Member] | Unaffiliated Third Party [Member] | April 9, 2019 [Member] | |||||||||||||||
Convertible notes payable, principal amount | 250,000 | 250,000 | |||||||||||||
Senior Promissory Notes [Member] | March 23, 2020 Forbearance Agreement [Member] | |||||||||||||||
Convertible notes payable, principal amount | $ 1,500,000 | ||||||||||||||
Redemption premium percentage | 1.20% | ||||||||||||||
Conversion price per share | $ 6 | ||||||||||||||
Agreement redemption description | (1): (September 16, 2020 (or, if earlier, such date when all amounts outstanding under the Note shall be paid in full or converted into shares of Common Stock in accordance therewith) and (2) the time of any breach by the Company of the Agreement or the occurrence of an Event of Default that is not an Existing Default (the “Forbearance Expiration Date”), (b) during the Forbearance Period waive the prepayment premium to any Company Optional Redemption, and (c) during the Forbearance Period, waive the repayment in full of the Note other than the Required Payments (as defined) prior to September 16, 2020. The Scheduled Required Prepayments are $100,000 upon signing the Agreement and five (5) monthly payments thereafter aggregating $200,000 with all amounts outstanding under the Note due on September 16, 2020. In addition, there are mandatory prepayments in the event the Company completes a Subsequent Placement (as defined) or long-term debt (other than from the Buyer or from officers and directors and advisors of the Company) or factoring and purchase order indebtedness, the Company shall effect a Company Optional Redemption amount equal to 50% of the gross proceeds (less reasonable expenses of counsel and any investment bank) together with all Scheduled Required Payments. | ||||||||||||||
Senior Promissory Notes [Member] | July 24, 2019 [Member] | |||||||||||||||
Convertible notes payable, principal amount | $ 750,000 | ||||||||||||||
Senior Promissory Notes [Member] | August 1, 2019 [Member] | |||||||||||||||
Convertible notes payable, principal amount | 500,000 | 500,000 | |||||||||||||
Senior Promissory Notes [Member] | October 23, 2019 [Member] | |||||||||||||||
Convertible notes payable, principal amount | 250,000 | 250,000 | |||||||||||||
Principal balance | 250,000 | $ 250,000 | |||||||||||||
Senior Promissory Notes [Member] | May 5, 2020 [Member] | |||||||||||||||
Convertible notes payable, principal amount | 2,000,000 | ||||||||||||||
Senior Promissory Notes [Member] | On May 8, 2020[Member] | |||||||||||||||
Convertible notes payable, principal amount | 200,000 | ||||||||||||||
Senior Promissory Notes [Member] | On April 23, 2020[Member] | |||||||||||||||
Convertible notes payable, principal amount | 200,000 | ||||||||||||||
Principal balance | $ 281,000 | ||||||||||||||
Senior Promissory Notes [Member] | July 3, 2020 [Member] | |||||||||||||||
Principal balance | $ 5,000,000 | $ 2,000,000 | $ 2,000,000 | $ 1,000,000 | |||||||||||
Securities Purchase Agreement [Member] | Institutional investors [Member] | |||||||||||||||
Convertible notes payable, principal amount | $ 1,500,000 | ||||||||||||||
Cash commission description | (i) from taking any action with respect to the Existing Default and (ii) from issuing any demand for redemption of the Note on the basis of the Existing Default until the earlier of: (1): June 16, 2021 (or, if earlier, such date when all amounts outstanding under the Note shall be paid in full or converted into shares of Common Stock in accordance therewith) and (2) the time of any breach by the Company of the Agreement or the occurrence of an Event of Default that is not an Existing Default (the “Forbearance Expiration Date), (b) during the Forbearance Period (as defined) waive the prepayment premium to any Company Optional Redemption (which will result in the 120% redemption premium effectively replaced with 100%), and (c) during the Forbearance Period, waive the repayment in full of the Note other than the Required Payments (as defined) prior to June 16, 2021. The Scheduled Required Prepayments are $63,000 upon signing the Agreement and eight (8) monthly payments thereafter aggregating $480,000 with the remaining $607,000 outstanding under the Note due on June 16, 2021. In addition, there are mandatory prepayments in the event the Company completes a Subsequent Placement (as defined) or long-term debt (other than from the Buyer or from officers, directors and 10% or greater shareholders of the Company) or factoring and purchase order indebtedness, the Company shall effect a Company Optional Redemption amount equal to 50% of the gross proceeds (less reasonable expenses of counsel and any investment bank) together with all Scheduled Required Payments. | Roth Capital Partners, LLC (“Roth”), as the Company’s exclusive placement agent, received a cash commission for this transaction equal to six (6%) percent of the total gross proceeds of the offering. This 6% fee or $90,000 was recorded as debt discount along with the $30,000 in legal fees associated with the May 2019 Note. | |||||||||||||
