XML 41 R14.htm IDEA: XBRL DOCUMENT v3.20.1
Commitments and Contingencies
12 Months Ended
Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 8 – Commitments and Contingencies

 

Employment Agreements

 

On January 8, 2017, the Company entered into an employment agreement with Antonio Milici, its chief executive officer and chief scientific officer, for a five-year term. On the same date, the Company also entered into an employment agreement with Tannya L. Irizarry, its chief administrative officer and interim chief financial officer, for a five-year term.

 

The Company agreed to pay Dr. Milici a base salary of $258,000 per annum, plus $90,000 worth of Series B Convertible Preferred Stock in March of each year. The Company also agreed to pay Dr. Milici bonus compensation or a lump sum equal to two (2) times the salary at the time the Company has net income of at least two million ($2,000,000) dollars each year based on performance. In addition, the Company agreed to pay a onetime payment of $26,900 at the renewal of the employment agreement. The Company is also required to pay all living expenses to Dr. Milici during the time his deferred salary is not entirely released during the term of his employment agreement. Once deferred salary is entirely released to Dr. Milici, he is responsible for his taxes. Dr. Milici is also entitled to a leased Company vehicle of his selection. At the end of aforementioned lease, Dr. Milici is authorized to either purchase the vehicle and/or exchange leased vehicle for another vehicle. The Company did not issue $90,000 worth of Series B Preferred Stock in 2019 as the Company did not have enough authorized shares of Series B Preferred stock. The Company included $90,000 in the annual salary accrual for Dr. Milici. For the fiscal years 2019 and 2018, all salary was deferred.

 

The Company agreed to pay Ms. Irizarry a base salary of $208,000 per annum, plus $45,000 worth of Series B Convertible Preferred Stock in March of each year. The Company also agreed to pay Ms. Irizarry bonus compensation or a lump sum equal to two (2) times the salary at the time the Company has net income of at least two million ($2,000,000) dollars each year based on performance. In addition, the Company agreed to pay a onetime payment of $18,000 at the renewal of the employment agreement. The Company is also required to pay all living expenses to Ms. Irizarry during the time her deferred salary is not entirely released during the term of her employment agreement. Once deferred salary is entirely released to Ms. Irizarry, she is responsible for her taxes. Ms. Irizarry is also entitled to a leased Company vehicle of her selection. At the end of aforementioned Lease, Ms. Irizarry is authorized to either purchase the vehicle and/or exchange leased vehicle for another vehicle. The Company did not issue $45,000 worth of Series B Preferred Stock in 2019 as the Company did not have enough authorized shares of Series B Preferred stock. The Company included $45000 in the annual salary accrual for Ms. Irizarry. For the fiscal years 2019 and 2018, all salary was deferred.

 

As of December 31, 2019, the Company has issued to Dr. Milici, CEO and Tannya Irizarry, CAO, CFO a total of 26,038,572 shares of Series B Preferred Stock pursuant to the terms of their employee agreements.

 

Legal Contingencies

 

The Company is involved in claims arising during the ordinary course of business resulting from disputes with vendors and stockholders over various contracts and agreements. The Company has outstanding judgments that are deemed to be lapsed and passed Colorado’s statute of limitations. Other than those outstanding judgments listed below, no other legal claims have been made or are known at this time.

 

On June 6, 2008, a judgment was issued against the Company in the case of MAG Capital, LLC aka Mercator Momentum Fund III LP, Mercator Momentum Fund, LP and Monarch Pointe Fund, Ltd. v. the Company in the Orange County District Court in the State of California in the amount of $37,721. The Company has not satisfied the judgment. The total balance on the Company’s records was $80,621, which included accrued interest. MAG Capital, LLC aka Mercator Momentum Fund III LP was dissolved August 25. 2008. As of December 31, 2018, the Company removed the liability from its records. See Note 5 – Extinguishment of Debt.

 

On June 26, 2009, a judgment was issued against the Company in the case of Enterprise Leasing Company of Denver v. the Company in the Jefferson County District Court in the State of Colorado in the amount of $78,178. The Company has not satisfied the judgment. The total amount recorded on the Company’s books was $84,432 including interest. As of December 31, 2018, the Company removed the liability from its records. See Note 5 – Extinguishment of Debt.

 

On August 17, 2010, a judgment was issued against the Company in the case of Banc of America Leasing v. the Company in the Oakland County District in Troy, Michigan in the amount of $24,183. The Company has not satisfied the judgment. As of December 31, 2018, the Company removed the liability from its records. See Note 5 – Extinguishment of Debt.

 

On February 10, 2009 a judgment was issued against the Company in the case of Centennial Credit Corporation v. the Company in Jefferson County district Court in the State of Colorado in the amount of $967. The Company has not satisfied the judgment, but due to the explanation above, the liability has been written off.

