XML 27 R17.htm IDEA: XBRL DOCUMENT
v3.23.1

CONVERTIBLE DEBT | 3 Months Ended
--- | ---
Mar. 31, 2023
CONVERTIBLE DEBT |
CONVERTIBLE DEBT | NOTE 11 – CONVERTIBLE DEBT A summary of the Company’s convertible debt activity as of and for the 3 and 12 months ended March 31, 2023 and December 31, 2022 is presented below:
|  | March 31, 2023 |  |  | December 31, 2022 |
Beginning balance convertible notes |  | $ | 100,000 |  |  | $ | 640,000 |
Payments |  |  | (100,000 | ) |  |  | (525,000 | )
Conversion to common stock |  |  | - |  |  |  | (15,000 | )
Convertible notes payable |  | $ | - |  |  | $ | 100,000 |
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”). 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 to equity. 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. 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. Therefore, as of March 31, 2023 and December 31, 2022, the fair value of the derivative liability was $0. For the three months ended March 31, 2023 and 2022, the Company recorded a loss on the change in fair value of the derivative of $0 and a gain of $1,873, 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 bore an interest rate of 8% per annum and originally matured on the earlier of (i) consummation of the Company listing its common shares on the NEO Stock Exchange or (ii) October 31, 2021. However, the listing to NEO Stock Exchange did not occur. As of December 31, 2022, the Company had a principal balance of $100,000 and had accrued $13,740 in interest expense. During the three months ended March 31, 2023, the Company paid the balance in full. 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 was being amortized over the life of the loan. As of December 31, 2022, the debt discount had been fully amortized. As of March 31, 2023 and December 31, 2022, the fair value of the derivative liability was $0 and $54,293, respectively. For the three months ended March 31, 2023 and 2022, the Company recorded a loss of $3,384 and a gain of $13,128, respectively, from the change in fair value of derivative liability as other income in the condensed consolidated statements of operations and comprehensive loss. The Company considered both the note payable and conversion feature separately and upon settlement. The Company re-valued the conversion feature to fair value and applied extinguishment accounting as the debt has now been settled. Because the conversion feature is extinguished upon settling the note, the value of the conversion feature goes though debt extinguishment debt and the Company recorded a gain on settlement of debt. During the three months ended March 31, 2023, the Company recorded a gain on extinguishment of debt of $50,909. 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. 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 our Nasdaq listing in 2022, the total principal and accrued interest outstanding on the note would 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 our Nasdaq listing, subject to a conversion floor of $75.00. However, the Company, upon agreement with the third party, did not convert the note and fully repaid it in cash on October 21, 2022. 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 three months ended March 31, 2023 and 2022, the Company recorded amortization of debt discount in the amount of $0 and $127,916, respectively, which is included in non-cash interest expense on the accompanying condensed statements of operations and comprehensive loss. Derivative Liabilities The table below provides a summary of the changes in fair value, including net transfers in and/or out of all financial liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2023:
|  | Amount |
Balance on January 1, 2023 |  | $ | 54,293 |
Reduction of derivative related to conversions |  |  | (50,909 | )
Change in fair value of derivative liabilities |  |  | (3,384 | )
Balance on March 31, 2023 |  | $ | - |
The fair value of the derivative conversion features and warrant liabilities as of December 31, 2022 was calculated using a Monte-Carlo option model valued with the following assumptions:
|  | December 31, |
|  | 2022 |
Dividend yield |  |  | 0 | %
Expected volatility |  | 87.9%-157.2 |
Risk free interest rate |  | 1.46%-3.75 |
Contractual terms (in years) |  | 1.25 - .75 |

X
- References No definition available. + Details
Name: | cosm_ConvertibleDebtDisclosureTextBlock
Namespace Prefix: | cosm_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_LongtermConvertibleDebtCurrentAndNoncurrentAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration