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RELATED PARTY TRANSACTIONS | 12 Months Ended
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Dec. 31, 2019
RELATED PARTY TRANSACTIONS |
NOTE 8 - RELATED PARTY TRANSACTIONS | On the date of our inception, we issued 2 million shares of our common stock to our three officers and directors which were recorded at no value (offsetting increases and decreases in common stock and additional paid-in capital). Doc Pharma S.A. As of December 31, 2019, the Company has a prepaid balance of €2,181,780 ($2,449,484) and an accounts payable balance of €22,576 ($25,346), resulting in a net prepaid balance of €2,158,434 ($2,424,138) to Doc Pharma S.A. related to purchases of inventory. Additionally, the Company has a receivable balance of €546,240 ($613,264),.As of December 31, 2018, the Company had a prepaid balance of €1,867,239 ($2,139,109) and an accounts payable balance of €31,514 ($36,103), resulting in a net prepaid balance of €1,835,725 ($2,103,006) to Doc Pharma S.A., related to purchases of inventory. Additionally, the Company has a receivable balance and €38,323 ($43,903). During the years ended December 31, 2019 and 2018, the Company has purchased a total of €3,095,163 ($3,464,725) and €4,596,227 ($5,431,361) of products from Doc Pharma, respectively. During the years ended December 31, 2019 and 2018 the Company had €779,919 ($873,041) and €201,645 ($238,284) revenue from Doc Pharma, respectively. Doc Pharma S.A is considered a related party to the Company due to the fact that the CEO of Doc Pharma is the wife of Grigorios Siokas, the Company’s CEO and principal shareholder, who also served as a principal of Doc Pharma SA in the past. Medihelm S.A As of December 31, 2019, the Company had a prepaid balance of €3,109,147 ($3,490,639) and an accounts payable balance of £39,818 ($52,500) and €143,393 ($160,987), resulting in a net prepaid balance of $3,277,152 to Medihelm S.A. related to purchases of inventory. Additionally, the Company has a receivable balance of €1,163,070 ($1,305,779). As of December 31, 2018, the Company has a prepaid balance of €2,459,805 ($2,817,953) and an accounts payable balance of £42,065 ($53,566), resulting in a net prepaid balance of $2,764,387 to Medihelm S.A. related to purchases of inventory. Additionally, the Company has a receivable balance of €127,292 ($145,826). During the years ended December 31, 2019 and 2018, SkyPharm purchased €2,332,755 ($2,611,286) and €9,564,899 ($11,302,842) of products from Medihelm, respectively, and Decahedron purchased $0 and £718,050 ($958,454) of products from Medihelm, respectively. During the years ended December 31, 2019 and 2018, SkyPharm had revenue of €945,074 ($1,057,916) and €1,055,435 ($1,247,208) from Medihelm, respectively. Medihelm S.A. is considered a related party to the Company due to the fact that the managing director of Medihelm is the mother of Nicholaos Lazarou, who was the managing director of the Company’s UK subsidiary, Decahedron through June 2019. Nicholaos Lazarou Following the acquisition of Decahedron, Nicholaos Lazarou was the managing director of the Company’s UK subsidiary until June 30, 2019. On December 19, 2017, the Company entered into a stock purchase agreement with an officer and director of the Company, whereby for consideration of €80,000 ($94,495) the Company purchased 20,000 shares of its common stock. As per the agreement, the sale and transfer of the shares occurred on December 19, 2017, the date of signing, however the Company is entitled to pay the full consideration in tranches until July 2018. As of December 31, 2017, the Company has paid consideration of €28,000 ($33,073) and had an amount due to related party of €52,000 ($61,422) recorded as accounts payable related party as of December 31, 2017. The shares were returned to the Company in February 2018. During the year ended December 31, 2018, the Company repaid the remaining balance of €52,000 ($61,448) and had an amount due to related party of €0 ($0) as of December 31, 2018. On June 18, 2018, the Company entered into a stock purchase agreement with an officer and director of the Company, whereby for consideration of €60,000 ($69,912) the Company repurchased 15,000 shares of its common