10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

OR

☐     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ___________ to ___________

Commission file number: 000-54436

COSMOS HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Nevada	27-0611758
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
141 West Jackson Blvd, Suite 4236 Chicago, Illinois	60604
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number: (312) 536-3102

N/A

(Former name, former address and former three months, if changed since last report)

Title of Each Class	Trading Symbol	Name of Each Exchange On Which Registered
Common Stock, $.001 par value	COSM	OTCQX

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒     No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒     No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
(Do not check if a smaller reporting company)		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐     No ☒

Applicable only to Corporate Issuers:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of August 16, 2021, there were 17,318,486 shares issued and 16,968,140 shares outstanding of the registrant’s common stock.

COSMOS HOLDINGS INC.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited).	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	38
Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	45
Item 4.	Controls and Procedures.	45
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.	47
Item 1A	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	47
Item 3.	Defaults Upon Senior Securities.	47
Item 4.	Mine Safety Disclosures.	47
Item 5.	Other Information.	47
Item 6.	Exhibits.	48
SIGNATURES		49

2

COSMOS HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
	June 30, 2021			December 31, 2020
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	805,772		$	628,395
Accounts receivable, net		25,544,240			23,440,650
Accounts receivable - related party		3,135,184			3,468,564
Marketable securities		216,107			222,792
Inventory		3,530,874			3,292,557
Prepaid expenses and other current assets		4,931,366			5,148,441
Prepaid expenses and other current assets - related party		2,917,334			3,468,653
Operating lease right-of-use asset		983,849			833,763
Financing lease right-of-use asset		250,534			269,131
TOTAL CURRENT ASSETS		42,315,260			40,772,946
Property and equipment, net		1,578,041			1,757,213
Goodwill and intangible assets, net		214,099			230,506
Other assets		763,645			905,318
Deferred tax assets		286,329			178,430
TOTAL ASSETS	$	45,157,374		$	43,844,413
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	12,449,944		$	11,973,981
Accounts payable and accrued expenses - related party		193,894			1,733
Accrued interest		953,625			742,374
Customer advances		19,378			22,340
Convertible notes payable, net of unamortized discount of $418,504 and $494,973, respectively		766,496			952,027
Derivative liability - convertible note		435,478			460,728
Notes payable		9,335,709			12,042,712
Notes payable - related party		486,005			501,675
Lines of credit		5,038,912			5,076,684
Loans payable - related party		704,403			1,629,246
Taxes payable		764,140			760,446
Operating lease liability, current portion		168,216			200,204
Financing lease liability, current portion		80,891			89,926
Other current liabilities		500,444			339,000
TOTAL CURRENT LIABILITIES		31,897,535			34,793,076
Share settled debt obligation		1,554,590			1,554,590
Notes payable - long term portion		10,235,503			10,771,882
Operating lease liability, net of current portion		801,243			590,538
Financing lease liability, net of current portion		180,134			188,172
Other liabilities		103,821			107,168
TOTAL LIABILITIES		44,772,826			48,005,426
Commitments and Contingencies (see Note 13)		-			-
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $0.001 par value; 100,000,000 shares authorized; 0 shares issued and outstanding as of June 30, 2021 and December 31, 2020		-			-
Common stock, $0.001 par value; 300,000,000 shares authorized; 16,566,947 and 13,485,128 shares issued and 16,216,619 and 13,069,800 outstanding as of June 30, 2021 and December 31, 2020, respectively		16,566			13,484
Additional paid-in capital		23,901,367			14,333,285
Treasury stock, 350,328 and 415,328 shares as of June 30, 2021 and December 31, 2020, respectively		(611,204	)		(611,854	)
Accumulated deficit		(23,303,783	)		(18,750,824	)
Accumulated other comprehensive income		381,602			854,896
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)		384,548			(4,161,013	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	45,157,374		$	43,844,413
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

