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Related Party Transactions
12 Months Ended
Dec. 31, 2017
Related Party Transactions [Abstract]  
Related Party Transactions

Note 10 – Related Party Transactions

 

The Company accrued and paid consulting fees of $41,250 per month through April 2017 and $57,917 per month through December 2017, accounting fees of $12,500 per month and rent of $1,500 per month to a company owned by Mr. Jack Ross, Chief Executive Officer of the Company. The Company expensed $796,336 and $481,215, respectively during 2017 and 2016 as consulting fees, and made payments totaling $796,336 and $481,215 towards services to an entity owned and controlled by an officer and shareholder of the Company for the year ended December 31, 2017 and 2016. The Company also paid out a bonus of $525,000 during 2017. As of December 31, 2017 and 2016, the total outstanding balance was $0.

 

On January 22, 2015, the Company entered into a Loan Agreement with Knight Therapeutics (Barbados) Inc., a related party, for the purchase of the Focus Factor assets. At December 31, 2017 and 2016, the Company owed Knight $559,243 and $2,752,639, respectively, on this loan, net of discount (see Note 12).

 

On June 26, 2015, the Company entered into a Security Agreement with Knight Therapeutics, Inc., through its wholly owned subsidiary Neuragen Corp., for the purchase of Knight Therapeutics, Inc.’s assets. At December 31, 2017 and 2016, the Company owed Knight $575,000 and $625,000 in relation to this agreement (see Note 12).

 

On August 18, 2015, the Company entered into a Consulting Agreement with Kara Harshbarger, the co-founder of Hand MD, LLC, pursuant to which she will provide marketing and sales related service. The Company will pay Ms. Harshbarger $10,000 a month for one year unless the Consulting Agreement is terminated earlier by either party. The Company decided to extend the contract on a month to month basis. Hand MD, LLC is a 50% owner in Hand MD Corp. The Company expensed $120,000 through payroll for each of the years ended December 31, 2017 and 2016. As of December 31, 2017 and 2016, the total outstanding balance was $0.

 

On November 12, 2015, the Company entered into a Loan Agreement with Knight Therapeutics (Barbados) Inc., a related party, for the purchase of NomadChoice Pty Limited and Breakthrough Products, Inc. At December 31, 2017 and 2016, the Company owed Knight $0 and $3,680,162, respectively, on this loan, net of discount (see Note 12).

 

On December 22, 2016, we issued to Knight Therapeutics (Barbados) Inc., or Knight, 7,500,000 shares of our common stock in exchange for the cancellation of warrants to purchase an aggregate of 8,132,002 shares of our common stock held by Knight, with per share purchase prices of $0.34 and $0.49, and the cancellation of an option to purchase 1,000,000 shares of our common stock held by Knight, with an exercise price of $0.25 per share. As additional consideration, Knight has agreed to purchase up to $2.0 million worth of our common stock if and when we undertake a common stock equity financing, subject to certain terms and conditions.

 

On December 23, 2016, we entered into an agreement with Knight Therapeutics for the distribution rights of FOCUSFactor in Canada. In conjunction with this agreement, we are required to pay Knight a distribution fee equal to 30% of gross sales for sales achieved through a direct sales channel and 5% of gross sales for sales achieved through retail sales. The minimum due to Knight under this agreement is $100,000 Canadian dollars. As of December 31, 2017, the total outstanding balance was $100,000 Canadian dollars.

 

On August 9, 2017, the Company entered into a Loan Agreement with Knight Therapeutics (Barbados) Inc., a related party, for a working capital loan. At December 31, 2017, the Company owed Knight $9,110,030 on this loan, net of debt issuance cost (see Note 10).

 

The Company expensed royalty of $117,722 for the year ended December 31, 2017. At December 31, 2017 Sneaky Vaunt Corp., a subsidiary of the Company, owed Knight Therapeutics $4,608 in connection with a royalty distribution agreement.

 

The Company expensed commissions of $172,579 for the year ended December 31, 2017. At December 31, 2017 Sneaky Vaunt Corp., a subsidiary of the Company, owed Founded Ventures, owned by a shareholder in the Company, $2,581 in connection with a commission agreement. The Company paid a development fee for the brand, Sneaky Vaunt, in the amount of $761,935 for the year ended December 31, 2017.

 

The Company expensed commissions of $13,952 for the year ended December 31, 2017. The Company paid a development fee for the brand, The Queen Pegasus, in the amount of $1,000,000 for the year ended December 31, 2017. At December 31, 2017, The Queen Pegasus, a subsidiary of the Company, owed Founded Ventures $1,462 in connection with a commission agreement.

 

The Company expensed royalty of $24,227 for the year ended December 31, 2017. At December 31, 2017 The Queen Pegasus, a subsidiary of the Company, owed Knight Therapeutics $10,274 in connection with a royalty distribution agreement.

 

The Company paid $125,000 for the year ended December 31, 2017 to Hand MD, Corp, related to a royalty agreement. At December 31, 2017, the Company owed Hand MD Corp. $250,000 in minimum future royalties.

 

The Company expensed royalty of $380,166 and $543,881 for the years ended December 31, 2017 and 2016, respectively. At December 31, 2017 and 2016, NomadChoice Pty Ltd., a subsidiary of the Company owed Knight Therapeutics $39,682 and $87,678, respectively, in connection with a royalty distribution agreement (see Note 3).