Securities Purchase Agreement [Member] | Holder [Member] | May 2019 Note [Member] | |||||||||||||||
Principal balance | $ 150,000 | ||||||||||||||
Common stock shares issuable upon conversion of debt/convertible securities | 250,000 | ||||||||||||||
Conversion price | $ 6 | ||||||||||||||
Event of default conversion price, description | The Note provides that upon an Event of Default, the Buyer may, among other things, require the Company to redeem all or a portion of the Note at a redemption premium of 120%, multiplied by the product of the conversion rate ($6.00 per share) and the then current market price. | Upon an Event of Default (regardless of whether such event has been cured), the Buyer may convert at an alternative conversion price equal to the lower of the then applicable Conversion Price or seventy-five (75%) percent of the then Volume-Weighted Average Price (as defined, the “VWAP”). | |||||||||||||
Terms of Blocker Provision | The common stock would exceed 9.99% of the Company’s issued and outstanding common stock. | ||||||||||||||
Per-delivery shares issued | 12,000,000 | ||||||||||||||
Customary events of default, description | Note includes customary Events of Default and provides that the Buyer may require the Company to redeem (regardless of whether the Event of Default has been cured) all or a portion of the Note at a redemption premium equal to the greater of: (i) the product of the redemption premium of one hundred twenty-five (125%) percent, multiplied by the conversion amount, and (ii) the product of the conversion rate ($6.00 per share) multiplied by the product of 125% multiplied by the then current market price. The Buyer may also require redemption of the May 2019 Note upon a Change of Control (as defined) at a premium of one hundred twenty-five (125%) percent. The Company has the right to redeem the May 2019 Note at any time, in whole or in part, in cash at a price equal to 120% of the then outstanding conversion amount. |
DEBT (Details Narrative)
DEBT (Details Narrative) | May 12, 2020USD ($) | May 08, 2020USD ($) | May 05, 2020USD ($) | Dec. 06, 2019USD ($) | May 12, 2018USD ($) | May 12, 2017USD ($) | May 05, 2017USD ($) | Apr. 10, 2017USD ($) | Mar. 16, 2017USD ($) | Aug. 04, 2016USD ($) | May 18, 2020USD ($) | Apr. 23, 2020USD ($) | Mar. 23, 2020USD ($) | Feb. 27, 2020USD ($) | Feb. 25, 2020USD ($) | Jan. 27, 2020 | Oct. 17, 2018USD ($) | May 31, 2018USD ($) | Mar. 23, 2017USD ($)shares | Mar. 20, 2017USD ($) | Nov. 16, 2015USD ($) | Sep. 30, 2020USD ($)shares | Sep. 30, 2020CAD ($)shares | Dec. 31, 2019USD ($) | Dec. 20, 2018 | Sep. 30, 2020EUR (€) | Jul. 03, 2020USD ($) | Mar. 31, 2018USD ($) | Nov. 16, 2017USD ($) | Jan. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Nov. 30, 2016USD ($) | Oct. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 13, 2016USD ($) |
Debt outstanding amount | $ 4,253,439 | $ 2,750,992 | |||||||||||||||||||||||||||||||||
Interest rate | 4.35% | 4.35% | 4.35% | ||||||||||||||||||||||||||||||||
Convertible notes payable, principal amount | $ 1,087,000 | ||||||||||||||||||||||||||||||||||
Gain on extingushment of debt | $ (54,327) | $ 0 | |||||||||||||||||||||||||||||||||
Distribution and Equity Acquisition Agreement [Member] | Marathon Global Inc [Member] | Gross Sales One [Member] | |||||||||||||||||||||||||||||||||||
Cash received upon gross sales | $ 2,750,000 | ||||||||||||||||||||||||||||||||||
Gross sales | 13,000,000 | ||||||||||||||||||||||||||||||||||
Distribution and Equity Acquisition Agreement [Member] | Marathon Global Inc [Member] | Gross Sales [Member] | |||||||||||||||||||||||||||||||||||
Cash received upon gross sales | 2,750,000 | ||||||||||||||||||||||||||||||||||
Gross sales | $ 6,500,000 | ||||||||||||||||||||||||||||||||||
Trade Facility [Member] | |||||||||||||||||||||||||||||||||||
Payment of interest and principal | $ 1,123,600 | ||||||||||||||||||||||||||||||||||
TFF [Member] | |||||||||||||||||||||||||||||||||||
Short term debt borrowing capacity | € | € 15,000,000 | ||||||||||||||||||||||||||||||||||
Libor rate description | all lending in U.S. dollars is the one-month LIBOR plus six (6%) percent margin; and (ii) for all lending in Euro, the one-month Euribor Rate plus six (6%) percent per annum, commencing June 1, 2018. | all lending in U.S. dollars is the one-month LIBOR plus six (6%) percent margin; and (ii) for all lending in Euro, the one-month Euribor Rate plus six (6%) percent per annum, commencing June 1, 2018. | |||||||||||||||||||||||||||||||||
CEO [Member] | |||||||||||||||||||||||||||||||||||
Percentage of wholly-owned subsidiary shares | 51.00% | ||||||||||||||||||||||||||||||||||
Synthesis facility agreement [Member] | TFF [Member] | |||||||||||||||||||||||||||||||||||
Debt outstanding amount | $ 5,629,555 | ||||||||||||||||||||||||||||||||||
Accrued expenses | $ 524,094 | ||||||||||||||||||||||||||||||||||
Description for amendment to agreement under ASU 470-50 | The Company evaluated the amended agreement under ASC 470-50 and concluded that it did not meet the 10% cash flow test and recorded debt modification expense of $138,110. | ||||||||||||||||||||||||||||||||||
Debt modification expense | $ 138,110 | ||||||||||||||||||||||||||||||||||
Synthesis facility agreement [Member] | TFF [Member] | Principal balance 1 [Member] | |||||||||||||||||||||||||||||||||||
Accrued expenses | $ 11,819 | $ 10,000 | |||||||||||||||||||||||||||||||||
Debt split, balance | $ 2,000,000 | 2,344,600 | 2,245,400 | ||||||||||||||||||||||||||||||||
Synthesis facility agreement [Member] | TFF [Member] | Principal balance 2 [Member] | |||||||||||||||||||||||||||||||||||
Maturity date | Aug. 31, 2021 | ||||||||||||||||||||||||||||||||||
Accrued expenses | 1,563 | 12,661 | |||||||||||||||||||||||||||||||||
Debt split, balance | $ 4,000,000 | 4,000,000 | 4,000,000 | ||||||||||||||||||||||||||||||||
Interest rate description | 6% per annum plus one-month Libor on the USD balance | ||||||||||||||||||||||||||||||||||
Repayment of debt, periodic payments | $ 150,000 | ||||||||||||||||||||||||||||||||||
Frequency of periodic payments | Quarterly | ||||||||||||||||||||||||||||||||||
Government Loan [Member] | |||||||||||||||||||||||||||||||||||
COVID Loan description | On June 24, 2020 the Company received a loan £50,000 ($61,845) from the Greek government. The loan has a six-year maturity and bears interest at a rate of 2.5% per annum beginning 12-months after the initial disbursement. The Company may prepay this loan without penalty at any time. | ||||||||||||||||||||||||||||||||||
Proceed from loan | $ 337,110 | ||||||||||||||||||||||||||||||||||
Rate of interest | 0.94% | ||||||||||||||||||||||||||||||||||
July 24, 2019 [Member] | Senior Promissory Notes [Member] | |||||||||||||||||||||||||||||||||||
Debt outstanding amount | 750,000 | ||||||||||||||||||||||||||||||||||
Accured interest expense | $ 134,079 | 49,625 | |||||||||||||||||||||||||||||||||
Maturity date | Jul. 24, 2020 | Jul. 24, 2020 | |||||||||||||||||||||||||||||||||
Interest rate | 15.00% | 15.00% | |||||||||||||||||||||||||||||||||
Due to related party | $ 750,000 | 750,000 | |||||||||||||||||||||||||||||||||
Convertible notes payable, principal amount | $ 750,000 | ||||||||||||||||||||||||||||||||||
August 1, 2019 [Member] | Senior Promissory Notes [Member] | |||||||||||||||||||||||||||||||||||
Maturity date | Aug. 1, 2020 | Aug. 1, 2020 | |||||||||||||||||||||||||||||||||
Accrued expenses | $ 87,739 | 31,438 | |||||||||||||||||||||||||||||||||
Loans payable | 1,500,000 | ||||||||||||||||||||||||||||||||||
Convertible notes payable, principal amount | $ 500,000 | 500,000 | |||||||||||||||||||||||||||||||||
Interest rate | 15.00% | 15.00% | |||||||||||||||||||||||||||||||||
October 23, 2019 [Member] | Senior Promissory Notes [Member] | |||||||||||||||||||||||||||||||||||
Debt outstanding amount | $ 250,000 | ||||||||||||||||||||||||||||||||||
Maturity date | Oct. 23, 2020 | Oct. 23, 2020 | |||||||||||||||||||||||||||||||||
Accrued expenses | $ 35,855 | 7,705 | |||||||||||||||||||||||||||||||||
Loans payable | 2,000,000 | ||||||||||||||||||||||||||||||||||
Convertible notes payable, principal amount | $ 250,000 | 250,000 | |||||||||||||||||||||||||||||||||
Interest rate | 15.00% | 15.00% | |||||||||||||||||||||||||||||||||
August 4, 2020 [Member] | Senior Promissory Notes [Member] | |||||||||||||||||||||||||||||||||||
Debt outstanding amount | $ 3,000,000 | ||||||||||||||||||||||||||||||||||
Convertible notes payable, principal amount | $ 3,000,000 | ||||||||||||||||||||||||||||||||||
Interest rate | 18.00% | 18.00% | |||||||||||||||||||||||||||||||||
Prepaid interest | $ 37,352 | ||||||||||||||||||||||||||||||||||
On April 18, 2018 [Member] | |||||||||||||||||||||||||||||||||||
Maturity date | Dec. 31, 2021 | Dec. 31, 2021 | |||||||||||||||||||||||||||||||||
Gain on debt settlement | $ 23,354 | ||||||||||||||||||||||||||||||||||
Libor rate description | Additionally, the interest rate was amended such that the interest rate for all advances is 4% plus the 3-Month Libor rate | Additionally, the interest rate was amended such that the interest rate for all advances is 4% plus the 3-Month Libor rate | |||||||||||||||||||||||||||||||||
July 3, 2020 [Member] | Senior Promissory Notes [Member] | |||||||||||||||||||||||||||||||||||
Debt outstanding amount | $ 2,000,000 | $ 2,000,000 | $ 1,000,000 | $ 5,000,000 | $ 5,000,000 | ||||||||||||||||||||||||||||||
Interest rate | 18.00% | 18.00% | |||||||||||||||||||||||||||||||||
Accrued expenses | $ 41,672 | ||||||||||||||||||||||||||||||||||
Loan Facility July 6, 2017 [Member] | |||||||||||||||||||||||||||||||||||
Fees forgiven related to advance | 40,000 | ||||||||||||||||||||||||||||||||||
Bridge Loans [Member] | |||||||||||||||||||||||||||||||||||
Gain on extingushment of debt | (25,292) | 0 | |||||||||||||||||||||||||||||||||
Loan Facility [Member] | |||||||||||||||||||||||||||||||||||
Debt outstanding amount | 3,083,149 | ||||||||||||||||||||||||||||||||||
Accrued interest expense | $ 47,059 | ||||||||||||||||||||||||||||||||||
Description of loan repayement | In accordance with the settlement agreement, interest will accrue from June 30, 2020 until repayment in full at a rate of 6% per annum for the first year and 5.25% per annum for the second year calculated on the balance outstanding from day to day during such period.Interest is due on the 10th day of each calendar month. If any amount, principal or interest is unpaid on its due date interest shall accrue from the due date until the date of its payment until the date of its payment in full at the rate of 7.25% per annum. The Company will make quarterly payments of €125,000 beginning May 6, 2021 with a final payment of €2,200,000 on May 6, 2022. The Company evaluated the settlement agreement for debt modification in accordance with ASC 470-50 and concluded that the debt qualified for debt extinguishment as the 10% cash flow test was met. As a result, the $3,828,630 of principal and accrued interest was written off and the new debt was recorded at fair value as of June 30, 2020 in the amount of $3,033,990. | In accordance with the settlement agreement, interest will accrue from June 30, 2020 until repayment in full at a rate of 6% per annum for the first year and 5.25% per annum for the second year calculated on the balance outstanding from day to day during such period.Interest is due on the 10th day of each calendar month. If any amount, principal or interest is unpaid on its due date interest shall accrue from the due date until the date of its payment until the date of its payment in full at the rate of 7.25% per annum. The Company will make quarterly payments of €125,000 beginning May 6, 2021 with a final payment of €2,200,000 on May 6, 2022. The Company evaluated the settlement agreement for debt modification in accordance with ASC 470-50 and concluded that the debt qualified for debt extinguishment as the 10% cash flow test was met. As a result, the $3,828,630 of principal and accrued interest was written off and the new debt was recorded at fair value as of June 30, 2020 in the amount of $3,033,990. | |||||||||||||||||||||||||||||||||
Gain on extingushment of debt | $ (29,035) | 0 | |||||||||||||||||||||||||||||||||
Restricted shares | shares | 1,000,000 | 1,000,000 | |||||||||||||||||||||||||||||||||
Marathon [Member] | |||||||||||||||||||||||||||||||||||
Shares issued for settlement of debt | shares | 444,876 | 444,876 | |||||||||||||||||||||||||||||||||
Distribution and equity acquisition agreement, description | As consideration for its services, Company received: (a) a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services; and (b) received cash of CAD $2,000,000, subject to repayment in Common Shares of the Company if it fails to meet certain performance milestones. The Company is entitled to receive an additional CAD $2,750,000 upon the Company’s receipt of gross sales of CAD $6,500,000 and an additional CAD $2,750,000 upon receipt of gross sales of CAD $13,000,000. | As consideration for its services, Company received: (a) a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services; and (b) received cash of CAD $2,000,000, subject to repayment in Common Shares of the Company if it fails to meet certain performance milestones. The Company is entitled to receive an additional CAD $2,750,000 upon the Company’s receipt of gross sales of CAD $6,500,000 and an additional CAD $2,750,000 upon receipt of gross sales of CAD $13,000,000. | |||||||||||||||||||||||||||||||||
Settlement amount | $ 1,554,590 | ||||||||||||||||||||||||||||||||||
Cash received | 2,000,000 | ||||||||||||||||||||||||||||||||||
Grigorios Siokas [Member] | Senior Promissory Note [Member] | January 27, Note [Member] | |||||||||||||||||||||||||||||||||||
Debt outstanding amount | 250,000 | ||||||||||||||||||||||||||||||||||
Description of new maturity date | new maturity date for the note is now December 31, 2020.Additionally, the interest rate was changed to 10% per annum and the Company may now prepay the January Note at any time without penalty. | ||||||||||||||||||||||||||||||||||
Maturity date | May 15, 2020 | ||||||||||||||||||||||||||||||||||
Interest rate | 5.00% | 18.00% | |||||||||||||||||||||||||||||||||
Accrued expenses | 13,047 | ||||||||||||||||||||||||||||||||||
Loans payable | 2,500,000 | ||||||||||||||||||||||||||||||||||
Grigorios Siokas [Member] | Senior Promissory Note [Member] | February and March 2020 Notes [Member] | |||||||||||||||||||||||||||||||||||
Debt outstanding amount | $ 35,000 | $ 25,000 | 25,000 | ||||||||||||||||||||||||||||||||
Accured interest expense | $ 2,665 | ||||||||||||||||||||||||||||||||||
Description of new maturity date | new maturity date for the note is now December 31, 2020.Additionally, the interest rate was changed to 10% per annum and the Company may now prepay the January Note at any time without penalty. | new maturity date for the note is now December 31, 2020.Additionally, the interest rate was changed to 10% per annum and the Company may now prepay the January Note at any time without penalty. | |||||||||||||||||||||||||||||||||
Maturity date | Dec. 31, 2020 | Dec. 31, 2020 | |||||||||||||||||||||||||||||||||
Interest rate | 5.00% | 5.00% | |||||||||||||||||||||||||||||||||
Debt outstanding amount | $ 35,000 | ||||||||||||||||||||||||||||||||||
Grigorios Siokas [Member] | Senior Promissory Note [Member] | February Note [Member] | |||||||||||||||||||||||||||||||||||
Debt outstanding amount | $ 1,000,000 | ||||||||||||||||||||||||||||||||||
Maturity date | Apr. 30, 2020 | Apr. 20, 2017 | |||||||||||||||||||||||||||||||||
Interest rate | 18.00% | ||||||||||||||||||||||||||||||||||
Unaffiliated Third Party [Member] | Senior Promissory Notes [Member] | |||||||||||||||||||||||||||||||||||
Debt outstanding amount | 2,000,000 | 2,000,000 | $ 2,000,000 | $ 200,000 | |||||||||||||||||||||||||||||||
Debt outstanding amount | 2,000,000 | 2,000,000 | |||||||||||||||||||||||||||||||||
Accrued expenses | 54,247 | 57,205 | $ 46,356 | 2,339 | |||||||||||||||||||||||||||||||
Loans payable | $ 3,000,000 | $ 1,000,000 | $ 2,750,000 | ||||||||||||||||||||||||||||||||
Description of loan repayment | The May 8 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The May 8 Note matured on June 8, 2020 unless in default. | The May 5 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The May 5 Note matures on December 31, 2020 unless in default. | The May 18 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The May 18 Note matures on December 31, 2020 unless in default. | The April Note bears interest at the rate of five (5%) percent per annum through May 31, 2020 and then shall change to 1% per annum effective June 1, 2020 paid quarterly in arrears. The April Note matures on December 31, 2020 unless in default. The Company may prepay the April Note within the first six (6) months by payment of unpaid interest for the first six (6) months and, after six (6) months, with a two (2%) percent ($4,000) premium | |||||||||||||||||||||||||||||||
Unaffiliated Third Party [Member] | Senior Promissory Notes [Member] | December 6, 2019 [Member] | |||||||||||||||||||||||||||||||||||
Debt outstanding amount | $ 250,000 | 250,000 | 250,000 | ||||||||||||||||||||||||||||||||
Accured interest expense | 16,541 | 890 | |||||||||||||||||||||||||||||||||
Description of new maturity date | new maturity date for the note is now December 31, 2020. Additionally, the interest rate changed to 10% per annum from March 31, 2020 through maturity and the Company may now prepay the December Note at any time without penalty | ||||||||||||||||||||||||||||||||||
Maturity date | Mar. 31, 2020 | Apr. 16, 2017 | Apr. 20, 2017 | ||||||||||||||||||||||||||||||||
Interest rate | 15.00% | 10.00% | 10.00% | ||||||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 2,250,000 | $ 50,000 | $ 120,220 | ||||||||||||||||||||||||||||||||
Convertible notes payable, principal amount | $ 250,000 | 250,000 | 250,000 | ||||||||||||||||||||||||||||||||
Unaffiliated Third Party [Member] | Senior Promissory Notes [Member] | April 1 to 3, 2019 [Member] | |||||||||||||||||||||||||||||||||||
Debt outstanding amount | 250,000 | 250,000 | |||||||||||||||||||||||||||||||||
Accured interest expense | $ 37,910 | 37,910 | |||||||||||||||||||||||||||||||||
Maturity date | Apr. 3, 2020 | Apr. 3, 2020 | |||||||||||||||||||||||||||||||||
Interest rate | 15.00% | 15.00% | |||||||||||||||||||||||||||||||||
Accrued expenses | $ 9,452 | 28,098 | |||||||||||||||||||||||||||||||||
Convertible notes payable, principal amount | 250,000 | 250,000 | |||||||||||||||||||||||||||||||||