COSMOS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
REVENUE	$	14,846,925		$	12,819,972		$	26,466,001		$	24,753,220
COST OF GOODS SOLD		12,810,082			10,471,841			23,427,823			21,211,918
GROSS PROFIT		2,036,843			2,348,131			3,038,178			3,541,302
OPERATING EXPENSES
General and administrative expenses		3,165,268			870,704			5,385,536			1,684,573
Sales and marketing expenses		139,633			380,326			544,725			434,056
Depreciation and amortization expense		108,413			110,788			215,486			210,796
TOTAL OPERATING EXPENSES		3,413,314			1,361,818			6,145,747			2,329,425
INCOME (LOSS) FROM OPERATIONS		(1,376,471	)		986,313			(3,107,569	)		1,211,877
OTHER INCOME (EXPENSE)
Other expense, net		(39,415	)		39,383			(217,626	)		27,949
Interest income (expense)		(780,607	)		(651,867	)		(1,512,433	)		(1,063,988	)
Non-cash interest expense		(88,979	)		-			(139,088	)		(29,509	)
Gain (loss) on equity investments, net		(161	)		32,418			279			10,246
Gain on extinguishment of debt		-			779,224			445,636			779,224
Change in fair value of derivative liability		26,496			-			87,869			-
Foreign currency transaction, net		96,584			194,828			(209,436	)		(32,306	)
TOTAL OTHER INCOME (EXPENSE), NET		(786,082	)		393,986			(1,544,799	)		(308,384	)
LOSS BEFORE INCOME TAXES		(2,162,553	)		1,380,299			(4,652,368	)		903,493
BENEFIT FROM (PROVISION FOR) INCOME TAXES		(216,503	)		(2,988	)		99,409			(9,492	)
NET INCOME (LOSS)		(2,379,056	)		1,377,311			(4,552,959	)		894,001
OTHER COMPREHENSIVE INCOME(LOSS)
Foreign currency translation adjustment, net		284			182,840			(473,294	)		39,078
TOTAL COMPREHENSIVE INCOME (LOSS)	$	(2,378,772	)	$	1,560,151		$	(5,026,253	)	$	933,079
BASIC NET INCOME (LOSS) PER SHARE	$	(0.15	)	$	0.10		$	(0.29	)	$	0.07
DILUTED NET INCOME (LOSS) PER SHARE	$	(0.15	)	$	0.10		$	(0.29	)	$	0.07
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic		16,105,409			13,225,387			15,572,773			13,225,387
Diluted		16,105,409			13,254,116			15,572,773			13,254,953
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

COSMOS HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
																Accumulated
																Other
	Common Stock				Additional		Treasury Stock									Comprehensive			Total
	No. of Shares		Value		Paid-in Capital		No. of Shares			Value			Accumulated Deficit			Income (Loss)			Stockholders' Deficit
Balance at January 1, 2020		13,225,387	$	13,225	$	13,525,749		(365,328	)	$	(411,854	)	$	(19,571,610	)	$	(16,339	)	$	(6,460,829	)
Foreign currency translation adjustment, net		-		-		-		-			-			-			(143,762	)		(143,762	)
Net loss		-		-		-		-			-			(483,310	)		-			(483,310	)
Balance at March 31, 2020		13,225,387	$	13,225	$	13,525,749		(365,328	)	$	(411,854	)	$	(20,054,920	)	$	(160,101	)	$	(7,087,901	)
Foreign currency translation adjustment, net		-		-		-		-			-			-			182,840			182,840
Net loss		-		-		-		-			-			1,377,311			-			1,377,311
Balance at June 30, 2020		13,225,387		13,225		13,525,749		(365,328	)		(411,854	)		(18,677,609	)		22,739			(5,527,750	)

																Accumulated
																Other
	Common Stock				Additional		Treasury Stock									Comprehensive			Total
	No. of Shares		Value		Paid-in Capital		No. of Shares			Value			Accumulated Deficit			Income (Loss)			Stockholders' Deficit
Balance at January 1, 2021		13,485,128	$	13,484	$	14,333,285		(415,328	)	$	(611,854	)	$	(18,750,824	)	$	854,896		$	(4,161,013	)
Foreign currency translation adjustment, net		-		-		-		-			-			-			(473,578	)		(473,578	)
Sale of treasury stock to third party		-		-		249,350		65,000			650			-			-			250,000
Restriced stock issued to a consultant		1,800,000		1,800		1,187,650														1,189,450
Conversion of notes payable into shares of common stock		781,819		782		2,563,582		-			-			-			-			2,564,364
Net loss		-		-		-		-			-			(2,173,903	)		-			(2,173,903	)
Balance at March 31, 2021		16,066,947	$	16,066	$	18,333,867		(350,328	)	$	(611,204	)	$	(20,924,727	)	$	381,318		$	(2,804,680	)
Foreign currency translation adjustment, net		-		-		-		-			-			-			284			284
Conversion of related party debt		500,000		500		2,999,500		-			-			-			-			3,000,000
Forgiveness of related party debt		-		-		600,000		-			-			-			-			600,000
Restriced stock issued to a consultant		-		-		1,968,000		-			-			-			-			1,968,000
Net loss		-		-		-		-			-			(2,379,056	)		-			(2,379,056	)
Balance at June 30, 2021		16,566,947		16,566		23,901,367		(350,328	)		(611,204	)		(23,303,783	)		381,602			384,548
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