 

In June 2009, a judgment was issued against the Company in the case of James Tufts v. the Company in Small Claims Court in Jefferson County Colorado in the amount of $4,000 plus expenses from a London trip. The Company has not satisfied the judgment, but due to the explanation included in this Note, the liability has been written off.

 

On September 23, 2010 a judgment was issued against the Company in the case of Liberty Acquisitions v. the Company in the Jefferson County District Court in the State of Colorado in the amount of $3,300. The Company has not satisfied the judgment, but due to the explanation included in this Note, the liability has been written off.

 

On November 26, 2012, the Internal Revenue Service filed a Federal Tax Lien in the amount of $1,275. The Company has not satisfied the lien.

 

On November 14, 2014, Litchfield Church Ranch, LLC filed a Summons in Forcible Entry and Detainer against the Company after the owner was unable to sell the building to us because he was upended for over $800,000 in his mortgage. As per the Summons, the plaintiff claimed $364,968.69 in past due rent. As per our accounting records, the Company had accrued $242,000 in rent expense with the offer to purchase such property at $1,850,000 plus scheduled payments for the past due rent. The owner’s bank did not allow him to sell the property. We participated in a mediation resulting in a settlement for $115,000 with the contingency to pay the goodwill amount of $15,000 by September 12, 2015. The Company had an additional six months to complete the remaining $100,000 settlement. If not paid off prior to August 12, 2016, there will be no discount and the Company shall owe the judgment balance in the amount of $325,885. The mediator, a retired judge, found in our favor. Therefore, the settlement was agreed upon by both parties. The Company did not pay the settlement agreement as of December 31, 2019 and default interest of 18% was accrued on the outstanding judgment balance through December 31, 2018. In July 2019, Litchfield Church Ranch, LLC was dissolved after the ownership sold the property. The Company claims that no money is owed.

 

Beginning in November 2010 and through July 2011, Gold X Change, Inc. (“GXC”) invested approximately $132,000 in the aggregate in the Company’s convertible notes. In July 2011, a dispute arose between the Company and GXC as to the number of shares issuable upon conversion of the convertible notes.  In order to resolve this dispute, the Company and GXC agreed to issue a total of 24 million shares of the Company’s common stock in the name of GXC; provided that GXC deposit such shares into an escrow account with an escrow agent.  Under the terms of the escrow agreement, these shares would only be released to GXC if GXC invested an additional $1 million into the Company within one year, which ended on September 30, 2012.  During the one year period, GXC only invested $880,162.  As a result of GXC’s failure to invest the full $1 million within the one year time period as required by the escrow agreement, GXC was in default under the escrow agreement and the 24 million shares were cancelled. The $880,162 paid by GXC to the Company was deemed to be the cost of the 4,003,860 shares of the Company’s common stock that was originally issued to GXC. The Company adjusted the note payable balance and reclassified the note balance to additional paid in capital to include such in the original transaction in which 4,003,860 shares of common stock were issued. Currently, GXC holds 1,189,300 shares of common stock after the President distributed 2,814,560 shares to different people and entities. The President disclaims beneficial ownership of such securities except to the extent of his pecuniary interest in such securities, if any. The Company claims that no additional funds are due to GXC.

 

Milestones Investment Agreement

 

In March 2018, we entered into a Milestones Investment Agreement with FOGT, LLC (in part controlled by a former member of the Board of Directors), pursuant to which FOGT, LLC had agreed to invest and purchase up to $5 million of Series A Convertible Preferred Stock pending completion of certain milestones. As of December 31, 2018, FOGT, LLC has invested $550,000 and we agreed to issue 5,500 shares of Series A Convertible Preferred Stock. FOGT, LLC had agreed to invest additional amounts as follows: (i) $1,500,000 upon completion of design, assembly and validation of an advanced robotic system; and (ii) $1,750,000 upon entering into a commercial agreement with a government organization or private entity. A dispute arose between FOGT, LLC and the Company. As a result, FOGT, LLC ceased further investments in the Company.

 

On September 6, 2019, FOGT, LLC and GeneThera, Inc. reached a settlement in the amount of $425,000. The legal team received $171,000 from this settlement resulting in net proceeds to the Company of approximately $254,000.

 

Lease Agreement

 

On January 1, 2018, the Company entered into a sublease for a 7,990 square foot office and lab space on 6860 Broadway in Denver, Colorado 80221, with GTI Research, Inc. a related party, the Company’s scientific robotic technology collaborator, for 75 months. GTI Research, Inc. a related party, required payment of $12,000 security deposit in December of 2017.

 

The lease was terminated on April 29, 2019, and the deposit of $12,000 was expensed at the date of the lease termination. No ROU asset or liability was established or recorded by the Company as of December 31, 2019 and 2018, respectively.