Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2021 | May 17, 2021 | |
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 | Mar. 31, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 | |
Entity Common Stock Shares Outstanding | 15,716,619 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 431,807 | $ 628,395 |
Accounts receivable, net | 21,845,148 | 23,440,650 |
Accounts receivable - related party | 3,247,612 | 3,468,564 |
Marketable securities | 214,349 | 222,792 |
Inventory | 3,417,074 | 3,292,557 |
Prepaid expenses and other current assets | 4,872,709 | 5,148,441 |
Prepaid expenses and other current assets - related party | 3,522,041 | 3,468,653 |
Operating lease right-of-use asset | 798,623 | 833,763 |
Financing lease right-of-use asset | 247,463 | 269,131 |
TOTAL CURRENT ASSETS | 38,596,826 | 40,772,946 |
Property and equipment, net | 1,623,962 | 1,757,213 |
Goodwill and intangible assets, net | 222,348 | 230,506 |
Other assets | 752,423 | 905,318 |
Deferred tax assets | 499,368 | 178,430 |
TOTAL ASSETS | 41,694,927 | 43,844,413 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 11,305,219 | 11,973,981 |
Accounts payable and accrued expenses - related party | 27,453 | 1,733 |
Accrued interest | 1,180,523 | 742,374 |
Customer advances | 22,761 | 22,340 |
Convertible notes payable, net of unamortized discount of $507,483 and $494,973, respectively | 859,517 | 952,027 |
Derivative liability - convertible note | 461,974 | 460,728 |
Notes payable | 9,233,095 | 12,042,712 |
Notes payable - related party | 481,698 | 501,675 |
Lines of credit | 4,780,126 | 5,076,684 |
Loans payable - related party | 1,941,773 | 1,629,246 |
Taxes payable | 757,635 | 760,446 |
Operating lease liability, current portion | 199,343 | 200,204 |
Financing lease liability, current portion | 68,353 | 89,926 |
Other current liabilities | 459,748 | 339,000 |
TOTAL CURRENT LIABILITIES | 31,779,218 | 34,793,076 |
Share settled debt obligation | 1,554,590 | 1,554,590 |
Notes payable - long term portion | 10,303,924 | 10,771,882 |
Operating lease liability, net of current portion | 570,429 | 590,538 |
Financing lease liability, net of current portion | 188,545 | 188,172 |
Other liabilities | 102,901 | 107,168 |
TOTAL LIABILITIES | 44,499,607 | 48,005,426 |
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 March 31, 2021 and December 31, 2020, respectively | 0 | 0 |
Common stock, $0.001 par value; 300,000,000 shares authorized; 16,066,947 and 13,485,128 shares issued and 15,716,619 and 13,069,800 outstanding as of March 31, 2021 and December 31, 2020, respectively | 16,066 | 13,484 |
Additional paid-in capital | 18,333,867 | 14,333,285 |
Treasury stock, 350,328 and 415,328 shares as of March 31, 2021 and December 31, 2020, respectively | (611,204) | (611,854) |
Accumulated deficit | (20,924,727) | (18,750,824) |
Accumulated other comprehensive gain | 381,318 | 854,896 |
TOTAL STOCKHOLDERS' DEFICIT | (2,804,680) | (4,161,013) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 41,694,927 | $ 43,844,413 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
CURRENT LIABILITIES: | ||
Convertible notes payable, net of unamortized discount | $ 507,483 | $ 494,973 |
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 | 16,066,947 | 13,485,128 |
Common stock, shares outstanding | 15,716,619 | 13,069,800 |
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 | 350,328 | 415,328 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) | ||
REVENUE | $ 11,619,076 | $ 11,933,248 |
COST OF GOODS SOLD | 10,617,741 | 10,740,077 |
GROSS PROFIT | 1,001,335 | 1,193,171 |
OPERATING EXPENSES | ||
General and administrative expenses | 2,220,268 | 813,870 |
Sales and marketing expenses | 405,092 | 53,729 |
Depreciation and amortization expense | 107,073 | 100,008 |
TOTAL OPERATING EXPENSES | 2,732,433 | 967,607 |
INCOME (LOSS) FROM OPERATIONS | (1,731,098) | 225,564 |
OTHER INCOME (EXPENSE) | ||
Other expense, net | (178,211) | (11,434) |
Interest expense | (731,826) | (412,121) |
Non-cash interest expense | (50,109) | (29,509) |
Gain (loss) on equity investments, net | 440 | (22,172) |
Gain on extinguishment of debt | 445,636 | 0 |
Change in fair value of derivative liability | 61,373 | 0 |
Foreign currency transaction loss, net | (473,578) | (143,762) |
TOTAL OTHER EXPENSE, NET | (758,717) | (702,370) |
LOSS BEFORE INCOME TAXES | (2,489,815) | (476,806) |
BENEFIT FROM (PROVISION FOR) INCOME TAXES | 315,912 | (6,504) |
NET LOSS | (2,173,903) | (483,310) |
OTHER COMPREHENSIVE LOSS | ||
Foreign currency translation adjustment, net | (143,762) | |
TOTAL COMPREHENSIVE LOSS | $ (2,647,481) | $ (627,042) |
BASIC NET LOSS PER SHARE | $ (0.14) | $ (0.04) |
DILUTED NET LOSS PER SHARE | $ (0.14) | $ (0.04) |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | ||
Basic | 15,034,219 | 13,225,387 |
Diluted | 15,034,219 | 13,225,387 |
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 Income (Loss) |
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, 2020 | 13,485,128 | (415,328) | ||||
Balance, amount at Dec. 31, 2020 | (4,161,013) | $ 13,484 | $ (611,854) | 14,333,285 | (18,750,824) | 854,896 |
Foreign currency translation adjustment, net | (473,578) | 0 | 0 | 0 | 0 | (473,578) |
Net loss | (2,173,903) | $ 0 | $ 0 | 0 | (2,173,903) | 0 |
Sale of treasury stock to third party, shares | 65,000 | |||||
Sale of treasury stock to third party, amount | 250,000 | $ 0 | $ 650 | 249,350 | 0 | 0 |
Restriced stock issued to a consultant, shares | 1,800,000 | |||||
Restriced stock issued to a consultant, amount | 1,189,450 | $ 1,800 | 1,187,650 | |||
Conversion of notes payable into shares of common stock, shares | 781,819 | |||||
Conversion of notes payable into shares of common stock, amount | 2,564,364 | $ 782 | $ 0 | 2,563,582 | 0 | 0 |
Balance, shares at Mar. 31, 2021 | 16,066,947 | (350,328) | ||||
Balance, amount at Mar. 31, 2021 | $ (2,804,680) | $ 16,066 | $ (611,204) | $ 18,333,867 | $ (20,924,727) | $ 381,318 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (2,173,903) | $ (483,310) |
Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities: | ||
Depreciation and amortization expense | 80,318 | 61,760 |
Amortization of right-of-use assets | 26,755 | 38,248 |
Amortization of debt discounts | 50,109 | 29,509 |
Lease expense | 64,543 | 53,600 |
Interest on finance leases | 4,453 | 2,301 |
Stock based compensation | 1,189,450 | 0 |
Deffered income taxes | (329,586) | 0 |
Gain on extinguishment of debt | (445,636) | 0 |
Change in fair value of the derivative liability | (61,373) | 0 |
Loss on change in fair value of equity investments | 440 | 22,172 |
Changes in Assets and Liabilities: | ||
Accounts receivable, net | 729,802 | (3,668,384) |
Accounts receivable - related party | 197,334 | 1,180,760 |
Inventory | (246,664) | 59,486 |
Prepaid expenses and other current assets | (1,088,881) | 17,398 |
Prepaid expenses and other current assets - related party | (196,436) | 3,596,200 |
Other assets | 157,915 | 12,683 |
Accounts payable and accrued expenses | 847,525 | (1,917,115) |
Accounts payable and accrued expenses - related party | 25,996 | (205,140) |
Accrued interest | 438,149 | 188,923 |
Customer advances | 1,333 | (76,328) |
Other current liabilities | 120,748 | (10,603) |
Lease liabilities | (36,772) | (41,542) |
Taxes payable | 0 | (3,307) |
Other liabilities | (20,958) | (2,050) |
NET CASH USED IN OPERATING ACTIVITIES | (665,339) | (1,144,739) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of fixed assets | (2,310) | (54,223) |
NET CASH USED IN INVESTING ACTIVITIES | (2,310) | (54,223) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment of convertible note payable | (180,000) | (100,000) |
Proceeds from convertible note payable | 100,000 | 0 |
Payment of related party note payable | 0 | (3,305) |
Proceeds from note payable | 0 | 1,310,000 |
Payment of related party loan | (65,761) | (49,572) |
Proceeds from related party loan | 398,457 | 516,819 |
Payment of lines of credit | (6,219,899) | (3,344,072) |
Proceeds from lines of credit | 6,123,067 | 4,079,719 |
Payments of finance lease liability | (25,746) | (19,886) |
Proceeds from sale of treasury stock | 250,000 | 0 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 380,118 | 2,389,703 |
Effect of exchange rate changes on cash | 90,943 | (244,397) |
NET CHANGE IN CASH | (196,588) | 946,344 |
CASH AT BEGINNING OF PERIOD | 628,395 | 38,537 |
CASH AT END OF PERIOD | 431,807 | 984,881 |
Cash paid during the period: | ||
Interest | 208,565 | 124,178 |
Income tax | 0 | 11,605 |
Supplemental Disclosure of Non-Cash Investing and Financing Activities | ||
Conversion of notes payable to common stock | $ 2,564,364 | $ 0 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021 and unaudited condensed consolidated statements of operations for the three months ended March 31, 2021 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 months ended March 31, 2021, are not necessarily indicative of the results that may be expected for the year ending December 31, 2021, 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, 2020 and 2019, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (“Form 10-K”). The accompanying consolidated balance sheet as of December 31, 2020 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 | 3 Months Ended |
Mar. 31, 2021 | |
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN | |
NOTE 2 - ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN | Overview Cosmos Holdings Inc. (“us”, “we”, or the “Company”) is a multinational pharmaceutical company. The Company imports, exports and distributes pharmaceutical products of brand-name and generic pharmaceuticals, over-the-counter (OTC) medicines, and a variety of dietary and vitamin supplements through its established network. Currently, the Company operates its business through its three wholly-owned subsidiaries: (i) SkyPharm, headquartered in Thessaloniki, Greece; (ii) Decahedron Ltd., head-quartered in Harlow, United Kingdom; and (iii) Cosmofarm, headquartered in Athens, Greece. Cosmofarm was acquired in 2018 and we believe this expansion has increased our sales and profit margins as we vertically integrate our business model. The Company also has an extensive and established distribution direct and indirect network within the European Union (EU). The Company’s cross-border pharmaceutical 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 the Company 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. The Company focuses on leveraging its growing purchasing scale and supplier relationships to secure discounts and provide pharmaceuticals at reduced prices and on continuing to drive organic growth at attractive margins for its cross-border pharmaceutical wholesale business. The Company regularly evaluates and undertakes strategic initiatives to expand its distribution reach, improve its profit margins, and strengthen its competitive position. In 2018, the Company entered the vitamins and dietary supplements segment and in the fourth quarter of 2018, the Company posted the first sales of its own brand of nutraceuticals: Sky Premium Life. Through the December 2018 acquisition of Cosmofarm, the Company entered the full-line pharmaceutical wholesale distribution segment. Cosmofarm now serves approximately 1500 independent retail pharmacies and 40 pharmaceutical wholesalers in the greater Athens, Greece region by providing brand-name and generic pharmaceuticals, over-the-counter medicines, vitamins, and dietary supplements. We invest in technology to enhance safety, distribution and warehousing efficiency and reliability. Cosmofarm operates two robotic ROWA, a German fully automated warehouse system, that ensure 0% error selection rate, accelerate order fulfillment, and yield higher cost-efficiency in Athens distribution center. 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). Pursuant to the EU directive of (2013/C 343/01), the Company is subject to fulfill the Guidelines of the Good Distribution Practices of medical products for human use. The Company submitted its application for renewal one month before the license expiration to the Hellenic Republic National Organization, but according to the EMA (eudragmdp.ema.europa.eu/inspections/view/wda/WDAHomePage.xhtml ): “Due to the restrictions caused by COVID-19, the period of validity of MIA’s, WDA’s, GMP and GDP certificates is automatically extended until the end of 2021. On-site inspections will resume as soon as there is a consensus that the period of the public health crisis has passed. The clarifying remark section of individual MIA’s, WDA’s, GMP and GDP certificates will indicate any exceptions. Competent authorities reserve the right to inspect a manufacturing site should the need arise.” 