COSMOS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Six Months Ended June 30,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(4,552,959	)	$	894,001
Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities:
Depreciation and amortization expense		166,219			140,748
Amortization of right-of-use assets		49,267			70,048
Amortization of debt discounts		139,088			29,509
Lease expense		99,610			104,588
Interest on finance leases		5,250			5,251
Loss on disposal of fixed asset					21,624
Stock-based compensation		3,157,450			-
Deferred income taxes		(107,646	)		-
Gain on extinguishment of debt		(445,636	)		(779,224	)
Change in fair value of the derivative liability		(87,869	)		-
Loss on change in fair value of equity investments		(1,318	)		(13,517	)
Changes in Assets and Liabilities:
Accounts receivable, net		(2,839,680	)		(5,960,027	)
Accounts receivable - related party		324,536			(53,620	)
Inventory		(336,047	)		(214,909	)
Prepaid expenses and other current assets		(1,415,455	)		(4,448,671	)
Prepaid expenses and other current assets - related party		450,454			2,914,042
Other assets		153,055			(12,084	)
Accounts payable and accrued expenses		2,249,153			2,052,075
Accounts payable and accrued expenses - related party		195,151			(237,809	)
Accrued interest		211,251			(260,347	)
Customer advances		(2,312	)		(92,751	)
Other current liabilities		161,444			49,165
Lease liabilities		(71,436	)		(84,425	)
Taxes payable		-			156
Other liabilities		(20,964	)		97
NET CASH USED IN OPERATING ACTIVITIES		(2,519,394	)		(5,876,080	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets		(12,100	)		(86,378	)
NET CASH USED IN INVESTING ACTIVITIES		(12,100	)		(86,378	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of convertible note payable		(362,000	)		(200,000	)
Proceeds from convertible note payable		100,000			-
Payment of related party note payable		-			(789,961	)
Payment of note payable		(20,000	)		(171,614	)
Proceeds from note payable		-			7,908,955
Payment of related party loan		(125,589	)		(102,257	)
Proceeds from related party loan		2,811,062			586,759
Payment of lines of credit		(12,189,057	)		(8,100,149	)
Proceeds from lines of credit		12,311,882			9,208,750
Payments of finance lease liability		(51,427	)		(38,719	)
Proceeds from sale of treasury stock		250,000			-
NET CASH PROVIDED BY FINANCING ACTIVITIES		2,724,871			8,301,764
Effect of exchange rate changes on cash		(16,000	)		28,665
NET CHANGE IN CASH		177,377			2,367,971
CASH AT BEGINNING OF PERIOD		628,395			38,537
CASH AT END OF PERIOD	$	805,772		$	2,406,508
Supplemental Disclosure of Cash Flow Information
Cash paid during the period:
Interest	$	208,565		$	124,178
Income tax	$	-		$	11,605
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Conversion of notes payable to common stock	$	2,564,364		$	-
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

NOTE 1 – BASIS OF PRESENTATION

The terms “COSM,” “we,” “the Company,” and “us” as used in this report refer to Cosmos Holdings, Inc. The accompanying unaudited condensed consolidated balance sheet as of June 30, 2021 and unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2021 have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management of COSM, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2021, are not necessarily indicative of the results that may be expected for the year ending December 31, 2021, or any other period. These unaudited consolidated financial statements and notes should be read in conjunction with the financial statements for each of the two years ended December 31, 2020 and 2019, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (“Form 10-K”). The accompanying condensed consolidated balance sheet as of December 31, 2020 has been derived from the audited financial statements filed in our Form 10-K and is included for comparison purposes in the accompanying balance sheet.

NOTE 2 – ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN

Overview

Cosmos Holdings Inc. (“us”, “we”, or the “Company”) is a multinational pharmaceutical company. The Company imports, exports and distributes pharmaceutical products of brand-name and generic pharmaceuticals, over-the-counter (OTC) medicines, and a variety of dietary and vitamin supplements through its established network. Currently, the Company operates its business through its three wholly-owned subsidiaries: (i) SkyPharm, headquartered in Thessaloniki, Greece; (ii) Decahedron Ltd., head-quartered in Harlow, United Kingdom; and (iii) Cosmofarm, headquartered in Athens, Greece. Cosmofarm was acquired in 2018 and we believe this expansion has increased our sales and profit margins as we vertically integrate our business model. The Company also has an extensive and established distribution direct and indirect network within the European Union (EU).

The Company’s cross-border pharmaceutical business serves wholesale pharmaceutical distributors and independent retail pharmacies across the EU through a network of three strategic distribution centers, as well as an additional warehousing facility. Pharmaceutical manufacturers generally implement variable pricing strategies within the EU market. Identifying and evaluating price spreads between EU member states enables the Company to source brand-name pharmaceuticals from countries where ex-factory prices are comparatively low and export to countries where the same products are priced higher. The Company focuses on leveraging its growing purchasing scale and supplier relationships to secure discounts and provide pharmaceuticals at reduced prices and on continuing to drive organic growth at attractive margins for its cross-border pharmaceutical wholesale business.

The Company regularly evaluates and undertakes strategic initiatives to expand its distribution reach, improve its profit margins, and strengthen its competitive position. In 2018, the Company entered the vitamins and dietary supplements segment and in the fourth quarter of 2018, the Company posted the first sales of its own brand of nutraceuticals: Sky Premium Life. Through the December 2018 acquisition of Cosmofarm, the Company entered the full-line pharmaceutical wholesale distribution segment. Cosmofarm now serves approximately 1500 independent retail pharmacies and 40 pharmaceutical wholesalers in the greater Athens, Greece region by providing brand-name and generic pharmaceuticals, over-the-counter medicines, vitamins, and dietary supplements. We invest in technology to enhance safety, distribution and warehousing efficiency and reliability. Cosmofarm operates two robotic ROWA, a German fully automated warehouse system, that ensure 0% error selection rate, accelerate order fulfillment, and yield higher cost-efficiency in our Athens distribution center.

We make use of analytics and customer feedback from our EU-wide network of wholesale pharmaceutical distributors and independent retail pharmacies to identify and evaluate which nutraceutical product codes to develop to add to our SkyPremium Life portfolio. We intend to continue to bring SkyPremium Life products to market primarily through our existing network of over 160 pharmaceutical wholesale clients and vendors and approximately 370 independent retail pharmacies in the EU. There is growing demand for vitamins and food supplements and we are committed to developing quality products and creating enhanced customer value.

7

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

We are also closely monitoring the legal framework for prescription and non-prescription derivatives of cannabis products as it develops in Europe. As the legal framework and processes are developed and implemented in each respective EU country, we intend to utilize our existing network to distribute both prescription and non-prescription derivatives of cannabis products to our current customer base. We currently intend to only distribute prescription and non-prescription derivatives of cannabis products to approved EU countries and not in the US.

We regularly evaluate acquisition targets that would allow us to expand our distribution reach and/or vertically integrate into the supply chain of the products that we currently distribute. We believe that the demand for reasonably priced medicines, delivered on time and in the highest quality is set to increase in the years to come, as the population’s life expectancy increases. With our product portfolio of patented and non-patented medicines, we contribute to the optimization of efficient medicinal care, and thereby lowering cost for health insurance funds, companies, and patients. We also believe that the demand for non-prescription wellness products such as food and dietary supplements will continue to increase as individuals are increasingly supplementing their nutritional intake.

We believe the EU pharmaceutical import/export market will continue to grow. We continue to encounter competition in the market as we grow. The competition comes in the form of level of service, reliability, and product quality. On the procurement side, we continue to expand our vendor base. In order to minimize business risks, we diversify our sources of supply. We maintain our high-quality standards by carefully selecting and qualifying our suppliers, as well as actively ensuring that our suppliers meet our standard of quality control on an ongoing basis.

On July 22, 2015, the Hellenic Ministry of Health and more specifically the National Organization for Medicines granted SkyPharm a license for the wholesale of pharmaceutical products for human use. The license is valid for a period of five years and pursuant to the EU directive of (2013/C343/01). Pursuant to the EU directive of (2013/C 343/01), the Company is subject to fulfill the Guidelines of the Good Distribution Practices of medical products for human use. The Company submitted its application for renewal one month before the license expiration to the Hellenic Republic National Organization, but according to the EMA (eudragmdp.ema.europa.eu/inspections/view/wda/WDAHomePage.xhtml): “Due to the restrictions caused by COVID-19, the period of validity of MIA’s, WDA’s, GMP and GDP certificates is automatically extended until the end of 2021. On-site inspections will resume as soon as there is a consensus that the period of the public health crisis has passed. The clarifying remark section of individual MIA’s, WDA’s, GMP and GDP certificates will indicate any exceptions. Competent authorities reserve the right to inspect a manufacturing site should the need arise.” Therefore, the Company is eligible to continue its operations until at least the end of 2021and expects to receive a temporary license by the end of 2021.

Decahedron received its Wholesale Distribution Authorization for human use on November 7, 2013, from the UK Medicines and Healthcare Products Regulatory Agency (MHRA) in accordance with Regulation 18 of the Human Medicines Regulations 2012 (SI 2012/1916) and it is subject to the provision of those Regulations and the Medicines Act 1971. This license will continue to remain in force from the date of issue by the Licensing Authority unless cancelled, suspended, revoked or varied as to the period of its validity or relinquished by the authorization holder.

Our subsidiaries are ISO 9001 certified for a management system for the trade and distribution of pharmaceuticals. As part of the certification process by the International Organization for Standardization, we need to be compliant with the General Data Protection Regulation (GDPR) adopted by the European Union. GDPR applies to the processing of personal data of persons in the EU by a controller or processor neither of which apply to our operations.

Corporate History and Structure

Cosmos Holdings, Inc. was incorporated in the State of Nevada under the name Prime Estates and Developments, Inc. on July 21, 2009. On November 14, 2013, we changed our name to Cosmos Holdings, Inc.

8

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

On September 27, 2013, the Company acquired one hundred (100%) percent of the outstanding common stock of Amplerissimo Ltd., a company incorporated in Cyprus (“Amplerissimo”), which became a wholly-owned subsidiary of the Company.

On November 21, 2017, the Company effected a one-for-ten (1:10) reverse stock split whereby the Company decreased, by a ratio of one-for-ten (1:10) the number of issued and outstanding shares of common stock. Proportional adjustments for the reverse stock split were made to the Company’s outstanding stock options, and warrants including all share and per-share data, for all amounts and periods presented in the consolidated financial statements.

