Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Apr. 12, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Entity Registrant Name | COSMOS HEALTH INC. | ||
Entity Central Index Key | 0001474167 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2022 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Entity Common Stock Shares Outstanding | 10,620,670 | ||
Entity Public Float | $ 6,022,594 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 000-54436 | ||
Entity Incorporation State Country Code | NV | ||
Entity Tax Identification Number | 27-0611758 | ||
Entity Address Address Line 1 | 141 West Jackson Blvd | ||
Entity Address Address Line 2 | Suite 4236 | ||
Entity Address City Or Town | Chicago | ||
Entity Address State Or Province | IL | ||
Entity Address Postal Zip Code | 60604 | ||
City Area Code | 312 | ||
Local Phone Number | 536-3102 | ||
Security 12b Title | Common Stock, par value $0.001 | ||
Security Exchange Name | NASDAQ | ||
Entity Interactive Data Current | Yes | ||
Icfr Auditor Attestation Flag | false | ||
Auditor Name | ArmaninoLLP | ||
Auditor Location | San Francisco, California | ||
Auditor Firm Id | 32 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 20,749,683 | $ 286,487 |
Accounts receivable, net | 22,761,990 | 26,491,845 |
Accounts receivable - related party | 2,830,595 | 3,267,569 |
Marketable securities | 14,881 | 11,468 |
Inventory | 3,451,868 | 3,147,276 |
Loans receivable | 377,038 | 377,590 |
Loans receivable - related party | 427,920 | 0 |
Prepaid expenses and other current assets | 1,967,527 | 2,987,687 |
Prepaid expenses and other current assets - related party | 3,463,401 | 3,263,241 |
TOTAL CURRENT ASSETS | 56,044,903 | 39,833,163 |
Property and equipment, net | 1,817,025 | 1,888,052 |
Goodwill and intangible assets, net | 706,914 | 485,767 |
Loans receivable - long term portion | 3,792,034 | 4,410,689 |
Loans receivable - related party - long term | 3,851,280 | 0 |
Operating lease right-of-use asset | 821,069 | 834,468 |
Financing lease right-of-use asset | 291,762 | 211,099 |
Other assets | 713,634 | 915,250 |
Deferred tax assets | 0 | 850,774 |
TOTAL ASSETS | 68,038,621 | 49,429,262 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 11,918,997 | 12,126,626 |
Accounts payable and accrued expenses - related party | 205,360 | 599,125 |
Accrued interest | 275,547 | 1,019,889 |
Lines of credit | 5,758,737 | 4,702,554 |
Convertible notes payable, net of unamortized discount of $0 and $258,938, respectively | 100,000 | 381,062 |
Derivative liability - convertible note | 54,293 | 45,665 |
Notes payable | 2,158,417 | 5,503,507 |
Notes payable - related party | 10,912 | 464,264 |
Loans payable | 0 | 1,000,000 |
Loans payable - related party | 12,821 | 1,293,472 |
Taxes payable | 126,855 | 1,324,722 |
Operating lease liability, current portion | 167,393 | 138,450 |
Financing lease liability, current portion | 97,097 | 73,078 |
Other current liabilities | 862,440 | 1,255,824 |
TOTAL CURRENT LIABILITIES | 21,748,869 | 29,928,238 |
Share settled debt obligation | 1,554,590 | 1,554,590 |
Notes payable - long term portion | 2,859,570 | 12,722,555 |
Operating lease liability, net of current portion | 653,673 | 696,015 |
Financing lease liability, net of current portion | 206,407 | 148,401 |
Other liabilities | 1,358,803 | 0 |
TOTAL LIABILITIES | 28,381,912 | 45,049,799 |
Commitments and Contingencies (see Note 14) | 0 | 0 |
MEZZANINE EQUITY | ||
Series A preferred stock, stated value $1,000 per share, 6,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2022 and 2021; liquidation preference of $372,414 | 372,414 | 0 |
STOCKHOLDERS' EQUITY: | ||
Common stock, $0.001 par value; 300,000,000 shares authorized; 10,605,412 and 701,780 shares issued and 10,589,915 and 686,283 outstanding as of December 31, 2022 and 2021, respectively | 10,606 | 702 |
Additional paid-in capital | 112,205,952 | 39,692,595 |
Subscription receivable | (4,750,108) | 0 |
Treasury stock, 15,497 shares as of December 31, 2022 and 2021, respectively | (816,707) | (816,707) |
Accumulated deficit | (66,232,813) | (34,345,506) |
Accumulated other comprehensive loss | (1,132,635) | (151,621) |
TOTAL STOCKHOLDERS' EQUITY | 39,284,295 | 4,379,463 |
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY | $ 68,038,621 | $ 49,429,262 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Convertible notes payable, net of unamortized discount | $ 0 | $ 258,938 |
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 | 10,605,412 | 701,780 |
Common stock, shares outstanding | 10,589,915 | 686,283 |
Preferred stock, shares authorized | 100 | 100 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Treasury stock | 15,497 | 15,497 |
Series A Preferred Stock | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, shares par value | $ 1 | $ 1,000 |
Preferred stock, shares authorized | 6,000,000 | 6,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Liquidation preference | 372,414 | 372,414 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||
REVENUE | $ 50,347,652 | $ 56,239,667 |
COST OF GOODS SOLD | 44,390,695 | 47,909,180 |
GROSS PROFIT | 5,956,957 | 8,330,487 |
OPERATING EXPENSES | ||
General and administrative expenses | 10,183,025 | 9,208,701 |
Salaries and wages | 2,429,021 | 2,472,953 |
Sales and marketing expenses | 630,057 | 732,545 |
Depreciation and amortization expense | 188,890 | 449,692 |
TOTAL OPERATING EXPENSES | 13,430,993 | 12,863,891 |
LOSS FROM OPERATIONS | (7,474,036) | (4,533,404) |
OTHER INCOME (EXPENSE) | ||
Other expense, net | (2,424,649) | (88,882) |
Interest expense | (2,345,410) | (2,823,842) |
Interest income | 236,349 | 46,316 |
Non-cash interest expense | (1,619,838) | (757,021) |
Gain on equity investments, net | 1,676 | 2,541 |
Gain on extinguishment of debt | 1,004,124 | 606,667 |
Change in fair value of derivative liability | (20,257) | 193,513 |
Foreign currency transaction, net | (413,279) | (493,527) |
TOTAL OTHER EXPENSE, NET | (5,581,284) | (3,314,235) |
LOSS BEFORE INCOME TAXES | (13,055,320) | (7,847,639) |
INCOME TAXES | (775,051) | (114,010) |
NET LOSS | (13,830,371) | (7,961,649) |
Deemed dividend on issuance of warrants | (32,004,730) | 0 |
Deemed dividend on downround of warrants | (8,480,379) | (7,633,033) |
Deemed dividend on warrant exchange | (1,067,876) | 0 |
Deemed dividend on downround of preferred stock | (8,189,515) | 0 |
Deemed dividend on preferred stock | (372,414) | 0 |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | (63,945,285) | (15,594,682) |
OTHER COMPREHENSIVE LOSS | ||
Foreign currency translation adjustment, net | (981,014) | (1,006,517) |
TOTAL COMPREHENSIVE LOSS | $ (64,926,299) | $ (16,601,199) |
BASIC NET LOSS PER SHARE | $ (33.16) | $ (23.74) |
DILUTED NET LOSS PER SHARE | $ (33.16) | $ (23.74) |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | ||
Basic | 1,928,172 | 656,933 |
Diluted | 1,928,172 | 656,933 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) AND MEZZANINE EQUITY - USD ($) | Total | Preferred Stock | Common Stock | Treasury Stock | Additional Paid-In Capital | Subscription Receivable [Member] | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Balance, shares at Dec. 31, 2020 | 539,405 | 16,613 | ||||||
Balance, amount at Dec. 31, 2020 | $ (4,161,013) | $ 0 | $ 539 | $ (611,854) | $ 14,346,230 | $ 0 | $ (18,750,824) | $ 854,896 |
Foreign currency translation adjustment, net | (1,006,517) | 0 | $ 0 | 0 | 0 | 0 | 0 | (1,006,517) |
Conversions of convertible note payable, shares | 8,535 | |||||||
Conversions of convertible note payable, amount | 959,025 | 0 | $ 9 | 0 | 959,016 | 0 | 0 | 0 |
Conversion of notes payable into shares of common stock, shares | 44,125 | |||||||
Conversion of notes payable into shares of common stock, amount | 3,878,480 | 0 | $ 44 | 0 | 3,878,436 | 0 | 0 | 0 |
Conversion of related party debt, shares | 40,000 | |||||||
Conversion of related party debt, amount | 6,000,000 | 0 | $ 40 | 0 | 5,999,960 | 0 | 0 | 0 |
Beneficial conversion feature discount related to convertible notes payable | 294,000 | 0 | 0 | 0 | 294,000 | 0 | 0 | 0 |
Forgiveness of related party debt | 600,000 | 0 | $ 0 | 0 | 600,000 | 0 | 0 | 0 |
Restricted stock issued to a consultant, shares | 72,000 | |||||||
Restricted stock issued to a consultant, amount | 5,904,000 | 0 | $ 72 | $ 0 | 5,903,928 | 0 | 0 | 0 |
Sale of treasury stock to third party, shares | 2,600 | |||||||
Sale of treasury stock to third party, amount | 250,000 | 0 | $ 0 | $ 650 | 249,350 | 0 | 0 | 0 |
Cancellation of treasury shares, shares | (2,285) | 2,285 | ||||||
Cancellation of treasury shares, amount | 0 | 0 | $ (2) | $ 171,360 | (171,358) | 0 | 0 | 0 |
Purchase of treasury stock from third party, shares | (3,769) | |||||||
Purchase of treasury stock from third party, amount | (376,863) | 0 | 0 | $ (376,863) | 0 | 0 | 0 | 0 |
Deemed dividend on warrants | 0 | 0 | 0 | 0 | 7,633,033 | 0 | (7,633,033) | 0 |
Net loss | (7,961,649) | 0 | $ 0 | $ 0 | 0 | 0 | (7,961,649) | 0 |
Deemed dividend on preferred stock | 0 | |||||||
Balance, shares at Dec. 31, 2021 | 701,780 | 15,497 | ||||||
Balance, amount at Dec. 31, 2021 | 4,379,463 | 0 | $ 702 | $ (816,707) | 39,692,595 | 0 | (34,345,506) | (151,621) |
Foreign currency translation adjustment, net | (981,014) | 0 | $ 0 | 0 | 0 | 0 | 0 | (981,014) |
Conversion of notes payable into shares of common stock, shares | 9,520 | |||||||
Conversion of notes payable into shares of common stock, amount | 973,420 | 0 | $ 9 | 0 | 973,411 | 0 | 0 | 0 |
Net loss | (13,830,371) | 0 | 0 | 0 | 0 | 0 | (13,830,371) | 0 |
Adjustments for prior periods from adopting ASU 2020-06 | (240,752) | $ 0 | 0 | 0 | (294,000) | 0 | 53,248 | 0 |
Issuance of Series A preferred stock, net of issuance costs of $547,700, shares | 6,000 | |||||||
Issuance of Series A preferred stock, net of issuance costs of $547,700, amount | 0 | $ 5,452,300 | $ 0 | 0 | 0 | 0 | 0 | 0 |
Conversion of Series A preferred stock, shares | (6,000) | 386,588 | ||||||
Conversion of Series A preferred stock, amount | 5,452,300 | $ (5,452,300) | $ 387 | 0 | 5,451,913 | 0 | 0 | 0 |
Sale of common stock, shares | 5,314,987 | |||||||
Sale of common stock, amount | 6,622,924 | 0 | $ 5,315 | 0 | 11,367,717 | (4,750,108) | 0 | 0 |
Sale of warrants bundled with common stock | 26,216,237 | 0 | $ 0 | 0 | 26,216,237 | 0 | 0 | 0 |
Exercise of warrants, shares | 3,608,667 | |||||||
Exercise of warrants, amount | 10,826,000 | 0 | $ 3,609 | 0 | 10,822,391 | 0 | 0 | 0 |
Conversion of convertible debt, shares | 1,574 | |||||||
Conversion of convertible debt, amount | 38,144 | 0 | $ 1 | 0 | 38,143 | 0 | 0 | 0 |
Cashless exercise of warrants, shares | 526,112 | |||||||
Cashless exercise of warrants, amount | 0 | 0 | $ 526 | 0 | (526) | 0 | 0 | 0 |
Shares issued in lieu of cash, shares | 40,600 | |||||||
Shares issued in lieu of cash, amount | 175,941 | 0 | $ 41 | 0 | 175,900 | 0 | 0 | 0 |
Fair value of warrants issued in lieu of cash | 24,401 | 0 | 0 | 0 | 24,401 | 0 | 0 | 0 |
Deemed dividend upon downround of preferred stock and warrants | 0 | 0 | 0 | 0 | 16,669,894 | 0 | (16,669,894) | 0 |
Deemed dividend on preferred stock | (372,414) | 372,414 | 0 | 0 | 0 | 0 | (372,414) | 0 |
Deemed dividend on warrant exchange | 0 | 0 | $ 0 | 0 | 1,067,876 | 0 | (1,067,876) | 0 |
Rounding upon reverse stock split of 1 for 25 common shares, shares | 15,584 | |||||||
Rounding upon reverse stock split of 1 for 25 common shares, amount | 16 | 0 | $ 16 | $ 0 | 0 | 0 | 0 | 0 |
Balance, shares at Dec. 31, 2022 | 10,605,412 | 15,497 | ||||||
Balance, amount at Dec. 31, 2022 | $ 39,284,295 | $ 372,414 | $ 10,606 | $ (816,707) | $ 112,205,952 | $ (4,750,108) | $ (66,232,813) | $ (1,132,635) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (13,830,371) | $ (7,961,649) |
Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities: | ||
Depreciation and amortization expense | 103,194 | 352,422 |
Amortization of right-of-use assets | 85,696 | 97,270 |
Amortization of debt discounts and accretion of debt | 1,619,838 | 757,021 |
Bad debt expense | 5,621,938 | 1,087,339 |
Write-off of investment | 0 | 211,047 |
Lease expense | 210,463 | 260,663 |
Interest on finance leases | 16,467 | 11,576 |
Stock-based compensation | 24,401 | 5,904,000 |
Deferred income taxes | 780,099 | (714,108) |
Gain on extinguishment of debt | (876,894) | (606,667) |
Change in fair value of the derivative liability | 20,257 | (193,513) |
Gain on net change in fair value of equity investments | (1,676) | (2,541) |
Gain on forgiveness of accrued interest | (127,230) | 0 |
Shares issued in lieu of cash | 175,941 | 0 |
Changes in assets and liabilities: | ||
Accounts receivable | (3,073,366) | (5,889,802) |
Accounts receivable - related party | (170,815) | 97,234 |
Inventory | (485,469) | (89,582) |
Prepaid expenses and other assets | (894,893) | (3,109,941) |
Prepaid expenses and other current assets - related party | (375,311) | (55,657) |
Loan receivable | 0 | (2,663,676) |
Loan receivable - related party | (4,213,728) | 0 |
Other assets | 0 | 23,294 |
Accounts payable and accrued expenses | 2,092,104 | 3,199,770 |
Accounts payable and accrued expenses - related party | (357,681) | 624,349 |
Accrued interest | (913,280) | 292,392 |
Lease liabilities | (210,781) | (231,900) |
Taxes payable | (1,107,135) | 622,047 |
Other current liabilities | (320,420) | 1,005,685 |
Other liabilities | 1,338,013 | (124,247) |
NET CASH USED IN OPERATING ACTIVITIES | (14,870,639) | (7,097,174) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from loan receivable | 351,474 | 63,699 |
Purchase of property and equipment | (74,207) | (581,398) |
Sale of fixed assets | 12,736 | 0 |
Purchase of intangible assets | (308,866) | (309,118) |
Purchase of marketable securities | (2,634) | 0 |
NET CASH USED IN INVESTING ACTIVITIES | (21,497) | (826,817) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment of convertible note payable | (525,000) | (907,000) |
Proceeds from convertible note payable | 0 | 600,000 |
Payment of related party note payable | (421,373) | 0 |
Payment of note payable | (12,479,735) | (605,387) |
Proceeds from note payable | 487,098 | 591,500 |
Payment of related party loan | (4,824,035) | (139,594) |
Proceeds from related party loan | 3,625,007 | 7,424,164 |
Payment of loans payable | (1,065,000) | 0 |
Proceeds from loans payable | 65,000 | 0 |
Payment of lines of credit | (20,975,110) | (23,913,958) |
Proceeds from lines of credit | 22,354,567 | 24,437,020 |
Proceeds from issuance of Series A Preferred Stock | 6,000,000 | 0 |
Proceeds from the issuance of common stock | 35,275,573 | 0 |
Proceeds from the exercise of warrants | 10,826,000 | 0 |
Payments of finance lease liability | (99,906) | (92,105) |
Payments of financing fees | (3,194,798) | 0 |
Purchase of treasury stock | 0 | (376,863) |
Proceeds from sale of treasury stock | 0 | 250,000 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 35,048,288 | 7,267,777 |
Effect of exchange rate changes on cash | 307,044 | 314,306 |
NET CHANGE IN CASH | 20,463,196 | (341,908) |
CASH AT BEGINNING OF YEAR | 286,487 | 628,395 |
CASH AT END OF YEAR | 20,749,683 | 286,487 |
Cash paid during the year: | ||
Interest | 588,051 | 2,059,305 |
Income tax | 0 | 0 |
Supplemental Disclosure of Non-Cash Investing and Financing Activities | ||
Cancellation of treasury shares | 0 | 171,360 |
Discounts related to beneficial conversion features of convertible debentures | 0 | 294,000 |
Conversion of convertible notes payable to common stock | 15,000 | 649,711 |
Conversion of notes payable to common stock | 973,420 | 3,878,480 |
Conversion of loans payable related party to common stock | 0 | 6,600,000 |
Conversion of derivative liability to additional paid-in capital | 0 | 284,169 |
Deemed dividend on warrants upon conversion of convertible debt | 32,004,730 | 7,633,033 |
Deemed dividend on preferred stock and warrants upon trigger of downround feature | 16,669,894 | 0 |
Deemed dividend upon cumulative dividend on preferred stock | 372,414 | 0 |
Conversion of Series A preferred stock | 5,452,300 | 0 |
Conversion of convertible debt | $ 38,144 | $ 0 |
ORGANIZATION AND NATURE OF BUSI
ORGANIZATION AND NATURE OF BUSINESS | 12 Months Ended |
Dec. 31, 2022 | |
ORGANIZATION AND NATURE OF BUSINESS | |
ORGANIZATION AND NATURE OF BUSINESS | NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS Cosmos Health Inc. and its subsidiaries (Nasdaq: COSM), (“us”, “we”, Group, or the “Company”) are an international healthcare group headquartered in Chicago, Illinois. The group is engaged in the nutraceuticals sector through its own proprietary lines of products “Sky Premium Life” and “Mediterranation”. The Company is operating in the pharmaceutical sector as well, through the provision of a broad line of branded generics and OTC medications. In addition, the group is involved in the healthcare distribution sector through its subsidiaries in Greece and the UK, serving retail pharmacies and wholesale distributors. The Company is strategically focusing on the research and development (“R&D”) of novel patented nutraceuticals (Intellectual Property) and specialized root extracts as well as on the R&D of proprietary complex generics and innovative OTC products. The Company has developed a global distribution platform and is currently expanding throughout Europe, Asia and North America. The Company has offices and distribution centers in Thessaloniki and Athens, Greece and Harlow, UK. The Company was incorporated in the State of Nevada under the name Prime Estates and Developments, Inc. on July 21, 2009, and on November 29, 2022, we changed our name to Cosmos Health Inc. Through its acquisition of Amplerissimo Ltd, on September 27, 2013, the Company changed its principal activities into trading of products, providing representation, and provision of consulting services to various sectors. On August 1, 2014, the Company formed SkyPharm S.A., a Greek Company (“SkyPharm”), a subsidiary that focuses on the trading, sourcing and export of nutraceutical and pharmaceutical products. In February 2017, the Company acquired Decahedron Ltd., a UK Company (“Decahedron”) which is a fully licensed second-generation wholesaler specializing in imports and exports of generics and OTC pharmaceutical products within the EEA and distributor of Sky Premium Life nutraceutical products in the UK. On December 19, 2018, the Company acquired Cosmofarm, a pharmaceutical wholesaler specializing in the distribution and export of pharmaceutical products through its extensive pharmacies network. Going Concern The Company’s consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplates the continuation of the Company as a going concern. For the year ended December 31, 2022, the Company had revenue of $50,347,652, net loss of $13,055,320 and net cash used in operations of $14,870,639. Additionally, as of December 31, 2022, the Company had positive working capital of $34,296,033, an accumulated deficit of $66,232,813, and stockholders’ equity of $39,284,295. The Company’s revenues are not able to sustain its operations, and concerns exist regarding the Company’s ability to meet its obligations as they become due. The Company is subject to a number of risks to those of smaller commercial companies, including dependence on key individuals and products, the difficulties inherent in the development of a commercial market, the need to obtain additional capital, competition from larger companies, and other pharmaceutical and health care companies. Management evaluated the above conditions which raise substantial doubt about the Company’s ability to continue as a going concern to determine if it can meet its obligations for the subsequent twelve months from the date of this filing. Management considered its ability to access future capital, curtail expenses if needed, expand product lines, and acquire new products. Based on the management’s evaluations, it has devised a plan in order to meet its obligations for the next twelve months. Management’s plans include expansion of brand name products to the market, expanding the current product portfolio, and evaluating acquisition targets to expand distribution. Furthermore, the Company intends to vertically integrate the supply chain distribution network Finally, the Company plans to access the capital markets further in order to raise additional funds through equity offerings. Additionally, as of December 31, 2022, the Company's cash reserves amounted to $20.7 million compared to $286 thousand as of December 31, 2021.During the year ended December 31, 2022, the Company raised $46.0 million from equity financings, fortifying its capital position. In addition, the Company received $10.5 million during the year from the exercise of warrants. The Company used cash proceeds to reduce its debt by approximately $15.1 million from $26 million as of December 31, 2021, to $10.9 million as of December 31, 2022. It is management’s conclusion that these plans above, collectively, alleviate the conditions that raised substantial doubt about the Company’s ability to continue as a going concern. Therefore, it is determined that no substantial doubt exists about the Company’s ability to continue as a going concern for a period of twelve months from the date of this filing. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Financial Statement Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP. Principles of Consolidation Our 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 consolidated financial statements in conformity with U.S. GAAP 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 the date of issuance of this Annual Report on Form 10-K. 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. The Effects of War in the Ukraine On February 24, 2022, Russian forces launched significant military action against Ukraine. There continues to be sustained conflict and disruption in the region, which is expected to endure for the foreseeable future. We do not conduct any commercial transactions with either Ukraine or Russia and 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 the date of issuance of this Annual Report on Form 10-K. Such political issues and conflicts could have a material adverse effect on our results of operations and financial condition if they escalate in areas in which we do business. In addition, changes in and adverse actions by governments in foreign markets in which we do business could have a material adverse effect on our results of operations and financial condition. Foreign Currency Translation and Other Comprehensive Loss The functional currency of the Company’s subsidiaries is the Euro and British Pound. For financial reporting purposes, both the Euro (“EUR”) and British Pound (“GBP”) have been translated into United States dollars ($) and/or (“USD”) as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Equity transactions are translated at each historical transaction date spot rate. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity (deficit) as “Accumulated other comprehensive income (loss)”. Gains and losses resulting from foreign currency transactions are included in the statements of operations and comprehensive loss as other comprehensive loss. There have been no significant fluctuations in the exchange rate for the conversion of EUR or GBP to USD after the balance sheet date. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the consolidated balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency included in the consolidated results of operations as incurred. As of December 31, 2022 and 2021, the exchange rates used to translate amounts in Euros into USD and British Pounds into USD for the purposes of preparing the consolidated financial statements were as follows: December 31, 2022 December 31, 2021 Exchange rate on balance sheet dates EUR: USD exchange rate 1.0698 1.1318 GBP: USD exchange rate 1.2077 1.3500 Average exchange rate for the period EUR: USD exchange rate 1.0534 1.1830 GBP: USD exchange rate 1.2371 1.3764 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 December 31, 2022 and December 31, 2021, there were no cash equivalents. The Company maintains bank accounts in the United States denominated in U.S. Dollars, in Greece denominated in Euros, U.S. Dollars and Great Britain Pounds (British Pounds Sterling), and in Bulgaria denominated in Euros. The Company also maintains bank accounts in the United Kingdom, denominated in Euros and Great Britain Pounds (British Pounds Sterling). As of December 31, 2022 and 2021, the aggregate amount in these foreign accounts were $831,793 and $250,139, respectively. Additionally, as of December 31, 2022 and 2021, the Company had cash on hand in the amount of $15,690 and $25,773, respectively. 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. As of December 31, 2021, $407,174 was reclassified from line of credit to Notes payable, $7,393 in accumulated depreciation has been reclassified from property and equipment to accumulated amortization of goodwill and intangible assets and $4,772 was reclassified from prepaid expenses and other current assets to marketable securities on the consolidated balance sheet. Additionally, as of December 31, 2021, $92,826 was reclassified from payment of lines of credit to payment of note payable on the consolidated statement of cash flows. Moreover, the total balances of operating lease right-of-use asset and financing lease right-of-use asset of $834,468 and $211,099 respectively, were reclassified from current assets to non-current assets for the year ended December 31, 2021. Finally, a balance of $366,269 concerning certain receivables with a Related Party was reclassified from accounts receivable, net to accounts receivable - related party for the year ended December 31, 2021. Accounts 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 December 31, 2022 and 2021, the Company’s allowance for doubtful accounts was $7,309,311 and $1,702,743, 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. As of December 31, 2022 and 2021, the Company had a VAT net receivable balance of $79,373 and a net payable balance of $400,616 respectively, recorded in the consolidated balance sheet as prepaid expenses and other current assets and accounts payable and accrued expenses, respectively. Inventory Inventory is stated at the lower-of-cost or net realizable value using the weighted average FIFO 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 $70,109 and $319,337 for the years ended December 31, 2022 and 2021, 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. For the years ended December 31, 2022 and 2021, the Company had no impairment of long-lived assets. 