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. Our subsidiaries are ISO 9001 certified for a management system for the trade and distribution of pharmaceuticals. As part of the certification process by the International Organization for Standardization, we need to be compliant with the General Data Protection Regulation (GDPR) adopted by the European Union. GDPR applies to the processing of personal data of persons in the EU by a controller or processor neither of which apply to our operations. 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 Company (“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 Company (“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. (“Cosmofarm”), 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 consolidated financial statements are prepared in conformity with U.S. GAAP, which contemplates the continuation of the Company as a going concern. For the three months ended March 31, 2021, the Company had revenue of $11,619,076, net loss of $2,173,903 and net cash used in operations of $665,339. Additionally, as of March 31, 2021, the Company had working capital of $6,817,608, an accumulated deficit of $20,924,727, and stockholders’ deficit of $2,804,680. It is management’s opinion that these conditions raise substantial 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 Company has undergone strategic review processes to help find a definitive solution to the Company’s accumulated deficit constraints. Options under consideration in the strategic review process include, but are not limited to, securing new debt, exchange debt to equity, restructuring current debt facilities from short term to long term and making the proper actions for new fund raising. The 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 ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund its operations. 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. The Effects of COVID-19 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 May 17, 2021, 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 March 31, 2021, and December 31, 2020, 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. For the three the three months ended March 31, 2020, $53,729 in sales and marketing expenses were reclassified from general and administrative expenses. Additionally, for the three months ended March 31, 2020, $188,923 was reclassified from accounts payable and accrued expenses to accrued interest on the Statement of Cash Flows. These reclassifications have no impact on previously reported net income. Account Receivable, net 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 March 31, 2021, and December 31, 2020, the Company’s allowance for doubtful accounts was $687,340 and $715,845, 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 $71,471 and $53,512 for the three months ended March 31, 2021 and 2020, 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. 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 March 31, 2021, no revision to the remaining amortization period of the intangible assets was made. Amortization expense was $8,158 and $8,248 for the three months ended March 31, 2021 and 2020, 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 March 31, 2021, 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 $5.24 per share, or value of $209,495 of Diversa S.A. and 16,666 shares which traded at a closing price of $0.29 per share or value of $4,854 of National Bank of Greece. Additionally, the Company has $4,582 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 March 31, 2021 and December 31, 2020, on a recurring basis: March 31, 2021 Total Carrying Level 1 Level 2 Level 3 Value Marketable securities – ICC International Cannabis Corp. $ - - - $ - Marketable securities – Divsersa S.A. 209,495 - - 290,495 Marketable securities – National Bank of Greece 4,854 - - 4,854 $ 214,349 $ 214,349 December 31, 2020 Total Carrying Level 1 Level 2 Level 3 Value Marketable securities – ICC International Cannabis Corp. $ - - - $ - Marketable securities – Divsersa S.A. 218,183 - - 218,183 Marketable securities – National Bank of Greece 4,609 - - 4,609 $ 222,792 $ 222,792 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 In accordance with ASC 606, Revenue from Contracts with Customers, the Company uses 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 transfer of the product to the customer. 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-Improvements to Nonemployee Share-Based Payment Accounting.” 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 22% in Greece (tax losses are carried forward for five years effective January 1, 2013) and 19% in United Kingdom of England. Losses may also be subject to limitation under certain rules regarding change of ownership. We regularly review deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if we do not consider it to be more likely than not that the deferred tax assets will be realized. Our review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets. At March 31, 2021 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 not been identified because there is a limitation on periods that the Tax authorities can audit retrospectively 5 years prior to the current fiscal year. Therefore, no prospective tax audit from tax authorities may arise. Retirement and Termination Benefits Under Greek labor law, employees |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 3 Months Ended |
Mar. 31, 2021 | |
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 three months ended March 31, 2021 of $0. The value of the investments as of March 31, 2021 and December 31, 2020, was $0 and $0, 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 March 31, 2021. 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 March 31, 2021, 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 $5.24 per share, or value of $209,495 of Diversa S.A. and 16,666 shares which traded at a closing price of $0.29 per share or value of $4,854 of National Bank of Greece. The Company recorded a net unrealized gain on the fair value of these investments of $440 during the three months ended March 31, 2021. 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 March 31, 2021 was $176,145 and is included in “Other assets” on the Company’s condensed consolidated balance sheet. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 3 Months Ended |
Mar. 31, 2021 | |
PROPERTY AND EQUIPMENT, NET | |
NOTE 4 - PROPERTY AND EQUIPMENT, NET | Property and equipment, net consists of the following: March 31, 2021 December 31, 2020 Leasehold improvements $ 538,684 $ 560,711 Vehicles 100,286 105,057 Furniture, fixtures and equipment 1,575,228 1,632,654 Computers and software 137,903 149,005 2,352,031 2,447,427 Less: Accumulated depreciation and amortization (728,069 ) (690,214 ) Total $ 1,623,962 $ 1,757,213 |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, NET | 3 Months Ended |
Mar. 31, 2021 | |
GOODWILL AND INTANGIBLE ASSETS, NET | |
NOTE 5 - GOODWILL AND INTANGIBLE ASSETS NET | Intangible assets, net consist of the following at: March 31, 2021 December 31, 2020 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 (91,139 ) (82,981 ) Subtotal 172,651 180,809 Goodwill 49,697 49,697 Total $ 222,348 $ 230,506 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2021 | |
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 three months ended March 31, 2021 and 2020. The Company’s Greece subsidiaries are governed by the income tax laws of Greece. The corporate tax rate in Greece is 22% 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 March 31, 2021, and 2020, 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 in the United States. 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 March 31, 2021 and December 31, 2020, the Company has maintained a valuation allowance against all net deferred tax assets in the United States only. Foreign valuation allowances had been reversed at December 31, 2020. As of March 31, 2021, and December 31, 2020, the Company has a benefit for tax recorded in any jurisdiction where it is subject to income tax, in the amount of $499,368 and $178,430, respectively, which is included in Deferred tax assets, on the condensed consolidated balance sheets. |
CAPITAL STRUCTURE
CAPITAL STRUCTURE | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021, no preferred shares have been issued. Common Stock The Company is authorized to issue 300 million shares of common stock. As of March 31, 2021 and December 31, 2020, the Company had 16,066,947 and 13,485,128 shares of our common stock issued and 15,716,619 and 13,069,800 shares outstanding, respectively. Purchase of Treasury Shares 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 December 31, 2020, the Company made $40,000 in payments. 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 December 31, 2020, the Company made $40,000 in payments. On September 30, 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 December 31, 2020, the Company made $40,000 in payments. On October 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 December 31, 2020, the Company made $40,000 in payments. On November 30, 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 December 31, 2020, the Company made $40,000 in payments. Sale of Treasury Shares On February 5, 2021, the Company entered into a Stock Purchase Agreement (the “February SPA”) with an unaffiliated third-party. The February SPA provides for the Company’s to sell 65,000 shares of the Company’s common stock held in treasury at $3.85 per share or a total of $250,000. Consulting Agreement The Company entered into a Consulting Agreement (the “Agreement”) effective as of February 5, 2021, with a non-affiliated consultant (the “Consultant”). The Company engaged the Consultant to perform consulting services relating to Company management, debt structure, business plans and business development in connection with any capitalization transactions involving the Company and any newly created or existing entities. The Agreement is for a term of nine (9) months with an initial term of ninety (90) days (the “Initial Term”). The Agreement is terminable by the Company for any reason upon written notice at any time after the Initial Term. The Company agreed to pay Consultant and its assignees an aggregate of 1,800,000 restricted shares of Common Stock, earned at the rate of 200,000 shares per month, which shall be issued and fully paid for in consideration of the Consultant’s considerable expertise and experience and its commitment to work for the Company. However, in the event the Agreement is terminated for any reason after the Initial Term, the shares are subject to a claw back for any months remaining after the Termination Date. The Consultant retained 800,000 of the 1,800,000 shares and agreed with an assignee and the Company that 1,600,000 of the 1,800,000 shares shall be held in book entry for six (6) months from the date of this Agreement, subject to the above claw back. The shares valued on the date of the agreement at $3.28 per share or $5,904,000, which will be amortized over the term of the agreement. As of March 31, 2021, the Company has recorded $1,189,451 in stock-based compensation for the 400,000 shares earned through the end of the period. Potentially Dilutive Securities No options, warrants or other potentially dilutive securities have been issued as of March 31, 2021 and December 31, 2020, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021, the Company has a prepaid balance of $3,522,041 and an accounts payable balance of $27,453, resulting in a net prepaid balance of $3,494,588 to Doc Pharma S.A. related to purchases of inventory. Additionally, the Company has a receivable balance of $3,247,612. As of December 31, 2020, the Company has a prepaid balance of $3,468,653 to Doc Pharma S.A. related to purchases of inventory. Additionally, the Company had a receivable balance of $3,468,564. During the three months ended March 31, 2021 and 2020, the Company purchased a total of $589,261 and $670,631 of products from Doc Pharma S.A., respectively. During the three months ended March 31, 2021 and 2020 the Company had $290,598 and $261,543 in revenue from Doc Pharma S.A., 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 S.A. in the past. Notes Payable – Related Party A summary of the Company’s related party notes payable as of March 31, 2021 and December 31, 2020 is presented below: 2021 2020 Beginning Balance $ 501,675 $ 1,375,532 Payments - (996,136 ) Foreign currency translation (19,977 ) 122,279 Ending Balance $ 481,698 $ 501,675 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 pursuant to the original agreement. The note is not in default and the maturity date has been extended until December 31, 2021. As of December 31, 2020, the note had an outstanding principal balance of €400,000 ($489,200) and accrued interest of €158,287 ($193,585). As of March 31, 2021, the Company has an outstanding balance of €400,000 ($469,720) and accrued interest of €198,220 ($232,770). 