On December 19, 2018, the Company completed the purchase of all of the capital stock of Cosmofarm Ltd. (“Cosmofarm”), a pharmaceutical wholesaler based in Athens, Greece. The principal of the selling shareholder is Panagiotis Kozaris, who remained with Cosmofarm as a director and chief operating officer once it became a wholly owned subsidiary of the Company. Grigorios Siokas, the Company’s CEO, became the new CEO of Cosmofarm. Mr. Kozaris had no prior relationship to the Company other than as an independent shareholder. The purchase price payable is €200,000 evidenced by a promissory note.

Going Concern

The Company’s consolidated financial statements are prepared in conformity with U.S. GAAP, which contemplates the continuation of the Company as a going concern. For the six months ended June 30, 2021, the Company had revenue of $26,466,001, net loss of $4,552,959 and net cash used in operations of $2,519,394. Additionally, as of June 30, 2021, the Company had working capital of $10,417,725, an accumulated deficit of $23,303,783, and stockholders’ equity of $384,548. It is management’s opinion that these conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date of this filing.

The Company has undergone strategic review processes to help find a definitive solution to the Company’s accumulated deficit constraints. Options under consideration in the strategic review process include, but are not limited to, securing new debt, exchange debt to equity, restructuring current debt facilities from short term to long term and taking the proper actions for new fund raising.

The condensed consolidated financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of this uncertainty.

The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund its operations. If the Company is unable to obtain adequate capital, it could be forced to cease development of operations.

In order to continue as a going concern, develop a reliable source of revenues, and achieve a profitable level of operations, the Company will need, among other things, additional capital resources. Management’s plans to continue as a going concern include raising additional capital through increased sales of product and by sale of equity and/or debt. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described herein and eventually secure other sources of financing and attain profitable operations.

Summary of Significant Accounting Policies

Basis of Financial Statement Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

9

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

Principles of Consolidation

Our condensed consolidated accounts include our accounts and the accounts of our wholly-owned subsidiaries, SkyPharm S.A., Decahedron Ltd. and Cosmofarm Ltd. All significant intercompany balances and transactions have been eliminated.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The Effects of COVID-19

Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of August 16, 2021, the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change, as new events occur, and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of June 30, 2021, and December 31, 2020, there were no cash equivalents.

The Company maintains bank accounts in the United States denominated in U.S. Dollars and in Greece and in Bulgaria all of them denominated in Euros. The Company also maintains bank accounts in the United Kingdom, denominated in Euros and Great Britain Pounds (British Pounds Sterling).

Reclassifications to Prior Period Financial Statements and Adjustments

Certain reclassifications have been made in the Company’s financial statements of the prior period to conform to the current year presentation. For the three and six months ended June 30, 2020, $380,326 and $434,056, respectively, in sales and marketing expenses were reclassified from general and administrative expenses. Additionally, for the six months ended June 30, 2020, $260,347 was reclassified from accounts payable and accrued expenses to accrued interest on the Statement of Cash Flows. These reclassifications have no impact on previously reported net income.

Account Receivable, net

Accounts receivable are stated at their net realizable value. The allowance for doubtful accounts against gross accounts receivable reflects the best estimate of probable losses inherent in the receivables’ portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available information. As of June 30, 2021, and December 31, 2020, the Company’s allowance for doubtful accounts was $693,485 and $715,845, respectively.

Tax Receivable

The Company pays Value Added Tax (“VAT”) or similar taxes (“input VAT”), income taxes, and other taxes within the normal course of its business in most of the countries in which it operates related to the procurement of merchandise and/or services it acquires and/or on sales and taxable income. The Company also collects VAT or similar taxes on behalf of the government (“output VAT”) for merchandise and/or services it sells. If the output VAT exceeds the input VAT, this creates a VAT payable to the government. If the input VAT exceeds the output VAT, this creates a VAT receivable from the government. The VAT tax return is filed on a monthly basis offsetting the payables against the receivables. In observance of EU regulations for intra-EU cross-border sales, our subsidiaries in Greece, SkyPharm and Cosmofarm, do not charge VAT for sales to wholesale drug distributors registered in other European Union member states. The net VAT receivable is recorded in prepaid expense and other current assets on the condensed consolidated balance sheets.

10

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

Inventory

Inventory is stated at net realizable value using the weighted average method. Inventory consists primarily of finished goods and packaging materials, i.e., packaged pharmaceutical products and the wrappers and containers they are sold in. A periodic inventory system is maintained by 100% count. Inventory is replaced periodically to maintain the optimum stock on hand available for immediate shipment.

The Company writes down inventories to net realizable value based on physical condition, expiration date, current market conditions, as well as forecasted demand. The Company’s inventories are not highly susceptible to obsolescence. Many of the Company’s inventory items are eligible for return to our suppliers when pre-agreed product requirements, including, but not limited to, physical condition and expiration date, are not met.