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. First, under step 0, we determine whether it is more likely than not that the fair value of the reporting unit is less than the carrying amount. Following, if step 0 fails, 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, included in Note 4 as 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 December 31, 2022, no revision to the remaining amortization period of the intangible assets was made. Amortization expense was $33,085 and $33,085 for the years ended December 31, 2022 and 2021, 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 records its share in the earnings of the investee and is included in “Equity earnings of affiliate” in the 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 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 sale 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 December 31, 2022, investments consisted of (i) 3,000,000 shares, which traded at a closing price of $0 per share or a value of $0 of ICC International Cannabis Corp and (ii) 16,666 shares which traded at a closing price of $0.40 per share or value of $6,681 of National Bank of Greece. Additionally, the Company has $8,200 in equity securities of Pancreta Bank, which are revalued annually. As of December 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., 16,666 shares which traded at a closing price of $0.40 per share or value of $6,696 of National Bank of Greece. Additionally, the Company has $4,416 in equity securities of Pancreta bank, which are not publicly traded and recorded at cost. See Note 2 for additional investments in equity securities. Fair Value Measurement The Company applies 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 table presents assets that are measured and recognized at fair value as of December 31, 2022 and 2021, on a recurring basis: December 31, 2022 Total Carrying Level 1 Level 2 Level 3 Value Marketable securities – ICC International Cannabis Corp. $ - - - $ - Marketable securities – National Bank of Greece 6,681 - - 6,681 $ 6,681 $ 6,681 December 31, 2021 Total Carrying Level 1 Level 2 Level 3 Value Marketable securities – ICC International Cannabis Corp. $ - - - $ - Marketable securities – National Bank of Greece 6,696 - - 6,696 $ 6,696 $ 6,696 In addition, 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. Derivative Instruments Derivative financial instruments are recorded in the accompanying consolidated balance sheets at fair value in accordance with ASC 815. When the Company enters into a financial instrument such as a debt or equity agreement (the “host contract”), the Company assesses whether the economic characteristics of any embedded features are clearly and closely related to the primary economic characteristics of the remainder of the host contract. When it is determined that (i) an embedded feature possesses economic characteristics that are not clearly and closely related to the primary economic characteristics of the host contract, and (ii) a separate, stand-alone instrument with the same terms would meet the definition of a financial derivative instrument, then the embedded feature is bifurcated from the host contract and accounted for as a derivative instrument. The estimated fair value of the derivative feature is recorded in the accompanying consolidated balance sheets separately from the carrying value of the host contract. Subsequent changes in the estimated fair value of derivatives are recorded as a gain or loss in the Company’s consolidated statements of operations. 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 current liabilities 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 advances 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”) 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 amounts included in the accompanying statements of operations and comprehensive loss are translated at the average rates of exchange for the year. Gains or losses resulting from translating foreign currency financial statements are accumulated in a separate component of stockholders’ equity (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 other income (expense) in the consolidated statements of operations and comprehensive loss. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash investments and accounts receivable. The following tables show the number of the Company’s clients which contributed 10% or more of revenue and accounts receivable, respectively: Year Ended December 31, Year Ended December 31, 2022 2021 Number of 10% clients 0 1 Percentage of total revenue 0.00 % 15.33 % Percentage of total AR 0.00 % 35.08 % 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 carryforwards. 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 The corporate income tax rate is 22% in Greece and 19% in the United Kingdom. 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 December 31, 2022, we believe our United Kingdom and Greece deferred tax assets will not be realized, as such, we recorded a $2,371,886 valuation allowance. 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 December 31, 2022 and December 31, 2021 was $0 and $0, respectively, and has been recorded as a long-term liability within the 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. Years Ended December 31, 2022 2021 Weighted average number of common shares outstanding Basic 1,928,172 656,933 Potentially dilutive common stock equivalents - - Weighted average number of common and equivalent shares outstanding – Diluted 1,928,172 656,933 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. Accounting Standard Adopted The Company has adopted Accounting Standards Update (“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) (“ASU 2020-06”), effective as of January 1, 2022, using the modified retrospective transition method which, among other things, simplifies the accounting for convertible instruments by eliminating the requirement to separate conversion features from the host contract. Consequently, a convertible debt instrument is accounted for as a single liability measured at its amortized cost and interest expense will be recognized at the coupon rate. The adoption resulted in the elimination of the debt discount that had been recorded within equity (see Note 11, “Convertible Debt”). In May 2021, the FASB issued ASU 2021-04—Earnings Per Share (Topic 260), Debt— Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments in this ASU are effective for public and nonpublic entities for fiscal years beginning after December 15, 2021, and interim periods with fiscal years beginning after December 15, 2021. Early adoption is permitted, including adoption in an interim period. The Company adopted ASU 2021-04 on January 1, 2022. The adoption did not have a material impact on its consolidated financial statements. Correction of an Immaterial Error During the three-month period ended June 30, 2022, the Company concluded it should have adopted ASU 2020-06 on January 1, 2022. The Company retrospectively adopted ASU 2020-06 as of January 1, 2022 in its Form 10-Q for the period ended June 30, 2022 with a cumulative catch-up adjustment. The net impact of the adjustments was recorded as a reduction to the January 1, 2022 balance of additional paid-in capital in the amount of $294,000 and a reduction in accumulated deficit in the amount of $53,248, as presented in the statement of stockholders’ equity, and a reduction in discount on convertible notes payable in the amount of $240,752. The Company has concluded the impact to form 10-Q for the three-month period ended March 31, 2022 to be immaterial to the consolidated financial statements and recorded a catchup/correcting adjustment in the current Form 10-K. Recent Accounting Pronouncements In December 2022, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2022-06, Deferral of the Sunset Date of Reference Rate Reform (Topic 848). Topic 848 provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate (e.g., LIBOR) reform if certain criteria are met, for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The ASU deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The ASU is effective as of December 21, 2022 through December 31, 2024. We continue to evaluate transactions or contract modifications occurring as a result of reference rate reform and determine whether to apply the optional guidance on an ongoing basis. We adopted ASU 2022-06 during 2022. The ASU has not and is currently not expected to have a material impact on the Companies consolidated financial statements. In March 2022, the FASB issued ASU 2022-02, Troubled Debt Restructurings and Vintage Disclosures. This ASU eliminates the accounting guidance for troubled debt restructurings by creditors that have adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments, which was adopted on January 1, 2020. The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated financial statements. ASU 2022-02 also enhances the disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. In addition, the ASU amends the guidance on vintage disclosures to require entities to disclose current period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of ASC 326-20. The ASU is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Adoption of the ASU would be applied prospectively. Early adoption is also permitted, including adoption in an interim period. This ASU is currently not expected to have a material impact on the Company’s consolidated financial statements. October 2021, the FASB issued accounting standards update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers, as if it h |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 12 Months Ended |
Dec. 31, 2022 | |
MARKETABLE SECURITIES | |
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. On March 20, 2023, the Company gave Marathon thirty (30) days’ advance notice that the agreement will be terminated effective April 19, 2023, as a result of Marathon’s failure to deliver Market Competitive product pricing and Marathon has not become profitable as at the fifth anniversary date 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. Marathon is an 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. On March 20, 2023, the Company’s Legal counsel provided notice to Marathon Global Inc, that Cosmos terminated the Equity agreement dated on March 19, 2018 pursuant to Section 3.2 and that termination is effective thirty days from the date of the letter. 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 Company 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 included in “Gains on exchange of equity investments” in the consolidated statements of operations. 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 year ended December 31, 2022 of $0. The value of the investments as of December 31, 2022 and December 31, 2021, 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 12 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 years ended December 31, 2022 and 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 December 31, 2021, in addition to the 3,000,000 ICC shares valued at $0, as noted above, marketable securities also consisted of the following: 16,666 shares, which traded at a closing price of $0.40 per share or value of $6,696, of National Bank of Greece. The Company recorded a net unrealized gain on the fair value of these investments of $2,541 during the year ended December 31, 2021 and a realized loss of $211,047 related to the write off of the Diversa S.A. shares that were delisted. As of December 31, 2022, in addition to the 3,000,000 ICC shares valued at $0, as noted above, marketable securities also consisted of the following: 16,666 shares which traded at a closing price of $0.40 per share or value of $6,680 of National Bank of Greece. Additionally, the Company has $8,200 in equity securities of Pancreta Bank, which are revalued annually. The Company recorded a net unrealized gain on the fair value of these investments of $1,676 during the year ended December 31, 2022. CosmoFarmacy LP In September 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 December 31, 2022 and 2021, was $160,470 and $169,770, respectively, and is included in “Other assets” on the Company’s consolidated balance sheets. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | NOTE 4 – PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following at December 31,: 2022 2021 Leasehold improvements and technical works $ 502,882 $ 519,278 Vehicles 107,976 96,657 Furniture, fixtures and equipment 1,945,207 2,065,100 Computers and software 138,783 141,490 2,694,848 2,822,525 Less: Accumulated depreciation and amortization (877,823 ) (934,473 ) Total $ 1,817,025 $ 1,888,052 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 5 – GOODWILL AND INTANGIBLE ASSETS Goodwill and intangible, net assets consist of the following at December 31,: 2022 2021 License $ 643,204 $ 345,739 Trade name /mark 36,997 36,997 Customer base 176,793 176,793 856,994 559,529 Less: Accumulated amortization (199,777 ) (123,460 ) Subtotal 657,217 436,069 Goodwill 49,697 49,698 Total $ 706,914 $ 485,767 At December 31, 2022, the estimated aggregate amortization expense for intangible assets subject to amortization for each of the five succeeding fiscal years is as follows: Year Amount 2023 $ 81,406 2024 82,318 2025 81,826 2026 43,637 2027 43,637 Thereafter 324,393 Sum $ 657,217 |
LOAN RECEIVABLE
LOAN RECEIVABLE | 12 Months Ended |
Dec. 31, 2022 | |
LOAN RECEIVABLE | |
LOAN RECEIVABLE | NOTE 6 – LOAN RECEIVABLE On October 30, 2021, the Company entered into an agreement for a ten-year loan with Medihelm SA to memorialize €4,284,521 ($4,849,221) in prepayments the Company had made. The prepayments to Medihelm SA had been made in accordance with the parallel export business, through which Medihelm supplied and would supply SkyPharm SA with branded pharmaceuticals. This business is no longer in place for the Company and thus the Company entered into this agreement with Medihelm SA in order for the outstanding amount to be settled. Interest is calculated at a rate of 5.5% per annum on a 360-day basis. Under the terms of the agreement, the Company is to receive 120 equal payments over the term of the loan. As of December 31, 2021, the Company had a short-term receivable balance of $377,590 and a long-term receivable balance of $4,410,689 under this loan. During the year ended December 31, 2022, the Company received €333,619 ($356,906) in principal payments such that as of December 31, 2022, the Company had a short-term receivable balance of $377,038 and a long-term receivable balance of $3,792,034 under this loan. The Company also received €190,734($204,047) in interest payments during year ended December 31, 2022. |
CAPITAL STRUCTURE
CAPITAL STRUCTURE | 12 Months Ended |
Dec. 31, 2022 | |
CAPITAL STRUCTURE | |
CAPITAL STRUCTURE | NOTE 7 – CAPITAL STRUCTURE Preferred Stock The Company is authorized to issue 100 million shares of preferred stock, of which 6,000,000 are designated as Series A convertible preferred stock. The preferred stock has a liquidation preference over the common stock and is non-voting. As of December 31, 2022 and 2021, no preferred shares were issued and outstanding. Major Rights & Preferences of Series A Preferred Stock On and effective October 4, 2021, the Company amended and restated its articles of incorporation (the “Amended and Restated Articles”) and filed a certificate of designation (the “COD”) for its Series A Preferred Stock (the “Series A Preferred Stock”) with the State of Nevada. The Amended and Restated Articles allow the Company’s Board of Directors the authority to authorize the issuance of preferred stock from time to time in one or more classes or series by resolution. On February 23, 2022, the Company filed Correction No. 1 to the COD. On July 28, 2022, the Company filed an Amendment to the COD with the State of Nevada to allow a holder to waive application of the Beneficial Ownership Limitation with respect to the conversion of Series A Preferred Stock. With respect to payment of dividends and distribution of assets upon liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, all shares of the Series A Preferred Stock will rank: (i) senior to all of the Company’s Common Stock and any other equity securities that the Company may issue in the future, (ii) equal to any other equity securities that the Company may issue in the future, the terms of which specifically provide that such equity securities are on parity or senior to the Series A Preferred Stock (“Parity Securities”), (iii) junior to all other equity securities the Company issues, the terms of which specifically provide that such equity securities rank senior to the Series A Preferred Stock, and (iv) junior to all of the Company’s existing and future indebtedness; without the prior written consent of the Majority Holders. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company (a “Liquidation”), the Holders of shares of Series A Preferred Stock shall be first entitled to receive out of the assets of the Company available for distribution to its shareholders. Each Holder shall not be entitled to vote with holders of outstanding shares of Common Stock, voting together as a single class, with respect to any and all matters presented to the stockholders of the Company for their action or consideration, except as provided by law or as set forth in the COD. The holders of Series A Preferred Stock are entitled to receive dividends paid and distributions made to the holders of Common Stock to the same extent as if the holders of Series A Preferred Stock had converted such shares into shares of Common Stock. The Series A Preferred Stock was initially convertible into the Company’s Common Stock as determined by dividing the number of shares of Series A Preferred Stock to be converted by the lower of (i) $75.00 or (ii) 80% of the average volume weighted average price for the Company’s Common Stock for the five (5) trading days immediately following the effectiveness of the registration statement concerning the shares (the “Conversion Price”). On June 14, 2022, the Conversion Price was reset to $15.54 per share. Each holder is entitled to receive dividends in shares of Series A Preferred Stock or cash determined based on the stated value of each Series A Preferred Stock at the dividend rate of 8.0% per year. For the year ended December 31, 2022, the Company recorded $372,414 as a deemed dividend in accordance with the Series A Preferred Stock cumulative dividend. As of December 31, 2022, the cumulative dividend has been recorded as mezzanine equity. The Company expects to pay the aforementioned dividend in shares of the Company’s common stock during the year ended December 31, 2023, upon which the total dividend value will be reclassified from mezzanine to permanent equity. On February 28, 2022, the Company entered into a securities purchase agreement, or the Purchase Agreement, with certain investors and an insider for a private placement of the Company’s securities (the “Private Placement”). The Private Placement consisted of the sale of 6,000 shares of the Company’s Series A Convertible Preferred Stock, or the Series A Shares, at a price of $1,000 per share, and 80,000 warrants to purchase shares of common stock, or the Warrants, for aggregate gross proceeds of approximately $6 million. The Warrants were initially exercisable to purchase shares of common stock at $82.50 per share, or 110% of the Series A Shares initial conversion price and will expire five and one-half years following the initial exercise date of the Warrants. The Company determined that the 80,000 warrants are additional value being distributed to the preferred stockholders and presented the warrants’ fair value of $5,788,493 as a deemed dividend on issuance of warrants in the consolidated statements of operations and comprehensive loss. The warrants were valued using the Black-Scholes option pricing model with the following terms: a) exercise price of $82.50, b) common stock fair value of $85.50, c) volatility of 118%, d) discount rate of 1.71%, e) term of 5.50 years and f) dividend rate of 0%. The closing of the Private Placement occurred on February 28, 2022. As a condition to the closing of the sale, the Company’s common stock received conditional approval for listing and trading on the Nasdaq Capital Market and commenced trading on February 28, 2022, under the trading symbol, COSM. Concurrent with the issuance of the Series A Shares, the Company executed a registration rights agreement (the “Registration Rights Agreement”) to register the resale of the shares of common stock issuable upon conversion of the Series A Shares and the shares of common stock issuable upon exercise of the warrants issued in connection with the Series A Shares. The Company was required to file its initial registration statement within 45 days following February 28, 2022. The Effectiveness Date was required to be 60 days after February 28, 2022, or 75 days following the SEC’s full review, and any additional registration statements that may be required are to be filed within 20 days following the date required by the SEC. If the Company fails to timely file its initial registration statement, or any additional registration statement, or otherwise comply with the requirements of the Registration Rights Agreement, the Company shall pay each holder 2% of the subscription amount in cash until cured, with an additional penalty of 18% if the cash payment is not made within seven days of the cash payable date. The Company filed its initial registration statement on May 25, 2022, and thus accrued for liquidated damages payable to the Holders in the amount of $250,260, calculated as described above, for both the late filing of the registration statement (event) and the 1st anniversary (30 days following the event date) of the event which along with an additional lumpsum amount of $2,000,000 agreed to paid to the investors as additional damages led to a total amount of $2,250,260 concerning liquidated damages related to the February Private Placement within the year ended December 31, 2022. Upon the effectiveness of the Company’s registration statement, the Series A Shares conversion price was adjusted to $15.54 and the warrant exercise price was adjusted to $15.54 per share. The Company recorded a deemed dividend in the amount of $8,189,515 upon reducing the conversion price from $75.00 to $15.54 which was recorded as an increase to additional paid-in capital and an increase to accumulated deficit. The Series A Shares rank senior to all of the Company’s Common Stock and any other equity securities that the Company may issue in the future with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up. While the Series A Shares are outstanding, the Company may not amend, alter or change adversely the powers, preferences or rights given to the Series A Shares, create, or authorize the creation of, any additional class or series of capital stock of the Company (or any security convertible into or exercisable for any class or series of capital stock of the Company), including any class or series of capital stock of the Company that ranks superior to or in parity with the Series A Shares, alter, amend, modify, or repeal its Articles of Incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series A Shares, increase or decrease the number of authorized shares of Series A Shares, any agreement, commitment or transaction that would result in a Change of Control, any sale or disposition of any material assets outside of the ordinary course of business of the Company, any material change in the principal business of the Company, including the entry into any new line of business or exit of any current line of business, and circumvent a right or preference of the Series A Shares. Any holder of the Series A Shares shall have the right by written election to the Company to convert all or any portion of the outstanding Series A Shares. Immediately upon effectiveness of a registration statement registering for resale all of the Registrable Securities (as defined in the Registration Rights Agreement), all outstanding Series A Shares shall automatically convert into Common Stock, subject to certain beneficial ownership limitations. Mezzanine Equity The Series A Shares are recorded as mezzanine equity in accordance with ASC 480 at its initial net carrying value in the amount of $5,452,300. The Series A Shares are recorded as mezzanine equity in accordance with ASC 480 as the Company may be obligated to issue a variable number of shares at a fixed price known at inception and there is no maximum number of shares that could potentially be issued upon conversion. In this instance, cash settlement would be presumed and the Series A Shares are classified as mezzanine equity in accordance with ASC 480-10-S99. Immediately upon effectiveness of the registration statement registering for resale of all the common stock issuable under the Series A Shares, all outstanding Series A Shares shall automatically convert into common stock. As of December 31, 2022, 6,000 of the Series A Shares had been converted into 386,588 shares of common stock in accordance with the terms of the agreements and thus an amount of $5,452,300 was reclassified from mezzanine equity to common stock and additional paid-in capital, in the aggregate. Common Stock The Company is authorized to issue 300 million shares of common stock. As of December 31, 2022 and 2021, the Company had 10,605,412 and 701,780 shares of our common stock issued, respectively, and 10,589,915 and 686,283 shares outstanding, respectively. Sale of Treasury Shares On February 5, 2021, the Company entered into a Stock Purchase Agreement (the “February SPA”) with an unaffiliated third-party. With the February SPA the Company proceeded to sell 2,600 shares of the Company’s common stock held in treasury at $96.25 per share or a total of $250,000. Cancellation of Treasury Shares On September 15, 2021, the Company cancelled 2,285 shares of common stock valued at $171,360 that were held in treasury. Purchase of Treasury Shares On December 29, 2021, the Company entered into a Stock Purchase Agreement (the “December SPA”) with a shareholder. With the December SPA provides for the Company proceeded to the purchase of 3,769 shares of the Company’s common stock at $100.00 per share or an aggregate of $376,863. Reverse split On December 15, 2022 the Company announced a reverse stock split with a ratio of 1-for-25 (one-for-twenty five) effective at the opening of the business day on Friday, December 16, 2022. The CUSIP number of the Company after the split will change to 221413-305. The reverse stock split was authorized at the Company’s Annual General Meeting (“AGM”) on December 2, 2022 and was approved by the Company’s Board of Directors on December 15, 2022. 