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 has no maturity date and is non-interest bearing. As of December 31, 2020, the Company had a principal balance of €10,200 ($12,475). As March 31, 2021 a principal balance of €10,200 ($11,978) remained as of March 31, 2021. Dimitrios Goulielmos is a current director and former CEO of the Company. The above balances are adjusted for the foreign currency rate as of the balance sheet date. For the three months ended March 31, 2021 the Company recorded a loss of $19,977. Loans Payable – Related Party A summary of the Company’s related party loans payable during the three months ended March 31, 2021, and the year ended December 31, 2020 is presented below: 2021 2020 Beginning Balance $ 1,629,246 $ 1,026,264 Proceeds 398,864 725,563 Payments (65,761 ) (149,695 ) Foreign currency translation (20,577 ) 27,114 Ending Balance $ 1,941,773 $ 1,629,246 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, 2020, the Company had an outstanding principal balance under these loans of $1,629,246 in loans payable to Grigorios Siokas. During the three months ended March 31, 2021, the Company borrowed additional proceeds of €169,000 ($198,865) and $200,000 and repaid €56,000 ($65,761) of these loans. As of March 31, 2021, the Company had an outstanding balance under these loans of $1,941,773. The above balances are adjusted for the foreign currency rate as of the balance sheet date. For the three months ended March 31, 2021 the Company recorded a loss of $20,577. 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 | 3 Months Ended |
Mar. 31, 2021 | |
LINES OF CREDIT | |
NOTE 9 - LINES OF CREDIT | A summary of the Company’s lines of credit as of March 31, 2021 and December 31, 2020 is presented below: March 31, 2021 December 31, 2020 National $ 2,837,626 $ 3,540,550 Alpha 1,088,358 1,106,894 Pancretan 364,550 - National - COVID 489,592 429,240 Total $ 4,780,126 $ 5,076,684 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 $2,583,460 and $2,690,600 at March 31, 2021 and December 31, 2020, respectively for the 6% line of credit. The outstanding balance was $1,790,935 and $2,411,182 at March 31, 2021 and December 31, 2020, respectively. The maximum borrowing allowed was $1,174,300 and $1,223,000 at March 31, 2021 and December 31, 2020, respectively, for the 4.35% lines of credit. The outstanding balance was $1,046,691 and $1,129,368 at March 31, 2021 and December 31, 2020, 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 $1,174,300 and $1,123,000 at March 31, 2021 and December 31, 2020, respectively. The outstanding balance was $1,088,358 and $1,106,894 at March 31, 2021 and December 31, 2020, respectively. The Company entered into a line of credit with Pancreta bank on February 23,2021. The line of credit is renewed annually with a current interest rate of 6.10%. The maximum borrowing allowed was $587,150 at March 31, 2021. The outstanding balance was $364,550 at March 31, 2021. Interest expense for the three months ended March 31, 2021 and 2020, was $16,501 and $17,673, 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 three months ended March 31, 2021 and December 31, 2020, the Company was in compliance with these ratios and covenants. COVID-19 Government Funding On June 23, 2020, the Company’s subsidiary, Cosmofarm, entered into an agreement with the “National Bank of Greece SA” (the “Bank”) to borrow a maximum of €500,000 ($611,500) 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 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 $489,592 and $429,240 at March 31, 2021 and December 31, 2020. Interest expense for the three months ended March 31, 2021 was $0. |
CONVERTIBLE DEBT
CONVERTIBLE DEBT | 3 Months Ended |
Mar. 31, 2021 | |
CONVERTIBLE DEBT | |
NOTE 10 - CONVERTIBLE DEBT | A summary of the Company’s convertible debt during the three months ended March 31, 2021 and the year ended December 31, 2020 is presented below: 2021 2020 Beginning balance notes 1,447,000 1,500,000 New notes 100,000 540,000 Payments (180,000 ) (593,000 ) Subtotal notes 1,367,000 1,447,000 Debt discount at year end (507,483 ) (494,973 ) Note payable net of discount 859,517 952,027 All of the convertible debt is classified as short-term within the consolidated balance sheet as it all matures and will be paid back within fiscal year 2021. 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 ($6.00per 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. As of December 31, 2019, the Company had a principal balance of $907,000 on the May 2019 Note and the Company had accrued $15,420 in interest expense. During the three months ended March 31, 2021, the Company repaid $180,000 such that as of March 31, 2021, the Company had a principal balance $727,000 on the May 2019 Note and the Company had accrued $12,849 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 year ended December 31, 2020. December 21, 2020 Securities Purchase Agreement On December 21, 2020 (the “Issue Date”), Cosmos Holdings, Inc. (“Cosmos”, the “Borrower” or the “Company”) entered into a convertible promissory note with Platinum Point Capital, LLC (the “Holder”, “Lender” or “Platinum”). The Company issued the $540,000 Note in exchange for $500,000 in cash and included a $40,000 Original Issue Discount (“OID”) and paid $3,000 in financing costs. The principal amount together with interest at the rate of eight percent (8.0%) per annum, compounded annually (the “Interest Rate”), will be paid to the Lenders on or before the Maturity Date (December 31, 2021 or as defined below). Accrued interest shall be calculated on the basis of a 360-day year for the actual number of days elapsed. In the event that on or before the Maturity Date, the Note either (i) have not been converted or have not been otherwise satisfied in full or (ii) an Event of Default occurs, then the applicable rate of interest on the outstanding amount of the Note since inception shall be the Interest Rate plus eighteen percent (18.0%), the Default Interest. Unless previously converted, the principal and accrued interest on the Note is due and payable in cash (USD) upon the earlier of (i) December 31, 2021, (ii) a Change of Control (as defined below) or (iii), an Event of Default (as defined below) (collectively, the “Maturity Date”). As of March 31, 2021, the Company had a principal balance of $540,000 and had accrued $12,600 in interest expense. The Note may be prepaid in whole or part beginning from the issue date until a date not later than 180 days thereafter, the Company shall have the right to prepay the full amount outstanding under the Note (principal and accrued interest), in full by making a payment to the Holder in an amount equal to one hundred twenty (120%) multiplied by the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of the Note plus (y) Default Interest, if any. The Holder shall have the right at any time from the Issue Date to convert all or part of the outstanding and unpaid principal amount of the Note into Common Stock at the Conversion Price of as defined below. a) The Conversion Price b) Conversion upon Qualified Financing c) Conversion Price During Major Announcements The Company determined that the embedded conversion feature of the convertible promissory note meets the definition of a beneficial conversion feature and a derivative liability which is accounted for separately. The Company measured the beneficial conversion feature’s intrinsic value on December 16, 2020 and determined that the embedded derivative was valued at $456,570 which was recorded as a debt discount, and together with the original issue discount and transaction expenses of $43,000, in the aggregate of $499,570, is being amortized over the life of the loan. For the three months ended March 31, 2021, $38,224 has been amortized. As of March 31, 2021, the fair value of the derivative liability was $416,513 and for the three months ended March 31, 2021, the Company recorded a gain of $44,215 from the change in fair value of derivative liability as other income in the consolidated statements of operations and comprehensive income (loss). January 7, 2021 Subscription Agreement On January 7, 2021 (the “Issue Date”), the Company entered into a subscription agreement with an unaffiliated third party, whereby the Company issued for a purchase price of $100,000 in principal amount, a convertible promissory note. The note bears an interest rate of 8% per annum and matures on the earlier of (i) consummation of the Company listing its common shares on the NEO Stock Exchange or October 31, 2021. Upon the consummation of a NEO listing, the total principal and accrued interest outstanding on the note will convert into shares of the Company’s common stock at a 25% discount to the prices of the common shares sold in the financing to be conducted in conjunction with the NEO listing. In the event that a NEO listing is not consummated on or before October 31, 2021, the note holder will have the option, in part or in full, to have the note repaid with interest, or convert the note into Company common stock at a 25% discount to the 30-day volume-weighted average price of the Common Shares on the most senior stock exchange in North American on which the common shares are trading prior to conversion. As of March 31, 2021, the Company had a principal balance of $100,000 and had accrued $1,734 in interest expense. The Company determined that the embedded conversion feature of the convertible promissory note meets the definition of a beneficial conversion feature and a derivative liability which is accounted for separately. The Company measured the beneficial conversion feature’s intrinsic value on January 7, 2021 and determined that the embedded derivative was valued at $62,619 which was recorded as a debt discount and is being amortized over the life of the loan. For the three months ended March 31, 2021, $11,885 has been amortized. As of March 31, 2021, the fair value of the derivative liability was $45,461 and for the three months ended March 31, 2021, the Company recorded a gain of $17,158 from the change in fair value of derivative liability as other income in the consolidated statements of operations and comprehensive income (loss). Derivative Liabilities The table below provides a summary of the changes in fair value, including net transfers in and/or out of all financial liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2021: Amount Balance on December 31, 2020 $ 460,728 Issuances to debt discount 62,619 Change in fair value of derivative liabilities (61,373 ) Balance on March 31, 2021 $ 461,974 The fair value of the derivative conversion features and warrant liabilities as of March 31, 2021 were calculated using a Monte-Carlo option model valued with the following assumptions: March 31, 2021 Dividend yield 0 % Expected volatility 121.3%-137.6 % Risk free interest rate 0.13%-0.17 % Contractual terms (in years) 0.59 – 0.81 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2021 | |
DEBT | |
NOTE 11 - DEBT | A summary of the Company’s third-party debt during the three months ended March 31, 2021 and the year ended December 31, 2020 is presented below: March 31, 2021 Loan Facility Trade Facility Third Party COVID Loans Total Beginning balance 3,302,100 6,446,000 12,631,284 435,510 22,814,594 Proceeds - - - - - Payments - - - - - Conversion of debt - - (3,010,000 ) - (3,010,000 ) Foreign currency translation (131,490 ) (97,400 ) (24,740 ) (13,945 ) (267,575 ) Reclass of long-term portion of debt (10,303,924 ) Ending Balance 3,171,610 6,348,600 9,596,544 421,265 9,233,095 December 31, 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 - - - 16,121,500 435,210 16,556,710 Payments - (191,287 ) - (5,006,115 ) - (5,230,725 ) Conversion of debt (807,795 ) (807,795 ) Debt extinguishment (12,066 ) - - (192,205 ) - (204,271 ) Foreign currency translation 269,047 - 200,600 1,304 - 470,951 Reclass of long-term portion of debt (10,771,882 ) Ending Balance 3,302,100 - 6,446,000 12,631,284 435,210 12,042,712 Loan Facility Agreement On June 30, 2020, the Company entered into a settlement agreement on an existing loan facility agreement whereby the Company agreed to make certain payments to the creditor and the creditor will accept such payments as full discharge of outstanding debt. 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. Trade Facility Agreements 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 ($2,348,600) 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, 2020, the Company had principal balances of €2,000,000 ($2,446,000), of which $2,384,850 is classified as Notes payable – long term portion on the consolidated balance sheet, and $4,000,000 under the agreements and the Company had accrued $402 and $16,185 respectively, in interest expense related to these agreements. As of March 31, 2021, the Company had principal balances of €2,000,000 ($2,348,600), of which $2,231,170 is classified as Notes payable – long term portion on the consolidated balance sheet, and $4,000,000 under the agreements and the Company had accrued $9,495 and $14,800 respectively, in interest expense related to these agreements. Third Party Debt 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, 2020, the Company had an outstanding principal balance of €8,000 ($9,784) and accrued interest of €4,785 ($5,852). As of March 31, 2021, the Company had an outstanding principal balance of €8,000 ($9,394) and accrued interest of €5,940 ($6,975). Conversion of Prior Year Senior Promissory Notes In the years ending December 31, 2019 and 2020, the Company executed Senior Promissory Notes (the “Debt”) in an aggregate total of $3,010,000 to an unaffiliated third-party lender (the “Lender”). As of December 31, 2020, the Company had a principal balance of $3,010.00 on this Debt and the Company had accrued $527,604 in interest expense. As of February 5, 2021 The Company entered into an Amended and Restated Debt Exchange Agreement (the “Agreement”) with the “Lender that provided for the issuance by the Company of 781,819 shares of common stock (the “Exchange Shares”), at the rate of $3.85 per share, in exchange for an aggregate of $3,010,000 principal amount of existing loans made by the Lender to the Company. The market price at the time this Agreement was negotiated was $3.28 per share and the Company recorded a gain on debt extinguishment of $445,636. All accrued and unpaid interest, $563,613 as of March 31, 2021, as well as any unpaid fees, shall be paid in three (3) equal monthly installments following the closing of a planned Canadian public offering. Pursuant to this Agreement, Grigorios Siokas, the Company’s Chief Executive Officer and principal shareholder, will be released from all personal guarantees on the Debt. 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 matured on December 31, 2020. The note is not in default and the Company is currently in negotiations with the lender to extend the maturity date. The May 18 Note is subject to acceleration in an Event of Default. 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 March 31, 2021 and December 31, 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. As of March 31, 2021 and December 31, 2020, the Company had a principal balance of $5,000,000 on this note, which is classified as long-term on the consolidated balance sheet. As of March 31, 2021 and December 31, 2020, the Company has accrued an aggregate total of $459,368 and $146,685 in accrued 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 matured 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. On October 29, 2020, the Company entered into a debt exchange agreement with the lender whereby the Company issued 259,741 shares of common stock at the rate of $3.85 per share in exchange for an aggregate of $1,000,000 principal amount of the existing loan. The fair market value of the Company’s common stock on the date of exchange was $3.11 per share and as such, the Company recorded a gain of $192,205. Interest will continue to accrue on the remaining debt and the converted amount until December 31, 2020. As of December 31, 2020, the Company had a principal balance of $2,000,000 on this note and prepaid interest of $8,514. As of March 31, 2021, the Company had a principal balance of $2,000,000 on this note and $97,282 in accrued interest expense. The note is not in default and the Company is in negotiations with the lender to extend the maturity date. November 19, 2020 Debt Agreement On November 19, 2020, the Company entered into an agreement with a third-party lender in the principal amount of €500,000 ($611,500). The note matures on November 18, 2025 and bears an annual interest rate, based on a 360-day year, of 3.3% plus .6% plus 6-month Euribor when Euribor is positive. Pursuant to the terms of the agreement, there is a six-month grievance from the first deposit date, which was November 19, 2020, for both interest accrual and principal repayment. The principal is to be repaid in 18 quarterly installments of €27,000 with the first payment due 9 months from the first deposit. As of December 31, 2020, the Company had no accrued interest and a principal balance of €500,000 ($611,500), of which $543,557 is classified as Notes payable – long term portion on the consolidated balance sheet. As of March 31, 2021, the Company had no accrued interest and a principal balance of €500,000 ($587,150), of which $489,294 is classified as Notes payable – long term portion on the consolidated balance sheet. 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. The balance as of March 31, 2021 was $352,290. 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. The balance as of March 31, 2021 was $68,975. Distribution and Equity Agreement As discussed in Note 3 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 3, 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 285,606 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 None of the above loans were made by any related parties. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2021 | |
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 4.84 years, with a weighted-average discount rate of 6.74%. The Company incurred lease expense for its operating leases of $64,577 and $53,576 which was included in “General and administrative expenses,” for the three months ended March 31, 2021 and 2020, respectively. The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of March 31, 2021. Maturity of Lease Liability Remainder of 2021 $ 202,886 2022 226,636 2023 202,152 2024 60,485 2025 56,366 Thereafter 154,975 Total undiscounted operating lease payments $ 903,500 Less: Imputed interest (133,728 ) Present value of operating lease liabilities $ 769,772 The Company’s weighted-average remaining lease term relating to its finance leases is 2.68 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 March 31, 2021. Maturity of Lease Liability Remainder of 2021 $ 73,974 2022 76,682 2023 66,780 2024 51,176 2025 20,716 Thereafter 584 Total undiscounted finance lease payments $ 289,912 Less: Imputed interest (33,014 ) Present value of finance lease liabilities $ 256,898 The Company had operating cash flows used in finances leases of $4,453 and $2,301 for the three months ended March 31, 2021 and 2020, respectively. The Company incurred interest expense on its finance leases of $4,453 which was included in “Interest expense,” for the three months ended March 31, 2021. The Company incurred amortization expense on its finance leases of $26,755 which was included in “Depreciation and amortization expense,” for the three months ended March 31, 2021. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021, 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. 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 | 3 Months Ended |
Mar. 31, 2021 | |
STOCK OPTIONS AND WARRANTS | |
NOTE 14 - STOCK OPTIONS AND WARRANTS | As of March 31, 2021, there were 37,000 options outstanding and 37,000 options exercisable with expiration dates of January 2022. A summary of the Company’s option activity during the three months ended March 31, 2021 is presented below: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Shares Price Term Value Balance Outstanding, December 31, 2020 62,000 $ 1.19 0.60 $ 242,200 Granted - - - - Forfeited - - - - Exercised - - - - Expired (25,000 ) - - - Balance Outstanding, March 31, 2021 37,000 $ 1.32 0.76 $ 163,750 Exercisable, March 31, 2021 37,000 $ 1.32 0.76 $ 163,750 As of March 31, 2021, 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 three months ended March 31, 2021 is presented below: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Shares Price Term Value Balance Outstanding, December 31, 2020 1,164,673 $ 6.41 3.01 $ 5,360 Granted - - - - Forfeited - - - - Exercised - - - - Expired - - - - Balance Outstanding, March 31, 2021 1,164,673 $ 6.41 2.76 $ 40,200 Exercisable, March 31, 2021 1,164,673 $ 6.41 2.76 $ 40,200 |
DISAGGREGATION OF REVENUE
DISAGGREGATION OF REVENUE | 3 Months Ended |
Mar. 31, 2021 | |
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 three months ended: Country March 31, 2021 March 31, 2020 Cyprus $ 14,723 $ - Denmark 54,686 - France - 1,091 Germany 13,613 667,302 Greece 11,453,496 10,689,681 Hungary - 36,140 Ireland - 35,113 Italy 15,727 6,041 Jordan - 9,417 Netherlands - 41,983 Poland - 33,455 Turkey - 28,398 UK 66,831 384,627 Total $ 11,619,076 $ 11,933,248 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2021 | |
SUBSEQUENT EVENTS | |
NOTE 16 - SUBSEQUENT EVENTS | On or about July 25, 2019, Mark Rubenstein, individually and as a shareholder of the Company, brought the action styled Rubenstein v. Siokas, et al. |
ORGANIZATION, NATURE OF BUSIN_2
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN | |
Overview | Cosmos Holdings Inc. (“us”, “we”, or the “Company”) is a multinational pharmaceutical company. The Company imports, exports and distributes pharmaceutical products of brand-name and generic pharmaceuticals, over-the-counter (OTC) medicines, and a variety of dietary and vitamin supplements through its established network. Currently, the Company operates its business through its three wholly-owned subsidiaries: (i) SkyPharm, headquartered in Thessaloniki, Greece; (ii) Decahedron Ltd., head-quartered in Harlow, United Kingdom; and (iii) Cosmofarm, headquartered in Athens, Greece. Cosmofarm was acquired in 2018 and we believe this expansion has increased our sales and profit margins as we vertically integrate our business model. The Company also has an extensive and established distribution direct and indirect network within the European Union (EU). The Company’s cross-border pharmaceutical 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 the Company 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. The Company focuses on leveraging its growing purchasing scale and supplier relationships to secure discounts and provide pharmaceuticals at reduced prices and on continuing to drive organic growth at attractive margins for its cross-border pharmaceutical wholesale business. The Company regularly evaluates and undertakes strategic initiatives to expand its distribution reach, improve its profit margins, and strengthen its competitive position. In 2018, the Company entered the vitamins and dietary supplements segment and in the fourth quarter of 2018, the Company posted the first sales of its own brand of nutraceuticals: Sky Premium Life. Through the December 2018 acquisition of Cosmofarm, the Company entered the full-line pharmaceutical wholesale distribution segment. Cosmofarm now serves approximately 1500 independent retail pharmacies and 40 pharmaceutical wholesalers in the greater Athens, Greece region by providing brand-name and generic pharmaceuticals, over-the-counter medicines, vitamins, and dietary supplements. We invest in technology to enhance safety, distribution and warehousing efficiency and reliability. Cosmofarm operates two robotic ROWA, a German fully automated warehouse system, that ensure 0% error selection rate, accelerate order fulfillment, and yield higher cost-efficiency in Athens distribution center. 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). Pursuant to the EU directive of (2013/C 343/01), the Company is subject to fulfill the Guidelines of the Good Distribution Practices of medical products for human use. The Company submitted its application for renewal one month before the license expiration to the Hellenic Republic National Organization, but according to the EMA (eudragmdp.ema.europa.eu/inspections/view/wda/WDAHomePage.xhtml ): “Due to the restrictions caused by COVID-19, the period of validity of MIA’s, WDA’s, GMP and GDP certificates is automatically extended until the end of 2021. On-site inspections will resume as soon as there is a consensus that the period of the public health crisis has passed. The clarifying remark section of individual MIA’s, WDA’s, GMP and GDP certificates will indicate any exceptions. Competent authorities reserve the right to inspect a manufacturing site should the need arise.” 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. Our subsidiaries are ISO 9001 certified for a management system for the trade and distribution of pharmaceuticals. As part of the certification process by the International Organization for Standardization, we need to be compliant with the General Data Protection Regulation (GDPR) adopted by the European Union. GDPR applies to the processing of personal data of persons in the EU by a controller or processor neither of which apply to our operations. |