Property and Equipment, net

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated on a straight-line basis over the useful lives (except for leasehold improvements which are depreciated over the lesser of the lease term or the useful life) of the assets as follows:

	Estimated Useful Life
Leasehold improvements and technical works		Lesser of lease term or 40 years
Vehicles		6 years
Machinery		20 years
Furniture, fixtures and equipment		5–10 years
Computers and software		3-5 years

Depreciation expense was $78,341 and $70,739 for the three months ended June 30, 2021 and 2020, respectively and $149,812 and $124,251 for the six months ended June 30, 2021 and 2020, respectively.

Impairment of Long-Lived Assets

In accordance with ASC 360-10, long-lived assets, property and equipment and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.

Goodwill and Intangibles, net

The Company periodically reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist. Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. Specifically, goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses level 3 inputs and a discounted cash flow methodology to estimate the fair value of a reporting unit. A discounted cash flow analysis requires one to make various judgmental assumptions including assumptions about future cash flows, growth rates, and discount rates. The assumptions about future cash flows and growth rates are based on the Company’s budget and long-term plans. Discount rate assumptions are based on an assessment of the risk inherent in the respective reporting units. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit.

11

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

On December 19, 2018, as a result of the acquisition of Cosmofarm, the Company recorded $49,697 of goodwill.

Intangible assets with definite useful lives are recorded on the basis of cost and are amortized on a straight-line basis over their estimated useful lives. The Company uses a useful life of 5 years for an import/export license. The Company evaluates the remaining useful life of intangible assets annually to determine whether events and circumstances warrant a revision to the remaining amortization period. If the estimate of the intangible asset’s remaining useful life is changed, the remaining carrying amount of the intangible asset will be amortized prospectively over that revised remaining useful life. As of June 30, 2021, no revision to the remaining amortization period of the intangible assets was made.

Amortization expense was $8,249 and $8,249 for the three months ended June 30, 2021 and 2020, respectively and $16,407 and $16,497 for the six months ended June 30, 2021 and 2020, respectively.

Equity Method Investment

For those investments in common stock or in-substance common stock in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, the investment is accounted for under the equity method. The Company will record its share in the earnings of the investee and will include it within the condensed consolidated statement of operations. The Company assesses its investment for other-than-temporary impairment when events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable and recognizes an impairment loss to adjust the investment to its then current fair value.

Investments in Equity Securities

Investments in equity securities are accounted for at fair value with changes in fair value recognized in net income (loss). Equity securities are classified as short-term or long-term based on the nature of the securities and their availability to meet current operating requirements. Equity securities that are readily available for use in current operations are reported as a component of current assets in the accompanying consolidated balance sheets. Equity securities that are not considered available for use in current operations would be reported as a component of long-term assets in the accompanying consolidated balance sheets. For equity securities with no readily determinable fair value, the Company elects a measurement alternative to fair value. Under this alternative, the Company measures the investments at cost, less any impairment, and adjusted for changes resulting from observable price changes in transactions for identical or similar investments of the investee. The election to use the measurement alternative is made for each eligible investment.

As of June 30, 2021, investments consisted of 3,000,000 shares, which traded at a closing price of $0 per share or a value of $0 of ICC International Cannabis Corp, 40,000 shares which traded at a closing price of $5.30 per share, or value of $211,368 of Diversa S.A. and 16,666 shares which traded at a closing price of $0.28 per share or value of $4,739 of National Bank of Greece. Additionally, the Company has $4,623 in equity securities of Pancreta Bank, which are not publicly traded and recorded at cost. See Note 3, for additional investments in equity securities.

12

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

Fair Value Measurement

The Company applies FASB ASC 820, Fair Value Measurements and Disclosures, (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

The following tables presents assets that are measured and recognized at fair value as of June 30, 2021 and December 31, 2020, on a recurring basis:

	June 30, 2021						Total Carrying
	Level 1		Level 2		Level 3		Value
Marketable securities – ICC International Cannabis Corp.	$	-		-		-	$	-
Marketable securities – Divsersa S.A.		211,368		-		-		211,368
Marketable securities – National Bank of Greece		4,739		-		-		4,739
	$	216,107					$	216,107

	December 31, 2020						Total Carrying
	Level 1		Level 2		Level 3		Value
Marketable securities – ICC International Cannabis Corp.	$	-		-		-	$	-
Marketable securities – Divsersa S.A.		218,183		-		-		218,183
Marketable securities – National Bank of Greece		4,609		-		-		4,609
	$	222,792					$	222,792

In addition, FASB ASC 825-10-25, Fair Value Option, (“ASC 825-10-25”), expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.

Customer Advances

The Company receives prepayments from certain customers for pharmaceutical products prior to those customers taking possession of the Company’s products; the Company records these receipts as customer advances until it has met all the criteria for recognition of revenue including passing control of the products to its customer, at such point the Company will reduce the customer and deposits balance and credit the Company’s revenues.