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 72,000 restricted shares of Common Stock, earned at the rate of 8,000 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 shares were valued on the date of the agreement at $82.00 per share or $5,904,000, which was be amortized over the term of the agreement. As of December 31, 2022 and 2021, the Company has recorded $0 and $5,904,000 in stock-based compensation for the 72,000 shares earned. Debt Exchange Agreements 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 31,273 shares of common stock (the “Exchange Shares”), at the rate of $96.25 per share, in exchange for an aggregate of $3,010,000 principal amount of existing loans made by the Lender to the Company (See Note 12). The market price at the time this Agreement was negotiated was $82.00 per share and the Company recorded a gain on debt extinguishment of $445,636 during the year ended December 31, 2021. As of December 31, 2021, the Company recorded $2,564,363 as an equity increase related to the extinguishment of debt. On June 23, 2021, the Company entered into a Debt Exchange Agreement (the “June Debt Exchange Agreement”) to exchange various loans with Grigorios Siokas (see Note 9), in the aggregate principal amount of $3,000,000 (the “Debt”). The Company agreed to issue the Lender shares of common stock of the Company at an exchange rate of $150.00 per share (the “Exchange Shares”) in exchange for the principal amount of Debt of $3,000,000 or 20,000 shares of common stock. On June 23, 2021, the fair value of the Company’s shares of common stock was $125.00 per share. For the year ended December 31, 2021, the Company recorded $3,000,000 as an increase in equity in accordance with ASC 850-10-20 due to the related party relationship and ASC 470-50-40-2, which provides guidance on extinguishments of related party debt. Accordingly, extinguishment transactions between related entities are in essence capital transaction, and no gain is recorded in the consolidated statements of operations for the difference between the fair value of $125.00 per share and the exchange rate of $150.00 per share. On July 13, 2021, the Company entered into a Debt Exchange Agreement (the “July 13 Agreement”) with Grigorios Siokas, the Company’s Chief Executive Officer (See Note 9). The July 13 Agreement provided for the issuance by the Company of 6,667 shares of common stock, at the rate of $150.00 per share, or an aggregate of $1,000,000, in exchange for $1,000,000 of existing loans by Mr. Siokas to the Company. On July 13, 2021, the fair value of the Company’s shares of common stock was $100.75 per share. For the year ended December 31, 2021, the Company recorded $1,000,000 as an increase in equity in accordance with ASC 850-10-20 due to the related party relationship and ASC 470-50-40-2, which provides guidance on extinguishments of related party debt. Accordingly, extinguishment transactions between related entities are in essence capital transaction, and no gain is recorded in the consolidated statements of operations for the difference between the fair value of $100.75 per share and the exchange rate of $150.00 per share. On July 19, 2021, the Company entered into a Debt Exchange Agreement (the “July 19 Agreement”) with Grigorios Siokas, the Company’s Chief Executive Officer (See Note 9). The July 19 Agreement provided for the issuance by the Company of 8,333 shares of common stock, at the rate of $150.00 per share, or an aggregate of $1,250,000, in exchange for $1,250,000 of existing loans by Mr. Siokas to the Company. On July 19, 2021, the fair value of the Company’s shares of common stock was $107.50 per share. For the year ended December 31, 2021, the Company recorded $1,250,000 as an increase in equity in accordance with ASC 850-10-20 due to the related party relationship and ASC 470-50-40-2 which provides guidance on extinguishments of related party debt. Accordingly, extinguishment transactions between related entities are in essence capital transaction, and no gain is recorded in the consolidated statements of operations for the difference between the fair value of $107.50 per share and the exchange rate of $150.00 per share. On August 4, 2021, the Company entered into a Debt Exchange Agreement (the “August 4 Agreement”) with a senior institutional lender (the “Lender”), SkyPharm S.A., a wholly-owned Greek subsidiary of the Company, and Grigorios Siokas, the Company’s Chief Executive Officer, as Guarantor. The parties to the Agreement had entered into a senior loan, as amended, as of June 30, 2020 (the “Loan”) pursuant to which the Loan had been reduced to EUR 2,700,000 ($3,302,100) (the “Debt”). The August 4 Agreement provides for the issuance by the Company of 12,852 shares of common stock (the “Exchange Shares”), at the rate of $125.00 per share, in exchange for the repayment of $1,606,500 (€1,350,000) principal amount effective upon the closing of the Agreement and 9,520 shares at an exchange rate of $125.00 per share, or at market value if the price is above $125.00 per share, upon listing of the Company’s common stock on Nasdaq in exchange for €1,000,000 of the Debt. On August 4, 2021, the fair value of the Company’s shares of common stock was $102.25 per share. For the year ending December 31, 2021, the Company recorded a gain on the settlement of debt in the amount of $292,383 in the consolidated statements of operations for the difference between the fair value of $102.25 per share and the exchange rate of $125.00 per share. As of December 31, 2021, the Company recorded $1,314,117 as an increase in equity related to the extinguishment of debt. On December 8, 2021, the Company entered into a Debt Exchange Agreement (the “December 8 Agreement”) with the Company’s Chief Executive Officer (See Note 9). The December 8 Agreement provided for the issuance by the Company of 5,000 shares of common stock, at the rate of $150.00 per share, or an aggregate of $750,000, in exchange for $750,000 of existing loans by Mr. Siokas to the Company. On December 8, 2021, the fair value of the Company’s shares of common stock was $86.00 per share. For the year ended December 31, 2021, the Company recorded $750,000 as a capital contribution and an increase in equity in accordance with ASC 850-10-20 due to the related party relationship and ASC 470-50-40-2 which provides guidance on extinguishments of related party debt. Accordingly, extinguishment transactions between related entities are in essence capital transaction, and no gain is recorded in the consolidated statements of operations for the difference between the fair value of $86.00 per share and the exchange rate of $150.00 per share. Debt Conversions During the year ended December 31, 2022, the Company issued 9,520 shares of common stock upon the conversion of $1,190,000 of notes payable. The Company recorded $973,420 as a capital contribution and an increase in equity related to the conversion of the $1,190,000 reduced by $216,580 recorded as a gain upon extinguishment of debt upon modification. The $216,580 gain upon extinguishment was determined using the fair value of the Company of $102.25 per share at the extinguishment commitment date. On May 1, 2022, the Company issued 1,574 shares of common stock to convert $26,515 principal and accrued interest. Following the conversion, the outstanding balance of the above Note was $0. Upon conversion, the 1,574 shares were issued at a fair value of $38,144 which was recorded as equity. Accordingly, upon conversion, the Company reduced its derivative liability by $11,629 (see Note 11). During the year ended December 31, 2021, the Company issued 8,535 shares of common stock to convert $550,144 of principal and accrued interest in accordance with a convertible promissory note issued to Platinum (as defined in Note 11). The Company recorded $959,025 as a capital contribution and an increase in equity related to the conversion of $550,144 of debt, $284,169 for the reduction of the derivative liability recorded as additional paid-in capital, and $124,711 recorded as a loss on debt extinguishment. Exercise of Warrants During the year ended December 31, 2022, the Company issued 3,608,667 shares of common stock upon the exercise of 3,608,667 warrants. The Company received proceeds of $10,826,000 upon exercise. During the year ended December 31, 2022, the Company issued 526,112 shares of common stock upon the cashless exercise of 776,674 warrants. Issuance of Common Stock and Warrants On May 25, 2022, the Company granted 1,333 warrants to a third party based on a settlement agreement signed on May 25, 2022 as compensation concerning the consulting services the third party provided for the Private Placement closed on February 28, 2022. The Company recorded stock-based compensation in the amount of $24,101 upon issuance of the warrants valued using the Black-Scholes option pricing model with the following assumptions: a) common stock fair value of $26.75, b) exercise price of $82.50, c) term of 5.51 years, d) volatility of 107.3%, e) dividend rate of 0%, and f) discount rate of 2.71%. On June 7, 2022, the Company issued 344,765 warrants upon triggering the down round protection feature in relation to the warrants issued in connection with the Series A shares with an exercise price of $15.54 and a term of approximately 5 years. Additionally, the Company lowered the exercise price of the 80,000 warrants then outstanding from $82.50 to $15.54 per common share upon triggering the down round protection. The Company recorded a deemed dividend in the amount of $8,480,379 in relation to the down round protection feature for the incremental value of the shares issued and lowered exercise price valued using the Black-Scholes option pricing model with the following assumptions: a) common stock fair value of $26.75, b) old exercise price of $82.50 and revised exercise price of $15.54, c) term of 5.24 years, d) volatility of 121.47%, e) dividend rate of 0%, and f) discount rate of 2.99%. On July 14, 2022, the Company issued 300 shares to a consultant for services rendered. For the year ended December 31, 2022, the Company recorded $3,120 as general and administrative expense related to the issuance. On October 20, 2022, the Company issued 2,486,667 shares of common stock and 5,000,000 warrants, in the aggregate, upon entering into a securities purchase agreement for an aggregate purchase price of $7,500,000. Of the 5,000,000 warrants, 2,500,000 were designated as Series A and 2,500,000 were designated as Series B. The Series A warrants have an exercise price of $3.00 per share and expire two years from the date of issuance. The Series B warrants have an exercise price of $3.00 per share and expire seven years from the date of issuance. The Company allocated the proceeds between the common stock and warrants issued and recorded a discount to the common stock associated with the warrants in the amount of $8,437,977, in the aggregate, which was recorded as additional paid-in capital and a deemed dividend. The warrants were valued using the Black-Scholes option pricing model with the following assumptions: a) fair value of common stock of $2.20, b) exercise price of $3.00, c) terms of 2 years and 7 years, d) dividend rate of 0%, e) volatility of 135.05% and 129.02%, and f) risk free interest rate of 4.62% and 4.36%. On October 20, 2022 the Company cancelled 424,765 warrants in exchange for 849,530 additional warrants with existing warrant holders. The new warrants were issued with an exercise price of $3.00 per common share and a term of 7 years. As a result, the Company recorded a deemed dividend as an increase to accumulated deficit and additional paid-in capital and reduced net income available to common shareholders by $1,067,876. The Company valued (a) the fair value of the 424,765 warrants immediately before exchange in the amount of $645,108, (b) the fair value of the warrants immediately after the exchange in the amount of $1,712,984, and (c) recorded the difference as a deemed dividend in the amount of $1,067,876. The warrants were valued using the Black-Scholes option pricing model using the following assumptions: a) fair value of common stock of $2.20, b) exercise prices of $15.54 pre-exchange and $3.00 post-exchange, c) terms of 4.87 years pre-exchange and 7 years post-exchange, d) dividend rate of 0%, e) volatility of 132.3% pre-exchange and 131.9% post-exchange, and f) risk free interest rate of 4.45% pre-exchange and 4.36% post-exchange. On November 21, 2022, the Company entered into a settlement and general release pursuant to a letter agreement dated July 7, 2021 whereby a consultant claimed to be entitled to compensation with respect to a previous financing. As a result of the settlement, the Company issued 40,000 shares of common stock which was recorded as general and administrative expense for the year ended December 31, 2022 in the amount of $173,121. On December 19, 2022, the Company issued 2,828,320 shares of common stock and 2,828,320 warrants (of which 260,870 were cancelled subsequent to December 31, 2022), in the aggregate, upon entering into a securities purchase agreement for an aggregate purchase price of $32,525,680 and net proceeds of $30,600,319. The warrants have an exercise price of $11.50 per share and expire five years from the date of issuance. The Company allocated the proceeds between the common stock and net warrants issued and recorded a discount to the common stock associated with the warrants in the amount of $17,778,260 which was recorded as additional paid-in capital and a deemed dividend. The warrants were valued using the Black-Scholes option pricing model with the following assumptions: a) fair value of common stock of $11.50, b) exercise price of $7.59, c) terms of 5 years, d) dividend rate of 0%, e) volatility of 157.53%, and f) risk free interest rate of 3.70%. No options warrants or other potentially dilutive securities other than those disclosed above have been issued as of December 31, 2022. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | NOTE 8 – INCOME TAXES The Company provides for income taxes using an asset and liability approach under which deferred income taxes are provided for based upon enacted tax laws and rates applicable to periods in which the taxes become payable. The domestic and foreign components of income (loss) before (benefit from) provision for income taxes were as follows: December 31, 2022 December 31, 2021 Domestic $ (7,093,161 ) $ (8,365,298 ) Foreign (5,962,159 ) 517,659 $ (13,055,320 ) $ (7,847,639 ) The components of the (benefit from) provision for income taxes are as follows: December 31, 2022 December 31, 2021 Current tax provision Federal $ - $ - State - - Foreign (75,724 ) 802,364 Total current tax provision $ (75,724 ) $ 802,364 Deferred tax provision Domestic $ - $ - State - - Foreign 850,775 (688,354 ) Total deferred tax provision $ 850,775 $ (688,354 ) Total current provision $ 775,051 $ 114,010 The reconciliation of income tax expense computed at the U.S. federal statutory rate to the income tax provision for the years ended December 31, 2022 and 2021 is as follows: December 31, 2022 December 31, 2021 US Loss before income taxes $ (13,055,320 ) $ (7,847,639 ) Taxes under statutory US tax rates $ (2,741,617 ) $ (1,648,004 ) Increase (decrease) in taxes resulting from: Increase in valuation allowance $ 3,989,786 $ 3,001,899 Foreign tax rate differential $ 34,601 $ (24,977 ) Permanent differences $ 128,705 $ (734,428 ) US tax on foreign income $ - $ 493,028 163(j)catchup - (76,888 ) Prior period adjustments $ (186,143 ) $ 52,034 State taxes $ (450,280 ) $ (948,654 ) Income tax expense $ 775,052 $ 114,010 Companies subject to the Global Intangible Low-Taxed Income provision (GILTI) have the option to account for the GILTI tax as a period cost if and when incurred, or to recognize deferred taxes for outside basis temporary differences expected to reverse as GILTI. We have elected to account for GILTI as a period cost. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities consist of the following: December 31, 2022 December 31, 2021 Net operating loss carryforward $ 5,899,702 $ 4,515,900 Capital loss carryforward 801,744 801,744 Section 163(j) carryforward 561,130 - Nonqualified stock options - 96,104 Foreign exchange 297,263 13,438 Allowance for doubtful accounts 1,616,926 374,604 Accrued expenses 352,025 528,895 Mark to market adjustment in securities 358,761 358,761 Lease liability 259,381 253,620 Gain on extinguishment of debt - - Depreciation (22,914 ) (6,765 ) Total deferred tax assets 10,124,018 6,936,211 Intangibles (8,139 ) (8,139 ) Inventory (49,961 ) (14,728 ) Right of use asset (256,769 ) (243,207 ) Goodwill (10,979 ) (10,979 ) Total deferred tax liabilities (325,848 ) (277,053 ) Valuation allowance (9,798,170 ) (5,808,384 ) Net deferred tax assets $ - $ 850,774 At December 31, 2022, the Company had U.S. net operating loss (“NOL”) carryforwards of approximately $17,169,419 that may be offset against future taxable income, subject to limitation under IRC Section 382. Of the $17.2 million Federal NOL carryforwards, $2.5 million are pre-2018 and begin to expire in 2031. The remaining balance of $4.6 million, are limited to utilization of 80% of taxable income but do not have an expiration. At December 31, 2022, the Company had Greek NOL carryforwards of $87,384 and has UK NOL carryforwards of $1,450,783. A valuation allowance exists for all operations, based on a more likely than not criterion and in consideration of all available positive and negative evidence. ASC 740 requires that the tax benefit of net operating losses (“NOLs”), temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. Because of the Company’s history of domestic operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance, on all our deferred tax asset. In 2020, foreign (Greece and United Kingdom) valuation allowances were released, aggregating $200,000, but has since reinstated all of the valuation allowances in the current year amounting to $2,372,000 during 2022. Management considered all available evidence to when evaluating the realizability of foreign deferred tax assets by jurisdiction and concluded primarily based upon a strong earnings history that these deferred tax assets were more-likely-than-not realizable. The Company applied the “more-likely-than-not” recognition threshold to all tax positions taken or expected to be taken in a tax return, which resulted in no unrecognized tax benefits as of December 31, 2022 and December 31, 2021, respectively. We recognize interest accrued related to unrecognized tax benefits and penalties as income tax expense. The Company files income tax returns in Illinois, United States, and in foreign jurisdictions including Greece, and United Kingdom. As of December 31, 2022, all domestic tax years are open to tax authority examination due the availability of net operating loss deductions, 2010 through 2022. In Greece, the statute of limitations is open for five years, 2017 through 2022. In United Kingdom, the statute of limitations is open for four years, 2018 through 2022. Currently, there are no ongoing tax authority income tax examinations. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 9 – RELATED PARTY TRANSACTIONS Doc Pharma S.A. As of December 31, 2022, the Company has a prepaid balance of $3,320,345 and an accounts payable balance of $201,991 to Doc Pharma S.A. related to purchases of inventory. Additionally, the Company has a receivable balance of $2,070,570. As of December 31, 2021, the Company has a prepaid balance of $3,263,241 to Doc Pharma S.A. related to purchases of inventory. Additionally, the Company had a receivable balance of $2,901,300 and an accounts payable balance of $565,756. During the years ended December 31, 2022 and 2021, the Company purchased a total of $1,755,103 and $3,084,805 of products from Doc Pharma S.A., respectively. During the years ended December 31, 2022 and 2021 the Company had $1,058,780 and $978,321 revenue from Doc Pharma S.A., respectively. On October 10, 2020, the Company entered into a contract manufacturer outsourcing (“CMO”) agreement with Doc Pharma whereby Doc Pharma is responsible for the development and manufacturing of pharmaceutical products and nutritional supplements according to the Company’s specifications based on strict pharmaceutical standards and good manufacturing practice (“GMP”) protocols as the National Organization for Medicines requires. The Company has the exclusive ownership rights for trading and distribution of its own branded nutritional supplements named “Sky Premium Life ® For the years ended December 31, 2022 and 2021, the Company has purchased €1,653,911 ($1,742,282) and €1,699,507 ($2,010,517), respectively, in inventory related to this agreement. On May 17, 2021, Doc Pharma and the Company entered into a Research and Development “R&D” agreement whereby Doc Pharma will be responsible for the research, development, design, registration, copy rights and licenses of 250 nutritional supplements for the final products called Sky Premium Life ® The balance of prepaid expenses due to SkyPharm SA due Doc Pharma SA as of December 31, 2022, had increased to €7,103,706 ($7,599,545), which was mainly attributable to the prepayments SkyPharm SA made in accordance with the CMO agreement and the extensive orders and sales of the SPL products the Company expects to achieve within 2023, mainly through its Amazon channels in UK, Singapore, Canada and other countries. However, as the benefit from a significant portion of the prepaid balance would not have been realized within a 12-month period, the Company opted to secure a portion of the outstanding prepaid balance through a loan agreement. On January 1, 2023, SkyPharm S.A. (the “Lender”) entered into a loan agreement with Doc Pharma S.A. (the “Borrower”) for €4,000,000 ($4,279,200), all of which was financed through the outstanding prepaid balance. The duration of the loan will be for a 10-year period up to December 1, 2032 (“the Maturity date”). The loan will bear a fixed interest rate of 5.5% payable on a monthly basis and will be repayable in 120 equal instalments of €33,333.33 ($35,660). The loan may be prepaid anytime during its in full or partially based on the Company’s product requirements and other factors, without Doc Pharma incurring any prepayment penalty. As of December 31, 2022, the loan had a current portion of €400,000 ($427,920) and a non-current portion of €3,600,000 ($3,851,280), which was reclassified to Loans receivable – related party as of December 31, 2022. 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. Panagiotis Kozaris From time-to-time purchases back shares that Panagiotis Kozaris owns and records them as treasury shares. The Company pays Panagiotis Kozaris in advance for the shares owned and obtains the shares upon execution of a cumulative stock-purchase agreement (“SPA”). During 2021 the Company prepaid a total of $376,901 to Panagiotis Kozaris and executed a cumulative SPA on December 29, 2021, upon which shares of treasury stock were obtained by the Company, reducing Panagiotis Kozaris’ prepaid expense balance to $0 as of December 31, 2021. During the year ended December 31, 2022 the Company paid Panagiotis Kozaris an additional sum of $143,056 for shares owned, however, no SPA for these funds has been executed as of December 31, 2022. The amount of $143,056 is included in Prepaid expenses and other current assets – related party, on the accompanying consolidated balance sheets as of December 31, 2022. The Company intends to execute a cumulative SPA for these amounts during Q2 2023. Panagiotis Kozaris is considered a related party due to the fact that he is a former General operational manager and current employee of Cosmofarm SA. Maria Kozari During 2021, the Company, through its subsidiary, Cosmofarm SA, commenced a partnership with a pharmacy called “Pharmacy & More”, owned by Maria Kozari. The transactions with the respective pharmacy were in Cosmofarm’s normal course of business, however, a more flexible credit policy was allowed as the pharmacy was new and needed to be established in the market. During the years ended December 31, 2022 and 2021 the Company’s net sales to Pharmacy & More amounted to $463,467 and $358,524 respectively. As of December 31, 2022 and 2021 the Company’s outstanding receivable balance due from the pharmacy amounted to $760,025 (€710,436) and $366,270 (€366,270), respectively, and are included in Accounts receivable - related party, on the accompanying consolidated balance sheets. The Company has recorded a cumulative bad debt allowance of $59,957 to the outstanding balance due from Pharmacy & More as of December 31, 2022, with the reserve for the period ended December 31, 2022 amounting to $48,230. The Company plans to acquire Pharmacy & More within fiscal year 2023, however the acquisition is conditional upon waiver of certain local legal restrictions. Upon acquisition, the Company intends to offset the outstanding receivable balance with the corresponding purchase price. Maria Kozari is considered a related party to the Company due to the fact that she is the daughter of Panagiotis Kozaris, a former Operational General Manager and current employee of Cosmofarm SA. Notes Payable – Related Party A summary of the Company’s related party notes payable during the years ended December 31, 2022 and 2021 is presented below: 2022 2021 Beginning Balance $ 464,264 $ 501,675 Payments (472,920 ) - Foreign currency translation 19,568 (37,411 ) Ending Balance $ 10,912 $ 464,264 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, matured on March 18, 2019 pursuant to the original agreement and was extended until December 31, 2021. The note is not in default and the maturity date has been extended again until December 31, 2023. As of December 31, 2021 the Company had an outstanding balance of €400,000 ($452,720) and accrued interest of €177,313 ($200,683). The Company repaid the outstanding principal balance in full during the year ended December 31, 2022. As of December 31, 2022 the Company had accrued interest of €192,891 ($206,355) outstanding related to this loan. 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, 2021, the Company had a principal balance of €10,200 ($11,544). A principal balance of €10,200 ($10,912) remained as of December 31, 2022. Dimitrios Goulielmos is a former director and CEO of the Company. The above balances are adjusted for the foreign currency rate as of the balance sheet date. For the years ended December 31, 2022, and 2021, the Company recorded a foreign currency translation loss of $19,568 and a gain of $37,411, respectively. Loans Payable – Related Party A summary of the Company’s related party loans payable during the years ended December 31, 2022 and 2021 is presented below: 2022 2021 Beginning balance $ 1,293,472 $ 1,629,246 Proceeds 3,635,756 6,377,156 Payments (4,851,678 ) (133,552 ) Conversion of debt - (6,000,000 ) Settlement of lawsuit - (600,000 ) Foreign currency translation (64,729 ) 20,623 Ending balance $ 12,821 $ 1,293,472 Grigorios Siokas From time to time, Grigorios Siokas loans the Company funds in the form of non-interest bearing, no-term loans. On May 10, 2021, the Company entered into a Debt Exchange agreement (“May Debt Exchange”) related to a lawsuit from on or about July 25, 2019, whereby Mark Rubenstein, individually and as a shareholder of the Company, brought the action styled Rubenstein v. Siokas, et al. During the year ended December 31, 2021, the Company entered into various agreements (as defined in Note 7) with Mr. Siokas whereby the Company exchanged an aggregate total of $6,000,000 of debt into 40,000 shares of Common Stock at above market prices. During the year ended December 31, 2021, the Company borrowed additional proceeds of €1,803,000 ($2,040,635), €230,000 ($275,306) and $4,061,215 and repaid €118,000 ($133,552) of these loans. During the year ending December 31, 2021, the Company converted $2,250,000 of the July 20 Note at a conversion price of $150.00 and issued 15,000 shares of common stock. As of December 31, 2021, the Company had an outstanding balance under these notes and loans of $1,293,472. During the year ended December 31, 2022, the Company borrowed additional proceeds of €656,750 ($702,591), and $2,933,165 and repaid €1,688,800 ($1,806,678) and $3,045,000 of these loans. The above balances are adjusted for the foreign currency rate as of the balance sheet date. For the years ended December 31, 2022 and 2021, the Company recorded a gain of $64,729 and a loss of $20,623, respectively. 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 | 12 Months Ended |
Dec. 31, 2022 | |
LINES OF CREDIT | |
LINES OF CREDIT | NOTE 10 – LINES OF CREDIT A summary of the Company’s lines of credit as of December 31, 2022, and 2021 is presented below: December 31, 2022 December 31, 2021 National $ 3,103,605 $ 3,265,236 Alpha 991,492 947,333 Pancreta 1,232,128 489,985 EFG 431,512 - Ending balance $ 5,758,737 $ 4,702,554 The line of credit with National Bank of Greece is renewed annually with current interest rates of 6.00%, 4.35% (“COSME 2” facility) and 4.35% (plus the 6-month Euribor plus any contributions currently in force by law on certain lines of credit), (“COSME 1” facility). The maximum borrowing allowed for the 6% line of credit was $3,182,655 and $2,489,960 as of December 31, 2022 and 2021, respectively. The outstanding balance of the facility was $2,118,952 and $2,185,413, as of December 31, 2022 and 2021, respectively. The maximum borrowing allowed for the 4.35% lines of credit, was $1,069,800 and $1,131,800 as of December 31, 2022 and 2021, respectively. The outstanding balance of the facilities was $984,653 and $1,079,823 as of December 31, 2022 and 2021, 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 $1,069,800 and $1,131,800 as of December 31, 2022 and 2021, respectively. The outstanding balance of the facility was $991,429 and $947,333, as of December 31, 2022 and 2021, 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 as of December 31, 2022 and 2021was $1,487,022 and $565,900, respectively. The outstanding balance of the facility as of December 31, 2022 and 2021, was $1,232,128 and $489,985, respectively. The Company entered into a line of credit with EGF on June 6, 2022. The line of credit is renewed annually with a current interest rate of 4.49%. The maximum borrowing allowed as of December 31, 2022 was $427,920. The outstanding balance of the facility as of December 31, 2022 was $431,512. 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. As of December 31, 2022 and 2021, the Company was in compliance with these ratios and covenants. The above lines of credit are guaranteed and backed by customer receivable checks and they are not considered to be a direct debt obligation for the Company. They are a type of factoring, where the postponed customer checks are assigned by the Company to the bank, in order to be financed at a pre-agreed rate. Interest expense for the years ended December 31, 2022 and 2021, was $294,156 and $283,415, respectively. |
