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COMMITMENTS AND CONTINGENCIES | 12 Months Ended
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Dec. 31, 2018
Notes to Financial Statements |
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, 2018, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s operations. Operating Leases The Company conducts its operations from an office located in Chicago, Illinois for which beginning in January 2015, the monthly rent expense was $709, which has been paid through December 31, 2017. The lease expired as of May 31, 2017, however, the Company has negotiated and entered into a two-year amendment to that lease that commenced as of June 1, 2017 through May 31, 2019. The monthly rate from June 1, 2017 through May 31, 2018 was $709 per month and increased to $730 per month from June 1, 2018 through May 31, 2019. Rent expense for the years ended December 31, 2018 and 2017, was $8,651 and $8,502, respectively. Prior to the sale on September 30, 2018, the offices of Amplerissimo were located at 9, Vasili, Michaelidi Street, 3026, Limassol, Cyprus. The Company had a one-year lease which commenced on July 29, 2013 and was last renewed through July 2018, at the rate of €110 per month. Rent expense for the years ended December 31, 2018 and 2017 was $1,183 and $1,492, respectively. The offices of SkyPharm are located at 5, Agiou Georgiou Street 57001, Pylaia, Thessaloniki, Greece. The Company has a six-year lease that commenced on September 1, 2014 at the rate of €4,325 ($4,955) per month. In December 2015, the lease was revised to include an additional rental of the first floor at a rate of €800 ($916) per month. The lease was further revised in March 2016 to include another additional rental of the first floor at a rate of €800 ($916) per month beginning in May 2016. On May 30, 2016, the lease was revised again to include an additional rental of space at a rate of €1,825 ($2,091) per month beginning in June 2016. On March 23, 2017, SkyPharm entered into an additional three-year lease at a rate of €1,250 ($1,432) per month that commenced May 2017. As a result, the total monthly lease amount is now €9,000 ($10,310) per month. Rent expense for the years ended December 31, 2018 and 2017 was €108,000 ($127,624) and €103,000 ($116,400) respectively. The offices of Decahedron are located at Unit 11, Spire Greene Centre, Harlow, CM19 5TR, Essex, U.K., for which we pay approximately ₤1,908 ($2,430) per month, under an amendment to a lease dated October 25, 2011, which commenced on October 25, 2016 and expires on October 24, 2021. Rent expense for the year ended December 31, 2018 and from the date of acquisition through December 31, 2017 was ₤29,789 ($39,762) and ₤20,992 ($27,180), respectively. As of December 31, 2018, the offices of Cosmofarm were located at Herakleous 39, Neos Kosmos, Athens, Attiki, Greece, 11743. The lease expired of €1,400 ($1,654) per month expired on March 31, 2019. Cosmofarm has subsequently moved its principal offices to Gonata Stylianou 15, Peristeri, Attiki, Greece 12133. The Company has a ten-year lease which commenced on July 18, 2018, at the rate of €3,333 ($3,809), subject to a grace period until September 30, 2018. Rent expense did not accrue from July 18, 2018, to September 30, 2018. The Company rents additional square footage at Missonos 15-17, Neos Kosmos, Athens, Attiki, Greece, 11743. The Company has a three-year lease which commenced on May 1, 2017, at a rate of €400 ($457) per month. Future minimum operating lease commitments consisted of the following at December 31, 2018:
Year Ended December 31, |  | Amount (USD) |
2019 |  | $ | 207,853 |
2020 |  | $ | 118,054 |
2021 |  | $ | 70,121 |
2022 |  | $ | 45,824 |
2023 |  | $ | 45,824 |
Thereafter |  | $ | 164,203 |
|  | $ | 651,879 |
Capital Leases The Company leases mechanical equipment under capital leases. The following is a schedule of future minimum lease payments, together with the present value of minimum lease payments under capital leases, at December 31, 2018:
Year Ending December 31, |  | Amount (USD) |
2019 |  |  | 36,801 |
2020 |  |  | 14,955 |
Less amount representing interest |  |  | (2,217 | )
Present value of minimum lease payments |  |  | 49,539 |
Less current portion |  |  | (34,805 | )
|  |  | 14,734 |
Interest expense for the years ended December 31, 2018 and 2017 was $256 and $0, respectively. Intellectual Property Sale Agreement On October 1, 2016, the Company entered into an Intellectual Property Sale Agreement with Anastasios Tsekas and Olga Parthenea Georgatsou (the “IPSA”) for the purchase of certain intellectual property rights relating to proprietary pharmaceutical formulas and any related technical information arising or related thereto (the “Intellectual Property”). The IPSA provides that the sellers shall be entitled to an aggregate of 200,000 shares of common stock of the Company, none of which have been issued to date, and issuable as follows in equal parts to each seller:
| • | 50,000 shares upon the successful conclusion of Preclinical Trials.