Unaffiliated Third Party [Member] | Senior Promissory Notes [Member] | April 9, 2019 [Member] | |||||||||||||||||||||||||||||||||||
Debt outstanding amount | $ 250,000 | ||||||||||||||||||||||||||||||||||
Maturity date | Apr. 9, 2020 | Apr. 9, 2020 | |||||||||||||||||||||||||||||||||
Interest rate | 15.00% | 15.00% | |||||||||||||||||||||||||||||||||
Accrued expenses | $ 27,431 | 55,581 | |||||||||||||||||||||||||||||||||
Convertible notes payable, principal amount | 250,000 | 250,000 | |||||||||||||||||||||||||||||||||
Due from related party | 500,000 | ||||||||||||||||||||||||||||||||||
SkyPharm [Member] | Trade Facility [Member] | |||||||||||||||||||||||||||||||||||
Debt outstanding amount | $ 5,369,678 | ||||||||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 2,344,600 | ||||||||||||||||||||||||||||||||||
Description for the repayment | The total facility will be calculated as 95% of the agreed upon value of Decahedron’s receivables. | ||||||||||||||||||||||||||||||||||
Term of credit facility | 12 months | ||||||||||||||||||||||||||||||||||
Credit facility origination fee, percentage | 2.00% | ||||||||||||||||||||||||||||||||||
Monthly credit fee, percentage | 1.00% | ||||||||||||||||||||||||||||||||||
Proceeds from debt | $ 247,117 | ||||||||||||||||||||||||||||||||||
SkyPharm [Member] | Trade Facility [Member] | Minimum [Member] | |||||||||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 2,291,200 | ||||||||||||||||||||||||||||||||||
SkyPharm [Member] | Trade Facility [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 6,736,200 | ||||||||||||||||||||||||||||||||||
SkyPharm [Member] | Bridge Loans [Member] | |||||||||||||||||||||||||||||||||||
Debt outstanding amount | 106,542 | ||||||||||||||||||||||||||||||||||
Maturity date | Sep. 30, 2017 | ||||||||||||||||||||||||||||||||||
Interest rate | 1.00% | ||||||||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 34,745 | 50,000 | |||||||||||||||||||||||||||||||||
Accrued expenses | 27,627 | ||||||||||||||||||||||||||||||||||
SkyPharm [Member] | Second amendment to loan facility agreement [Member] | |||||||||||||||||||||||||||||||||||
Debt outstanding amount | 3,078,442 | ||||||||||||||||||||||||||||||||||
Maturity date | Aug. 4, 2016 | ||||||||||||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 2,664,960 | $ 155,516 | $ 452,471 | $ 250,000 | $ 100,000 | $ 174,000 | |||||||||||||||||||||||||||||
Accrued expenses | 609,607 | ||||||||||||||||||||||||||||||||||
Description for the repayment | The amounts owed under the A&R Loan Facility were repayable upon the earlier of (i) seventy-five days following the demand of the Lender; or (ii) August 31, 2018 | ||||||||||||||||||||||||||||||||||
Common stock shares issuable upon conversion of debt/convertible securities | shares | 1,000,000 | ||||||||||||||||||||||||||||||||||
SkyPharm [Member] | Loan Facility [Member] | |||||||||||||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 1,292,769 | ||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||
SkyPharm [Member] | Amendment to loan facility agreement [Member] | |||||||||||||||||||||||||||||||||||
Debt outstanding amount | $ 240,251 | ||||||||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 1,533,020 | ||||||||||||||||||||||||||||||||||
SkyPharm [Member] | Decahedron [Member] | Trade Facility [Member] | |||||||||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 3,222,825 | ||||||||||||||||||||||||||||||||||
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 facility origination fee, percentage | 2.00% | ||||||||||||||||||||||||||||||||||
Monthly credit fee, percentage | 1.00% | ||||||||||||||||||||||||||||||||||
Panagiotis Drakopoulos [Member] | Loan Agreement [Member] | |||||||||||||||||||||||||||||||||||
Debt outstanding amount | 9,378 | 14,595 | |||||||||||||||||||||||||||||||||
Maturity date | Nov. 15, 2016 | ||||||||||||||||||||||||||||||||||
Interest rate | 6.00% | ||||||||||||||||||||||||||||||||||
Short term debt borrowing capacity | $ 42,832 | ||||||||||||||||||||||||||||||||||
Accrued expenses | 5,435 | $ 4,677 | |||||||||||||||||||||||||||||||||
Repayment of debt | $ 5,862 |
DEBT (Details)
DEBT (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Beginning balance loans | $ 12,029,724 | $ 9,803,733 |
Proceeds | 15,926,295 | 2,500,000 |
Payments | (5,253,918) | (227,912) |
Debt extinguishment | (54,327) | 0 |
Foreign currency translation | 215,648 | (46,097) |
Ending balance loans | 22,863,422 | 12,029,724 |
Loan Facility [Member] | ||
Proceeds | 0 | 0 |
Debt extinguishment | (29,035) | 0 |
Payments | (82,061) | 0 |
Beginning balance loans | 3,078,442 | 3,078,442 |
Foreign currency translation | 115,803 | 0 |