CONVERTIBLE DEBT
CONVERTIBLE DEBT | 12 Months Ended |
Dec. 31, 2022 | |
CONVERTIBLE DEBT | |
CONVERTIBLE DEBT | NOTE 11 – CONVERTIBLE DEBT A summary of the Company’s convertible debt during the years ended December 31, 2022 and 2021 is presented below: 2022 2021 Beginning balance convertible notes $ 640,000 $ 1,447,000 New notes - 625,000 Payments (525,000 ) (907,000 ) Conversion to common stock (15,000 ) (525,000 ) Subtotal notes 100,000 640,000 Debt discount at year end - (258,938 ) Convertible note payable, net of discount $ 100,000 $ 381,062 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 2023. December 21, 2020 Securities Purchase Agreement On December 21, 2020 the Company entered into a convertible promissory note with Platinum Point Capital, LLC (the “Holder”, “Lender” or “Platinum”) pursuant to a Securities Purchase Agreement (the “SPA”). 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) had not been converted or have not been otherwise satisfied in full or (ii) an Event of Default (as defined in the SPA) 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 in the SPA) or (iii), an Event of Default (collectively, the “Maturity Date”). During the year ended December 31, 2021, the Company converted an aggregate total of $525,000 in principal and $25,144 in accrued interest and fees into 8,535 shares of the Company’s common stock at an average price per share of $64.50. Upon conversion, the 8,535 shares were issued at a fair value of $959,024 which was recorded as equity. Accordingly, upon conversion, the Company reduced its outstanding debt by $550,144, reduced its derivative liability by $284,169, and recorded a loss on extinguishment of $124,711. On May 1, 2022 the Company issued 1,574 shares of common stock to convert the outstanding principal and accrued interest balance of $26,515. Following the conversion, the outstanding balance of the above Note is $0. Upon conversion, the 1,574 shares were issued at a fair value of $38,144 which was recorded as equity. Accordingly, upon conversion, the Company reduced its derivative liability by $11,629 (see Note 7). The Company determined that the embedded conversion feature of the convertible promissory note meets the definition of a derivative liability which is accounted for separately. The Company determined a derivative liability exists 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. As of December 31, 2022 the full amount of the debt discount has been amortized and as of December 31, 2021 $494,973 of the debt discount had been amortized. As of December 31, 2022 and 2021, the fair value of the derivative liability was $0 and $5,822, respectively. For the years ended December 31, 2022 and 2021, the Company recorded a loss on the change in fair value of the derivative of $5,807 and a gain of $170,737, respectively. 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 matured on the earlier of (i) consummation of the Company listing its common shares on the NEO Stock Exchange or (ii) 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. As a result of a NEO listing not being consummated on or before October 31, 2021, the note holder has 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 December 31, 2022, the Company had a principal balance of $100,000 and had accrued $13,740 in interest expense. The Company determined that the embedded conversion feature of the convertible promissory note meets the definition of a derivative liability which is accounted for separately. The Company measured the embedded derivative valued at $62,619 which was recorded as a debt discount and additional paid-in capital and is being amortized over the life of the loan. As of December 31, 2022, the debt discount had been fully amortized. As of December 31, 2022 and 2021, the fair value of the derivative liability was $54,293 and $39,843, respectively. For the years ended December 31, 2022 and 2021, the Company recorded a loss of $14,450 and a gain of $22,776, respectively, from the change in fair value of derivative liability as other income in the consolidated statements of operations and comprehensive loss. Convertible Promissory Note and Securities Purchase Agreement On September 17, 2021 (the “Issue Date”), the Company entered into a convertible promissory note and securities purchase agreement with an unaffiliated third party. Convertible Promissory Note The Company issued the convertible promissory note for a purchase price of $525,000 in principal amount for cash proceeds of $500,000. The note was issued with an original issue discount (“OID”) of $25,000, bears an interest rate of 10% per annum and matures on the earlier of (i) the consummation of the Company listing its common shares on the Nasdaq Stock Market or (ii) September 17, 2022. Upon the consummation of a Nasdaq listing, the total principal and accrued interest outstanding on the note will convert into shares of the Company’s common stock at a 30% discount to the prices of the common shares sold in the financing to be conducted in conjunction with the Nasdaq listing, subject to a conversion floor of $3.00. The Company determined that the embedded conversion feature of the convertible promissory note meets the definition of a beneficial conversion feature which is accounted for separately as of December 31, 2021. The Company measured the beneficial conversion feature’s intrinsic value on September 17, 2021, at $294,000 which, together with the OID of $25,000 was recorded as a debt discount and is being amortized over the life of the loan For the year ended December 31, 2021, $60,063 of the debt discount has been amortized. As of December 31, 2021, the Company had accrued a principal balance of $525,000, had accrued $15,166 in interest expense, and had remaining debt discount of $258,937 which resulted in a net convertible note payable of $266,063. On January 1, 2022, the Company adopted ASU 2020-06 using the modified retrospective method. As a result of the adoption, on January 1, 2022, the Company recorded an increase to additional paid-in capital of $294,000 and a decrease to accumulated deficit of $53,248. For the year ended December 31, 2022, $25,000 of the debt discount was reduced and recorded as a reduction to additional paid-in capital. As of December 31, 2022, the Company repaid the remaining outstanding balance of the note and thus its outstanding balance as of the end of the period was $0. For the year ended December 31, 2022, the Company amortized the remaining debt discount in the amount of $18,185 included in non-cash interest expense as of December 31, 2022. Securities Purchase Agreement On September 17, 2021, the Company entered into a Securities Purchase Agreement (the “SPA”) with a third party whereby the Company agree to issue 5,000,000 shares of Series A Preferred Stock at a purchase price of $1.00 per share or $5,000,000 in the aggregate, and a Warrant (the “Warrant”) to purchase 100% of the number of shares of the Company’s Common Stock issuable upon conversion of the Series A Preferred Stock. The Series A Preferred Stock will be convertible into the Company’s Common Stock as determined by multiplying the number of shares of Series A Preferred Stock to be converted by the lower of (i) $100.00 or (ii) 80% of the average volume weighted average price for the Company’s Common Stock for the five (5) days prior to the date of Uplisting, subject to a floor of $75.00 per share. The shares of common stock issuable upon conversion of Series A Preferred Stock and exercise of the Warrants are subject to a Registration Right Agreement. The Warrant has an exercise price equal to 110% of the Conversion Price of the Series A Preferred Stock and expires five (5) years from the date of issuance. The SPA is subject to certain conditions to close. As of December 31, 2021 and the date of this filing, the conditions to close had not been met, the funds have not been transferred, the preferred shares and the warrant was not issued. The SPA automatically terminated on March 31, 2022. 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 years ended December 31, 2022 and 2021: Amount Balance on January 1, 2021 $ 460,728 Issuances to debt discount 62,619 Reduction of derivative related to conversions (284,169 ) Change in fair value of derivative liabilities (193,513 ) Balance on December 31, 2021 45,665 Issuances to debt discount - Reduction of derivative related to conversions (11,629 ) Change in fair value of derivative liabilities 20,257 Balance on December 31, 2022 $ 54,293 The fair value of the derivative conversion features and warrant liabilities as of December 31, 2022 and 2021 were calculated using a Monte-Carlo option model valued with the following assumptions: December 31, December 31, 2022 2021 Dividend yield 0 % 0 % Expected volatility 87.9%-157.2 % 106.8%-107.3 Risk free interest rate 1.46%-3.75 % 0.41%-0.44 Contractual terms (in years) 1.25 - .75 .50 - .52 |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2022 | |
NOTES PAYABLE | |
NOTES PAYABLE | NOTE 12 – NOTES PAYABLE A summary of the Company’s third-party debt during the years ended December 31, 2022 and 2021 is presented below: December 31, 2022 Loan Facility Trade Facility Third Party COVID Loans Total Beginning balance $ 1,299,784 $ 6,207,010 $ 10,077,977 $ 641,291 $ 18,226,062 Proceeds - - 492,336 - 492,336 Payments (240,705 ) (2,795,786 ) (9,494,823 ) (10,029 ) (12,541,343 ) Conversion of debt (1,190,000 ) - - - (1,190,000 ) Recapitalized upon debt modification (81,923 ) (221,060 ) (781,752 ) - (1,084,735 ) Accretion of debt and debt discount 81,910 216,182 781,752 - 1,079,844 Foreign currency translation 130,934 (100,814 ) 22,414 (16,711 ) 35,823 Subtotal - 3,305,532 1,505,078 207,377 5,017,987 Notes payable - long-term - (1,604,700 ) (1,076,698 ) (178,172 ) (2,859,570 ) Notes payable - short-term $ - $ 1,700,832 $ 428,380 $ 29,205 $ 2,158,417 December 31, 2021 Loan Facility Trade Facility Third Party COVID Loans Total Beginning balance $ 3,302,100 $ 6,446,000 $ 12,631,284 $ 435,210 $ 22,814,594 Proceeds - - 565,900 - 565,900 Payments (141,475 ) (57,835 ) (62,878 ) (3,233 ) (265,421 ) Conversion of debt (1,606,500 ) - (3,010,000 ) - (4,616,500 ) Recapitalized upon debt modification (86,670 ) - - - (86,670 ) Debt forgiveness - - - (169,770 ) (169,770 ) Reclassification of Line of Credit - - - 407,174 407,174 Foreign currency translation (167,671 ) (181,155 ) (46,329 ) (28,090 ) (423,245 ) Subtotal 1,299,784 6,207,010 10,077,977 641,291 18,226,062 Notes payable - long-term - (2,450,000 ) (9,854,906 ) (417,649 ) (12,722,555 ) Notes payable - short-term $ 1,299,784 $ 3,757,010 $ 223,071 $ 223,642 $ 5,503,507 Our outstanding debt as of December 31, 2022 is repayable as follows: December 31, 2022 2023 $ 2,158,417 2024 794,171 2025 1,729,737 2026 204,829 2027 and thereafter 130,833 Total debt 5,017,987 Less: notes payable - current portion (2,158,417 ) Notes payable - long term portion $ 2,859,570 Loan Facility Agreement On August 4, 2021, the Company entered into an exchange agreement for the existing loan facility agreement with Synthesis Peer-to-Peer Income Fund, whereby the Company agreed to the following: • Issue on August 4, 2021, 12,852 shares of common stock to settle $1,606,500 (€1,350,000) of debt. The Company recorded a gain on settlement of $292,383 upon the issuance of the 12,852 shares; and • Agreed to issue no more than 9,520 shares of common stock upon approval of the listing of the Company’s common stock on Nasdaq to settle $1,190,000 (€1,000,000) of debt. The Company issued these shares on February 28, 2022. Upon issuance of the 9,520 shares of common stock, the Company recorded a gain on extinguishment of debt in the amount of $216,580 determined using the fair value of the Company’s common stock at the commitment date of $102.25 per share. The Company evaluated the August 4, 2021, exchange agreement for debt modification in accordance with ASC 470-50 and concluded that the debt qualified for debt extinguishment because a substantial conversion feature was added to the debt terms. Upon extinguishment, the Company recorded a loss upon extinguishment in the amount of $6,642 and recorded the new debt at fair value based on the present value of future cash flows using a discount rate of 11.66%. The Company incurred non-cash interest expense of $81,910 during the period ended December 31, 2022 concerning the debt extinguishment effect on August 4, 2021. The principal debt balance was paid in full during the year ended December 31, 2022. As of December 31, 2022 and 2021, the Company has accrued interest expense of $12,853 and $4,414, respectively, and the principal balance of the debt is $0 and $1,299,784, respectively, which is classified as Notes payable on the consolidated balance sheets. 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 40,000 shares of common stock of the Company owned by Mr. Siokas. During Q2 2022, the Company informally agreed with the Lender to extend the maturity of the facility to September 30, 2022. During Q3 2022, the maturity of the facility was further informally extended to December 31, 2022. The Company reassessed and adjusted accordingly the accretion of the debt extinguishment effect described above. Trade Facility Agreements On May 12, 2017, SkyPharm entered into a Trade Finance Facility Agreement (the “TFF”) with Synthesis Structured Commodity Trade Finance Limited (the “Lender”) as amended on November 16, 2017, and May 16, 2018. 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. On December 30, 2020, the Company transferred the Euro €2,000,000 loan to a new third-party lender. The terms remained the same except interest will now accrue at 5.5% per annum plus Euribor. The principal is to be repaid in a total of five quarterly installments beginning October 31, 2021 of 50,000 Euro each with a final repayment of 1,800,000 Euro payable on the earlier of 24 months after December 30, 2020 or October 31, 2022. During the year ended December 31, 2021, the Company repaid €50,000 ($56,508) of the €2,000,000 balance such that as of December 31, 2021, the Company had principal balances of €1,950,000 ($2,207,010) and $4,000,000 under the agreements, of which $2,450,000 is classified as notes payable-long term on the consolidated balance sheet and the Company had accrued $10,466 in interest expense related to these agreements. On March 3, 2022, the Company entered into a modification agreement to extend the maturity date to January 10, 2023 and payments under the $4,000,000 loan. The loan was considered a modification under ASC 470-50 because the change in the present value of cash flows is less than 10%. During June 2022, the Company agreed with the Lender to postpone the repayment of an installment of $500,000 due on June 30, 2022 (based on the extension agreement signed on March 3, 2022) until January 2023. Based on the updated cash flow test performed, the change in the present value of the cash flows was again less than 10% and the change is considered a modification. During September 2022 the Company agreed with the Lender to postpone the full repayment of the outstanding balance, $3,950,000, plus unpaid accrued interest until January 2023. The Company capitalized fees paid upon modification of €200,000 that are being amortized over the life of the loan. The Company incurred non-cash interest expense of $216,182 during the period ended December 31, 2022 concerning the above capitalized fees. During the year ended December 31, 2022, the Company repaid €175,000 ($187,215) of the €1,950,000 balance and $2,593,363 of the $4,000,000 balance such that as of December 31, 2022, the Company had principal balances of €1,775,000 ($1,898,895) and $1,406,637 under the agreements. As of December 31, 2022, the Company had accrued $309,365 in interest expense related to these agreements. On January 31, 2023, the Company entered into a Settlement Agreement for the $4,000,000 Trade Finance Facility dated July 5, 2017 and later amended on June 10, 2019 that agreed to the full and final settlement of the Fund, the settlement of which is to be recorded on a binding basis. The Company paid $1,100,000 to the Fund on February 3, 2023, and the remaining outstanding balance was waived in full such that the balance of the Fund is now $0. 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, 2021, the Company had an outstanding principal balance of €8,000 ($9,054) and accrued interest of €6,318 ($7,151). As of December 31, 2022, the Company had an outstanding principal balance of €8,000 ($8,558) and accrued interest of €6,797 ($7,271). Conversion of Senior Promissory Notes In the year ending December 31, 2019, the Company executed Senior Promissory Notes (the “Debt”) in an aggregate total of $2,500,000 to an unaffiliated third-party lender (the “Lender”). In the year ended December 31, 2020, the Company executed additional Senior Promissory Notes to an unaffiliated third-party lender in an aggregate principal total of $510,000. As of December 31, 2020, the Company had an aggregate principal balance of $3,010,000 on this Debt and the Company had accrued $527,604 in interest expense. On 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 31,273 shares of common stock (the “Exchange Shares”), at the rate of $96.25 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 $82.00 per share and the Company recorded a gain on debt extinguishment of $445,636. All accrued and unpaid interest, $563,613 as of December 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. During October 2022, the Company repaid $436,383 of the outstanding interest and received forgiveness for the remaining balance of $127,230. Thus, the balance of the accrued interest as of December 31, 2022 is $0. May 18, 2020, July 3, 2020, and August 4, 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 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 December 31, 2021 the Company had a principal balance of $2,000,000 on this note, which was classified as Notes payable long-term portion on the consolidated balance sheet. This note was modified during fiscal year 2022, see further discussion below. July 3, 2020 Senior Promissory Note On July 3, 2020, the Company executed a Senior Promissory Note (the “July 3 Note”) in the principal amount of $5,000,000 payable to an unaffiliated third-party lender. The July 3 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The July 3 Note matures on June 30, 2022 unless in default. The July 3 Note is subject to acceleration in an Event of Default (as defined). Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the July 3 Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection. The Company used the proceeds from the July 3 Note to repay the principal outstanding on the May 18 Note ($2,000,000), the May 18 Note ($2,000,000), and the February Note ($1,000,000). As of December 31, 2021, the Company had a principal balance of $5,000,000 on this note, which was classified as Notes payable – long term portion on the consolidated balance sheet. As of December 31, 2021, the Company had accrued an aggregate total of $210,574 in interest expense related to these loans. This note was modified during fiscal year 2022, see further discussion below. 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. 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 10,390 shares of common stock at the rate of $96.25 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 $77.75 per share and as such, the Company recorded a gain of $192,205. Interest continued 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 December 31, 2021, the Company had a principal balance of $2,000,000 on this note, which was classified as Notes payable – long term portion on the consolidated balance sheet, and $60,166 in accrued interest expense. This note was modified during fiscal year 2022, see further discussion below. Modification of May 18, 2020, July 3, 2020, and August 4, 2020 Senior Promissory Notes On February 23, 2022, the Company entered into modification agreements to extend the due dates of the May 18 Note, July 3 Note, and August 4 Note to June 30, 2023 of $9,000,000, in the aggregate. The Company paid restructuring fees totaling $506,087 upon modification. The Company determined the modification should be recorded as debt extinguishment in accordance with ASC 470 because the present value of the remaining cash flows under the terms of the new debt instrument is at least 10% different from the present value of the remaining cash flows under the terms of the original instrument. The Company recorded the new debt at fair value in the amount of $7,706,369 and a gain upon extinguishment in the amount of $787,544. During the year ended December 31, 2022, the Company repaid the aggregate principal balance of $7,000,000 and the aggregate accrued interest related to these notes in full and recorded non-cash interest expense in the amount of $1,293,631 for the accretion of debt. As of December 31, 2022, the Company had a principal balance of $0 in relation to the May 18 Note, July 3 Note, and August 4 Note. 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 nine-month grievance from the first deposit date, which was November 19, 2020, for principal repayment. The principal is to be repaid in 18 quarterly installments of €27,778 with the first payment due 9 months from the first deposit. During the year ended December 31, 2021, the Company repaid €55,556 ($62,878) of the principal and as of December 31, 2021, the Company had accrued interest of $5,642 related to this note and a principal balance of €444,444 ($503,022), of which $377,270 is classified as Notes payable – long term portion on the consolidated balance sheet. During the year ended December 31, 2022, the Company repaid €111,111 ($118,867) of the principal and as of December 31, 2022, the Company has accrued interest of $8,069 related to this note and a principal balance of €333,333 ($356,600), of which $237,733 is classified as Notes payable – long term portion on the accompanying consolidated balance sheet. July 30, 2021 Debt Agreement On July 30, 2021, the Company entered into an agreement with a third-party lender in the principal amount of €500,000 ($578,850). The note matures on August 5, 2026 and bears an annual interest rate that applies to 60% of the principal of the note that is based on a 365-day year, of 5.84% plus 3-month Euribor when Euribor is positive. Pursuant to the terms of the agreement, there is a nine-month grace period for principal repayment during which interest is accrued. The principal is to be repaid in 18 quarterly installments of €27,778 commencing three months from the end of the grace period. As of December 31, 2021, the Company has accrued interest of $3,100 and a principal balance of €500,000 ($565,900), of which $477,637 is classified as Notes payable – long term portion on the consolidated balance sheet. During the year ended December 31, 2022, the Company repaid €77,985 ($83,428) of the principal balance. As of December 31, 2022, the Company has accrued interest of $2,728 and a principal balance of €422,016 ($451,472), of which $336,788 is classified as Notes payable – long term portion on the accompanying consolidated balance sheet. June 9, 2022 Debt Agreement On June 9, 2022 the Company entered into an agreement with a third-party lender in the principal amount of €320,000 ($335,008). The Note matures on June 16, 2027 and bears an annual interest of 3.89% plus levy of 0.60% plus the 3-month Euribor (when positive). Pursuant to the agreement, there is a twelve-month grace period for principal repayment during which interest is accrued. The principal is to be repaid in 17 equal quarterly installments of €18,824 commencing on June 30, 2023. As of December 31, 2022 the Company has accrued interest of $8,379 and an outstanding balance of €320,000 ($342,336), of which $281,924 is classified as Notes payable – long term portion on the accompanying consolidated balance sheet. August 29, 2022 Promissory Note On August 29, 2022, the Company entered into a promissory note for the principal amount $166,667. The Company received $150,000 in cash and recorded $16,667 as an original issue discount upon issuance. The promissory note matures on the earlier of (a) December 27, 2022, or (b) the date the Company completes a debt or equity financing of at least $1,000,000. The debt carries an annual interest rate of 12% which is due upon maturity. During the three and nine months ended December 31, 2022, the Company has recorded amortization of debt discount of $16,667 in relation to the original issue discount. As of December 31, 2022, the Company has repaid the principal balance in full and has a balance of $5,041 in accrued interest related to this note. COVID-19 Government Loans On May 12, 2020, the Company’s subsidiary, SkyPharm, was granted and on May 22, 2020 the Company received a €300,000 ($366,900) loan from the Greek government. The loan will be repaid in 40 equal monthly installments beginning on July 29, 2022. As a condition to the loan, the Company was required to retain the same number of employees until October 31, 2020. During the year ended December 31, 2021, the Company received a waiver of 50% forgiveness of the loan and recorded $177,450 as other income. As of December 31, 2021 the principal balance was $169,770. As of December 31, 2022, the principal balance was $150,441. 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). The note 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 was paid in 3 equal monthly installments. The note is interest bearing from the date of receipt and is payable every three (3) months at an interest rate of 2.7%. During the year ending December 31, 2022, the Company reclassified $407,174 from Lines of Credit on the consolidated balance sheet to Notes Payable. The outstanding balance was €323,529 ($346,112) and €359,758 ($407,174) on December 31, 2022 and 2021, respectively of which $220,253 and $366,171, respectively, is classified as Notes payable - long-term portion on the consolidated balance sheets. On June 24, 2020, the Company received a loan £50,000 ($68,310) from the United Kingdom government. The loan has a ten-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 Company repaid £2,335 ($3,233) of principal during the year ended December 31, 2021, and the balance as of December 31, 2021 was £47,665 ($64,347). As of December 31, 2022, the principal balance was £47,144 ($56,936). 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, 2022, the Company would be required to issue 420,471 common shares to settle its debt obligation. The Company could be obligated to potentially issue an unlimited number of common shares to settle its Share-settled debt obligation. If such events were to occur, the Company would be required to increase its authorized share capital and since increasing the authorized share capital is within the control of the Company, as our CEO controls greater than 50% of the outstanding common stock of the Company, the original classification of equity-classified financial instruments issued by the Company were not affected. On March 20, 2023, the Company’s Legal counsel provided notice to Marathon Global Inc, that Cosmos terminated the Equity agreement dated on March 19, 2018 pursuant to Section 3.2 and that termination is effective thirty days from the date of the letter. None of the above loans were made by any related parties. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