13

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

Revenue Recognition

In accordance with ASC 606, Revenue from Contracts with Customers, the Company uses a five-step model for recognizing revenue by applying the following steps: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the performance obligations are satisfied by transferring the promised goods to the customer. Once these steps are met, revenue is recognized upon transfer of the product to the customer.

Stock-based Compensation

The Company records stock-based compensation in accordance with ASC 718, Stock Compensation (“ASC 718”) and Staff Accounting Bulletin No. 107 (“SAB 107”) regarding its interpretation of ASC 718. ASC 718 requires the fair value of all stock-based employee compensation awarded to employees to be recorded as an expense over the related requisite service period. The Company values any employee or non-employee stock-based compensation at fair value using the Black-Scholes Option Pricing Model.

The Company accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASU 2018-07, “Compensation-Stock Compensation-Improvements to Nonemployee Share-Based Payment Accounting.”

Foreign Currency Translations and Transactions

Assets and liabilities of all foreign operations are translated at year-end rates of exchange, and the statements of operations are translated at the average rates of exchange for the year. Gains or losses resulting from translating foreign currency financial statements are accumulated in a separate component of stockholders’ deficit until the entity is sold or substantially liquidated.

Gains or losses from foreign currency transactions (transactions denominated in a currency other than the entity’s local currency) are included in net earnings.

Income Taxes

The Company accounts for income taxes under the asset and liability method, as required by the accounting standard for income taxes ASC 740. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as net operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company is liable for income taxes in Greece and the United Kingdom The corporate income tax rate is 22% in Greece and 19% in United Kingdom. Losses may also be subject to limitation under certain rules regarding change of ownership.

14

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

We regularly review deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if we do not consider it to be more likely than not that the deferred tax assets will be realized. Our review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets. At June 30, 2021 the Company has maintained a valuation allowance against all net deferred tax assets in each jurisdiction in which it is subject to income tax.

The Company periodically reviews the uncertainties and judgments related to the application of complex income tax regulations to determine income tax liabilities in several jurisdictions. The Company uses a “more likely than not” criterion for recognizing the income tax benefit of uncertain tax positions and establishing measurement criteria for income tax benefits. The Company has evaluated the impact of these positions and due to the fact that the fiscal years 2013 - 2014 are unaudited by the Greek tax authorities, a potential tax liability has not been identified because there is a limitation on periods that the Tax authorities can audit retrospectively 5 years prior to the current fiscal year. Therefore, no prospective tax audit from tax authorities may arise.

Retirement and Termination Benefits

Under Greek labor law, employees are entitled to lump-sum compensation in the event of termination or retirement. The amount depends on the employee’s work experience and renumeration as of the day of termination or retirement. If an employee remains with the company until full-benefit retirement, the employee is entitled to a lump-sum equal to 40% of the compensation to be received if the employee were to be dismissed on the same day. The Company periodically reviews the uncertainties and judgments related to the application of the relevant labor law regulations to determine retirement and termination benefits obligations of its Greek subsidiaries. The Company has evaluated the impact of these regulations and has identified a potential retirement and termination benefits liability. The amount of the liability as of June 30, 2021 and December 31, 2020, was $102,901 and $107,167 respectively, and has been recorded as a long-term liability within the condensed consolidated balance sheets.

Basic and Diluted Net Loss per Common Share

Basic income per share is calculated by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted income per share is calculated by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period and, when dilutive, potential shares from stock options and warrants to purchase common stock, using the treasury stock method. In accordance with ASC 260, Earnings Per Share, the following table reconciles basic shares outstanding to fully diluted shares outstanding.

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Weighted average number of common shares outstanding Basic		16,105,409		13,225,387		15,572,773		13,225,387
Potentially dilutive common stock equivalents		-		28,729		-		29,566
Weighted average number of common and equivalent shares outstanding - Diluted		16,105,409		13,254,116		15,572,773		13,254,953

Common stock equivalents are included in the diluted income per share calculation only when option exercise prices are lower than the average market price of the common shares for the period presented.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective January 1, 2024, for the Company. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. Management is currently evaluating the effect of the adoption of ASU 2020-06 on the consolidated financial statements.

Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements.

15

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

NOTE 3 – MARKETABLE SECURITIES

Distribution and Equity Agreement

On March 19, 2018, the Company entered into a Distribution and Equity Acquisition Agreement (the “Distribution and Equity Acquisition Agreement”) with Marathon Global Inc. (“Marathon”), a company incorporated in the Province of Ontario, Canada. Marathon was formed to be a global supplier of cannabis, cannabidiol (CBD) and/or any cannabis extract products, extracts, ancillaries and derivatives (collectively, the “Products”). The Company was appointed the exclusive distributor of the Products initially throughout Europe and on a non-exclusive basis wherever else lawfully permitted. The Company has no present intention to distribute any Products under this Agreement in the United States or otherwise participate in cannabis operations in the United States. The Company intends to await further clarification from the U.S. Government on cannabis regulation prior to determining whether to enter the domestic market.