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 Company (“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 Company (“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. (“Cosmofarm”), 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 consolidated financial statements are prepared in conformity with U.S. GAAP, which contemplates the continuation of the Company as a going concern. For the three months ended March 31, 2021, the Company had revenue of $11,619,076, net loss of $2,173,903 and net cash used in operations of $665,339. Additionally, as of March 31, 2021, the Company had working capital of $6,817,608, an accumulated deficit of $20,924,727, and stockholders’ deficit of $2,804,680. It is management’s opinion that these conditions raise substantial 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 Company has undergone strategic review processes to help find a definitive solution to the Company’s accumulated deficit constraints. Options under consideration in the strategic review process include, but are not limited to, securing new debt, exchange debt to equity, restructuring current debt facilities from short term to long term and making the proper actions for new fund raising. The 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 ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund its operations. 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. |
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. |
The Effects of COVID-19 | 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 May 17, 2021, 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 March 31, 2021, and December 31, 2020, 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. For the three the three months ended March 31, 2020, $53,729 in sales and marketing expenses were reclassified from general and administrative expenses. Additionally, for the three months ended March 31, 2020, $188,923 was reclassified from accounts payable and accrued expenses to accrued interest on the Statement of Cash Flows. These reclassifications have no impact on previously reported net income. |
Account receivable, net | 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 March 31, 2021, and December 31, 2020, the Company’s allowance for doubtful accounts was $687,340 and $715,845, 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 $71,471 and $53,512 for the three months ended March 31, 2021 and 2020, 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. 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 March 31, 2021, no revision to the remaining amortization period of the intangible assets was made. Amortization expense was $8,158 and $8,248 for the three months ended March 31, 2021 and 2020, 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 March 31, 2021, 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 $5.24 per share, or value of $209,495 of Diversa S.A. and 16,666 shares which traded at a closing price of $0.29 per share or value of $4,854 of National Bank of Greece. Additionally, the Company has $4,582 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 March 31, 2021 and December 31, 2020, on a recurring basis: March 31, 2021 Total Carrying Level 1 Level 2 Level 3 Value Marketable securities – ICC International Cannabis Corp. $ - - - $ - Marketable securities – Divsersa S.A. 209,495 - - 290,495 Marketable securities – National Bank of Greece 4,854 - - 4,854 $ 214,349 $ 214,349 December 31, 2020 Total Carrying Level 1 Level 2 Level 3 Value Marketable securities – ICC International Cannabis Corp. $ - - - $ - Marketable securities – Divsersa S.A. 218,183 - - 218,183 Marketable securities – National Bank of Greece 4,609 - - 4,609 $ 222,792 $ 222,792 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 | In accordance with ASC 606, Revenue from Contracts with Customers, the Company uses 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 transfer of the product to the customer. |
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-Improvements to Nonemployee Share-Based Payment Accounting.” |
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 22% in Greece (tax losses are carried forward for five years effective January 1, 2013) and 19% in United Kingdom of England. Losses may also be subject to limitation under certain rules regarding change of ownership. We regularly review deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if we do not consider it to be more likely than not that the deferred tax assets will be realized. Our review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets. At March 31, 2021 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 not been identified because there is a limitation on periods that the Tax authorities can audit retrospectively 5 years prior to the current fiscal year. Therefore, no prospective tax audit from tax authorities may arise. |
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 March 31, 2021, and December 31, 2020, was $102,901 and $107,167 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 March 31, 2021 2020 Weighted average number of common shares outstanding Basic 15,034,219 13,225,387 Potentially dilutive common stock equivalents - - Weighted average number of common and equivalent shares outstanding – Diluted 15,034,219 13,225,387 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 August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) ”Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective January 1, 2024, for the Company. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. Management is currently evaluating the effect of the adoption of ASU 2020-06 on the consolidated financial statements. Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. |
ORGANIZATION, NATURE OF BUSIN_3
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 |
Fair value a measured and recognized asset | March 31, 2021 Total Carrying Level 1 Level 2 Level 3 Value Marketable securities – ICC International Cannabis Corp. $ - - - $ - Marketable securities – Divsersa S.A. 209,495 - - 290,495 Marketable securities – National Bank of Greece 4,854 - - 4,854 $ 214,349 $ 214,349 December 31, 2020 Total Carrying Level 1 Level 2 Level 3 Value Marketable securities – ICC International Cannabis Corp. $ - - - $ - Marketable securities – Divsersa S.A. 218,183 - - 218,183 Marketable securities – National Bank of Greece 4,609 - - 4,609 $ 222,792 $ 222,792 |
Basic and Diluted Net Loss per Common Share | Three Months Ended March 31, 2021 2020 Weighted average number of common shares outstanding Basic 15,034,219 13,225,387 Potentially dilutive common stock equivalents - - Weighted average number of common and equivalent shares outstanding – Diluted 15,034,219 13,225,387 |
PROPERTY AND EQUIPMENT NET (Tab
PROPERTY AND EQUIPMENT NET (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of Property and equipment, net | March 31, 2021 December 31, 2020 Leasehold improvements $ 538,684 $ 560,711 Vehicles 100,286 105,057 Furniture, fixtures and equipment 1,575,228 1,632,654 Computers and software 137,903 149,005 2,352,031 2,447,427 Less: Accumulated depreciation and amortization (728,069 ) (690,214 ) Total $ 1,623,962 $ 1,757,213 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
GOODWILL AND INTANGIBLE ASSETS, NET | |
Schedule of Goodwill and Intangible assets | March 31, 2021 December 31, 2020 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 (91,139 ) (82,981 ) Subtotal 172,651 180,809 Goodwill 49,697 49,697 Total $ 222,348 $ 230,506 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
RELATED PARTY TRANSACTIONS | |
Schedule of related party notes payable | 2021 2020 Beginning Balance $ 501,675 $ 1,375,532 Payments - (996,136 ) Foreign currency translation (19,977 ) 122,279 Ending Balance $ 481,698 $ 501,675 |
Summary of related party loans payable | 2021 2020 Beginning Balance $ 1,629,246 $ 1,026,264 Proceeds 398,864 725,563 Payments (65,761 ) (149,695 ) Foreign currency translation (20,577 ) 27,114 Ending Balance $ 1,941,773 $ 1,629,246 |
LINES OF CREDIT (Tables)
LINES OF CREDIT (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
LINES OF CREDIT | |
Summary of lines of credit | March 31, 2021 December 31, 2020 National $ 2,837,626 $ 3,540,550 Alpha 1,088,358 1,106,894 Pancretan 364,550 - National - COVID 489,592 429,240 Total $ 4,780,126 $ 5,076,684 |
CONVERTIBLE DEBT (Tables)
CONVERTIBLE DEBT (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
CONVERTIBLE DEBT | |
Summary of convertible debt | 2021 2020 Beginning balance notes 1,447,000 1,500,000 New notes 100,000 540,000 Payments (180,000 ) (593,000 ) Subtotal notes 1,367,000 1,447,000 Debt discount at year end (507,483 ) (494,973 ) Note payable net of discount 859,517 952,027 |
Derivative Liabilities | Amount Balance on December 31, 2020 $ 460,728 Issuances to debt discount 62,619 Change in fair value of derivative liabilities (61,373 ) Balance on March 31, 2021 $ 461,974 |
Fair value of the derivative conversion features and warrant liabilities | March 31, 2021 Dividend yield 0 % Expected volatility 121.3%-137.6 % Risk free interest rate 0.13%-0.17 % Contractual terms (in years) 0.59 – 0.81 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
DEBT | |
Summary of debt | March 31, 2021 Loan Facility Trade Facility Third Party COVID Loans Total Beginning balance 3,302,100 6,446,000 12,631,284 435,510 22,814,594 Proceeds - - - - - Payments - - - - - Conversion of debt - - (3,010,000 ) - (3,010,000 ) Foreign currency translation (131,490 ) (97,400 ) (24,740 ) (13,945 ) (267,575 ) Reclass of long-term portion of debt (10,303,924 ) Ending Balance 3,171,610 6,348,600 9,596,544 421,265 9,233,095 December 31, 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 - - - 16,121,500 435,210 16,556,710 Payments - (191,287 ) - (5,006,115 ) - (5,230,725 ) Conversion of debt (807,795 ) (807,795 ) Debt extinguishment (12,066 ) - - (192,205 ) - (204,271 ) Foreign currency translation 269,047 - 200,600 1,304 - 470,951 Reclass of long-term portion of debt (10,771,882 ) Ending Balance 3,302,100 - 6,446,000 12,631,284 435,210 12,042,712 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
LEASES | |
Summary of operating leases | Maturity of Lease Liability Remainder of 2021 $ 202,886 2022 226,636 2023 202,152 2024 60,485 2025 56,366 Thereafter 154,975 Total undiscounted operating lease payments $ 903,500 Less: Imputed interest (133,728 ) Present value of operating lease liabilities $ 769,772 |
Summary of finance leases | Maturity of Lease Liability Remainder of 2021 $ 73,974 2022 76,682 2023 66,780 2024 51,176 2025 20,716 Thereafter 584 Total undiscounted finance lease payments $ 289,912 Less: Imputed interest (33,014 ) Present value of finance lease liabilities $ 256,898 |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
STOCK OPTIONS AND WARRANTS | |
Summary of warrant activity during year | Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Shares Price Term Value Balance Outstanding, December 31, 2020 62,000 $ 1.19 0.60 $ 242,200 Granted - - - - Forfeited - - - - Exercised - - - - Expired (25,000 ) - - - Balance Outstanding, March 31, 2021 37,000 $ 1.32 0.76 $ 163,750 Exercisable, March 31, 2021 37,000 $ 1.32 0.76 $ 163,750 |