LEASES | NOTE 13 – 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 on the date of inception. The Company’s weighted-average remaining lease term relating to its operating leases is 5.49 years, with a weighted-average discount rate of 6.74%. The Company incurred lease expense for its operating leases of $210,463 and $260,664 which was included in “General and administrative expenses,” for the years ended December 31, 2022 and 2021, respectively. The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of December 31, 2022: Maturity of Lease Liability 2023 $ 216,409 2024 217,051 2025 144,252 2026 107,851 2027 and thereafter 297,407 Total undiscounted operating lease payments $ 982,970 Less: Imputed interest (161,904 ) Present value of operating lease liabilities $ 821,066 The Company’s weighted-average remaining lease term relating to its finance leases is 3.27 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 December 31, 2022: Maturity of Lease Liability 2023 $ 113,699 2024 97,540 2025 68,516 2026 41,634 2027 and thereafter 17,452 Total undiscounted finance lease payments $ 338,841 Less: Imputed interest (35,337 ) Present value of finance lease liabilities $ 303,504 The Company had financing cash flows used in finances leases of $99,906 and $92,105 for the years ended December 31, 2022 and 2021, respectively. The Company incurred interest expense on its finance leases of $16,467 and $11,576 which was included in “Interest expense,” for the years ended December 31, 2022 and 2021, respectively. The Company incurred amortization expense on its finance leases of $85,696 and $97,270 which was included in “Depreciation and amortization expense,” for the years ended December 31, 2022 and 2021, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 – 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 December 31, 2022, the following litigations were pending. None of the below is expected to have a material financial or operational impact. Solgar Inc. sued SkyPharm SA for product homogeneity regarding the nutraceutical line “Sky Premium Life”. As a result, Solgar requested the prohibition for SkyPharm to manufacture, import and sell, market or in any way possess and distribute, including Internet sales and advertise in any way in the Greek market of “Sky Premium Life” due to homogeneity with Solgar’s products. Lawsuit with data no 4545/2021 of the company “Solgar Inc.” against SkyPharm before the Court of First Instance of Thessaloniki, according to which Solgar Inc. requests to prohibit SkyPharm SA’s use of the nutraceutical line “Sky Premium Life” packages as its characteristics are similar to Solgar Inc.’s and is also seeking the withdrawal of existing ones from the market. Solgar Inc. has further requested to be awarded compensation for non-pecuniary damage amounting to €20,000 (financial obligation). The case was heard on January 28, 2022, and the decision numbered 8842/2022 of the court of Thessaloniki was issued, which, accepted our claims and dismissed the Solgar’s I.N.C. lawsuit. Compilation and submission of a memorandum against the National Medicines Agency with no. 127351/16.12.2021 document. On July 22, 2015, the National Medicines Agency approved the license of wholesale sale of pharmaceutical products of the pharmaceutical company under the name SkyPharm SA with set validity at five years and an expiration date of July 22, 2020. Subsequently, SkyPharm SA on June 15, 2020, legally and timely submitted the application for renewal of the wholesale license of pharmaceutical products to the National Medicines Agency even though the period under review is characterized by the COVID – 19 pandemic The National Medicines Agency did not respond, therefore the Company asked from the lawyer to immediately ask for the decision of the renewal. Two months after the filing of no. 3459 / 15.01.2021 letter of the attorney and almost nine months after the no. 627615.06.2020 company application for the renewal and the National Medicines Agency replied by rejecting the renewal request on March 9, 2021 (ref. 62769 / 20-25.02.2021). In addition, document No. 127351-16.12.2021 of EOF to SkyPharm states that after an inspection of EOF at the premises of the company “Doc Pharma”, SkyPharm did not have a wholesale license in force in violation of article 106 par. 1b and par. 1c of the ministerial decision D.YG3a / GP.32221 / 29-4-2019 and issued invoices dated February 26, 2021 and March 8, 2021). The National Medicines Agency has not yet replied to the renewal request. Order for payment by the court which derived from a fine related to tax audit that concerns financial year 2014. The ruling with no. 483/16.12.2020 was against Cosmofarm SA. The defendant appealed against the decision by the ruling with no.11541/09.03.2021.This appeal was dismissed due to inactive passage of 120 days. Because of this inactive passage, Cosmofarm appealed against Greek tax authorities, no.6704/29.11.2021. There was an obligation of additional tax and fines imposition of €91,652 that Cosmofarm has already paid and claim back through the appeal (financial claim). As of December 31, 2022, the trial is still pending. Advisory Agreements On July 1, 2021, the Company entered into a two-year advisory agreement with a third party (the “Consultant”) for advisory and consulting services related to the Company’s intention to become listed on NASDAQ. Peter Goldstein, a then director of the Company is a principal of the Consultant. As consideration for services rendered, the Company will pay the consultant 4,000 a month until the Company commences trading on NASDAQ. Upon NASDAQ listing, the Company shall pay $10,000 per month, with $4,000 per month paid on a monthly basis and $6,000 per month accrued until such time as the Company raises an aggregate of $10,000,000. In addition, the consultant will receive a $100,000 bonus upon NASDAQ listing and when the Company has raised an aggregate of $10,000,000. The $100,000 bonus was incurred and settled within 2022. Finally, the Company has agreed that the Consultant shall receive a total of 10,000 shares of the Company’s common stock, 2,000 of such shares that have been previously issued pursuant to previous agreements and 8,000 shares to be issued when the Company commences trading on NASDAQ. As of December 31, 2022, 17,258 additional shares have been issued to the Consultant concerning the Company’s listing on Nasdaq. On July 7, 2021, the Company entered into an agreement with a non-exclusive financial advisor and placement agent. The term of the agreement is a minimum of 45 days and will continue until 5 business days following the date in which a party receives written notice from the other party of termination. As consideration for services rendered, the Company shall pay: a) a cash fee equal to 10% of the gross proceeds of any securities sold in the offering payable at closing of the offering from the gross proceeds of the offering; b) 1% of the gross proceeds of any securities sold in the offering payable at closing of the offering from the gross proceeds of the offering for unaccountable expenses; c) warrants to purchase shares of the Company’s common stock equal to 10% of the number of shares issued in the offering or to be issued thereafter upon conversion of any convertible securities issued in the offering. These warrants will have a 5-year term and an exercise price equal to the price per share of common stock sold in the offering or conversion or exercise price into common stock of any convertible security sold and will have the same provisions, terms, conditions, rights and preferences as the securities sold in the offering; d) a cash fee equal to 10% of the exercise price of all securities constituting warrants, options or other rights to purchase securities sold in the offering payable only upon exercise. The above agreement was finalized through the November 21, 2022 settlement agreement and the placement agent received $52,500 of cash compensation, 17,500 of free trading shares and 22,500 restricted shares included in shares issued in lieu of cash on the accompanying statement of changes in stockholders' equity (deficit) and mezzanine equity as of December 31, 2022. On July 7, 2021, the Company entered into a 6-month agreement with a non-exclusive agent, advisor or underwriter in any offering of securities of the Company. At the closing of any offering the Company will compensate the agent: a) a cash fee or as an underwritten offering an underwriter discount equal to 7% of the aggregate gross proceeds raised in each offering. For all investors referred directly to the Company by the agent, a cash fee or as an underwritten offering an underwriter discount equal to 5% of the aggregate gross proceeds invested by such investors, b) the Company shall issue to the agent or its designees at each closing, warrants to purchase shares of the Company’s common stock equal to 5% of the aggregate number of shares of common stock placed in each offering, c) out of the proceeds of each closing, the Company also agreed to pay the agent up to $35,000 for non-accountable expenses (up to $50,000 for a public offering) along with up to $50,000 for fees and expenses of legal counsel and other out-of-pocket expenses (increase to up to $100,000 for public offerings) plus additional miscellaneous costs. The agent would also have the right of first refusal from the date of the agreement until the 12-month anniversary following consummation of any offerings for total proceeds of at least $3 million raised by investors introduced by the agent. On August 25, 2022, the Company signed a 4-month agreement with a consultant for a marketing/media plan and the development of a forward-looking strategy for the Company. The Consultant’s compensation for the above services amounted to $150,000, $75,000 all of which has been paid as of December 31, 2022. Research & Development Agreements On June 26, 2022, the Company signed an R&D agreement with a third party, through which the Company assigns the third party the support of the Research and Development department with the implementation of two projects related to the development of new products and services in the field of health focusing on the human intestinal microbiome. The cost of the project amounts to EUR 820,000 and is allocated to certain phases of the projects. It will be due and payable upon completion of the corresponding phases. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 15 – EARNINGS PER SHARE Basic net loss per share is computed by dividing net loss attributable to the Company, decreased with respect to net income or increased with respect to net loss by dividends declared on preferred stock by using the weighted-average number of common shares outstanding. The dilutive effect of incremental common shares potentially issuable under outstanding options, warrants and restricted shares is included in diluted earnings per share in 2022 and 2021 utilizing the treasury stock method. The computations of basic and diluted per share data were as follows: 2022 2021 Numerator for Basic and Diluted Earnings Per Share: Net loss $ (63,945,285 ) $ (15,594,682 ) Denominator for Basic Earnings Per Share: Weighted Average Shares 1,928,172 656,933 Potentially Dilutive Common Shares - - Adjusted Weighted Average Shares 1,928,172 656,933 Basic and Diluted Net Loss per Share (33.16 ) (23.74 ) The following table summarized the potential shares of common stock that were excluded from the computation of diluted net loss per share for the years ended December 31, 2022 and 2021 as such shares would have had an anti-dilutive effect: 2022 2021 Common Stock Warrants 4,194,236 142,713 Common Stock Options - 1,480 Convertible Debt 8,827 8,759 Total 4,203,063 152,952 |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 12 Months Ended |
Dec. 31, 2022 | |
STOCK OPTIONS AND WARRANTS | |
STOCK OPTIONS AND WARRANTS | NOTE 16 – STOCK OPTIONS AND WARRANTS As of December 31, 2022, there were 0 options outstanding and 0 options exercisable. A summary of the Company’s option activity during the years ended December 31, 2022 and 2021 is presented below: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Shares Price Term Value Balance Outstanding, January 1, 2021 62,000 $ 1.19 0.60 $ 242,200 Granted - - - - Forfeited - - - - Exercised - - - - Expired (25,000 ) - - - Balance Outstanding, December 31, 2021 37,000 $ 1.32 0.01 $ 75,850 Granted - - - - Forfeited - - - - Exercised - - - - Expired (37,000 ) - - - Balance Outstanding, December 31, 2022 - $ - - $ - Exercisable, December 31, 2022 - $ - - $ - Omnibus Equity Incentive Plan On September 19, 2022 the Company held a Board of Directors meeting, whereas, the Board of Directors had elected to adopt an Omnibus Equity Incentive Plan (the “Plan”), that includes reserving 200,000 shares of common stock eligible for issuance under the Plan to be registered on a Form S-8 Registration Statement with the SEC. The Plan is designed to enable the flexibility to grant equity awards to the Company’s officers, employees, non-employee directors and consultants and to ensure that it can continue to grant equity awards to eligible recipients at levels determined to be appropriate by the Board and/or the Compensation Committee. According to the Proxy Statement filed with the SEC on October 20, 2022 the Plan was subject to final approval by the Company’s stockholders at the Annual Meeting of Stockholders held on December 2, 2022 when the Plan was approved. Warrant Anti-Dilution Adjustment and Deemed Dividend The Company’s warrants outstanding contain certain anti-dilution adjustments if the Company issues shares of its common stock at a lower price per share than the applicable exercise price of the underlying warrant. If any such dilutive issuance occurs prior to the exercise of such warrant, the exercise price will be adjusted downward to a price equal to the common stock issuance, and the number of warrants that may be purchase upon exercise is increased proportionately so that the aggregate exercise price payable under the warrant shares shall be the same as the aggregate exercise price in effect immediately prior to such adjustment. On December 21, 2021, the Company issued its common stock upon conversion of its convertible debt at an issuance price of $50.50 per share. As a result, the Company issued additional warrants to the Company’s existing warrant holders to purchase 101,343 shares of common stock with an exercise price of $50.50 per share. The new warrants were issued with a weighted average contractual term of 2.04 years. The deemed dividend was recorded as an increase to accumulated deficit and additional paid-in capital and reduced net income available to common shareholders by the same amount. The Company valued (a) the fair value of the warrants immediately before the re-pricing in the amount of $1,915,077, (b) the fair value of the warrants immediately after the re-pricing in the amount of $9,548,110, and (c) recorded the difference as deemed dividend in the amount of $7,633,033. The warrants were valued using the Black-Scholes option pricing model using the following terms: a) fair value of common stock of $93.75, b) exercise prices of $125.00, $150.00 and $187.50 before re-pricing, c) exercise price of $50.50 after re-pricing, d) terms of 1.40 years, 1.97 years, 2.20 years and 2.26 years, e) dividend rate of 0%, and f) risk free interest rate of 0.41%. As of December 31, 2022, there were 4,194,236 warrants outstanding and 4,194,236 warrants exercisable with 4,180,902 warrants having expiration dates from May 2023 through December 2027 and 13,334 warrants with no expiration date. A summary of the Company’s warrant activity for the years ending December 31, 2022 and 2021 is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Shares Price Term Value Balance Outstanding, January 1, 2021 45,587 $ 160.25 3.01 $ - Granted 101,343 50.50 2.04 - Forfeited - - - - Exercised - - - - Expired - - - - Balance Outstanding, December 31, 2021 147,930 $ 50.50 2.04 $ 4,992,621 Granted 9,030,301 5.96 4.18 - Forfeited (424,767 ) - - - Exercised (4,559,228 ) - - - Expired - - - - Balance Outstanding, December 31, 2022 4,194,236 $ 8.31 5.04 $ 2,562,600 Exercisable, December 31, 2022 4,194,236 $ 8.31 5.04 $ 2,562,600 |
DISAGGREGATION OF REVENUE
DISAGGREGATION OF REVENUE | 12 Months Ended |
Dec. 31, 2022 | |
DISAGGREGATION OF REVENUE | |
DISAGGREGATION OF REVENUE | NOTE 17 – 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 years ended: Country 2022 2021 Croatia $ 38,596 $ 18,441 Cyprus 92,685 112,640 Denmark - 53,710 Germany - 13,370 Greece 49,812,839 55,564,240 Italy - 15,446 UK 403,532 461,820 Total $ 50,347,652 $ 56,239,667 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 18 – SUBSEQUENT EVENTS Loan Agreement with Doc Pharma On January 1, 2023, SkyPharm SA (“the Lender”) signed a loan agreement with Doc Pharma SA (“the Borrower”) for €4,000,000 relating to the prepaid balance the Lender has due from the Borrower. The balance of SkyPharm SA due from DocPharma SA as of December 31, 2022, had increased to EUR 7,103,706 ($7,599,545), which was mainly attributable to the prepayments SkyPharm SA made in accordance with the CMO agreement and the orders and sales of the SPL products the Company expects to achieve within 2023.The duration of the loan will be for a 10-year period up to December 1, 2032 (“the Maturity date”). It will bear a fixed interest rate of 5.5% payable on monthly basis and will be repayable in 120 equal instalments of €33,333. The loan may be prepaid anytime during its term, in full or partially based on the Company’s product requirements & other factors, without Doc Pharma incurring any prepayment penalty. Purchase of Land and Buildings On January 6, 2023, the Company signed a purchase agreement with a third party to acquire buildings and a lot, in Montreal, Canada, of approximately 450 square meters for use as a warehouse and to establish a distribution center for its nutraceutical products in Canada. The total purchase price was $3,950,000. The Company has paid in advance, approximately $1.2 million, related to this agreement. Amendment to Distribution Agreement On January 20, 2023, the Company amended the initial Distribution Agreement dated September 22, 2022 with the first purchase order to market and distribute Virax Biolabs’ (Nasdaq: VRAX) ViraxClear branded COVID-19 and Influenza A+B Antigen Combo Rapid Detection Kits. The Company will have exclusive distribution rights for Greece and Cyprus, with the opportunity to distribute the ViraxClear branded test kits across Europe on a non-exclusive basis. Settlement Agreement On January 31, 2023, the Company entered into a Settlement Agreement with a Third-Party Lender for the $4,000,000 Trade Finance Facility (the “Fund”) dated July 5, 2017 and later amended on June 10, 2019 that agreed to the full and final settlement of the Fund, the settlement of which is to be recorded on a binding basis. The Company paid $1,100,000 to the Fund on February 3, 2023 and the remaining outstanding balance was waived in full such that the balance of the Fund is now $0. Stock Buyback Program On January 24, 2023 the Company announced that its Board of Directors has approved a share repurchase program with authorization to purchase up to $3 million of its common stock. Cosmos may repurchase shares from time to time through open market purchases in accordance with applicable securities laws and other restrictions. Departure and Appointment of Certain Officers On February 1, 2023, the Company announced the appointment of Nikos Bardakis, who comes with over two decades of international branded pharmaceutical sector experience, as the Chief Operating Officer (COO). Nikos Bardakis succeeded Pavlos Ignatiades, who assumed the position of Chief Communications Officer (CCO). Repayment of Convertible Promissory Note On February 7, 2023 the Company fully repaid the outstanding balance and interest of the January 7, 2021, $100,000 Convertible Promissory Note. Acquisition of a Pharmaceutical Company On March 7, 2023, the Company announced that it has entered into a material definitive agreement with a Greek pharmaceutical company that manufactures, sells, distributes, and markets original branded products researched and developed by leading global pharmaceutical and healthcare companies. This material definitive agreement is pursuant to the Binding Letter of Intent dated July 19, 2022, and amended on January 10, 2023. On February 28, 2023, Cosmos Health injected €4.1 million into this pharmaceutical company, which will allow it to emerge from an entity at a restructuring stage, as an entity with a robust balance sheet and a strong foundation for future growth. The next phase is the execution of a Stock Purchase Agreement to be concluded no later than May 1, 2023. Acquisition of a Telehealth Company On March 17, 2023, the Company announced that it has entered into a definitive agreement to a Telehealth Company for an undisclosed sum. The Sale and Purchase Agreement (“SPA”) was signed on March 17, 2023, and the transaction is closed on April 3, 2023. Termination of Equity Agreement On March 20, 2023, the Company’s Legal counsel provided notice to Marathon Global Inc, that Cosmos terminated the Equity agreement dated on March 19, 2018, pursuant to Section 3.2 and that termination is effective thirty days from the date of the letter. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Financial Statement Presentation | The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP. |
Foreign Currency Translation and Other Comprehensive Loss | The functional currency of the Company’s subsidiaries is the Euro and British Pound. For financial reporting purposes, both the Euro (“EUR”) and British Pound (“GBP”) have been translated into United States dollars ($) and/or (“USD”) as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Equity transactions are translated at each historical transaction date spot rate. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity (deficit) as “Accumulated other comprehensive income (loss)”. Gains and losses resulting from foreign currency transactions are included in the statements of operations and comprehensive loss as other comprehensive loss. There have been no significant fluctuations in the exchange rate for the conversion of EUR or GBP to USD after the balance sheet date. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the consolidated balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency included in the consolidated results of operations as incurred. As of December 31, 2022 and 2021, the exchange rates used to translate amounts in Euros into USD and British Pounds into USD for the purposes of preparing the consolidated financial statements were as follows: December 31, 2022 December 31, 2021 Exchange rate on balance sheet dates EUR: USD exchange rate 1.0698 1.1318 GBP: USD exchange rate 1.2077 1.3500 Average exchange rate for the period EUR: USD exchange rate 1.0534 1.1830 GBP: USD exchange rate 1.2371 1.3764 |
Foreign Currency Translations and Transactions | Assets and liabilities of all foreign operations are translated at year-end rates of exchange, and amounts included in the accompanying statements of operations and comprehensive loss are translated at the average rates of exchange for the year. Gains or losses resulting from translating foreign currency financial statements are accumulated in a separate component of stockholders’ equity (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 other income (expense) in the consolidated statements of operations and comprehensive loss. |
Principles of Consolidation | Our 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 consolidated financial statements in conformity with U.S. GAAP 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 the date of issuance of this Annual Report on Form 10-K. 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. |
The Effects of War in the Ukraine | On February 24, 2022, Russian forces launched significant military action against Ukraine. There continues to be sustained conflict and disruption in the region, which is expected to endure for the foreseeable future. We do not conduct any commercial transactions with either Ukraine or Russia and 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 the date of issuance of this Annual Report on Form 10-K. Such political issues and conflicts could have a material adverse effect on our results of operations and financial condition if they escalate in areas in which we do business. In addition, changes in and adverse actions by governments in foreign markets in which we do business could have a material adverse effect on our results of operations and financial condition. |
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 December 31, 2022 and December 31, 2021, there were no cash equivalents. The Company maintains bank accounts in the United States denominated in U.S. Dollars, in Greece denominated in Euros, U.S. Dollars and Great Britain Pounds (British Pounds Sterling), and in Bulgaria denominated in Euros. The Company also maintains bank accounts in the United Kingdom, denominated in Euros and Great Britain Pounds (British Pounds Sterling). As of December 31, 2022 and 2021, the aggregate amount in these foreign accounts were $831,793 and $250,139, respectively. Additionally, as of December 31, 2022 and 2021, the Company had cash on hand in the amount of $15,690 and $25,773, respectively. |
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. As of December 31, 2021, $407,174 was reclassified from line of credit to Notes payable, $7,393 in accumulated depreciation has been reclassified from property and equipment to accumulated amortization of goodwill and intangible assets and $4,772 was reclassified from prepaid expenses and other current assets to marketable securities on the consolidated balance sheet. Additionally, as of December 31, 2021, $92,826 was reclassified from payment of lines of credit to payment of note payable on the consolidated statement of cash flows. Moreover, the total balances of operating lease right-of-use asset and financing lease right-of-use asset of $834,468 and $211,099 respectively, were reclassified from current assets to non-current assets for the year ended December 31, 2021. Finally, a balance of $366,269 concerning certain receivables with a Related Party was reclassified from accounts receivable, net to accounts receivable - related party for the year ended December 31, 2021. |
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 December 31, 2022 and 2021, the Company’s allowance for doubtful accounts was $7,309,311 and $1,702,743, 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. As of December 31, 2022 and 2021, the Company had a VAT net receivable balance of $79,373 and a net payable balance of $400,616 respectively, recorded in the consolidated balance sheet as prepaid expenses and other current assets and accounts payable and accrued expenses, respectively. |
Inventory | Inventory is stated at the lower-of-cost or net realizable value using the weighted average FIFO 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 $70,109 and $319,337 for the years ended December 31, 2022 and 2021, 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. For the years ended December 31, 2022 and 2021, the Company had no impairment of long-lived assets. |