stock. As per the agreement, the sale and transfer of the shares occurred on June 18, 2018, the date of signing, however the Company is entitled to pay the full consideration in tranches until November 2018. During the year ended December 31, 2018, the Company paid consideration of €60,000 ($70,902) and has an amount due to related party of €0 ($0) as of December 31, 2018. On November 30, 2018, the Company entered into a stock purchase agreement with Nicholaos Lazarou, whereby for consideration of $60,000 the Company repurchased 20,000 shares of its common stock. As per the agreement, the sale and transfer of the shares occurred on November 30, 2018, the date of signing, however, the Company was entitled to pay the full consideration in tranches until August 2019. As of December 31, 2018, the Company had an amount due to related party of $48,683. During the year ended December 31, 2019, the Company repaid the remaining balance in the amount of $48,683. On June 20, 2019, the Company entered into a stock purchase agreement with Nicholaos Lazarou whereby for consideration of $15,000, the Company repurchased 114,518 shares of its common stock. As per the agreement, the sale and transfer of the shares occurred on June 20, 2019, the date of signing. During the year ended December 31, 2019, the Company paid the $15,000 in consideration in full. Notes Payable – Related Party A summary of the Company’s related party notes payable during the years ended December 31, 2019 and 2018 is presented below:
|  | 2019 |  |  | 2018 |
Beginning Balance |  | $ | 1,793,437 |  |  | $ | 97,979 |
Transfer of third-party debt |  |  | - |  |  |  | 1,718,400 |
Payments |  |  | (382,055 | ) |  |  | (18,330 | )
Foreign currency translation |  |  | (35,850 | ) |  |  | (4,612 | )
Ending Balance |  | $ | 1,375,532 |  |  | $ | 1,793,437 |
Grigorios Siokas On December 20, 2018, the €1,500,000 ($1,718,400) note payable, originally borrowed pursuant to a Loan Agreement with a third-party lender, dated March 16, 2018, was transferred to Grigorios Siokas. The note bears an interest rate of 4.7% per annum and has a maturity date of March 18, 2019. As of December 31, 2018, the Company has an outstanding principal balance of €1,500,000 ($1,718,400) and accrued interest of €55,631 ($63,371). During the year ended December 31, 2019, the Company repaid €300,000 ($336,810) and as of December 31, 2019, the Company had an outstanding principal balance of €1,200,000 ($1,347,240) and accrued interest of €144,207 ($128,447). Grigorios Siokas is the Company’s CEO and principal shareholder. Dimitrios Goulielmos On November 21, 2014, the Company entered into an agreement with Dimitrios Goulielmos, as amended on November 4, 2016. Pursuant to the amendment, this loan is non-interest bearing. During the year ended December 31, 2018, the Company repaid €16,000 ($18,330) and a principal balance of €53,500 ($61,290) remained as of December 31, 2018. During the year ended December 31, 2019, the Company repaid €40,300 ($45,245) and a principal balance of €13,200 ($14,820) remained as of December 31, 2019. Dimitrios Goulielmos is a current director and former CEO of the Company. DOC Pharma On November 1, 2015, the Company entered into a €12,000 ($12,662) Loan Agreement with Doc Pharma S.A, pursuant to which Doc Pharma S.A., paid existing bills of the Company in the amount of €12,000 ($12,662), excluding the Vendor Bills. The loan bears an interest rate of 2% per annum and was due and payable in full on October 31, 2016. As of December 31, 2018, the Company has an outstanding principal balance under this note of €12,000 ($13,747) and accrued interest expense of $836. As of December 31, 2019, the Company has an outstanding principal balance of €12,000 ($13,472) and accrued interest expense of $1,100. The above balances are adjusted for the foreign currency rate as of the balance sheet date. For the years ended December 31, 2019 and 2018 the Company recorded losses of $35,850 and $4,612, respectively. Loans Payable – Related Party A summary of the Company’s related party loans payable during the years ended December 31, 2019 and 2018 is presented below:
|  | 2019 |  |  | 2018 |
Beginning Balance |  | $ | 1,775,251 |  |  | $ | 7,213 |
Proceeds |  |  | 585,915 |  |  |  | 2,408,965 |