Schedule of option activity after three year | Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Shares Price Term Value Balance Outstanding, December 31, 2020 1,164,673 $ 6.41 3.01 $ 5,360 Granted - - - - Forfeited - - - - Exercised - - - - Expired - - - - Balance Outstanding, March 31, 2021 1,164,673 $ 6.41 2.76 $ 40,200 Exercisable, March 31, 2021 1,164,673 $ 6.41 2.76 $ 40,200 |
DISAGGREGATION OF REVENUE (Tabl
DISAGGREGATION OF REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
DISAGGREGATION OF REVENUE | |
Schedule of Revenue disaggregated by country | Country March 31, 2021 March 31, 2020 Cyprus $ 14,723 $ - Denmark 54,686 - France - 1,091 Germany 13,613 667,302 Greece 11,453,496 10,689,681 Hungary - 36,140 Ireland - 35,113 Italy 15,727 6,041 Jordan - 9,417 Netherlands - 41,983 Poland - 33,455 Turkey - 28,398 UK 66,831 384,627 Total $ 11,619,076 $ 11,933,248 |
ORGANIZATION, NATURE OF BUSIN_4
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN (Details) | 3 Months Ended |
Mar. 31, 2021 | |
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 |
Leasehold improvements and technical works [Member] | |
Estimated useful life, description | Lesser of lease term or 40 years |
Machinery [Member] | |
Estimated Useful Life | 20 years |
Vehicles [Member] | |
Estimated Useful Life | 6 years |
ORGANIZATION, NATURE OF BUSIN_5
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN (Details 1) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Fair value of assets and liabilities | $ 214,349 | $ 222,792 |
Marketable securities - ICC International Cannabis Corp. [Member] | ||
Fair value of assets and liabilities | 0 | 0 |
Marketable securities - Divsersa S.A. [Member] | ||
Fair value of assets and liabilities | 290,495 | 218,183 |
Marketable securities - National Bank of Greece [Member] | ||
Fair value of assets and liabilities | 4,854 | 4,609 |
Level 1 [Member] | ||
Fair value of assets and liabilities | 214,349 | 222,792 |
Level 1 [Member] | Marketable securities - ICC International Cannabis Corp. [Member] | ||
Fair value of assets and liabilities | 0 | 0 |
Level 1 [Member] | Marketable securities - Divsersa S.A. [Member] | ||
Fair value of assets and liabilities | 209,495 | 218,183 |
Level 1 [Member] | Marketable securities - National Bank of Greece [Member] | ||
Fair value of assets and liabilities | 4,854 | 4,609 |
Level 2 [Member] | ||
Fair value of assets and liabilities | 0 | 0 |
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] | ||
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 BUSIN_6
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN (Details 2) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
BASIS OF PRESENTATION | ||
Weighted average number of common shares outstanding Basic | 15,034,219 | 13,225,387 |
Potentially dilutive common stock equivalents | ||
Weighted average number of common and equivalent shares outstanding - Diluted | 15,034,219 | 13,225,387 |
ORGANIZATION NATURE OF BUSINESS
ORGANIZATION NATURE OF BUSINESS AND GOING CONCERN (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Nov. 21, 2017 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2018 | Sep. 29, 2018 | Feb. 28, 2017 | |
Accrued interest expense | $ 188,923 | |||||||
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 | |||||||
Revenue | $ 11,619,076 | $ 11,933,248 | ||||||
Income tax term | 5 years | |||||||
Allowance for doubtful accounts | $ 687,340 | $ 715,845 | ||||||
Sales and marketing expenses | 405,092 | 53,729 | ||||||
Net loss | (2,173,903) | (483,310) | ||||||
Working capital deficit | (6,817,608) | |||||||
Cash used in operation | 665,339 | |||||||
Accumulated deficit | (20,924,727) | (18,750,824) | ||||||
TOTAL STOCKHOLDERS' DEFICIT | (2,804,680) | (7,087,901) | (4,161,013) | $ (6,460,829) | ||||
Depreciation expense | 71,471 | 53,512 | ||||||
Amortization expense | 8,158 | 8,248 | ||||||
Goodwill | 49,697 | 49,697 | ||||||
Potential retirement and termination benefits liability | $ 102,901 | $ 107,167 | ||||||
Import/export license [Member] | ||||||||
Estimated Useful Life | 5 years | |||||||
Greece [Member] | ||||||||
Revenue | $ 11,453,496 | $ 10,689,681 | ||||||
Income tax rate | 24.00% | |||||||
United Kingdom Of England [Member] | ||||||||
Income tax rate | 19.00% | |||||||
Pancreta Bank [Member] | ||||||||
Additional investments in equity securities | $ 4,582 | |||||||
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 | $ 209,495 | |||||||
Closing price | $ 5.24 | |||||||
National Bank of Greece [Member] | ||||||||
Equity method investment shares acquired, shares | 16,666 | |||||||
Equity method investment shares acquired, value | $ 4,854 | |||||||
Closing price | $ 0.29 | |||||||
ICC International Cannabis Corp [Member] | ||||||||
Equity method investment shares acquired, shares | 3,000,000 | |||||||
Equity method investment shares acquired, value | $ 0 | |||||||
Closing price | $ 0 |
MARKETABLE SECURITIES (Details
MARKETABLE SECURITIES (Details Narrative) | 1 Months Ended | 3 Months Ended | |||||
Jul. 16, 2018USD ($)shares | May 17, 2018USD ($)shares | Mar. 31, 2021USD ($)$ / sharesshares | Mar. 31, 2021CAD ($) | Mar. 31, 2021EUR (€) | Dec. 31, 2020USD ($) | Jun. 30, 2019 | |
Net unrealized loss on fair value investment | $ 440 | ||||||
Marketable securities - National Bank of Greece [Member] | |||||||
Closing price of shares | $ / shares | $ 0.29 | ||||||
Marketable securities | $ 4,854 | ||||||
Shares issued as marketable securities | shares | 16,666 | ||||||
Stock issued during the period, amount | $ 209,495 | ||||||
Marketable securities - Divsersa S.A. [Member] | |||||||
Closing price of shares | $ / shares | $ 5.24 | ||||||
Shares issued as marketable securities | shares | 40,000 | ||||||
Cosmo Farmacy LP [Member] | |||||||
Investement | $ 176,145 | ||||||
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% | ||||||
Marathon Global Inc [Member] | Distribution and Equity Acquisition Agreement [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 | ||||
Agreement term | 5 years | 5 years | 5 years | ||||
Marathon Global Inc [Member] | Distribution and Equity Acquisition Agreement [Member] | Gross Sales One [Member] | |||||||
Cash received upon gross sales | $ 2,750,000 | ||||||
Gross sales | 13,000,000 | ||||||
Marathon Global Inc [Member] | Distribution and Equity Acquisition Agreement [Member] | Gross Sales [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 | ||||
Agreement term | 5 years | 5 years | 5 years | ||||
Cash received upon gross sales | $ 2,750,000 | ||||||
Gross sales | 6,500,000 | ||||||
Marathon Global Inc [Member] | Share Exchange Agreement [Member] | |||||||
Shares of Marathon transferred by company to KBB | shares | 2,500,000 | ||||||
Gain on exchange of investment | $ 2,092,200 | $ 1,953,000 | |||||
ICC [Member] | Share Exchange Agreement [Member] | |||||||
Net unrealized loss on fair value investment | $ 0 | ||||||
Upfront cash received | $ 2,000,000 | ||||||
Investement | $ 0 | $ 0 | |||||
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 | shares | 3,000,000 | ||||||
Additional shares issued, amount | $ 0 | ||||||
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 | ||||||
May and July 2018 [Member] | Marathon Global Inc [Member] | |||||||
Consideration for the distribution services, shares | $ 5,000,000 |
PROPERTY PLANT AND EQUIPMENT (D
PROPERTY PLANT AND EQUIPMENT (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Property plant and equipment | $ 2,352,031 | $ 2,447,427 |
Less: Accumulated depreciation | (728,069) | (690,214) |
Total | 1,623,962 | 1,757,213 |
Computers and software [Member] | ||
Property plant and equipment | 137,903 | 149,005 |
Leasehold Improvements [Member] | ||
Property plant and equipment | 538,684 | 560,711 |
Vehicles [Member] | ||
Property plant and equipment | 100,286 | 105,057 |
Furniture, fixtures and equipment [Member] | ||
Property plant and equipment | $ 1,575,228 | $ 1,632,654 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS, NET (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Goodwill and intangible assets, gross | $ 263,790 | $ 263,790 |
Less: Accumulated Amortization | (91,139) | (82,981) |
Subtotal | 172,651 | 180,809 |
Goodwill | 49,697 | 49,697 |
Total | 222,348 | 230,506 |
Customer Base [Member] | ||
Goodwill and intangible assets, gross | 176,793 | 176,793 |
Trade name / mark [Member] | ||
Goodwill and intangible assets, gross | 36,997 | 36,997 |
License [Member] | ||
Goodwill and intangible assets, gross | $ 50,000 | $ 50,000 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Deferred tax assets | $ (329,586) | $ 0 | |
United States [Member] | |||
Deferred tax assets | $ 499,368 | $ 178,430 | |
Federal Statutory Income Tax Rate, description | The corporate tax rate in the United Kingdom is 19% on income reported in the statutory financial statements after appropriate tax adjustments. |
CAPITAL STRUCTURE (Details Narr
CAPITAL STRUCTURE (Details Narrative) - USD ($) | Feb. 05, 2021 | Nov. 30, 2020 | Oct. 31, 2020 | Sep. 30, 2020 | Aug. 31, 2020 | Jul. 31, 2020 | Jun. 20, 2019 | Mar. 31, 2021 | Dec. 31, 2020 |
Common stock, shares, outstanding | 15,716,619 | 13,069,800 | |||||||
Common stock, shares issued | 16,066,947 | 15,716,619 | |||||||
Common stock shares authorized | 300,000,000 | 300,000,000 | |||||||
Restricted shares of Common stock | 1,800,000 | ||||||||
Stock earned per month | 200,000 | ||||||||
Stock-based compensation | $ 1,189,451 | ||||||||
Stock-based compensation, shares earned | 400,000 | ||||||||
Retained agreement descriptions | The Consultant retained 800,000 of the 1,800,000 shares and agreed with an assignee and the Company that 1,600,000 of the 1,800,000 shares shall be held in book entry for six (6) months from the date of this Agreement, subject to the above claw back. The shares valued on the date of the agreement at $3.28 per share or $5,904,000, which will be amortized over the term of the agreement. | ||||||||
Preferred stock shares authorized | 100,000,000 | 100,000,000 | |||||||
Stock Purchase Agreement [Member] | Shareholder [Member] | February [Member] | |||||||||
Treasury stock sell | 65,000 | ||||||||
Stock held in treasury, value | $ 250,000 | ||||||||
Stock Purchase Agreement [Member] | Shareholder [Member] | Sepetember [Member] | |||||||||
Payment made against shares purchased | $ 40,000 | ||||||||
Common stock, shares purchased | 10,000 | ||||||||
Common stock, purchase price | $ 4 | ||||||||
Aggregate common stock value | $ 40,000 | ||||||||
Stock Purchase Agreement [Member] | Shareholder [Member] | July [Member] | |||||||||
Payment made against shares purchased | 40,000 | ||||||||
Common stock, shares purchased | 10,000 | ||||||||
Common stock, purchase price | $ 4 | ||||||||
Aggregate common stock value | $ 40,000 | ||||||||
Stock Purchase Agreement [Member] | Shareholder [Member] | August [Member] | |||||||||
Payment made against shares purchased | 40,000 | ||||||||
Common stock, shares purchased | 10,000 | ||||||||
Common stock, purchase price | $ 4 | ||||||||
Aggregate common stock value | $ 40,000 | ||||||||
Stock Purchase Agreement [Member] | Shareholder [Member] | October [Member] | |||||||||
Payment made against shares purchased | 40,000 | ||||||||
Common stock, shares purchased | 10,000 | ||||||||
Common stock, purchase price | $ 4 | ||||||||
Aggregate common stock value | $ 40,000 | ||||||||
Stock Purchase Agreement [Member] | Shareholder [Member] | November [Member] | |||||||||
Payment made against shares purchased | $ 40,000 | ||||||||
Common stock, shares purchased | 10,000 | ||||||||
Common stock, purchase price | $ 4 | ||||||||
Aggregate common stock value | $ 40,000 | ||||||||
Stock Purchase Agreement [Member] | Former Officer and Director [Member] | |||||||||
Consideration for stock purchase | $ 15,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Notes Payable - Related Party [Member] - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Beginning Balance | $ 501,675 | $ 1,375,532 |
Payments | 0 | (996,136) |
Foreign currency translation | (19,977) | 122,279 |
Ending Balance | $ 481,698 | $ 501,675 |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details 1) - Loans Payable - Related Party [Member] - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Beginning Balance | $ 1,629,246 | $ 1,026,264 |
Proceeds | 398,864 | 725,563 |
Payments | (65,761) | (149,695) |
Foreign currency translation | (20,577) | 27,114 |
Ending Balance | $ 1,941,773 | $ 1,629,246 |
RELATED PARTY TRANSACTIONS (D_3
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 20, 2018 | Dec. 31, 2020 | |