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. First, under step 0, we determine whether it is more likely than not that the fair value of the reporting unit is less than the carrying amount. Following, if step 0 fails, 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, included in Note 4 as 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 December 31, 2022, no revision to the remaining amortization period of the intangible assets was made. Amortization expense was $33,085 and $33,085 for the years ended December 31, 2022 and 2021, 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 records its share in the earnings of the investee and is included in “Equity earnings of affiliate” in the 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 | 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 sale 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 December 31, 2022, investments consisted of (i) 3,000,000 shares, which traded at a closing price of $0 per share or a value of $0 of ICC International Cannabis Corp and (ii) 16,666 shares which traded at a closing price of $0.40 per share or value of $6,681 of National Bank of Greece. Additionally, the Company has $8,200 in equity securities of Pancreta Bank, which are revalued annually. As of December 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., 16,666 shares which traded at a closing price of $0.40 per share or value of $6,696 of National Bank of Greece. Additionally, the Company has $4,416 in equity securities of Pancreta bank, which are not publicly traded and recorded at cost. See Note 2 for additional investments in equity securities. |
Fair Value Measurement | The Company applies 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 table presents assets that are measured and recognized at fair value as of December 31, 2022 and 2021, on a recurring basis: December 31, 2022 Total Carrying Level 1 Level 2 Level 3 Value Marketable securities – ICC International Cannabis Corp. $ - - - $ - Marketable securities – National Bank of Greece 6,681 - - 6,681 $ 6,681 $ 6,681 December 31, 2021 Total Carrying Level 1 Level 2 Level 3 Value Marketable securities – ICC International Cannabis Corp. $ - - - $ - Marketable securities – National Bank of Greece 6,696 - - 6,696 $ 6,696 $ 6,696 In addition, 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. |
Derivative Instruments | Derivative financial instruments are recorded in the accompanying consolidated balance sheets at fair value in accordance with ASC 815. When the Company enters into a financial instrument such as a debt or equity agreement (the “host contract”), the Company assesses whether the economic characteristics of any embedded features are clearly and closely related to the primary economic characteristics of the remainder of the host contract. When it is determined that (i) an embedded feature possesses economic characteristics that are not clearly and closely related to the primary economic characteristics of the host contract, and (ii) a separate, stand-alone instrument with the same terms would meet the definition of a financial derivative instrument, then the embedded feature is bifurcated from the host contract and accounted for as a derivative instrument. The estimated fair value of the derivative feature is recorded in the accompanying consolidated balance sheets separately from the carrying value of the host contract. Subsequent changes in the estimated fair value of derivatives are recorded as a gain or loss in the Company’s consolidated statements of operations. |
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 current liabilities 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 advances 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”) 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.” |
Concentrations of Credit Risk | Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash investments and accounts receivable. The following tables show the number of the Company’s clients which contributed 10% or more of revenue and accounts receivable, respectively: Year Ended December 31, Year Ended December 31, 2022 2021 Number of 10% clients 0 1 Percentage of total revenue 0.00 % 15.33 % Percentage of total AR 0.00 % 35.08 % |
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 carryforwards. 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 The corporate income tax rate is 22% in Greece and 19% in the United Kingdom. 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 December 31, 2022, we believe our United Kingdom and Greece deferred tax assets will not be realized, as such, we recorded a $2,371,886 valuation allowance. |
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 December 31, 2022 and December 31, 2021 was $0 and $0, respectively, and has been recorded as a long-term liability within the 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. Years Ended December 31, 2022 2021 Weighted average number of common shares outstanding Basic 1,928,172 656,933 Potentially dilutive common stock equivalents - - Weighted average number of common and equivalent shares outstanding – Diluted 1,928,172 656,933 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. |
Accounting Standard Adopted | The Company has adopted Accounting Standards Update (“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) (“ASU 2020-06”), effective as of January 1, 2022, using the modified retrospective transition method which, among other things, simplifies the accounting for convertible instruments by eliminating the requirement to separate conversion features from the host contract. Consequently, a convertible debt instrument is accounted for as a single liability measured at its amortized cost and interest expense will be recognized at the coupon rate. The adoption resulted in the elimination of the debt discount that had been recorded within equity (see Note 11, “Convertible Debt”). In May 2021, the FASB issued ASU 2021-04—Earnings Per Share (Topic 260), Debt— Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments in this ASU are effective for public and nonpublic entities for fiscal years beginning after December 15, 2021, and interim periods with fiscal years beginning after December 15, 2021. Early adoption is permitted, including adoption in an interim period. The Company adopted ASU 2021-04 on January 1, 2022. The adoption did not have a material impact on its consolidated financial statements. |
Correction of an Immaterial Error | During the three-month period ended June 30, 2022, the Company concluded it should have adopted ASU 2020-06 on January 1, 2022. The Company retrospectively adopted ASU 2020-06 as of January 1, 2022 in its Form 10-Q for the period ended June 30, 2022 with a cumulative catch-up adjustment. The net impact of the adjustments was recorded as a reduction to the January 1, 2022 balance of additional paid-in capital in the amount of $294,000 and a reduction in accumulated deficit in the amount of $53,248, as presented in the statement of stockholders’ equity, and a reduction in discount on convertible notes payable in the amount of $240,752. The Company has concluded the impact to form 10-Q for the three-month period ended March 31, 2022 to be immaterial to the consolidated financial statements and recorded a catchup/correcting adjustment in the current Form 10-K. |
Recent Accounting Pronouncements | In December 2022, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2022-06, Deferral of the Sunset Date of Reference Rate Reform (Topic 848). Topic 848 provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate (e.g., LIBOR) reform if certain criteria are met, for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The ASU deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The ASU is effective as of December 21, 2022 through December 31, 2024. We continue to evaluate transactions or contract modifications occurring as a result of reference rate reform and determine whether to apply the optional guidance on an ongoing basis. We adopted ASU 2022-06 during 2022. The ASU has not and is currently not expected to have a material impact on the Companies consolidated financial statements. In March 2022, the FASB issued ASU 2022-02, Troubled Debt Restructurings and Vintage Disclosures. This ASU eliminates the accounting guidance for troubled debt restructurings by creditors that have adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments, which was adopted on January 1, 2020. The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated financial statements. ASU 2022-02 also enhances the disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. In addition, the ASU amends the guidance on vintage disclosures to require entities to disclose current period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of ASC 326-20. The ASU is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Adoption of the ASU would be applied prospectively. Early adoption is also permitted, including adoption in an interim period. This ASU is currently not expected to have a material impact on the Company’s consolidated financial statements. October 2021, the FASB issued accounting standards update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers, as if it had originated the contracts. The new guidance creates an exception to the general recognition and measurement principles of ASC 805, Business Combinations. The new guidance should be applied prospectively and is effective for all public business entities for fiscal years beginning after December 15, 2022 and include interim periods. The guidance is effective for all other entities for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effects of the adoption of ASU No. 2021-08 on its 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. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of the exchange rates | December 31, 2022 December 31, 2021 Exchange rate on balance sheet dates EUR: USD exchange rate 1.0698 1.1318 GBP: USD exchange rate 1.2077 1.3500 Average exchange rate for the period EUR: USD exchange rate 1.0534 1.1830 GBP: USD exchange rate 1.2371 1.3764 |
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 |
Schedule of Assets Measured and Recognized at Fair Value on a Recurring Basis | December 31, 2022 Total Carrying Level 1 Level 2 Level 3 Value Marketable securities – ICC International Cannabis Corp. $ - - - $ - Marketable securities – National Bank of Greece 6,681 - - 6,681 $ 6,681 $ 6,681 December 31, 2021 Total Carrying Level 1 Level 2 Level 3 Value Marketable securities – ICC International Cannabis Corp. $ - - - $ - Marketable securities – National Bank of Greece 6,696 - - 6,696 $ 6,696 $ 6,696 |
Schedule of revenue and accounts receivable | Year Ended December 31, Year Ended December 31, 2022 2021 Number of 10% clients 0 1 Percentage of total revenue 0.00 % 15.33 % Percentage of total AR 0.00 % 35.08 % |
Schedule of Reconciliation of Basic Shares Outstanding to Fully Diluted Shares Outstanding | Years Ended December 31, 2022 2021 Weighted average number of common shares outstanding Basic 1,928,172 656,933 Potentially dilutive common stock equivalents - - Weighted average number of common and equivalent shares outstanding – Diluted 1,928,172 656,933 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT | |
Schedule of Property and Equipment | 2022 2021 Leasehold improvements and technical works $ 502,882 $ 519,278 Vehicles 107,976 96,657 Furniture, fixtures and equipment 1,945,207 2,065,100 Computers and software 138,783 141,490 2,694,848 2,822,525 Less: Accumulated depreciation and amortization (877,823 ) (934,473 ) Total $ 1,817,025 $ 1,888,052 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of Goodwill and Intangible Assets | 2022 2021 License $ 643,204 $ 345,739 Trade name /mark 36,997 36,997 Customer base 176,793 176,793 856,994 559,529 Less: Accumulated amortization (199,777 ) (123,460 ) Subtotal 657,217 436,069 Goodwill 49,697 49,698 Total $ 706,914 $ 485,767 |
Schedule of estimated aggregate amortization expense for intangible assets | Year Amount 2023 $ 81,406 2024 82,318 2025 81,826 2026 43,637 2027 43,637 Thereafter 324,393 Sum $ 657,217 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Schedule of income before income tax domestic and foreign | December 31, 2022 December 31, 2021 Domestic $ (7,093,161 ) $ (8,365,298 ) Foreign (5,962,159 ) 517,659 $ (13,055,320 ) $ (7,847,639 ) |
Schedule of provision for income taxes | December 31, 2022 December 31, 2021 Current tax provision Federal $ - $ - State - - Foreign (75,724 ) 802,364 Total current tax provision $ (75,724 ) $ 802,364 Deferred tax provision Domestic $ - $ - State - - Foreign 850,775 (688,354 ) Total deferred tax provision $ 850,775 $ (688,354 ) Total current provision $ 775,051 $ 114,010 |
Significant components of deferred tax assets and liabilities | December 31, 2022 December 31, 2021 Net operating loss carryforward $ 5,899,702 $ 4,515,900 Capital loss carryforward 801,744 801,744 Section 163(j) carryforward 561,130 - Nonqualified stock options - 96,104 Foreign exchange 297,263 13,438 Allowance for doubtful accounts 1,616,926 374,604 Accrued expenses 352,025 528,895 Mark to market adjustment in securities 358,761 358,761 Lease liability 259,381 253,620 Gain on extinguishment of debt - - Depreciation (22,914 ) (6,765 ) Total deferred tax assets 10,124,018 6,936,211 Intangibles (8,139 ) (8,139 ) Inventory (49,961 ) (14,728 ) Right of use asset (256,769 ) (243,207 ) Goodwill (10,979 ) (10,979 ) Total deferred tax liabilities (325,848 ) (277,053 ) Valuation allowance (9,798,170 ) (5,808,384 ) Net deferred tax assets $ - $ 850,774 |
Schedule of reconciliation of income tax expense | December 31, 2022 December 31, 2021 US Loss before income taxes $ (13,055,320 ) $ (7,847,639 ) Taxes under statutory US tax rates $ (2,741,617 ) $ (1,648,004 ) Increase (decrease) in taxes resulting from: Increase in valuation allowance $ 3,989,786 $ 3,001,899 Foreign tax rate differential $ 34,601 $ (24,977 ) Permanent differences $ 128,705 $ (734,428 ) US tax on foreign income $ - $ 493,028 163(j)catchup - (76,888 ) Prior period adjustments $ (186,143 ) $ 52,034 State taxes $ (450,280 ) $ (948,654 ) Income tax expense $ 775,052 $ 114,010 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
Schedule of Related Party Notes Payable | 2022 2021 Beginning Balance $ 464,264 $ 501,675 Payments (472,920 ) - Foreign currency translation 19,568 (37,411 ) Ending Balance $ 10,912 $ 464,264 |
Schedule of Related Party Loans Payable | 2022 2021 Beginning balance $ 1,293,472 $ 1,629,246 Proceeds 3,635,756 6,377,156 Payments (4,851,678 ) (133,552 ) Conversion of debt - (6,000,000 ) Settlement of lawsuit - (600,000 ) Foreign currency translation (64,729 ) 20,623 Ending balance $ 12,821 $ 1,293,472 |
LINES OF CREDIT (Tables)
LINES OF CREDIT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LINES OF CREDIT | |
Schedule of Lines of Credit | December 31, 2022 December 31, 2021 National $ 3,103,605 $ 3,265,236 Alpha 991,492 947,333 Pancreta 1,232,128 489,985 EFG 431,512 - Ending balance $ 5,758,737 $ 4,702,554 |
CONVERTIBLE DEBT (Tables)
CONVERTIBLE DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
CONVERTIBLE DEBT | |
Schedule of Convertible Debt | 2022 2021 Beginning balance convertible notes $ 640,000 $ 1,447,000 New notes - 625,000 Payments (525,000 ) (907,000 ) Conversion to common stock (15,000 ) (525,000 ) Subtotal notes 100,000 640,000 Debt discount at year end - (258,938 ) Convertible note payable, net of discount $ 100,000 $ 381,062 |
Derivative Liabilities | Amount Balance on January 1, 2021 $ 460,728 Issuances to debt discount 62,619 Reduction of derivative related to conversions (284,169 ) Change in fair value of derivative liabilities (193,513 ) Balance on December 31, 2021 45,665 Issuances to debt discount - Reduction of derivative related to conversions (11,629 ) Change in fair value of derivative liabilities 20,257 Balance on December 31, 2022 $ 54,293 December 31, December 31, 2022 2021 Dividend yield 0 % 0 % Expected volatility 87.9%-157.2 % 106.8%-107.3 Risk free interest rate 1.46%-3.75 % 0.41%-0.44 Contractual terms (in years) 1.25 - .75 .50 - .52 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
NOTES PAYABLE | |
Summary of Debt | December 31, 2022 Loan Facility Trade Facility Third Party COVID Loans Total Beginning balance $ 1,299,784 $ 6,207,010 $ 10,077,977 $ 641,291 $ 18,226,062 Proceeds - - 492,336 - 492,336 Payments (240,705 ) (2,795,786 ) (9,494,823 ) (10,029 ) (12,541,343 ) Conversion of debt (1,190,000 ) - - - (1,190,000 ) Recapitalized upon debt modification (81,923 ) (221,060 ) (781,752 ) - (1,084,735 ) Accretion of debt and debt discount 81,910 216,182 781,752 - 1,079,844 Foreign currency translation 130,934 (100,814 ) 22,414 (16,711 ) 35,823 Subtotal - 3,305,532 1,505,078 207,377 5,017,987 Notes payable - long-term - (1,604,700 ) (1,076,698 ) (178,172 ) (2,859,570 ) Notes payable - short-term $ - $ 1,700,832 $ 428,380 $ 29,205 $ 2,158,417 December 31, 2021 Loan Facility Trade Facility Third Party COVID Loans Total Beginning balance $ 3,302,100 $ 6,446,000 $ 12,631,284 $ 435,210 $ 22,814,594 Proceeds - - 565,900 - 565,900 Payments (141,475 ) (57,835 ) (62,878 ) (3,233 ) (265,421 ) Conversion of debt (1,606,500 ) - (3,010,000 ) - (4,616,500 ) Recapitalized upon debt modification (86,670 ) - - - (86,670 ) Debt forgiveness - - - (169,770 ) (169,770 ) Reclassification of Line of Credit - - - 407,174 407,174 Foreign currency translation (167,671 ) (181,155 ) (46,329 ) (28,090 ) (423,245 ) Subtotal 1,299,784 6,207,010 10,077,977 641,291 18,226,062 Notes payable - long-term - (2,450,000 ) (9,854,906 ) (417,649 ) (12,722,555 ) Notes payable - short-term $ 1,299,784 $ 3,757,010 $ 223,071 $ 223,642 $ 5,503,507 |
Summary of Outstanding Debt | Our outstanding debt as of December 31, 2022 is repayable as follows: December 31, 2022 2023 $ 2,158,417 2024 794,171 2025 1,729,737 2026 204,829 2027 and thereafter 130,833 Total debt 5,017,987 Less: notes payable - current portion (2,158,417 ) Notes payable - long term portion $ 2,859,570 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
Summary of Operating Leases | Maturity of Lease Liability 2023 $ 216,409 2024 217,051 2025 144,252 2026 107,851 2027 and thereafter 297,407 Total undiscounted operating lease payments $ 982,970 Less: Imputed interest (161,904 ) Present value of operating lease liabilities $ 821,066 |
Summary of Finance Leases | Maturity of Lease Liability 2023 $ 113,699 2024 97,540 2025 68,516 2026 41,634 2027 and thereafter 17,452 Total undiscounted finance lease payments $ 338,841 Less: Imputed interest (35,337 ) Present value of finance lease liabilities $ 303,504 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER SHARE | |
Schedule of Basic net income loss per share | 2022 2021 Numerator for Basic and Diluted Earnings Per Share: Net loss $ (63,945,285 ) $ (15,594,682 ) Denominator for Basic Earnings Per Share: Weighted Average Shares 1,928,172 656,933 Potentially Dilutive Common Shares - - Adjusted Weighted Average Shares 1,928,172 656,933 Basic and Diluted Net Loss per Share (33.16 ) (23.74 ) |
Schedule of diluted net loss per share | 2022 2021 Common Stock Warrants 4,194,236 142,713 Common Stock Options - 1,480 Convertible Debt 8,827 8,759 Total 4,203,063 152,952 |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
STOCK OPTIONS AND WARRANTS | |
Schedule of Option Activity | Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Shares Price Term Value Balance Outstanding, January 1, 2021 62,000 $ 1.19 0.60 $ 242,200 Granted - - - - Forfeited - - - - Exercised - - - - Expired (25,000 ) - - - Balance Outstanding, December 31, 2021 37,000 $ 1.32 0.01 $ 75,850 Granted - - - - Forfeited - - - - Exercised - - - - Expired (37,000 ) - - - Balance Outstanding, December 31, 2022 - $ - - $ - Exercisable, December 31, 2022 - $ - - $ - |
Summary of Warrants Activity | Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Shares Price Term Value Balance Outstanding, January 1, 2021 45,587 $ 160.25 3.01 $ - Granted 101,343 50.50 2.04 - Forfeited - - - - Exercised - - - - Expired - - - - Balance Outstanding, December 31, 2021 147,930 $ 50.50 2.04 $ 4,992,621 Granted 9,030,301 5.96 4.18 - Forfeited (424,767 ) - - - Exercised (4,559,228 ) - - - Expired - - - - Balance Outstanding, December 31, 2022 4,194,236 $ 8.31 5.04 $ 2,562,600 Exercisable, December 31, 2022 4,194,236 $ 8.31 5.04 $ 2,562,600 |
DISAGGREGATION OF REVENUE (Tabl
DISAGGREGATION OF REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
DISAGGREGATION OF REVENUE | |
Schedule of Revenue Disaggregation | Country 2022 2021 Croatia $ 38,596 $ 18,441 Cyprus 92,685 112,640 Denmark - 53,710 Germany - 13,370 Greece 49,812,839 55,564,240 Italy - 15,446 UK 403,532 461,820 Total $ 50,347,652 $ 56,239,667 |
ORGANIZATION AND NATURE OF BU_2
ORGANIZATION AND NATURE OF BUSINESS (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue | $ 50,347,652 | $ 56,239,667 | |
Net cash used in operations | 14,870,639 | ||
Net loss | (13,055,320) | (7,847,639) | |
Working capital | 34,296,033 | ||
Accumulated deficit | (66,232,813) | (34,345,506) | |
Stockholders' equity | 39,284,295 | 4,379,463 | $ (4,161,013) |
Cash reserves | 20,700,000 | 286,000 | |
Amount raised from equity financings | 46,000,000 | ||
Proceeds from exercise of warrants | 10,500,000 | ||
Outstanding debt | 26,000,000 | $ 10,900,000 | |
Debt reduced | $ 15,100,000 | ||
ICC International Cannabis Corp [Member] | |||
Closing price | $ 0 | $ 0 | |
Equity method investment shares acquired, value | $ 0 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Euro [Member] | ||
Average exchange rate for the period | ||
USD exchange rate | 1.0698 | 1.1318 |
USD average exchange rate | 1.0534 | 1.1830 |
GBP [Member] | ||
Average exchange rate for the period | ||
USD exchange rate | 1.2077 | 1.3500 |
USD average exchange rate | 1.2371 | 1.3764 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 12 Months Ended |
Dec. 31, 2022 | |
Vehicles [Member] | |
Estimated Useful Life | 6 years |
Machinery [Member] | |
Estimated Useful Life | 20 years |
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 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Fair value of assets and liabilities | $ 6,681 | $ 6,696 |
Marketable securities - ICC International Cannabis Corp. [Member] | ||
Fair value of assets and liabilities | 0 | 0 |
Marketable securities - National Bank of Greece [Member] | ||
Fair value of assets and liabilities | 6,681 | 6,696 |
Level 1 [Member] | ||
Fair value of assets and liabilities | 6,681 | 6,696 |
Level 1 [Member] | Marketable securities - ICC International Cannabis Corp. [Member] | ||
Fair value of assets and liabilities | 0 | 0 |
Level 1 [Member] | Marketable securities - National Bank of Greece [Member] | ||
Fair value of assets and liabilities | 6,681 | 6,696 |
Level 2 [Member] | Marketable securities - ICC International Cannabis Corp. [Member] | ||
Fair value of assets and liabilities | 0 | 0 |
Level 2 [Member] | Marketable securities - National Bank of Greece [Member] | ||
Fair value of assets and liabilities | 0 | 0 |
Level 3 [Member] | Marketable securities - ICC International Cannabis Corp. [Member] | ||
Fair value of assets and liabilities | 0 | 0 |
Level 3 [Member] | Marketable securities - National Bank of Greece [Member] | ||
Fair value of assets and liabilities | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - integer | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Number of 10% clients | 0 | 1 |
Percentage of total revenue | 0% | 15.33% |
Percentage of total AR | 0% | 35.08% |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Weighted average number of common shares outstanding Basic | 1,928,172 | 656,933 |
Weighted average number of common and equivalent shares outstanding - Diluted | 1,928,172 | 656,933 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 19, 2018 | |
Reclassified from line of credit to Notes payable | $ 407,174 | |||
Reclassified to accumulated amortization of goodwill and intangible assets | 7,393 | |||
Reclassified to marketable securities | 4,772 | |||
Operating lease right-of-use asset | $ 821,069 | 834,468 | ||
Financing lease right-of-use asset | 291,762 | 211,099 | ||
Reclassified to note payable of cash flows | 92,826 | |||
Reclassified from accounts receivable | 366,269 | |||
VAT net receivable and payable balance | 79,373 | 400,616 | ||
Long-term liability | 0 | 0 | ||
Allowance for doubtful accounts | 7,309,311 | 1,702,743 | ||
Cash on hand | 15,690 | 25,773 | ||
Foreign accounts | 831,793 | 250,139 | ||
Depreciation expense | 70,109 | 319,337 | ||
Amortization expense | 33,085 | 33,085 | ||
Goodwill | 49,697 | 49,698 | $ 49,697 | |
Reduction in additional paid-in capital | 294,000 | |||
Reduction in accumulated deficit | 53,248 | |||
Reduction in convertible notes payable | $ 240,752 | |||
United Kingdom Of England [Member] | ||||
Income tax rate | 19% | |||
Greece [Member] | ||||
Valuation allowance | $ 2,371,886 | |||
Income tax rate | 22% | |||
ICC International Cannabis Corp [Member] | ||||
Equity method investment aggregate cost | $ 0 | 0 | $ 0 | |
Total amounts in account | $ 101,589 | $ 134,935 | ||
Income tax rate | 22% | |||
Equity method investment shares acquired, shares | 3,000,000 | 3,000,000 | ||
Closing price | $ 0 | $ 0 | ||
National Bank of Greece [Member] | ||||
Equity method investment aggregate cost | $ 6,681 | $ 6,696 | ||
Equity method investment shares acquired, shares | 16,666 | 16,666 | ||
Closing price | $ 0.40 | $ 0.40 | ||
Pancreta Bank [Member] | ||||
Equity method investment aggregate cost | $ 8,200 | $ 4,416 |
MARKETABLE SECURITIES (Details
MARKETABLE SECURITIES (Details Narrative) | 1 Months Ended | 12 Months Ended | |||||
Jul. 16, 2018 USD ($) shares | May 17, 2018 USD ($) shares | Dec. 31, 2022 CAD ($) | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2022 EUR (€) | Dec. 31, 2021 USD ($) $ / shares shares | Sep. 30, 2019 | |
Marketable securities | $ 4,772 | ||||||
Marketable securities - National Bank of Greece [Member] | |||||||
Closing price of shares | $ / shares | $ 0.40 | $ 0.40 | |||||
Marketable securities | $ 6,680 | $ 6,696 | |||||
Shares issued as marketable securities | shares | 16,666 | 16,666 | |||||
Marketable securities - Divsersa S.A. [Member] | |||||||
Stock issued during the period, amount | $ 8,200 | ||||||
Cosmo Farmacy LP [Member] | |||||||
Investement | $ 160,470 | $ 169,770 | |||||
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% | ||||||
Cash contributed to limited partner | € | € 150,000 | ||||||
Equity ownership remaining | 30% | ||||||
Marathon Global Inc [Member] | May and July 2018 [Member] | |||||||
Consideration for the distribution services, shares | $ 5,000,000 | ||||||
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 | ||||
Cash received upon gross sales | $ 2,750,000 | ||||||
Marathon Global Inc [Member] | Distribution and Equity Acquisition Agreement [Member] | Gross Sales [Member] | |||||||
Cash received upon gross sales | 2,750,000 | ||||||
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 | ||||||
Cash received upon gross sales | 2,750,000 | ||||||
Gross sales | $ 6,500,000 | ||||||
Share Exchange Agreement [Member] | ICC [Member] | |||||||
Investement | $ 0 | 0 | |||||
Upfront cash received | $ 211,047 | ||||||
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 | 3,000,000 | |||||
Additional shares issued, amount | $ 0 | $ 0 | |||||
Net unrealized gain on fair value investment | $ 1,676 | $ 2,541 | |||||
Share Exchange Agreement [Member] | Marathon Global Inc [Member] | |||||||
Shares of Marathon transferred by company to KBB | shares | 2,500,000 | ||||||
Gain on exchange of investment | $ 2,092,200 | $ 1,953,000 | |||||
Share Exchange Agreement [Member] | Kaneh Bosm Biotechnology Inc [Member] | |||||||
Transfer of shares | shares | 2,500,000 | ||||||
Share Exchange Agreement [Member] | Kaneh Bosm Biotechnology Inc [Member] | Canadian Securities Exchange [Member] | |||||||
Exchange of shares | shares | 5,000,000 |