Ending balance loans | 3,083,149 | 3,078,442 |
Bridge Loans [Member] | ||
Proceeds | 0 | 0 |
Debt extinguishment | (25,292) | 0 |
Beginning balance loans | 191,287 | 191,287 |
Payments | (165,995) | 0 |
Foreign currency translation | 0 | 0 |
Ending balance loans | 0 | 191,287 |
Third Party [Member] | ||
Debt extinguishment | 0 | 0 |
Payments | (5,005,862) | (227,912) |
Beginning balance loans | 2,514,595 | 242,805 |
Proceeds | 15,510,000 | 2,500,000 |
Foreign currency translation | 645 | (298) |
Ending balance loans | 13,019,378 | 2,514,595 |
Trade Facility [Member] | ||
Proceeds | 0 | 0 |
Payments | 0 | 0 |
Beginning balance loans | 6,245,400 | 6,291,199 |
Foreign currency translation | 99,200 | (45,799) |
Ending balance loans | 6,344,600 | 6,245,400 |
COVID Loans [Member] | ||
Beginning balance loans | 0 | 0 |
Proceeds | 416,295 | 0 |
Payments | 0 | 0 |
Debt extinguishment | 0 | 0 |
Foreign currency translation | 0 | 0 |
Ending balance loans | $ 398,955 | $ 0 |
LEASES (Details)
LEASES (Details) | Sep. 30, 2020USD ($) |
LEASES | |
Remainder of 2020 | $ 25,060 |
2021 | 85,041 |
2022 | 56,270 |
2023 | 56,270 |
2024 | 56,270 |
Thereafter | 210,982 |
Total undiscounted operating lease payments | 489,894 |
Less: Imputed interest | 104,332 |
Present value of operating lease liabilities | $ 385,562 |
LEASES (Details 1)
LEASES (Details 1) | Sep. 30, 2020USD ($) |
LEASES | |
Remainder of 2020 | $ 22,789 |
2021 | 82,746 |
2022 | 57,954 |
2023 | 45,664 |
2024 | 32,675 |
Thereafter | 8,072 |
Total undiscounted finance lease payments | 249,900 |
Less: Imputed interest | 27,922 |
Present value of finance lease liabilities | $ 221,978 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
LEASES | ||
Operating lease, term of agreements | The Company has various lease agreements with terms up to 10 years, comprising leases of office space. Some leases include options to purchase, terminate or extend for one or more years. | |
Operating lease expense | $ 148,218 | $ 195,564 |
Operating lease weighted-average remaining lease term | 7318 years | |
Operating lease, weighted average discount rate | 0.0674% | |
Operating lease, cash flows | $ 148,218 | |
Finance lease, weighted average remaining lease term | 2 years 2 months 15 days | |
Finance lease, weighted average discount rate | 0.0674% | |
Operating lease cash flows used in finance lease | $ 9,197 | |
Finance lease, interest expense | 9,197 | $ 0 |
Operating cash flows used in finance leases | 57,316 | |
Finance lease, amortization expense | $ 90,550 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - EUR (€) | Sep. 04, 2018 | Aug. 08, 2017 | Nov. 16, 2017 | Sep. 30, 2020 |
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. | |||
Cash commission description | In connection with the Company’s September 4, 2018 Note offering, the Agent received a cash commission for this transaction of $140,000, equal to seven (7%) percent of the total gross proceeds of the offering and the issuance of five-year warrants to purchase seven (7%) 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, or 26,056 shares) | In connection with the Company’s November 16, 2017 Note offering, the Agent received a cash commission of $240,000, 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 the offering (excluding shares of common stock issuable upon exercise of any warrants issued to investors, or 53,600 shares) | ||
Intellectual property sale agreement [Member] | Anastasios Tsekas and Olga Parthenea Georgatsou [Member] | On October 1, 2016 [Member] | ||||
Operating lease periodic payment | € 1,500 | |||
Common stock shares issuable upon conversion of debt/convertible securities | 200,000 | |||
Intellectual property sale agreement [Member] | Anastasios Tsekas and Olga Parthenea Georgatsou [Member] | On October 1, 2016 [Member] | Conclusion of Preclinical Trials [Member] | ||||
Common stock shares issuable upon conversion of debt/convertible securities | 50,000 | |||
Intellectual property sale agreement [Member] | Anastasios Tsekas and Olga Parthenea Georgatsou [Member] | On October 1, 2016 [Member] | conclusion of Phase I testing [Member] | ||||
Common stock shares issuable upon conversion of debt/convertible securities | 50,000 | |||
Intellectual property sale agreement [Member] | Anastasios Tsekas and Olga Parthenea Georgatsou [Member] | On October 1, 2016 [Member] | Conclusion of Phase III testing [Member] | ||||
Common stock shares issuable upon conversion of debt/convertible securities | 50,000 | |||
Intellectual property sale agreement [Member] | Anastasios Tsekas and Olga Parthenea Georgatsou [Member] | On October 1, 2016 [Member] | Conclusion of Phase II testing [Member] | ||||
Common stock shares issuable upon conversion of debt/convertible securities | 50,000 | |||