Payments |  |  | (262,226 | ) |  |  | (631,166 | )
Conversion of debt |  |  | (1,050,000 | ) |  |  | - |
Disposal of subsidiary |  |  | - |  |  |  | (9,501 | )
Reclassification of receivable |  |  | 2,547 |  |  |  | - |
Foreign currency translation |  |  | (25,223 | ) |  |  | (260 | )
Ending Balance |  | $ | 1,026,264 |  |  | $ | 1,775,251 |
Grigorios Siokas On October 1, 2016, the Company borrowed €5,000 ($5,276) as a loan payable from Grigorios Siokas. The loan is non-interest bearing and had a maturity date of October 1, 2017. During the year ending December 31, 2017, the Company borrowed an additional €1,000 ($1,202). On September 30, 2018, the debt, amounting to €6,000 ($6,973) was transferred to the third-party purchaser of Amplerissimo pursuant to the Share Purchase Agreement. As of December 31, 2018, the Company had an outstanding principal balance of $0 and no accrued interest under this loan. During the year ended December 31, 2018, the Company borrowed €1,622,700 ($1,858,965) and $382,000 of loans payable from Grigorios Siokas and repaid €269,000 ($308,166) and $155,000 of these loans. These loans are non-interest bearing and have no maturity dates. As of December 31, 2018, the Company had an outstanding principal balance of $1,777,799, consisting of €1,353,700 ($1,550,799) and $227,000, in loans payable to Grigorios Siokas. During the year ended December 31, 2019, the Company borrowed total additional proceeds of $585,914, repaid €233,567 ($262,226) of these loans and converted $1,050,000 of these loans into 140,001 shares of common stock at a conversion rate of $7.50 per share. These loans are non-interest bearing and have no maturity dates. As of December 31, 2019, the Company had an outstanding principal balance under these loans of $1,026,264 consisting of €297,314 ($303,502) and $722,762, in loans payable to Grigorios Siokas. On May 28, 2019, the Company entered into a Debt Exchange Agreement with Grigorios Siokas. The agreement provided for the issuance by the Company of 66,667 shares of common stock, at the rate of $7.50 per share, or an aggregate of $500,000, in exchange for $500,000 of existing loans by Mr. Siokas to the Company. The Company valued this transaction at fair value and recorded a $259,999 gain on extinguishment of related party debt to additional paid-in capital. On June 24, 2019, the Company entered into a Debt Exchange Agreement with Grigorios Siokas. The agreement provided for the issuance by the Company of 73,334 shares of common stock, at the rate of $7.50 per share, or an aggregate of $550,000, in exchange for $550,000 of existing loans by Mr. Siokas to the Company. The Company valued this transaction at fair value and recorded a $269,126 gain on extinguishment of related party debt to additional paid-in capital. Ourania Matsouki During the year ended December 31, 2016, the Company borrowed €44,995 ($47,479) from Mrs. Matsouki, Grigorios Siokas’ wife and CEO of Doc Pharma. During the year ended December 31, 2017, the Company borrowed an additional €55,000 ($66,121). These loans have no formal agreement and bear no interest. As of December 31, 2017, the Company paid back the outstanding balance of €99,995 ($120,214) of these loans. During the year ended December 31, 2018, the Company borrowed an additional €30,000 ($34,368). As of December 31, 2018, the Company has paid back the outstanding balance of €30,000 ($34,368) of these loans. Konstantinos Vassilopoulos During the year ended December 31, 2018, the Company borrowed and repaid an aggregate of $168,000 to Konstantinos Vassilopoulos, the Company’s former U.S. Finance manager and current Administrative Officer. These loans have no formal agreement and bear no interest. As of December 31, 2018, an outstanding principal balance of $0 and $0 accrued interest remained. The above balances are adjusted for the foreign currency rate as of the balance sheet date. For the years ended December 31, 2019 and 2018 the Company recorded $25,223 and $260, 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.

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- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -URI http://asc.fasb.org/topic&trid=2122745 + Details
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