PROPERTY PLANT AND EQUIPMENT (D
PROPERTY PLANT AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Property plant and equipment | $ 2,694,848 | $ 2,822,525 |
Less: Accumulated depreciation | (877,823) | (934,473) |
Total | 1,817,025 | 1,888,052 |
Computers and software [Member] | ||
Property plant and equipment | 138,783 | 141,490 |
Vehicles [Member] | ||
Property plant and equipment | 107,976 | 96,657 |
Leasehold Improvements [Member] | ||
Property plant and equipment | 502,882 | 519,278 |
Furniture, fixtures and equipment [Member] | ||
Property plant and equipment | $ 1,945,207 | $ 2,065,100 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 19, 2018 |
Goodwill and intangible assets, gross | $ 856,994 | $ 559,529 | |
Less: Accumulated Amortization | 199,777 | 123,460 | |
Subtotal | 657,217 | 436,069 | |
Goodwill | 49,697 | 49,698 | $ 49,697 |
Total | 706,914 | 485,767 | |
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 | $ 643,204 | $ 345,739 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS (Details 1) | Dec. 31, 2022 USD ($) |
GOODWILL AND INTANGIBLE ASSETS | |
2023 | $ 81,406 |
2024 | 82,318 |
2025 | 81,826 |
2026 | 43,637 |
2027 | 43,637 |
Thereafter | 324,393 |
Sum | $ 657,217 |
LOAN RECEIVABLE (Details Narrat
LOAN RECEIVABLE (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Oct. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
LOAN RECEIVABLE | |||
Prepayments of loan | $ 4,849,221 | ||
Interest rate | 5.50% | ||
Principal payments | $ 356,906 | ||
Short-term receivable | 377,038 | $ 377,590 | |
Interest payments | 204,047 | ||
Long term receivables | $ 3,792,034 | $ 4,410,689 | |
Loan receivables term | 360 days | ||
Decription of loan payment | the Company is to receive 120 equal payments over the term of the loan |
CAPITAL STRUCTURE (Details Narr
CAPITAL STRUCTURE (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||||||||||||||
Dec. 15, 2022 | Jun. 07, 2022 | May 02, 2022 | Dec. 08, 2021 | Aug. 04, 2021 | Jul. 13, 2021 | Feb. 05, 2021 | Dec. 19, 2022 | Oct. 20, 2022 | May 25, 2022 | Feb. 28, 2022 | Dec. 29, 2021 | Sep. 15, 2021 | Jul. 19, 2021 | Jun. 23, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | May 01, 2022 | Mar. 03, 2022 | Dec. 31, 2020 | Oct. 29, 2020 | |
Preferred stock, shares authorized | 100 | 100 | |||||||||||||||||||
Preferred stock, shares outstanding | 0 | 0 | |||||||||||||||||||
Preferred stock, shares issued | 0 | 0 | |||||||||||||||||||
Restricted shares of Common stock | 72,000 | ||||||||||||||||||||
Stock earned per month | 8,000 | ||||||||||||||||||||
Expenses during stock-based compensation | $ 0 | $ 5,904,000 | |||||||||||||||||||
Earned during stock-based compensation | 72,000 | ||||||||||||||||||||
Description of late filing of registration statement | the 1st anniversary (30 days following the event date) of the event which along with an additional lumpsum amount of $2,000,000 agreed to paid to the investors as additional damages led to a total amount of $2,250,260 concerning liquidated damages related to the February Private Placement within the year ended December 31, 2022 | ||||||||||||||||||||
Retained agreement descriptions | The shares were valued on the date of the agreement at $82.00 per share or $5,904,000, which was be amortized over the term of the agreement | ||||||||||||||||||||
Liquidated damages payable | $ 250,260 | ||||||||||||||||||||
Deemed dividend | $ 8,189,515 | ||||||||||||||||||||
Conversion price description | from $75.00 to $15.54 | ||||||||||||||||||||
Conversion price | $ 15.54 | ||||||||||||||||||||
Issued shares of common stock upon the cashless exercise | 526,112 | ||||||||||||||||||||
Cashless exercise warrants | 776,674 | ||||||||||||||||||||
Issued shares of common stock upon the exercise | 3,608,667 | ||||||||||||||||||||
Convertible stock | 6,000 | ||||||||||||||||||||
Conversion of stock in to common stock | 386,588 | ||||||||||||||||||||
Conversion of stock value | $ 5,452,300 | ||||||||||||||||||||
Common stock, shares authorized | 300,000,000 | 300,000,000 | |||||||||||||||||||
Common stock, shares issued | 10,605,412 | 701,780 | |||||||||||||||||||
Common stock, shares outstanding | 10,589,915 | 686,283 | |||||||||||||||||||
Series A preferred stock | $ 5,452,300 | ||||||||||||||||||||
Deemed dividend on issuance of warrants | (5,788,493) | ||||||||||||||||||||
Description of reverse split | the Company announced a reverse stock split with a ratio of 1-for-25 (one-for-twenty five) effective at the opening of the business day on Friday, December 16, 2022. The CUSIP number of the Company after the split will change to 221413-305. The reverse stock split was authorized at the Company’s Annual General Meeting (“AGM”) on December 2, 2022 and was approved by the Company’s Board of Directors on December 15, 2022 | ||||||||||||||||||||
Issued shares of common stock, value | 175,941 | ||||||||||||||||||||
Extinguishment of debt | $ 258,937 | ||||||||||||||||||||
Derivative liability | 54,293 | 45,665 | $ 11,629 | $ 460,728 | |||||||||||||||||
Gain on debt extinguishment | $ 445,636 | $ 1,004,124 | $ 606,667 | ||||||||||||||||||
Principal amount | $ 7,599,545 | ||||||||||||||||||||
Dividend rate | 0% | 0% | |||||||||||||||||||
Minimum [Member] | |||||||||||||||||||||
Volatility | 87.90% | 106.80% | |||||||||||||||||||
Term | 1 year 3 months | 6 months | |||||||||||||||||||
Risk free interest rate | 1.46% | 0.41% | |||||||||||||||||||
Maximum [Member] | |||||||||||||||||||||
Volatility | 157.20% | 107.30% | |||||||||||||||||||
Term | 9 months | 6 months 7 days | |||||||||||||||||||
Risk free interest rate | 3.75% | 0.44% | |||||||||||||||||||
General And Administrative Expense [Member] | |||||||||||||||||||||
Issued shares of consultant for services | 300 | ||||||||||||||||||||
Issued shares of consultant for services, value | $ 3,120 | ||||||||||||||||||||
General And Administrative Expense [Member] | November 21, 2022 [Member] | |||||||||||||||||||||
Issued shares of common stock, value | $ 173,121 | ||||||||||||||||||||
Issued shares of common stock | 40,000 | ||||||||||||||||||||
Debt Conversions [Member] | |||||||||||||||||||||
Convertible stock | 26,515 | ||||||||||||||||||||
Conversion of stock in to common stock | 1,574 | 8,535 | |||||||||||||||||||
Conversion of stock value | $ 38,144 | $ 550,144 | |||||||||||||||||||
Common stock, shares issued | 1,574 | ||||||||||||||||||||
Conversion of Debt | $ 1,190,000 | $ 0 | |||||||||||||||||||
Extinguishment of debt | $ 216,580 | ||||||||||||||||||||
Fair value, per share | $ 102.25 | ||||||||||||||||||||
Derivative liability | $ 40,663 | 284,169 | $ 11,629 | ||||||||||||||||||
Shares issued | 9,520 | ||||||||||||||||||||
Capital contribution | $ 973,420 | 959,025 | |||||||||||||||||||
Gain on debt extinguishment | $ 216,580 | 216,580 | (124,711) | ||||||||||||||||||
Increase in equity related to the conversion | 1,190,000 | 550,144 | |||||||||||||||||||
Debt Exchange Agreement [Member] | |||||||||||||||||||||
Common stock, shares issued | 12,852 | 10,390 | |||||||||||||||||||
Share issued price per share | $ 96.25 | ||||||||||||||||||||
Debt Exchange Agreement [Member] | Lender [Member] | |||||||||||||||||||||
Shares issued | 31,273 | ||||||||||||||||||||
Gain on debt extinguishment | $ 445,636 | ||||||||||||||||||||
Principal amount | $ 3,010,000 | ||||||||||||||||||||
Exchange rate | $ 96.25 | ||||||||||||||||||||
Share issued price per share | $ 82 | ||||||||||||||||||||
Increase in equity | $ 2,564,363 | ||||||||||||||||||||
Debt Exchange Agreement [Member] | Chief Executive Officer [Member] | |||||||||||||||||||||
Issued shares of common stock | 5,000 | 12,852 | 6,667 | 8,333 | |||||||||||||||||
Fair value, per share | $ 150 | $ 102.25 | $ 100.75 | $ 107.50 | $ 125 | ||||||||||||||||
Gain on debt extinguishment | 1,314,117 | ||||||||||||||||||||
Aggregate common stock value | $ 750,000 | $ 1,000,000 | $ 3,000,000 | ||||||||||||||||||
Principal amount | $ 750,000 | $ 1,606,500 | $ 1,000,000 | $ 1,250,000 | $ 3,000,000 | ||||||||||||||||
Exchange rate | $ 86 | $ 125 | $ 150 | $ 150 | $ 150 | ||||||||||||||||
Fair value of shares of common stock, per share | $ 100.75 | $ 107.50 | |||||||||||||||||||
Increase in equity | $ 1,000,000 | $ 1,250,000 | 3,000,000 | ||||||||||||||||||
Exchange share of common stock | 9,520 | 1,250,000 | 20,000 | ||||||||||||||||||
Share issued price per share | $ 86 | $ 102.25 | $ 150 | $ 150 | $ 125 | ||||||||||||||||
Gain on settlement of debt | $ 292,383 | ||||||||||||||||||||
Securities Purchase Agreement [Member] | |||||||||||||||||||||
Common stock, shares issued | 1,574 | ||||||||||||||||||||
Derivative liability | $ 11,629 | ||||||||||||||||||||
Issuance of Warrants [Member] | |||||||||||||||||||||
Deemed dividend | $ 8,480,379 | ||||||||||||||||||||
Conversion price description | from $82.50 to $15.54 | ||||||||||||||||||||
Warrants grant | 344,765 | 1,333 | |||||||||||||||||||
Stock based compensation | $ 24,101 | ||||||||||||||||||||
Common stock fair value | $ 26.75 | $ 26.75 | |||||||||||||||||||
Exercise price | $ 82.50 | $ 82.50 | |||||||||||||||||||
Volatility | 121.47% | 107.30% | |||||||||||||||||||
Dividend rate | 0% | 0% | |||||||||||||||||||
Term | 5 years 2 months 26 days | 5 years 6 months 3 days | |||||||||||||||||||
Discount rate | 2.99% | 2.71% | |||||||||||||||||||
Outstanding warrants | 80,000 | ||||||||||||||||||||
Issuance of Warrants [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||||
Issued shares of common stock, value | $ 7,500,000 | ||||||||||||||||||||
Issued shares of common stock | 2,486,667 | ||||||||||||||||||||
Common stock fair value | $ 2.20 | ||||||||||||||||||||
Exercise price | $ 3 | ||||||||||||||||||||
Volatility | 135.05% | ||||||||||||||||||||
Dividend rate | 0% | ||||||||||||||||||||
Warrants exercise price | $ 3 | ||||||||||||||||||||
Warrants exercise term | 7 years | ||||||||||||||||||||
Issued shares of warrants | 5,000,000 | ||||||||||||||||||||
Discount to common stock associated with warrants | $ 8,437,977 | ||||||||||||||||||||
Issued shares of warrants, value | 5,000,000 | ||||||||||||||||||||
Issuance of Warrants [Member] | Securities Purchase Agreement [Member] | October 20, 2022 [Member] | |||||||||||||||||||||
Deemed dividend | $ 1,067,876 | ||||||||||||||||||||
Common stock fair value | $ 2.20 | ||||||||||||||||||||
Dividend rate | 0% | ||||||||||||||||||||
Description of warrants | The Company valued (a) the fair value of the 424,765 warrants immediately before exchange in the amount of $645,108, (b) the fair value of the warrants immediately after the exchange in the amount of $1,712,984, and (c) recorded the difference as a deemed dividend in the amount of $1,067,876. | ||||||||||||||||||||
Cancelled warrants | 424,765 | ||||||||||||||||||||
Exchange for additional warrants with existing warrant holders | 849,530 | ||||||||||||||||||||
Warrants exercise price | $ 3 | ||||||||||||||||||||
Warrants exercise term | 7 years | ||||||||||||||||||||
Exercise price, pre-exchange | $ 15.54 | ||||||||||||||||||||
Exercise price, pro-exchange | $ 3 | ||||||||||||||||||||
Issuance of Warrants [Member] | Securities Purchase Agreement [Member] | December 19, 2022 [Member] | |||||||||||||||||||||
Issued shares of common stock | 2,828,320 | ||||||||||||||||||||
Common stock fair value | $ 11.50 | ||||||||||||||||||||
Exercise price | $ 7.59 | ||||||||||||||||||||
Volatility | 157.53% | ||||||||||||||||||||
Dividend rate | 0% | ||||||||||||||||||||
Term | 5 years | ||||||||||||||||||||
Risk free interest rate | 3.70% | ||||||||||||||||||||
Cancelled warrants | 260,870 | ||||||||||||||||||||
Warrants exercise price | $ 11.50 | ||||||||||||||||||||
Aggregate purchase price | $ 32,525,680 | ||||||||||||||||||||
Issued shares of warrants | 2,828,320 | ||||||||||||||||||||
Discount to common stock associated with warrants | $ 17,778,260 | ||||||||||||||||||||
Issuance of Warrants [Member] | Securities Purchase Agreement [Member] | Minimum [Member] | |||||||||||||||||||||
Volatility | 129.02% | ||||||||||||||||||||
Term | 2 years | ||||||||||||||||||||
Risk free interest rate | 4.36% | ||||||||||||||||||||
Issuance of Warrants [Member] | Securities Purchase Agreement [Member] | Minimum [Member] | October 20, 2022 [Member] | |||||||||||||||||||||
Exercise price | $ 3 | ||||||||||||||||||||
Volatility | 131.90% | ||||||||||||||||||||
Term | 4 years 10 months 13 days | ||||||||||||||||||||
Risk free interest rate | 4.36% | ||||||||||||||||||||
Issuance of Warrants [Member] | Securities Purchase Agreement [Member] | Maximum [Member] | |||||||||||||||||||||
Volatility | 135.05% | ||||||||||||||||||||
Term | 7 years | ||||||||||||||||||||
Risk free interest rate | 4.62% | ||||||||||||||||||||
Issuance of Warrants [Member] | Securities Purchase Agreement [Member] | Maximum [Member] | October 20, 2022 [Member] | |||||||||||||||||||||
Exercise price | $ 15.54 | ||||||||||||||||||||
Volatility | 132.30% | ||||||||||||||||||||
Term | 7 years | ||||||||||||||||||||
Risk free interest rate | 4.45% | ||||||||||||||||||||
Series A Preferred Stock | |||||||||||||||||||||
Preferred stock, shares authorized | 6,000,000 | 6,000,000 | |||||||||||||||||||
Preferred stock, shares outstanding | 0 | 0 | |||||||||||||||||||
Preferred stock, shares issued | 0 | 0 | |||||||||||||||||||
Deemed dividend | $ 372,414 | ||||||||||||||||||||
Description of convertible into Common Stock | Series A Preferred Stock was initially convertible into the Company’s Common Stock as determined by dividing the number of shares of Series A Preferred Stock to be converted by the lower of (i) $75.00 or (ii) 80% of the average volume weighted average price for the Company’s Common Stock for the five (5) trading days immediately following the effectiveness of the registration statement concerning the shares (the “Conversion Price”). On June 14, 2022, the Conversion Price was reset to $15.54 per share. | ||||||||||||||||||||
Dividend rate, per year | 8% | ||||||||||||||||||||
Preferred stock, Liquidation Preference | 6,000,000 | ||||||||||||||||||||
Series A Preferred Stock | Private Placement [Member] | |||||||||||||||||||||
Deemed dividend on issuance of warrants | $ (5,788,493) | ||||||||||||||||||||
Sales of shares | 6,000 | ||||||||||||||||||||
Warrants | 80,000 | ||||||||||||||||||||
Aggregate gross proceeds warrants | $ 6,000,000 | ||||||||||||||||||||
Shares price, per share | $ 1,000 | ||||||||||||||||||||
Warrants, Description | The Warrants were initially exercisable to purchase shares of common stock at $82.50 per share, or 110% of the Series A Shares initial conversion price and will expire five and one-half years following the initial exercise date of the Warrants | ||||||||||||||||||||
Warrants Black-Scholes option pricing model , Description | The warrants were valued using the Black-Scholes option pricing model with the following terms: a) exercise price of $82.50, b) common stock fair value of $85.50, c) volatility of 118%, d) discount rate of 1.71%, e) term of 5.50 years and f) dividend rate of 0%. | ||||||||||||||||||||
Additional value of Warrants | 2,000,000 | ||||||||||||||||||||
Series A Preferred Stock | Securities Purchase Agreement [Member] | |||||||||||||||||||||
Warrants exercise price | $ 3 | ||||||||||||||||||||
Preferred Stock, designated shares | 2,500,000 | ||||||||||||||||||||
Treasury Stocks [Member] | |||||||||||||||||||||
Cancelled shares of common stock | 2,285 | ||||||||||||||||||||
Cancelled shares of common stock, Value | $ 171,360 | ||||||||||||||||||||
Treasury Stocks [Member] | Stock Purchase Agreement [Member] | |||||||||||||||||||||
Sale of treasury shares | 2,600 | ||||||||||||||||||||
Treasury Stock, Common, Value | $ 250,000 | ||||||||||||||||||||
Sale of treasury shares, Par Value | $ 96.25 | ||||||||||||||||||||
Purchase of treasury shares of common stock | 3,769 | ||||||||||||||||||||
Purchase of treasury shares of common stock, aggregate value | $ 376,863 | ||||||||||||||||||||
Purchase of treasury shares, Par Value | $ 100 | ||||||||||||||||||||
Series B Preferred Stock | Securities Purchase Agreement [Member] | |||||||||||||||||||||
Warrants exercise price | $ 3 | ||||||||||||||||||||
Preferred Stock, designated shares | 2,500,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Loss before provision for income taxes | $ (13,055,320) | $ (7,847,639) |
Domestic [Member] | ||
Loss before provision for income taxes | (7,093,161) | (8,365,298) |
Foreign [Member] | ||
Loss before provision for income taxes | $ (5,962,159) | $ 517,659 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current tax provision | ||
Federal | $ 0 | $ 0 |
State | 0 | 0 |
Foreign | (75,724) | 802,364 |
Total current tax provision | (75,724) | 802,364 |
Deferred tax provision | ||
Domestic | 0 | 0 |
State | 0 | 0 |
Foreign | 850,775 | (688,354) |
Total deferred tax provision | 850,775 | (688,354) |
Total current provision | $ 775,051 | $ 114,010 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2020 | |
INCOME TAXES | ||
Income (loss) before income taxes | $ (13,055,320) | $ (7,847,639) |
Taxes under statutory US tax rates | (2,741,617) | (1,648,004) |
Increase in valuation allowance | 3,989,786 | 3,001,899 |
Foreign tax rate differential | 34,601 | (24,977) |
Permanent differences | 128,705 | (734,428) |
US tax on foreign income | 0 | 493,028 |
163(j) catch up | 0 | (76,888) |
Prior period adjustments | (186,143) | 52,034 |
State taxes | (450,280) | (948,654) |
Income tax expense | $ 775,052 | $ 114,010 |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 19, 2018 |
Goodwill | $ 49,697 | $ 49,698 | $ 49,697 |
Deferred Income Taxes [Member] | |||
Net operating loss carryforward | 5,899,702 | 4,515,900 | |
Capital loss carryforward | 801,744 | 801,744 | |
Section 163(j) carryforward | 561,130 | 0 | |
Nonqualified Stock Options | 0 | 96,104 | |
Foreign exchange | 297,263 | 13,438 | |
Allowance for doubtful accounts | 1,616,926 | 374,604 | |
Accrued expenses | 352,025 | 528,895 | |
Mark to market adjustment to securities | 358,761 | 358,761 | |
Lease liability | 259,381 | 253,620 | |
Gain on debt extinguishment | 0 | 0 | |
Depreciation | (22,914) | (6,765) | |
Total Deferred tax assets | 10,124,018 | 6,936,211 | |
Intangibles | (8,139) | (8,139) | |
Inventory | (49,961) | (14,728) | |
Right of use asset | (256,769) | (243,207) | |
Goodwill | (10,979) | (10,979) | |
Total Deferred tax liabilities | (325,848) | (277,053) | |
Valuation allowance | 9,798,170 | 5,808,384 | |
Net deferred tax assets (liabilities) | $ 0 | $ 850,774 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2020 | |
Federal Statutory Income Tax Rate, description | subject to limitation under IRC Section 382. Of the $17.2 million Federal NOL carryforwards, $2.5 million are pre-2018 and begin to expire in 2031. The remaining balance of $4.6 million, are limited to utilization of 80% of taxable income but do not have an expiration | |
Valuation allowances | $ 2,372,000 | $ 200,000 |
Net operating loss carry forward | 17,169,419 | |
UK [Member] | ||
Net operating loss carry forward | 1,450,783 | |
United States [Member] | ||
Net operating loss carry forward | $ 87,384 | |
Expiry | 2031 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Foreign currency translation | $ (413,279) | $ (493,527) |
Notes Payable - Related Party [Member] | ||
Beginning Balance | 464,264 | 501,675 |
Payments | (472,920) | 0 |
Foreign currency translation | 19,568 | (37,411) |
Ending Balance | $ 10,912 | $ 464,264 |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Conversion of debt | $ (1,190,000) | $ (4,616,500) |
Loans Payable - Related Party [Member] | ||
Beginning Balance | 1,293,472 | 1,629,246 |
Proceeds | 3,635,756 | 6,377,156 |
Payments | (4,851,678) | (133,552) |
Conversion of debt | 0 | (6,000,000) |
Settlement of lawsuit | 0 | (600,000) |
Foreign currency translation | (64,729) | 20,623 |
Ending Balance | $ 12,821 | $ 1,293,472 |
RELATED PARTY TRANSACTIONS (D_3
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
May 10, 2021 | May 17, 2022 | Feb. 25, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 20, 2018 | May 25, 2022 | Jan. 01, 2022 | |
Outstanding principal balance | $ 2,158,417 | $ 5,503,507 | ||||||
Debt instrument conversion price | $ 15.54 | |||||||
Shares issued | 10,605,412 | 701,780 | ||||||
Prepaid expenses | $ 7,599,545 | |||||||
Accrued interest | $ 275,547 | $ 1,019,889 | ||||||
Interest rate | 10% | |||||||
Repaid amount | $ 1,806,678 | 3,045,000 | ||||||
Revenue | 50,347,652 | 56,239,667 | ||||||
Grigorios Siokas [Member] | ||||||||
Borrowing | 2,933,165 | $ 1,718,400 | $ 702,591 | |||||
Outstanding principal balance | 452,720 | |||||||
Accrued interest | 206,355 | |||||||
Interest rate | 4.70% | |||||||
Maturity date | Mar. 18, 2019 | |||||||
Litigation settlement | $ 600,000 | |||||||
Plantiff attorney fees | 120,000 | |||||||
Litigation cost | $ 4,137 | |||||||
Grigorios Siokas [Member] | February Note [Member] | Senior Promissory Note [Member] | ||||||||
Interest rate | 18% | |||||||
Maturity date | Apr. 30, 2020 | |||||||
Grigorios Siokas Three [Member] | ||||||||
Borrowing | 2,040,635 | |||||||
Outstanding principal balance | 1,293,472 | |||||||
Additional proceeds from debt | 275,306 | |||||||
Repayment of loans | 133,552 | |||||||
Foreign curreny translation | $ 64,729 | 20,623 | ||||||
Debt instrument conversion price | $ 150 | |||||||
Convertible share description | Mr. Siokas whereby the Company exchanged an aggregate total of $6,000,000 of debt into 40,000 shares of Common Stock at above market prices. | |||||||
Debt instrument converted amount | $ 2,250,000 | |||||||
Shares issued | 15,000 | |||||||
Dimitrios Goulielmos [Member] | ||||||||
Outstanding principal balance | $ 10,912 | 11,544 | ||||||
DOC Pharma S.A. [Member] | ||||||||
Foreign curreny translation | $ 19,568 | 37,411 | ||||||
Interest rate | 5.50% | |||||||
Payments to purchase products | $ 1,755,103 | 3,084,805 | ||||||
Accounts payable balance | 201,991 | 565,756 | ||||||
Accounts receivable balance | 2,070,570 | 2,901,300 | ||||||
Prepaid balance | 3,320,345 | 3,263,241 | $ 4,279,200 | |||||
Revenue | $ 1,058,780 | 978,321 | ||||||
Agreement term | 5 years | |||||||
Pieces per product | 1,000 pieces | |||||||
Loan current portion | $ 427,920 | |||||||
Loan non-current portion | 3,851,280 | |||||||
Inventroy purchase | $ 1,742,282 | 2,010,517 | ||||||
Description of research and development | Design & Development (€725,000); Control and Product Manufacturing (€250,000) and Clinical Study and Research (€450,000). In the year ended December 31, 2021, SkyPharm bought 67 licenses at value of €261,300 ($289,860) from Doc Pharma which was the 18.33% of the total cost. | SkyPharm bought another 14 licenses at a value of €293,200 ($313,665) from Doc Pharma which was the 20.57% of the total cost. SkyPharm has bought in total as of December 31, 2022, 81 licenses at value of €554,500 ($593,204) which is 38.91% of the total cost. The agreement will be terminated on December 31, 2025. | ||||||
Panagiotis Kozaris [Member] | ||||||||
Shares owned | 143,056 | |||||||
Prepaid expenses | $ 143,056 | $ 0 | ||||||
Prepaid balance | 376,901 | |||||||
Maria Kozari [Member] | ||||||||
Accounts receivable balance | 760,025 | 366,270 | ||||||
Prepaid balance | 48,230 | |||||||
Net sales | 463,467 | $ 358,524 | ||||||
Cumulative bad debt allowance | $ 59,957 |
LINES OF CREDIT (Details)
LINES OF CREDIT (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Subtotal | $ 5,758,737 | $ 4,702,554 |
National [Member] | ||
Subtotal | 3,103,605 | 3,265,236 |
Alpha [Member] | ||
Subtotal | 991,492 | 947,333 |
Pancreta [Member] | ||
Subtotal | 1,232,128 | 489,985 |
EGF [Member] | ||
Subtotal | $ 431,512 | $ 0 |
LINES OF CREDIT (Details Narrat
LINES OF CREDIT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Interest Expense | $ 2,345,410 | $ 2,823,842 |
COVID-19 Government Funding [Member] | ||
Interest Expense | 294,156 | 283,415 |
Line of Credit [Member] | National Bank of Greece Two [Member] | ||
Borrowing | 1,069,800 | 1,131,800 |
Outstanding debt balance | 984,653 | 1,079,823 |
Line of Credit [Member] | Alpha Bank of Greece [Member] | ||
Borrowing | 1,069,800 | 1,131,800 |
Outstanding debt balance | 991,429 | 947,333 |
Line of Credit [Member] | Pancreta Bank of Greece [Member] | ||
Borrowing | 1,487,022 | 565,900 |
Outstanding debt balance | 1,232,128 | 489,985 |
National Bank of Greece One [Member] | Line of Credit [Member] | ||
Borrowing | 3,182,655 | 2,489,960 |
Outstanding debt balance | 2,118,952 | $ 2,185,413 |
EGF [Member] | Line of Credit [Member] | ||
Borrowing | 427,920 | |
Line of credit facility outstanding balance | $ 431,512 |
CONVERTIBLE DEBT (Details)
CONVERTIBLE DEBT (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
CONVERTIBLE DEBT | ||
Beginning balance convertible notes | $ 640,000 | $ 1,447,000 |
New notes | 0 | 625,000 |
Payments | (525,000) | (907,000) |
Conversion to common stock | (15,000) | (525,000) |
Subtotal notes | 100,000 | 640,000 |
Debt discount at year end | 0 | (258,938) |
Convertible note payable net of discount | $ 100,000 | $ 381,062 |
CONVERTIBLE DEBT (Details 1)
CONVERTIBLE DEBT (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CONVERTIBLE DEBT | ||
Beginning balance | $ 45,665 | $ 460,728 |
Issuances to debt discount | 0 | 62,619 |
Reduction of derivative related to conversions | 11,629 | 284,169 |
Change in fair value of derivative liabilities | 20,257 | (193,513) |
Ending balance | $ 54,293 | $ 45,665 |
CONVERTIBLE DEBT (Details 2)
CONVERTIBLE DEBT (Details 2) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Dividend yield | 0% | 0% |
Minimum [Member] | ||
Contractual terms (in years) | 1 year 3 months | 6 months |
Risk-free interest rate | 1.46% | 0.41% |
Expected volatility | 87.90% | 106.80% |
Maximum [Member] | ||
Contractual terms (in years) | 9 months | 6 months 7 days |
Risk-free interest rate | 3.75% | 0.44% |
Expected volatility | 157.20% | 107.30% |
CONVERTIBLE DEBT (Details Narra
CONVERTIBLE DEBT (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||
Dec. 21, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | May 01, 2022 | Sep. 17, 2021 | Jul. 14, 2021 | Jan. 07, 2021 | Dec. 31, 2020 | Dec. 16, 2020 | |
Convertible note payable net | $ 525,000 | ||||||||
Convertible notes payable, principal amount | 100,000 | $ 525,000 | |||||||
Debt discount | 294,000 | ||||||||
Accrued Interest expense | 13,740 | ||||||||
Derivative liability | $ 54,293 | $ 45,665 | $ 11,629 | $ 460,728 | |||||
Shares issued | 10,605,412 | 701,780 | |||||||
Interest expense | $ 377,038 | $ 377,590 | |||||||
Accumulated deficit | (66,232,813) | (34,345,506) | |||||||
Extinguishment of debt | $ 258,937 | ||||||||
Common Stocks | |||||||||
Average price per share | $ 64.50 | ||||||||
Accrued interest | $ 25,144 | ||||||||
Fees into common stock shares | 8,535 | ||||||||
Securities Purchase Agreement [Member] | |||||||||
Convertible note payable net | $ 266,063 | ||||||||
Convertible notes payable, principal amount | 525,000 | ||||||||
Gain on change in fair value of derivative liability | 14,450 | ||||||||
Outstanding balance | 22,776 | ||||||||
Accrued intetest | 15,166 | 26,515 | |||||||
Amortization of debt discount | 60,063 | ||||||||
Remaining debt discount | 258,937 | ||||||||
Derivative liability | $ 11,629 | ||||||||
Shares issued | 1,574 | ||||||||
Shares issued at a fair value | $ 38,144 | ||||||||
Securities Purchase Agreement [Member] | Convertible Promissory Note [Member] | |||||||||
Amortization of debt discount | 62,619 | ||||||||
Derivative liability | $ 54,293 | 39,843 | $ 62,619 | ||||||
Debt original issue discount | $ 40,000 | 25,000 | $ 25,000 | ||||||
Financing cost | $ 3,000 | ||||||||
Interest rate | 8% | 10% | |||||||
Default interest rate | 18% | 8% | |||||||
Purchase price principal amount | $ 100,000 | ||||||||
Note issued | $ 540,000 | ||||||||
Cash proceeds from conversion | $ 500,000 | ||||||||
Conversion discount to price | 30% | ||||||||
Beneficial conversion feature's intrinsic value | $ 25,000 | ||||||||
Note issued upon exchange for cash | $ 500,000 | ||||||||
Convertible debt description | (i) $100.00 or (ii) 80% of the average volume weighted average price for the Company’s Common Stock for the five (5) days prior to the date of Uplisting, subject to a floor of $75.00 per share. The shares of common stock issuable upon conversion of Series A Preferred Stock and exercise of the Warrants are subject to a Registration Right Agreement. The Warrant has an exercise price equal to 110% of the Conversion Price of the Series A Preferred Stock and expires five (5) years from the date of issuance. | ||||||||
Securities Purchase Agreement [Member] | Institutional investors [Member] | Senior Convertible Note 1 [Member] | |||||||||
Convertible notes payable, principal amount | $ 525,000 | ||||||||
Derivative liability | 0 | 5,822 | $ 284,169 | ||||||
Shares issued | 213,382 | ||||||||
Shares issued at a fair value | $ 959,024 | ||||||||
Interest expense | 18,185 | ||||||||
Accumulated deficit | (53,248) | ||||||||
Outstanding debt | 550,144 | ||||||||
Extinguishment of debt | $ 124,711 | ||||||||
Debt discount | 294,000 | $ 494,973 | $ 456,570 | ||||||
Transaction expenses | 43,000 | ||||||||
Amortized cost | $ 499,570 | ||||||||
Gain on the change in fair value of the derivative | 170,737 | ||||||||
Loss on the change in fair value of the derivative | $ 5,807 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Beginning balance loans | $ 18,226,062 | $ 22,814,594 |
Proceeds | 492,336 | 565,900 |
Payments | (12,541,343) | (265,421) |
Reclassification of Line of Credit | 407,174 | |
Conversion of debt | (1,190,000) | (4,616,500) |
Recapitalized upon debt modification | (1,084,735) | (86,670) |
Accretion of debt and debt discount | 1,079,844 | |
Subtotal | 5,017,987 | 18,226,062 |
Notes payable - long-term | (2,859,570) | (12,722,555) |
Debt forgiveness | (169,770) | |
Foreign currency translation | 35,823 | (423,245) |
Notes payable- short -term | 2,158,417 | 5,503,507 |
Loan Facility [Member] | ||
Beginning balance loans | 1,299,784 | 3,302,100 |
Proceeds | 0 | 0 |
Payments | (240,705) | (141,475) |
Reclassification of Line of Credit | 0 | |
Conversion of debt | (1,190,000) | (1,606,500) |
Recapitalized upon debt modification | (81,923) | (86,670) |
Accretion of debt and debt discount | 81,910 | |
Foreign currency translation | 130,934 | (167,671) |
Subtotal | 0 | 1,299,784 |
Notes payable - long-term | 0 | 0 |
Notes payable - short-term | 0 | 1,299,784 |
Debt forgiveness | 0 | |
Third Party [Member] | ||
Beginning balance loans | 10,077,977 | 12,631,284 |
Proceeds | 492,336 | 565,900 |
Payments | (9,494,823) | (62,878) |
Reclassification of Line of Credit | 0 | |
Conversion of debt | 0 | (3,010,000) |
Recapitalized upon debt modification | (781,752) | 0 |
Accretion of debt and debt discount | 781,752 | |
Foreign currency translation | 22,414 | (46,329) |
Subtotal | 1,505,078 | 10,077,977 |
Notes payable - long-term | (1,076,698) | (9,854,906) |
Notes payable - short-term | 428,380 | 223,071 |
Debt forgiveness | 0 | |
COVID Loans | ||
Beginning balance loans | 641,291 | 435,210 |
Proceeds | 0 | 0 |
Payments | (10,029) | (3,233) |
Reclassification of Line of Credit | 407,174 | |
Conversion of debt | 0 | 0 |
Recapitalized upon debt modification | 0 | 0 |
Accretion of debt and debt discount | 0 | |
Subtotal | 207,377 | 641,291 |
Notes payable - long-term | (178,172) | (417,649) |
Notes payable - short-term | 29,205 | 223,642 |
Debt forgiveness | (169,770) | |
Foreign currency translation | (16,711) | (28,090) |
Trade Facility [Member] | ||
Beginning balance loans | 6,207,010 | 6,446,000 |
Proceeds | 0 | 0 |
Payments | (2,795,786) | (57,835) |
Reclassification of Line of Credit | 0 | |
Conversion of debt | 0 | 0 |
Recapitalized upon debt modification | (221,060) | 0 |
Accretion of debt and debt discount | 216,182 | |
Subtotal | 3,305,532 | 6,207,010 |
Notes payable - long-term | (1,604,700) | (2,450,000) |
Debt forgiveness | 0 | |
Foreign currency translation | (100,814) | (181,155) |
Notes payable- short -term | $ 1,700,832 | $ 3,757,010 |
NOTES PAYABLE (Details 1)
NOTES PAYABLE (Details 1) | Dec. 31, 2022 USD ($) |
NOTES PAYABLE | |
2023 | $ 2,158,417 |
2024 | 794,171 |
2025 | 1,729,737 |
2026 | 204,829 |
2027 and thereafter | 130,833 |
Total Debt | 5,017,987 |
Less: notes payable - current portion | (2,158,417) |
Notes payable - long term portion | $ (2,859,570) |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) | 1 Months Ended | 12 Months Ended | |||||||||||||||||||
Mar. 03, 2022 USD ($) | Feb. 03, 2022 USD ($) | Aug. 04, 2021 USD ($) shares | Feb. 05, 2021 USD ($) shares | Dec. 30, 2020 USD ($) | Aug. 04, 2020 USD ($) | Jul. 03, 2020 USD ($) | May 12, 2020 USD ($) | Jul. 30, 2021 USD ($) | Nov. 19, 2020 USD ($) | Jun. 23, 2020 USD ($) | May 18, 2020 | Dec. 31, 2022 CAD ($) shares | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | Aug. 29, 2022 USD ($) | Oct. 29, 2020 USD ($) $ / shares shares | Oct. 17, 2018 USD ($) | Nov. 16, 2015 USD ($) | |
Stock issued for debt obligation | shares | 420,471 | 420,471 | |||||||||||||||||||
Accrued and unpaid interest | $ 309,365 | $ 563,613 | |||||||||||||||||||
Debt repayment during period | 50,000 | 3,233 | |||||||||||||||||||
Repayment of installment | 500,000 | 56,508 | |||||||||||||||||||
Repayments of debt | $ 4,000,000 | $ 1,100,000 | 187,215 | 10,466 | |||||||||||||||||
Notes payable | 12,479,735 | 605,387 | |||||||||||||||||||
Capitalized fees | 200,000 | ||||||||||||||||||||
Debt instruments final payament | $ 1,800,000 | 2,593,363 | |||||||||||||||||||
Debt prinicipal balance under agrreement | 1,406,637 | ||||||||||||||||||||
Debt outstanding amount | 3,950,000 | $ 0 | $ 578,850 | $ 56,936 | 64,347 | $ 3,010,000 | |||||||||||||||
Percentage of forgiveness | 50% | 50% | |||||||||||||||||||
Forgiveness recorde as other income | $ 177,450 | ||||||||||||||||||||
Loan received from related party | $ 366,900 | 150,441 | 169,770 | $ 2,500,000 | |||||||||||||||||
Non-cash interest expense | 216,182 | ||||||||||||||||||||
Senior promissory notes to unaffiliated third party | 510,000 | ||||||||||||||||||||
Decription of loan payment for interest | the Company of 31,273 shares of common stock (the “Exchange Shares”), at the rate of $96.25 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 $82.00 per share | ||||||||||||||||||||
Convertible notes payable, principal amount | $ 1,898,895 | 2,207,010 | |||||||||||||||||||
Agreement description | The note matures on August 5, 2026 and bears an annual interest rate that applies to 60% of the principal of the note that is based on a 365-day year, of 5.84% plus 3-month Euribor when Euribor is positive. Pursuant to the terms of the agreement, there is a nine-month grace period for principal repayment during which interest is accrued. The principal is to be repaid in 18 quarterly installments of €27,778 commencing three months from the end of the grace period | Company entered into an agreement with a third-party lender in the principal amount of €320,000 ($335,008). The Note matures on June 16, 2027 and bears an annual interest of 3.89% plus levy of 0.60% plus the 3-month Euribor (when positive). Pursuant to the agreement, there is a twelve-month grace period for principal repayment during which interest is accrued. The principal is to be repaid in 17 equal quarterly installments of €18,824 commencing on June 30, 2023 | Company entered into an agreement with a third-party lender in the principal amount of €320,000 ($335,008). The Note matures on June 16, 2027 and bears an annual interest of 3.89% plus levy of 0.60% plus the 3-month Euribor (when positive). Pursuant to the agreement, there is a twelve-month grace period for principal repayment during which interest is accrued. The principal is to be repaid in 17 equal quarterly installments of €18,824 commencing on June 30, 2023 | ||||||||||||||||||
Interest Rate | 10% | 10% | |||||||||||||||||||
Gains on debt extinguishment | $ 445,636 | $ 1,004,124 | $ 606,667 | ||||||||||||||||||
Accretion of debt and debt discount | $ 1,079,844 | ||||||||||||||||||||
Shares issued | shares | 10,605,412 | 701,780 | |||||||||||||||||||
Accrued interest expense | $ 0 | $ 527,604 | |||||||||||||||||||
Common stock exchange shares | shares | 31,273 | ||||||||||||||||||||
Outstanding interest | 436,383 | ||||||||||||||||||||
Forgiveness interest amount | $ 127,230 | ||||||||||||||||||||
Final repayment | shares | 1,800,000 | 1,800,000 | |||||||||||||||||||
Restricted shares | shares | 72,000 | 72,000 | |||||||||||||||||||
Debt discount | $ 294,000 | ||||||||||||||||||||
Notes payable- short -term | 2,158,417 | $ 5,503,507 | |||||||||||||||||||
Debt instruments periodic payment | $ 356,906 | ||||||||||||||||||||
Unaffiliated Third Party [Member] | Senior Promissory Notes [Member] | |||||||||||||||||||||
Debt outstanding amount | $ 3,000,000 | ||||||||||||||||||||
Loans payable | $ 4,000,000 | ||||||||||||||||||||
Description of loan repayment | The August 4 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 | 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) | 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) | |||||||||||||||||
June 23, 2020 [Member] | National Bank of Greece SA [Member] | |||||||||||||||||||||
Notes payable | $ 407,174 | ||||||||||||||||||||
Debt amount received from related party | $ 611,500 | ||||||||||||||||||||
Interest Rate | 2.70% | ||||||||||||||||||||
Debt outstanding amount | 346,112 | 407,174 | |||||||||||||||||||
Notes payable long term | $ 220,253 | 366,171 | |||||||||||||||||||
Maturity date | 60 years | ||||||||||||||||||||
August 29, 2022 [Member] | Promissory Notes [Member] | |||||||||||||||||||||
Debt outstanding amount | $ 16,667 | ||||||||||||||||||||
Agreement description | the Company entered into a promissory note for the principal amount $166,667. The Company received $150,000 in cash and recorded $16,667 as an original issue discount upon issuance. The promissory note matures on the earlier of (a) December 27, 2022, or (b) the date the Company completes a debt or equity financing of at least $1,000,000 | the Company entered into a promissory note for the principal amount $166,667. The Company received $150,000 in cash and recorded $16,667 as an original issue discount upon issuance. The promissory note matures on the earlier of (a) December 27, 2022, or (b) the date the Company completes a debt or equity financing of at least $1,000,000 | |||||||||||||||||||
Accured interest | $ 5,041 | ||||||||||||||||||||
Debt discount | $ 16,667 | ||||||||||||||||||||
July 3, 2020 [Member] | Senior Promissory Notes [Member] | |||||||||||||||||||||
Interest Rate | 18% | 18% | |||||||||||||||||||
Debt outstanding amount | $ 5,000,000 | $ 5,000,000 | |||||||||||||||||||
Accrued expenses | 210,574 | ||||||||||||||||||||
Principal amount of existing loan | $ 5,000,000 | $ 1,000,000 | |||||||||||||||||||
Debt instrument maturity date | Jun. 30, 2022 | Jun. 30, 2022 | |||||||||||||||||||
Repayment of may five note | 2,000,000 | ||||||||||||||||||||
Repayment of may eight note | 2,000,000 | ||||||||||||||||||||
Repayment of february note | $ 1,000,000 | ||||||||||||||||||||
Modification of May 18, 2020, July 3, 2020, and August 4, 2020 Senior Promissory Notes [Member] | |||||||||||||||||||||
Modification agreement amount | $ 9,000,000 | ||||||||||||||||||||
Restructuring fees | 506,087 | ||||||||||||||||||||
Fair value of debt | 7,706,369 | ||||||||||||||||||||
Gains on debt extinguishment | 787,544 | ||||||||||||||||||||
Debt principal payment | 7,000,000 | 2,000,000 | |||||||||||||||||||
Non cash interest expenses | 81,910 | ||||||||||||||||||||
Debt outstanding amount | 0 | ||||||||||||||||||||
Accretion of debt and debt discount | $ 1,293,631 | ||||||||||||||||||||
August 4, 2020 [Member] | Senior Promissory Notes [Member] | |||||||||||||||||||||
Debt instrument maturity date | Dec. 31, 2020 | Dec. 31, 2020 | |||||||||||||||||||
Debt Exchange Agreement [Member] | |||||||||||||||||||||
Repayments of debt | $ 83,428 | $ 118,867 | 62,878 | ||||||||||||||||||
Agreement description | 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 nine-month grievance from the first deposit | ||||||||||||||||||||
Debt outstanding amount | 565,900 | $ 611,500 | 356,600 | 503,022 | |||||||||||||||||
Accrued expenses | $ 5,642 | 8,069 | 60,166 | $ 8,514 | |||||||||||||||||
Notes payable long term | 477,637 | 237,733 | 377,270 | ||||||||||||||||||
Shares issued | shares | 12,852 | 10,390 | |||||||||||||||||||
Gain on settlement of debt upon shares issuance | $ 292,383 | $ 192,205 | |||||||||||||||||||
Common stock shares issuable upon listing on nasdaq | shares | 9,520 | ||||||||||||||||||||
Settlement of debt, shares issuable upon listing on nasdaq | $ 1,190,000 | ||||||||||||||||||||
Settlement of debt | 1,606,500 | ||||||||||||||||||||
Gain from extinguishment of debt | $ 6,642 | $ 216,580 | |||||||||||||||||||
Discount rate | 11.66% | ||||||||||||||||||||
Principal amount of existing loan | $ 1,000,000 | ||||||||||||||||||||
Fair value of price per share | $ / shares | $ 77.75 | ||||||||||||||||||||
Upon issuance of common stock | shares | 9,520 | 9,520 | |||||||||||||||||||
Share issued price per share | $ / shares | $ 96.25 | ||||||||||||||||||||
Synthesis Facility Agreement [Member] | TFF [Member] | |||||||||||||||||||||
Debt outstanding amount | $ 5,629,555 | ||||||||||||||||||||
Accrued expenses | 524,094 | ||||||||||||||||||||
Synthesis Facility Agreement [Member] | TFF [Member] | Principal Balance One [Member] | |||||||||||||||||||||
Debt instrument, transferred amount | $ 2,000,000 | ||||||||||||||||||||
Debt instrument, accrue interest rate | 5.50% | ||||||||||||||||||||
Debt instruments periodic payment | $ 50,000 | ||||||||||||||||||||
Debt intrument split, principal balance | $ 2,000,000 | ||||||||||||||||||||
Synthesis Facility Agreement [Member] | TFF [Member] | Principal balance 2 [Member] | |||||||||||||||||||||
Notes payable- short -term | 2,450,000 | ||||||||||||||||||||
Stated interest rate | 6% | ||||||||||||||||||||
Debt instrument, extended maturity, month and year | January 10, 2023 | January 2023 | January 2023 | ||||||||||||||||||
Debt split, balance | 4,000,000 | $ 4,000,000 | |||||||||||||||||||
June 9, 2022 Debt Agreement One [Member] | |||||||||||||||||||||
Repayments of debt | 83,428 | $ 335,008 | 62,878 | ||||||||||||||||||
Agreement description | The Note matures on June 16, 2027 and bears an annual interest of 3.89% plus levy of 0.60% plus the 3-month Euribor (when positive). Pursuant to the agreement, there is a twelve-month grace period for principal repayment during which interest is accrued. The principal is to be repaid in 17 equal quarterly installments | The Note matures on June 16, 2027 and bears an annual interest of 3.89% plus levy of 0.60% plus the 3-month Euribor (when positive). Pursuant to the agreement, there is a twelve-month grace period for principal repayment during which interest is accrued. The principal is to be repaid in 17 equal quarterly installments | |||||||||||||||||||
Debt outstanding amount | $ 342,336 | 4,000,000 | |||||||||||||||||||
Accured interest | 8,379 | ||||||||||||||||||||
Notes payable long term | 281,924 | 2,450,000 | |||||||||||||||||||
Loan Agreement [Member] | Panagiotis Drakopoulos [Member] | |||||||||||||||||||||
Debt outstanding amount | 8,558 | 9,054 | |||||||||||||||||||
Accrued expenses | 3,100 | 7,271 | 7,151 | ||||||||||||||||||
Short term debt borrowing capacity | $ 42,832 | ||||||||||||||||||||
July 30, 2021 Debt Agreement [Member] | |||||||||||||||||||||
Repayments of debt | $ 83,428 | 83,428 | 62,878 | ||||||||||||||||||
Debt outstanding amount | 451,472 | ||||||||||||||||||||
Accured interest | 2,728 | ||||||||||||||||||||
Notes payable long term | 336,788 | ||||||||||||||||||||
Loan Facility [Member] | |||||||||||||||||||||
Debt outstanding amount | 0 | 1,299,784 | $ 2,000,000 | ||||||||||||||||||
Accretion of debt and debt discount | 81,910 | ||||||||||||||||||||
Accrued interest expense | $ 12,853 | $ 4,414 | |||||||||||||||||||
Restricted shares | shares | 40,000 | 40,000 | |||||||||||||||||||
Distribution and Equity Acquisition Agreement [Member] | Marathon Global Inc [Member] | |||||||||||||||||||||
Cash received upon gross sales | $ 2,750,000 | ||||||||||||||||||||
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 | |||||||||||||||||||
Distribution and Equity Acquisition Agreement [Member] | Marathon Global Inc [Member] | Gross Sales One [Member] | |||||||||||||||||||||
Cash received upon gross sales | $ 2,750,000 | ||||||||||||||||||||
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 |
LEASES (Details)
LEASES (Details) - Operating Lease [Member] | Dec. 31, 2022 USD ($) |
2023 | $ 216,409 |
2024 | 217,051 |
2025 | 144,252 |
2026 | 107,851 |
2027 and Thereafter | 297,407 |
Total undiscounted operating lease payments | 982,970 |
Less: Imputed interest | (161,904) |
Present value of operating lease liabilities | $ 821,066 |
LEASES (Details 1)
LEASES (Details 1) - Finance Lease [Member] | Dec. 31, 2022 USD ($) |
2023 | $ 113,699 |
2024 | 97,540 |
2025 | 68,516 |
2026 | 41,634 |
2027 and Thereafter | 17,452 |
Total undiscounted finance lease payments | 338,841 |
Less: Imputed interest | (35,337) |
Present value of finance lease liabilities | $ 303,504 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
LEASES | ||
Operating lease, term of agreements | The Company has various lease agreements with terms up to 10 years, comprising leases of office space. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised. | |
Operating lease expense | $ 210,463 | $ 260,664 |
Operating lease weighted-average remaining lease term | 5.49 | |
Operating lease cash flows used in finance lease | $ 99,906 | 92,105 |
Operating lease, weighted average discount rate | 6.74% | |
Finance lease, weighted average remaining lease term | 3.27 years | |
Finance lease, interest expense | $ 16,467 | 11,576 |
Finance lease, weighted average discount rate | 6.74% | |
Finance lease, amortization expense | $ 85,696 | $ 97,270 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Shares issued | 10,605,412 | 701,780 | |
Description for advisory agreement | The term of the agreement is a minimum of 45 days and will continue until 5 business days following the date in which a party receives written notice from the other party of termination. As consideration for services rendered, the Company shall pay: a) a cash fee equal to 10% of the gross proceeds of any securities sold in the offering payable at closing of the offering from the gross proceeds of the offering; b) 1% of the gross proceeds of any securities sold in the offering payable at closing of the offering from the gross proceeds of the offering for unaccountable expenses; c) warrants to purchase shares of the Company’s common stock equal to 10% of the number of shares issued in the offering or to be issued thereafter upon conversion of any convertible securities issued in the offering. These warrants will have a 5-year term and an exercise price equal to the price per share of common stock sold in the offering or conversion or exercise price into common stock of any convertible security sold and will have the same provisions, terms, conditions, rights and preferences as the securities sold in the offering; d) a cash fee equal to 10% of the exercise price of all securities constituting warrants, options or other rights to purchase securities sold in the offering payable only upon exercise | ||
Description for compensation payable under agreement to consultants | a) a cash fee or as an underwritten offering an underwriter discount equal to 7% of the aggregate gross proceeds raised in each offering. For all investors referred directly to the Company by the agent, a cash fee or as an underwritten offering an underwriter discount equal to 5% of the aggregate gross proceeds invested by such investors, b) the Company shall issue to the agent or its designees at each closing, warrants to purchase shares of the Company’s common stock equal to 5% of the aggregate number of shares of common stock placed in each offering, c) out of the proceeds of each closing, the Company also agreed to pay the agent up to $35,000 for non-accountable expenses (up to $50,000 for a public offering) along with up to $50,000 for fees and expenses of legal counsel and other out-of-pocket expenses (increase to up to $100,000 for public offerings) plus additional miscellaneous costs. The agent would also have the right of first refusal from the date of the agreement until the 12-month anniversary following consummation of any offerings for total proceeds of at least $3 million raised by investors introduced by the agent. | ||
July 1, 2021 [Member] | Advisory Agreement [Member] | |||
Consulting fee payable monthly until listing | $ 4,000 | ||
Additional shares | 17,258 | ||
Cash compensation | $ 52,500 | ||
Free trading shares | 17,500 | ||
Shares issued | 22,500 | ||
Compensation for services | $ 150,000 | $ 75,000 | |
Description for consulting fees payable under agreement | the Company shall pay $10,000 per month, with $4,000 per month paid on a monthly basis and $6,000 per month accrued until such time as the Company raises an aggregate of $10,000,000. In addition, the consultant will receive a $100,000 bonus upon NASDAQ listing and when the Company has raised an aggregate of $10,000,000. The $100,000 bonus was incurred and settled within 2022. Finally, the Company has agreed that the Consultant shall receive a total of 10,000 shares of the Company’s common stock, 2,000 of such shares that have been previously issued pursuant to previous agreements and 8,000 shares to be issued when the Company commences trading on NASDAQ. As of December 31, 2022, 17,258 additional shares have been issued to the Consultant concerning the Company’s listing on Nasdaq. |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator for Basic and Diluted Earnings Per Share: | ||
Net income (loss) | $ (63,945,285) | $ (15,594,682) |
Denominator for Basic Earnings Per Share: | ||
Weighted Average Shares | 1,928,172 | 656,933 |
Adjusted Weighted Average Shares | 1,928,172 | 656,933 |
Basic and Diluted Net (Loss) Income per Share | $ (33.16) | $ (23.74) |
EARNINGS PER SHARE (Details 1)
EARNINGS PER SHARE (Details 1) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Excluded from computation of diluted net loss per share | 4,203,063 | 152,952 |
Convertible Debt [Member] | ||
Excluded from computation of diluted net loss per share | 8,827 | 8,759 |
Options [Member] | ||
Excluded from computation of diluted net loss per share | 1,480 | |
Warrants [Member] | ||
Excluded from computation of diluted net loss per share | 4,194,236 | 142,713 |
STOCK OPTIONS AND WARRANTS (Det
STOCK OPTIONS AND WARRANTS (Details) - Stock Options [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Shares Outstanding, Beginning | 37,000 | 62,000 |
Expired | (37,000) | (25,000) |
Number of Shares Outstanding, Ending | 0 | 37,000 |
Number of Shares Expired | 37,000 | |
Weighted Average Exercise Price Outstanding, Beginning | $ 1.32 | $ 1.19 |
Weighted Average Exercise Price Outstanding, Ending | 1.32 | |
Weighted Average Exercise Price Exercisable | $ 0 | $ 0 |
Weighted Average Remaining Contractual Term Outstanding, Beginning | 3 days | 7 months 6 days |
Weighted Average Remaining Contractual Term Outstanding, Ending | 0 years | 4 days |
Weighted Average Remaining Contractual Term Exercisable | 0 years | 0 years |
Aggregate Intrinsic Value Outstanding, Beginning | $ 75,850 | $ 242,200 |
Aggregate Intrinsic Value Outstanding, Ending | 0 | 0 |
Aggregate Intrinsic Value Exercisable | $ 0 | $ 0 |
STOCK OPTIONS AND WARRANTS (D_2
STOCK OPTIONS AND WARRANTS (Details 1) - Warrants [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Shares Outstanding, Beginning | 147,930 | 45,587 |
Granted | 9,030,301 | 101,343 |
Forfeited | (424,767) | 0 |
Exercised | 4,559,228 | 0 |
Expired | 0 | 0 |
Number of Shares Outstanding, Ending | 4,194,236 | 147,930 |
Number of Shares Exercisable | 4,194,236 | |
Weighted Average Exercise Price Outstanding, Beginning | $ 50.50 | $ 160.25 |
Weighted Average Exercise Price Granted | 5.96 | 50.50 |
Weighted Average Exercise Price Outstanding, Ending | 8.31 | $ 50.50 |
Weighted Average Exercise Price Exercisable | $ 8.31 | |
Weighted Average Remaining Contractual Term Outstanding, Beginning | 2 years 14 days | 3 years 3 days |
Weighted Average Remaining Contractual Term Granted | 4 years 2 months 4 days | 2 years 14 days |
Weighted Average Remaining Contractual Term Outstanding, Ending | 5 years 14 days | 2 years 15 days |
Weighted Average Remaining Contractual Term Exercisable | 5 years 14 days | |
Aggregate Intrinsic Value Outstanding, Beginning | $ 4,992,621 | $ 0 |
Aggregate Intrinsic Value Outstanding, Ending | 2,562,600 | $ 4,992,621 |
Aggregate Intrinsic Value Exercisable | $ 2,562,600 |
STOCK OPTIONS AND WARRANTS (D_3
STOCK OPTIONS AND WARRANTS (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares shares | |
Risk free interest rate | 0.41% |
Exercise price | $ / shares | $ 50.50 |
Exercise price after re-pricing | $ / shares | $ 13,334 |
Fair value of terms re-pricing | terms of 1.40 years, 1.97 years, 2.20 years and 2.26 years |
Warrants, issued | 200,000 |
Debt issuance price | $ / shares | $ 50.50 |
Warrant to purchase common stock | 4,180,902 |
Weighted average contractual term | 2 years 14 days |
Fair value of warrants immediately before the re-pricing | $ | $ 1,915,077 |
Fair value of warrants immediately after re-pricing | $ | 9,548,110 |
Dividend amount | $ | $ 7,633,033 |
Fair value of common stock before re-pricing | $ / shares | $ 93.75 |
Fair value of exercise prices before re-pricing | exercise prices of $125.00, $150.00 and $187.50 before re-pricing |
Divined rate | 0% |
Options [Member] | |
Number of shares exercisable | 0 |
Number of shares outstanding, beginning | 0 |
Expired dates description | expiration dates of January 2022 |
Warrants [Member] | |
Exercise price | $ / shares | $ 50.50 |
Number of shares exercisable | 4,194,236 |
Number of shares outstanding, beginning | 4,194,236 |
Expired dates description | expiration dates from May 2023 |
Warrants to purchase shares | 101,343 |
DISAGGREGATION OF REVENUE (Deta
DISAGGREGATION OF REVENUE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue | $ 50,347,652 | $ 56,239,667 |
Greece [Member] | ||
Revenue | 49,812,839 | 55,564,240 |
UK [Member] | ||
Revenue | 403,532 | 461,820 |
Croatia [Member] | ||
Revenue | 38,596 | 18,441 |
Cyprus [Member] | ||
Revenue | 92,685 | 112,640 |
Denmark [Member] | ||
Revenue | 0 | 53,710 |
Germany [Member] | ||
Revenue | 0 | 13,370 |
Italy [Member] | ||
Revenue | $ 0 | $ 15,446 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | 1 Months Ended | 12 Months Ended | ||||||
Feb. 07, 2023 USD ($) | Jan. 06, 2023 USD ($) ft² | Jan. 01, 2023 | Jan. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jan. 24, 2023 USD ($) | Mar. 03, 2022 USD ($) | |
Convertible Promissory Note | $ 0 | $ 600,000 | ||||||
Repurchase program with authorization to purchase | $ 3,000,000 | |||||||
Weighted average contractual term | 2 years 14 days | |||||||
Debt instrument, face amount | $ 7,599,545 | |||||||
Subsequent Events | ||||||||
Convertible Promissory Note | $ 100,000 | |||||||
Payment in advance | $ 1,200,000 | |||||||
Total purchase price of Land and Building | $ 3,950,000 | |||||||
Area of building | ft² | 450 | |||||||
Subsequent Events | Settlement Agreement | ||||||||
Trande finance facility amount | $ 4,000,000 | |||||||
Payment for agreement expenses | 1,100,000 | |||||||
Remaining outstanding balance | $ 0 | |||||||
Subsequent Events | SkyPharm SA | Loan | ||||||||
Fixed interest rate | 5.50% | |||||||
Maturity date | December 1, 2032 | |||||||
Weighted average contractual term | 10 years |