Advisory Agreement [Member] | SkyPharm [Member] | April 18, 2018 [Member] | ||||
Term of operating lease | 10 years | |||
Annually operating lease amount | € 104,000 |
STOCK OPTIONS AND WARRANTS (Det
STOCK OPTIONS AND WARRANTS (Details) - Stock Options [Member] | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Number of shares | |
Number of Shares Outstanding, Beginning | shares | 74,000 |
Granted | shares | 0 |
Forfeited | shares | 0 |
Exercised | shares | 0 |
Expired | shares | 0 |
Number of Shares Outstanding, Ending | shares | 74,000 |
Number of Shares Exercisable | shares | 74,000 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 1.32 |
Granted | $ / shares | 0 |
Forfeited | $ / shares | 0 |
Exercised | $ / shares | 0 |
Expired | $ / shares | 0 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | 1.32 |
Weighted Average Exercise Price Exercisable | $ / shares | $ 1.32 |
Weighted Average Remaining Contractual Term | |
Weighted Average Remaining Contractual Term Outstanding, Beginning | 2 years 5 months 19 days |
Granted | 0 years |
Weighted Average Remaining Contractual Term Outstanding, Ending | 8 months 15 days |
Weighted Average Remaining Contractual Term Exercisable | 11 months 19 days |
Aggregate Intrinsic Value | |
Aggregate Intrinsic Value Outstanding, Beginning | $ | $ 198,000 |
Granted | $ | 0 |
Forfeited | $ | 0 |
Exercised | $ | 0 |
Expired | $ | 0 |
Aggregate Intrinsic Value Outstanding, Ending | $ | 162,480 |
Aggregate Intrinsic Value Exercisable | $ | $ 162,480 |
STOCK OPTIONS AND WARRANTS (D_2
STOCK OPTIONS AND WARRANTS (Details 1) - Warrants [Member] | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Number of shares | |
Number of Shares Outstanding, Beginning | shares | 1,164,673 |
Granted | shares | 0 |
Forfeited | shares | 0 |
Exercised | shares | 0 |
Expired | shares | 0 |
Number of Shares Outstanding, Ending | shares | 1,164,673 |
Number of Shares Exercisable | shares | 1,164,673 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 6.41 |
Granted | $ / shares | 0 |
Forfeited | $ / shares | 0 |
Exercised | $ / shares | 0 |
Expired | $ / shares | 0 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | 6.41 |
Weighted Average Exercise Price Exercisable | $ / shares | $ 6.41 |
Weighted Average Remaining Contractual Term | |
Weighted Average Remaining Contractual Term Outstanding, Beginning | 5 years 4 days |
Weighted Average Remaining Contractual Term Outstanding, Ending | 3 years 6 months 7 days |
Weighted Average Remaining Contractual Term Exercisable | 3 years 6 months 7 days |
Aggregate Intrinsic Value | |
Aggregate Intrinsic Value Outstanding, Beginning Balance | $ | $ 0 |
Granted | $ | 0 |
Forfeited | $ | 0 |
Exercised | $ | 0 |
Expired | $ | 0 |
Aggregate Intrinsic Value Outstanding, Ending Balance | $ | $ 0 |
STOCK OPTIONS AND WARRANTS (D_3
STOCK OPTIONS AND WARRANTS (Details Narrative) | 9 Months Ended |
Sep. 30, 2020shares | |
Options [Member] | |
Number of Shares Exercisable | 74,000 |
Number of Shares Outstanding, Beginning | 74,000 |
Expired dates description | Expiration dates commencing October 2020 and continuing through January 2022. |
Warrants [Member] | |
Number of Shares Outstanding, Beginning | 1,164,673 |
Expired dates description | Expiration dates from May 2023 through March 2024. |
Number of Shares Exercisable | 1,164,673 |
DISAGGREGATION OF REVENUE (Deta
DISAGGREGATION OF REVENUE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue | $ 14,352,098 | $ 9,685,850 | $ 39,105,318 | $ 27,883,147 |
Greece [Member] | ||||
Revenue | 36,062,729 | 17,688,527 | ||
Iraq [Member] | ||||
Revenue | 0 | 2,134 | ||
Georgia [Member] | ||||
Revenue | 0 | 5,320 | ||
Libya [Member] | ||||
Revenue | 42,844 | 0 | ||
Croatia [Member] | ||||
Revenue | 8,796 | 5,338 | ||
Denmark [Member] | ||||
Revenue | 229,929 | 89,580 | ||
France [Member] | ||||
Revenue | 1,113 | 142,919 | ||
Germany [Member] | ||||
Revenue | 948,282 | 5,350,465 | ||
Hungary [Member] | ||||
Revenue | 36,881 | 261,092 | ||
Indonesia [Member] | ||||
Revenue | 0 | 7,197 | ||
Ireland [Member] | ||||
Revenue | 35,833 | 376,380 | ||
Italy [Member] | ||||
Revenue | 27,265 | 157,398 | ||
Jordan [Member] | ||||
Revenue | 19,710 | 20,216 | ||
Netherlands [Member] | ||||
Revenue | 156,392 | 763,889 | ||
Poland [Member] | ||||
Revenue | 28,941 | 270,306 | ||
Turkey [Member] | ||||
Revenue | 0 | 24,434 | ||
UK [Member] | ||||
Revenue | 1,501,261 | $ 2,217,438 | ||
Cyprus [Member] | ||||
Revenue | $ 5,343 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - PGS Ventures B.V. [Member] | 1 Months Ended |
Oct. 05, 2020USD ($) | |
Monthly fee | $ 10,000 |
Cash paid | 5,000 |
Payment of related party per month | 8,000 |
Stock and other consideration value | $ 5,000 |