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Related-Party Transactions
12 Months Ended
Dec. 31, 2020
Related Party Transactions [Abstract]  
Related-Party Transactions

Note 22. Related Party Transactions

The Company’s related parties include Moral Compass Corporation (“MCC”) and the John Sperling Foundation (“JSF”).  The rights to the intellectual property owned by Blue Horse Labs, Inc. (“BHL”) were assigned to its sole shareholder, the John Sperling Revocable Trust (“JSRT”) due to BHL’s dissolution and then subsequently to the JSF. The JSF is deemed a related party of the Company because MCC, the Company’s largest stockholder, and the JSF share common officers and directors.

Transactions with related parties are reflected in the consolidated financial statements under amounts due to related parties. Outlined below are details of agreements between the Company and its related parties:

JSF receives a single digit royalty from the Company when revenue has been collected on product sales or for license payments from third parties that involve certain intellectual property developed under research funding originally from BHL. Royalty fees due to JSF were $80,000 and $40,000 as of December 31, 2020 and December 31, 2019, respectively, and are included in the consolidated balance sheets as amounts due to related parties.

The Company currently leases land on the island of Molokai, Hawaii from an entity owned by Kevin Comcowich, the Chair of the Company’s Board of Directors, and his wife. The Company grows hemp on this land to support the operations of its joint venture Archipelago Ventures Hawaii. The original lease was executed in February 2019, covers 10 acres of land, has a term of two years and provides for rent payments of $1,200 per acre per year. In March and April 2020, the Company entered into two lease amendments for two additional 10-acre parcels and two additional 15-acre parcels, at the same lease rate of $1,200 per acre per year, and with a term of two years. The term for all five parcels of leased land ends February 28, 2022. In 2019, the Company engaged a third-party contractor to construct a fence on the property to adhere to the rules of the hemp pilot program. Out of pocket costs to build this fence were approximately $126,400. Mr. Comcowich supplied materials to the contractor and received payments from the contractor totaling approximately $44,000. The Company made lease payments in the amount of $84,000 and $84,000 for the years ended December 31, 2020 and 2019, respectively. For the advisory services provided by Mr. Comcowich to support the operations of the Archipelago joint venture, he was issued 5,273 options to purchase Arcadia common stock for which $9,000 of stock compensation expense was recognized during the year ended December 31, 2020.