Borrowing | $ 1,174,300 | $ 1,223,000 | ||
Accrued interest | 1,180,523 | 742,374 | ||
Revenue | 11,619,076 | $ 11,933,248 | ||
Grigorios Siokas Four [Member] | ||||
Borrowing | 200,000 | |||
Grigorios Siokas [Member] | ||||
Borrowing | $ 1,718,400 | |||
Outstanding principal balance | 469,720 | 489,200 | ||
Accrued interest | 232,770 | 193,585 | ||
Interest rate | 4.70% | |||
Maturity date | Mar. 18, 2019 | |||
Grigorios Siokas Three [Member] | ||||
Outstanding principal balance | 1,941,773 | 1,629,246 | ||
Additional proceeds from debt | 198,865 | |||
Repayment of loans | (65,761) | |||
Foreign curreny translation | (20,577) | |||
Dimitrios Goulielmos [Member] | ||||
Outstanding principal balance | 11,978 | 12,475 | ||
Foreign curreny translation | (19,977) | |||
DOC Pharma S.A. [Member] | ||||
Payments to purchase products | 589,261 | 670,631 | ||
Accounts payable balance | 27,453 | |||
Accounts receivable balance | 3,247,612 | 3,468,564 | ||
Prepaid balance | 3,522,041 | $ 3,468,653 | ||
Net prepaid balance | 3,494,588 | |||
Revenue | $ 290,598 | $ 261,543 |
LINES OF CREDIT (Details)
LINES OF CREDIT (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Lines of credit | $ 4,780,126 | $ 5,076,684 |
National - COVID [Member] | ||
Lines of credit | 489,592 | 429,240 |
Pancretan [Member] | ||
Lines of credit | 364,550 | 0 |
Alpha [Member] | ||
Lines of credit | 1,088,358 | 1,106,894 |
National [Member] | ||
Lines of credit | $ 2,837,626 | $ 3,540,550 |
LINES OF CREDIT (Details Narrat
LINES OF CREDIT (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Jun. 23, 2020 | |
Borrowing | $ 1,174,300 | $ 1,223,000 | ||
Interest rate | 4.35% | |||
Lines of credit | $ 4,780,126 | 5,076,684 | ||
Line of Credit [Member] | ||||
Interest expense | 0 | |||
Line of Credit [Member] | National Bank of Greece One [Member] | ||||
Borrowing | $ 2,583,460 | $ 2,690,600 | ||
Interest rate | 4.35% | 6.00% | ||
Outstanding debt balance | $ 1,790,935 | $ 2,411,182 | ||
National Bank of Greece Two [Member] | Line of Credit [Member] | ||||
Borrowing | $ 611,500 | |||
Interest rate | 2.70% | |||
Lines of credit | $ 489,592 | 429,240 | ||
Eurobank Bank of Greece [Member] | Line of Credit [Member] | ||||
Borrowing | 587,150 | |||
Lines of credit | $ 364,550 | |||
Interest rate | 6.10% | |||
Interest expense | $ 16,501 | $ 17,673 | 85,090 | |
Alpha Bank of Greece [Member] | Line of Credit [Member] | ||||
Borrowing | 1,174,300 | 1,223,000 | ||
Lines of credit | 1,088,358 | 1,106,894 | ||
Outstanding debt balance | $ 1,046,691 | $ 1,129,368 |
CONVERTIBLE DEBT (Details)
CONVERTIBLE DEBT (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
DEBT | ||
Beginning balance notes | $ 1,447,000 | $ 1,500,000 |
New notes | 100,000 | 540,000 |
Payments | (180,000) | (593,000) |
Subtotal notes | 1,367,000 | 1,447,000 |
Debt discount at year end | (507,483) | (494,973) |
Note payable net of discount | $ 859,517 | $ 952,027 |
CONVERTIBLE DEBT (Details 1)
CONVERTIBLE DEBT (Details 1) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
DEBT | |
Balance on December 31, 2020, beginning balance | $ 460,728 |
Issuances to debt discount | 62,619 |
Change in fair value of derivative liabilities | (61,373) |
Balance on March 31, 2021, ending balance | $ 461,974 |
CONVERTIBLE DEBT (Details 2)
CONVERTIBLE DEBT (Details 2) | 3 Months Ended |
Mar. 31, 2021 | |
Dividend yield | 0.00% |
Maximum [Member] | |
Expected life | 9 months 22 days |
Risk-free interest rate | 0.17% |
Expected volatility | 137.60% |
Minimum [Member] | |
Expected life | 7 months 2 days |
Risk-free interest rate | 0.13% |
Expected volatility | 121.30% |
CONVERTIBLE DEBT (Details Narra
CONVERTIBLE DEBT (Details Narrative) - USD ($) | Sep. 04, 2018 | Dec. 21, 2020 | Sep. 23, 2020 | Mar. 23, 2020 | Jun. 17, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 07, 2021 | May 17, 2019 | May 15, 2019 |
Interest expense | $ 1,734 | |||||||||||
Convertible notes payable, principal amount | $ 100,000 | |||||||||||
Amortization of debt discount | $ 50,109 | $ 29,509 | ||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||||||||
Change in fair value of derivative liability | $ (61,373) | |||||||||||
Forbearance and Amendment Agreement [Member] | ||||||||||||
Exercise price | $ 6 | |||||||||||
Prepayment amount | $ 63,000 | $ 100,000 | ||||||||||
Aggregate outstanding amount | 480,000 | $ 200,000 | ||||||||||
Remaining outstanding amount | $ 607,000 | |||||||||||
Event of default descriptions | 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 ($6.00per share) and the then current market price. | |||||||||||
Breach of agreement description | 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. | |||||||||||
December 16, 2020 [Member] | ||||||||||||
Amortization amount | 499,570 | |||||||||||
Amortization of debt discount | 38,224 | |||||||||||
Debt original issue discount | 43,000 | |||||||||||
Fair value of derivative liability | 416,513 | |||||||||||
Change in fair value of derivative liability | 44,215 | |||||||||||
Embedded derivative liability | 456,570 | |||||||||||
January 7, 2021 [Member] | ||||||||||||
Amortization amount | 11,885 | |||||||||||
Fair value of derivative liability | 45,461 | |||||||||||
Change in fair value of derivative liability | 17,158 | |||||||||||
Embedded derivative liability | $ 62,619 | |||||||||||
Subscription Agreement [Member] | ||||||||||||
Convertible notes payable, principal amount | $ 100,000 | |||||||||||
Discount Price | 25.00% | |||||||||||
Interest rate | 8.00% | |||||||||||
Securities Purchase Agreement [Member] | Convertible Promissory Note [Member] | ||||||||||||
Interest expense | $ 12,600 | |||||||||||
Convertible notes payable, principal amount | 540,000 | |||||||||||
Event of default conversion price, description | The Conversion Price shall equal the Variable Conversion Price (subject to stock splits, dividends, rights offerings or similar events) shall mean seventy-five percent (75%) multiplied by the Market Price defined as the average of the three (3) lowest trading prices for common stock during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date. | |||||||||||
Debt original issue discount | $ 40,000 | |||||||||||
Event of default descriptions | Note since inception shall be the Interest Rate plus eighteen percent (18.0%), the Default Interest. Unless previously converted, the principal and accrued interest on the Note is due and payable in cash (USD) upon the earlier of (i) December 31, 2021, (ii) a Change of Control (as defined below) or (iii), an Event of Default (as defined below) (collectively, the “Maturity Date”). | |||||||||||
Financing cost | $ 3,000 | |||||||||||
Interest rate | 8.00% | |||||||||||
Note issued | $ 540,000 | |||||||||||
Note issued upon exchange for cash | $ 500,000 | |||||||||||
Securities Purchase Agreement [Member] | Holder [Member] | May 2019 Note [Member] | ||||||||||||
Interest expense | 12,849 | |||||||||||
Convertible notes payable, principal amount | 727,000 | $ 907,000 | ||||||||||
Accrued expense | $ 15,420 | $ 15,420 | ||||||||||
Common stock shares issuable upon conversion of debt/convertible securities | 250,000 | |||||||||||
Conversion price | $ 6 | |||||||||||
Event of default conversion price, description | 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”). | |||||||||||
Payment amount to related party | $ 12,000,000 | |||||||||||
Customary events of default, description | 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. | |||||||||||
Terms of Blocker Provision | Common stock would exceed 9.99% of the Company’s issued and outstanding common stock. | |||||||||||
Repayment of amount | $ 180,000 | |||||||||||
Securities Purchase Agreement [Member] | Holder [Member] | September 2018 Notes [Member] | ||||||||||||
Event of default conversion price, description | Upon an Event of Default (regardless of whether such event has been cured), the Buyers may convert at an alternative conversion price equal to the lower of the then applicable Conversion Price or seventy-five (75%) percent of the then Volume-Weighted Average Price (as defined, the “VWAP”). | |||||||||||
Customary events of default, description | The Note at a redemption premium of one hundred twenty-five (125%) percent, multiplied by the greater of the conversion rate and the then current market price. The 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. | |||||||||||
Common stock, par value | $ 6 | |||||||||||
Securities Purchase Agreement [Member] | Institutional Investor [Member] | ||||||||||||
Convertible notes payable, principal amount | $ 1,500,000 | $ 1,500,000 | ||||||||||
Amortization amount | 90,491 | |||||||||||
Amortization of debt discount | $ 38,224 | $ 29,509 | ||||||||||
Common stock, par value | $ 0.001 | |||||||||||
Legal fees | $ 30,000 | |||||||||||
Cash commission description | 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 $30,000 in legal fees associated with the May 2019 Note. |
DEBT (Details)
DEBT (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Beginning balance loans | $ 22,814,594 | $ 12,029,724 | |
Conversion of debt | (3,010,000) | (807,795) | |
Proceeds | 0 | 16,556,710 | |
Payments | 0 | (5,230,725) | |
Debt extinguishment | 0 | (204,271) | |
Reclass of long-term portion of debt | (10,303,924) | (10,771,882) | |
Ending balance loans | 9,233,095 | 12,042,712 | |
Foreign currency translation | (267,575) | 470,951 | |
Foreign currency translation | $ (143,762) | ||
Bridge Loans [Member] | |||
Proceeds | 0 | 0 | |
Debt extinguishment | 0 | 0 | |
Beginning balance loans | 0 | 191,287 | |
Payments | 0 | (191,287) | |
Foreign currency translation | 0 | 0 | |
Ending balance loans | 0 | 0 | |
Loan Facility [Member] | |||
Proceeds | 0 | 0 | |
Debt extinguishment | 0 | (12,066) | |
Payments | 0 | 0 | |
Beginning balance loans | 3,302,100 | 3,078,442 | |
Foreign currency translation | (131,490) | 269,047 | |
Ending balance loans | 3,171,610 | 3,302,100 | |
Third Party [Member] | |||
Conversion of debt | (3,010,000) | (807,795) | |
Debt extinguishment | 0 | (192,205) | |
Foreign currency translation | (24,740) | 1,304 | |
Payments | 0 | (5,006,115) | |
Beginning balance loans | 12,631,284 | 2,514,595 | |
Proceeds | 0 | 16,121,500 | |
Ending balance loans | 9,596,544 | 12,631,284 | |
COVID Loans [Member] | |||
Beginning balance loans | 435,510 | 0 | |
Proceeds | 0 | 435,210 | |
Payments | 0 | 0 | |
Debt extinguishment | 0 | 0 | |
Ending balance loans | 421,265 | 435,210 | |
Foreign currency translation | (13,945) | 0 | |
Trade Facility [Member] | |||
Proceeds | 0 | 0 | |
Payments | 0 | 0 | |
Beginning balance loans | 6,446,000 | 6,245,400 | |
Foreign currency translation | (97,400) | 200,600 | |
Ending balance loans | $ 6,348,600 | $ 6,446,000 |
DEBT (Details Narrative)
DEBT (Details Narrative) | Feb. 05, 2021USD ($)shares | Aug. 04, 2020USD ($) | May 12, 2020USD ($) | May 08, 2020USD ($) | May 05, 2020USD ($) | May 12, 2018USD ($) | Aug. 04, 2016 | Nov. 19, 2020USD ($) | Jun. 24, 2020USD ($) | May 18, 2020USD ($) | Feb. 25, 2020USD ($) | Oct. 17, 2018USD ($) | May 31, 2018USD ($) | Mar. 31, 2021USD ($)shares | Mar. 31, 2021CAD ($)shares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($) | Dec. 20, 2018 | Jan. 07, 2021USD ($) | Oct. 29, 2020USD ($)$ / sharesshares | Jul. 03, 2020USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Nov. 16, 2017USD ($) | Nov. 16, 2015USD ($) |
Loan received from related party | $ 352,290 | $ 337,110 | $ 68,975 | $ 352,290 | $ (807,795) | $ 3,010,000 | |||||||||||||||||||
Decription of loan payment for interest | the Company of 781,819 shares of common stock (the “Exchange Shares”), at the rate of $3.85 per share, in exchange for an aggregate of $3,010,000 principal amount of existing loans made by the Lender to the Company. The market price at the time this Agreement was negotiated was $3.28 per share | 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. | 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 | ||||||||||||||||||||||
Common stock exchange shares | shares | 781,819 | ||||||||||||||||||||||||
Gain on debt extinguisment | $ 445,636 | ||||||||||||||||||||||||
Unpaid interest | $ 563,613 | ||||||||||||||||||||||||
Accrued interest expense | $ 188,923 | ||||||||||||||||||||||||
Restricted shares | shares | 1,800,000 | 1,800,000 | |||||||||||||||||||||||
Convertible notes payable, principal amount | $ 100,000 | ||||||||||||||||||||||||
Common stock share issued | shares | 16,066,947 | 15,716,619 | |||||||||||||||||||||||