| • | 50,000 shares upon the conclusion of Phase I testing.
| • | 50,000 shares upon the conclusion of Phase II testing.
| • | 50,000 shares upon the conclusion of Phase III testing.
The Company has agreed to pay Anastasios Tsekas €1,500 per month until the first issuance of the shares referenced above. The Company has also agreed that in the event the Company disposes of the Intellectual Property prior to the periods referenced above, the sellers shall be entitled to the issuance of all the shares referenced above. The Company is in the process of locating a suitable lab to conduct the preclinical trial phase, which has not yet begun as of the date of filing. Placement Agreement On August 8, 2017, the Company entered into an agreement with a third-party placement agent (the “Agent”) who will serve as the Company’s exclusive placement agent or sole book running manager with respect to any offerings of equity or equity-linked securities as well as any debt offering with the two organizations named in the agreement (the “Offering”) for a period of 120 days. In the event that an Offering is agreed upon by the Agent and the Company, the Company shall provide payment as follows: (1) a cash commission of 6% of the total gross proceeds for two named investors (2) a cash commission of 4% of total gross proceeds from five named investors and (3) excluding the five named investors in “(2)” a cash commission equal to 8% of the total gross proceeds from the Offering and the issuance to the Agent or its designees of warrants covering 8% of the shares of common stock issued or issuable by the Company in the Offering. Additionally, the Agent will receive a cash fee of 8% payable within 5 business days, but only in the event of, the receipt by the Company of any cash proceeds from the exercise of any warrants with an expiration equal to or less than 24 months sold in the Offering. In connection with the Company’s November 16, 2017 Note offering, the Agent received a cash commission of $240,000, equal to eight (8%) percent of the total gross proceeds of the offering and the issuance of five-year warrants to purchase eight (8%) percent of the shares of Common Stock issued or issuable in the offering (excluding shares of Common Stock issuable upon exercise of any Warrants issued to investors, or 53,600 shares); however, will receive eight (8%) percent of any cash proceeds received from the exercise of any Warrants sold in the offering with an expiration equal to or less than twenty-four (24) months. The Warrants are exercisable six (6) months after the date of issuance, or as of May 16, 2018. In connection with the Company’s September 4, 2018 Note offering, the Agent received a cash commission for this transaction of $140,000, equal to seven (7%) percent of the total gross proceeds of the offering and the issuance of five-year warrants to purchase seven (7%) percent of the shares of Common Stock issued or issuable in this offering (excluding shares of Common Stock issuable upon exercise of any Warrants issued to investors, or 26,056 shares); however, will receive seven (7%) percent of any cash proceeds received from the exercise of any Warrants sold in the offering with an expiration equal to or less than twenty-four (24) months. The Warrants are exercisable six (6) months after the date of issuance, or March 4, 2019. Advisory Agreement On April 18, 2018, SkyPharm S.A. entered into a ten-year Advisory Agreement with Synthesis Management Limited (the “Advisor”). The Advisor was retained to assist SkyPharm to secure corporate finance capital. The Advisor shall be paid €104,000 per year during the ten-year term.

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