Distribution and Equity Acquisition Agreement [Member] | Marathon Global Inc [Member] | |||||||||||||||||||||||||
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 | |||||||||||||||||||||||
Upfront cash received | $ 2,000,000 | ||||||||||||||||||||||||
Agreement term | 5 years | 5 years | |||||||||||||||||||||||
Distribution and Equity Acquisition Agreement [Member] | Marathon Global Inc [Member] | Gross Sales One [Member] | |||||||||||||||||||||||||
Cash received upon gross sales | $ 2,750,000 | ||||||||||||||||||||||||
Gross sales | 6,500,000 | ||||||||||||||||||||||||
Distribution and Equity Acquisition Agreement [Member] | Marathon Global Inc [Member] | Gross Sales [Member] | |||||||||||||||||||||||||
Cash received upon gross sales | 2,750,000 | ||||||||||||||||||||||||
Gross sales | $ 13,000,000 | ||||||||||||||||||||||||
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 | |||||||||||||||||||||||
Upfront cash received | $ 2,000,000 | ||||||||||||||||||||||||
Agreement term | 5 years | 5 years | |||||||||||||||||||||||
Trade Facility [Member] | |||||||||||||||||||||||||
Payment of interest and principal | $ 1,123,600 | ||||||||||||||||||||||||
Synthesis facility agreement [Member] | TFF [Member] | |||||||||||||||||||||||||
Debt outstanding amount | $ 5,629,555 | ||||||||||||||||||||||||
Accrued expenses | $ 524,094 | $ 402 | |||||||||||||||||||||||
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 2 [Member] | |||||||||||||||||||||||||
Maturity date | Aug. 31, 2021 | ||||||||||||||||||||||||
Accrued expenses | 14,800 | $ 16,185 | |||||||||||||||||||||||
Notes payable long term | 2,231,170 | 2,384,850 | |||||||||||||||||||||||
Convertible notes payable, principal amount | 2,348,600 | 2,446,000 | |||||||||||||||||||||||
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 | and the Company had accrued $9,495 and $14,800 respectively, in interest expense related to these agreements. | and the Company had accrued $9,495 and $14,800 respectively, in interest expense related to these agreements. | ||||||||||||||||||||||
Repayment of debt, periodic payments | $ 150,000 | ||||||||||||||||||||||||
Frequency of periodic payments | Quarterly | ||||||||||||||||||||||||
Debt Exchange Agreement [Member] | |||||||||||||||||||||||||
Debt outstanding amount | $ 611,500 | $ 587,150 | $ 2,000,000 | ||||||||||||||||||||||
Accrued expenses | 97,282 | 8,514 | |||||||||||||||||||||||
Notes payable long term | 543,557 | 489,294 | |||||||||||||||||||||||
Convertible notes payable, principal amount | $ 611,500 | 2,000,000 | 2,000,000 | $ 1,000,000 | |||||||||||||||||||||
Agreement description | The note matures on November 18, 2025 and bears an annual interest rate, based on a 360-day year, of 3.3% plus .6% plus 6-month Euribor when Euribor is positive. Pursuant to the terms of the agreement, there is a six-month grievance from the first deposit date, which was November 19, 2020, for both interest accrual and principal repayment. The principal is to be repaid in 18 quarterly installments of €27,000 with the first payment due 9 months from the first deposit. | ||||||||||||||||||||||||
Common stock share issued | shares | 259,741 | ||||||||||||||||||||||||
Share issued price per share | $ / shares | $ 3.85 | ||||||||||||||||||||||||
Gain on shares | $ 192,205 | ||||||||||||||||||||||||
July 3, 2020 [Member] | Senior Promissory Notes [Member] | |||||||||||||||||||||||||
Debt outstanding amount | $ 5,000,000 | 5,000,000 | $ 5,000,000 | ||||||||||||||||||||||
Interest rate | 18.00% | 18.00% | |||||||||||||||||||||||
Accrued expenses | $ 459,368 | 146,685 | |||||||||||||||||||||||
October 23, 2019 [Member] | Senior Promissory Notes [Member] | |||||||||||||||||||||||||
Maturity date | Oct. 23, 2020 | Oct. 23, 2020 | |||||||||||||||||||||||
Interest rate | 15.00% | 15.00% | |||||||||||||||||||||||
August 4, 2020 [Member] | Senior Promissory Notes [Member] | |||||||||||||||||||||||||
Interest rate | 18.00% | 18.00% | |||||||||||||||||||||||
Convertible notes payable, principal amount | $ 3,000,000 | ||||||||||||||||||||||||
On April 18, 2018 [Member] | |||||||||||||||||||||||||
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 | |||||||||||||||||||||||
Loan Facility [Member] | |||||||||||||||||||||||||
Debt outstanding amount | $ 3,170,610 | 3,302,100 | |||||||||||||||||||||||
Notes payable long term | 2,583,460 | 2,843,475 | |||||||||||||||||||||||
Accrued interest expense | $ 0 | 33,021 | |||||||||||||||||||||||
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. | |||||||||||||||||||||||
Restricted shares | shares | 1,000,000 | 1,000,000 | |||||||||||||||||||||||
Bridge Loans [Member] | |||||||||||||||||||||||||
Gain on debt extinguisment | 0 | ||||||||||||||||||||||||
Marathon [Member] | |||||||||||||||||||||||||
Cash received | $ 2,000,000 | ||||||||||||||||||||||||
Grigorios Siokas [Member] | |||||||||||||||||||||||||
Maturity date | Mar. 18, 2019 | ||||||||||||||||||||||||
Interest rate | 4.70% | ||||||||||||||||||||||||
Grigorios Siokas [Member] | Senior Promissory Note [Member] | February Note [Member] | |||||||||||||||||||||||||
Debt outstanding amount | $ 1,000,000 | ||||||||||||||||||||||||
Maturity date | Apr. 30, 2020 | ||||||||||||||||||||||||
Interest rate | 18.00% | ||||||||||||||||||||||||
Panagiotis Drakopoulos [Member] | Loan Agreement [Member] | |||||||||||||||||||||||||
Debt outstanding amount | $ 9,394 | $ 9,784 | |||||||||||||||||||||||
Short term debt borrowing capacity | 42,832 | ||||||||||||||||||||||||
Accrued expenses | $ 6,975 | $ 5,852 | |||||||||||||||||||||||
Unaffiliated Third Party [Member] | Senior Promissory Notes [Member] | |||||||||||||||||||||||||
Debt outstanding amount | $ 3,000,000 | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 | ||||||||||||||||||||
Loans payable | $ 3,000,000 | $ 1,000,000 | |||||||||||||||||||||||
Description of loan repayment | 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 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. | The May 5 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The May 5 Note matured on December 31, 2020. | The May 18 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The May 18 Note matured on December 31, 2020. The note is not in default and the Company is currently in negotiations with the lender to extend the maturity date. | 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 285,606 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 | 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 285,606 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 | |||||||||||||||||||
SkyPharm [Member] | Trade Facility [Member] | |||||||||||||||||||||||||
Debt outstanding amount | $ 5,369,678 | ||||||||||||||||||||||||
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] | Loan Facility [Member] | |||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||
Description for the repayment | 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. | ||||||||||||||||||||||||
SkyPharm [Member] | Second amendment to loan facility agreement [Member] | |||||||||||||||||||||||||
Short term debt borrowing capacity | $ 70,000 |
LEASES (Details)
LEASES (Details) - Operating Lease [Member] | Mar. 31, 2021USD ($) |
2021 | $ 202,886 |
2022 | 226,636 |
2023 | 202,152 |
2024 | 60,485 |
2025 | 56,366 |
Thereafter | 154,978 |
Total undiscounted operating lease payments | 903,500 |
Less: Imputed interest | (133,728) |
Present value of operating lease liabilities | $ 769,772 |
LEASES (Details 1)
LEASES (Details 1) - Finance Lease [Member] | Mar. 31, 2021USD ($) |
2021 | $ 73,974 |
2022 | 76,682 |
2023 | 66,780 |
2024 | 51,176 |
2025 | 20,716 |
Thereafter | 584 |
Total undiscounted finance lease payments | 289,912 |
Less: Imputed interest | (33,014) |
Present value of finance lease liabilities | $ 256,898 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
LEASES | ||
Operating lease, term of agreements | The Company has various lease agreements with terms up to 10 years, comprising leases of office space | |
Operating lease expense | $ 64,577 | $ 53,576 |
Operating lease weighted-average remaining lease term | 4 years 10 months 2 days | |
Operating lease, weighted average discount rate | 6.74% | |
Finance lease, weighted average remaining lease term | 2 years 8 months 5 days | |
Finance lease, weighted average discount rate | 6.74% | |
Operating lease cash flows used in finance lease | $ 4,453 | 2,301 |
Amortization of right-of-use assets | 26,755 | 38,248 |
Finance lease, interest expense | $ 4,453 | $ 2,301 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 1 Months Ended |
Apr. 18, 2018 | |
LEASES | |
Advisory description | 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 (Det
STOCK OPTIONS AND WARRANTS (Details ) - Warrants [Member] | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Number of Shares Outstanding, Beginning | $ | $ 62,000 |
Granted | shares | |
Exercised | shares | |
Forfeited | shares | |
Expired | shares | (25,000) |
Number of Shares Outstanding, Ending | $ | $ 37,000 |
Number of Shares Exercisable | shares | 37,000 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 1.19 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | 1.32 |
Weighted Average Exercise Price Exercisable | $ / shares | $ 1.32 |
Weighted average remainning contractual term | |
Weighted Average Remaining Contractual Term Outstanding, Beginning | 7 months 6 days |
Weighted Average Remaining Contractual Term Outstanding, Ending | 9 months 3 days |
Weighted Average Remaining Contractual Term Exercisable | 9 months 3 days |
Aggregate Intrinsic Value | |
Aggregate Intrinsic Value Outstanding, Beginning Balance | $ | $ 242,200 |
Aggregate Intrinsic Value Outstanding, Ending Balance | $ | 163,750 |
Aggregate Intrinsic Value Exercisable | $ | $ 163,750 |
STOCK OPTIONS AND WARRANTS (D_2
STOCK OPTIONS AND WARRANTS (Details 1) - Stock Options [Member] | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Number of Shares Outstanding, Beginning | 1,164,673 |
Granted | |
Forfeited | |
Exercised | |
Expired | |
Number of Shares Outstanding, Ending | 1,164,673 |
Number of Shares Exercisable | 1,164,673 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 6.41 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | 6.41 |
Weighted Average Exercise Price Exercisable | $ / shares | $ 6.41 |
Weighted average remainning contractual term | |
Weighted Average Remaining Contractual Term Outstanding, Beginning | 3 years 3 days |
Weighted Average Remaining Contractual Term Outstanding, Ending | 2 years 9 months 3 days |
Weighted Average Remaining Contractual Term Exercisable | 2 years 9 months 3 days |
Aggregate Intrinsic Value | |
Aggregate Intrinsic Value Outstanding, Beginning | $ | $ 5,360 |
Aggregate Intrinsic Value Outstanding, Ending | $ | 40,200 |
Aggregate Intrinsic Value Exercisable | $ | $ 40,200 |
STOCK OPTIONS AND WARRANTS (D_3
STOCK OPTIONS AND WARRANTS (Details Narrative) | 3 Months Ended |
Mar. 31, 2021shares | |
Warrants [Member] | |
Number of Shares Exercisable | 1,164,673 |
Number of Shares Outstanding, Beginning | 1,164,673 |
Expired dates description | expiration dates from May 2023 through March 2024 |
Options [Member] | |
Number of Shares Exercisable | 37,000 |
Number of Shares Outstanding, Beginning | 37,000 |
Expiration dates | January 2022 |
DISAGGREGATION OF REVENUE (Deta
DISAGGREGATION OF REVENUE (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue | $ 11,619,076 | $ 11,933,248 |
Greece [Member] | ||
Revenue | 11,453,496 | 10,689,681 |
Cyprus [Member] | ||
Revenue | 14,723 | 0 |
Denmark [Member] | ||
Revenue | 54,686 | 0 |
France [Member] | ||
Revenue | 0 | 1,091 |
Germany [Member] | ||
Revenue | 13,613 | 667,302 |
Hungary [Member] | ||
Revenue | 0 | 36,140 |
Ireland [Member] | ||
Revenue | 0 | 35,113 |
Italy [Member] | ||
Revenue | 15,727 | 6,041 |
Jordan [Member] | ||
Revenue | 0 | 9,417 |
Netherlands [Member] | ||
Revenue | 0 | 41,983 |
Poland [Member] | ||
Revenue | 0 | 33,455 |
Turkey [Member] | ||
Revenue | 0 | 28,398 |
UK [Member] | ||
Revenue | $ 66,831 | $ 384,627 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - Debt Exchange Agreement [Member] - July 25, 2019 [Member] | May 10, 2021USD ($) |
Litigation cost | $ 4,137 |
Total plantiff attornee fees | $ 120,000 |
Lawsuit settlement, Description | On or about September, 18, 2020, in an effort to avoid the uncertainty of litigation and further legal expense, Mr. Siokas agreed to settle the lawsuit by agreeing to reimburse the Company a total of six hundred thousand ($600,000) dollars. |