The Distribution and Equity Acquisition Agreement is to remain in effect indefinitely unless Marathon fails to provide Market Competitive (as defined) product pricing and Marathon has not become profitable within five (5) years of the agreement. The transaction closed on May 22, 2018 after the due diligence period, following which the Company received: (a) a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services; and (b) received cash of CAD $2,000,000, subject to repayment in common shares of the Company if it fails to meet certain performance milestones. The Company is entitled to receive an additional CAD $2,750,000 upon the Company’s receipt of gross sales of CAD $6,500,000 and an additional CAD $2,750,000 upon receipt of gross sales of CAD $13,000,000. The Company was also given the right to nominate one director to the Marathon board of directors.

Since Marathon was a newly formed entity with no assets and no activity, the Company attributed no value to the 5 million shares in Marathon which was received as consideration for the distribution services. As described below, the Company exchanged the Marathon shares in May and July 2018.

Share Exchange Agreements

On May 17, 2018, the Company entered into a Share Exchange Agreement (the “SEA”) with Marathon, ICC International Cannabis Corp (“ICC”) formerly known as Kaneh Bosm Biotechnology Inc. (“KBB”) and certain other sellers of Marathon capital stock. Under the SEA, the Company transferred 2.5 million shares in Marathon to ICC, a corporation incorporated under the laws of the Province of British Columbia and a public reporting issuer on the Canadian Securities Exchange, in exchange for 5 million shares of ICC. The Company accounted for the exchange at fair value and recognized a gain on exchange of its investment in Marathon of $1,953,000 in the year ended December 31, 2018.

On July 16, 2018, the Company completed a Share Exchange Agreement (the “New SEA”) with Marathon, ICC, and certain other sellers of Marathon capital stock whereby the Company transferred its remaining one-half interest (2.5 million shares) in Marathon to KBB for an additional 5 million shares of ICC. The Company accounted for the exchange at fair value and recognized a gain on exchange of its investment in Marathon of $2,092,200 in the year ended December 31, 2018. The ten million shares of ICC owned by the Company constituted approximately 7% of the 141,219,108 shares of capital stock of KBB then issued and outstanding. The Company does not have the ability to exercise significant influence over ICC.

The Company determined the fair value of both exchanges based on an actively quoted stock price of ICC received in exchange for the Marathon shares. The Company continues to fair value its investment in ICC with changes recognized in earnings each period and was recorded as an unrealized gain on exchange of investment during the six months ended June 30, 2021 of $0. The value of the investments as of June 30, 2021 and December 31, 2020, was $0 and $0, respectively.

16

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

Since no value was attributed to the 33 1/3% equity ownership interest in Marathon received as consideration for the distribution services, the Company would receive variable consideration in future for its services under the Distribution and Equity Acquisition Agreement, if certain milestones are achieved. Refer to Note 11 for the accounting associated with the cash of CAD $2 million received upfront. Variable consideration to be received in the future upon achieving the gross sales milestones described above, is constrained as the Company estimates that it is probable that a significant reversal of revenue could occur. In assessing the constraint, the Company considered its limited experience with the Products, new geographic markets and similar transactions, which affect the Company’s ability to estimate the likelihood of a probable revenue reversal. Therefore, no revenue has been recognized for the period ended June 30, 2021. The Company will continue to reassess variable consideration at each reporting period and update the transaction price when it becomes probable that a significant revenue reversal would not occur.

As of June 30, 2021, in addition to the 3,000,000 ICC shares valued at $0, as noted above, marketable securities also consisted of the following: 40,000 shares which traded at a closing price of $5.30 per share, or value of $211,368 of Diversa S.A. and 16,666 shares which traded at a closing price of $0.28 per share or value of $4,739 of National Bank of Greece. The Company recorded a net unrealized gain on the fair value of these investments of $279 during the six months ended June 30, 2021.

CosmoFarmacy LP

In June 2019, the Company entered into an agreement with an unaffiliated third party to incorporate CosmoFarmacy L.P. for the purpose of providing strategic management consulting services and the retail trade of pharmaceutical products, and OTC to pharmacies. CosmoFarmacy was incorporated with a 30-year term through May 31, 2049. The unaffiliated third party is the general partner (the “GP”) of the limited partnership and is responsible for management and decision-making associated with CosmoFarmacy. The initial share capital was set to EUR 150,000 which was later increased to EUR 500,000. The GP contributed the pharmacy license (the “License”) valued at EUR 350,000 (30-year term) to operate the business of CosmoFarmacy in exchange for a 70% equity ownership. The Company is a limited partner and contributed cash of EUR 150,000 for the remaining 30% equity ownership. CosmoFarmacy is not publicly traded and the Company’s investment has been recorded using the equity method of accounting. The value of the investment as of June 30, 2021 was $177,720 and is included in “Other assets” on the Company’s condensed consolidated balance sheet.

NOTE 4 – PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following:

	June 30, 2021			December 31, 2020
Leasehold improvements	$	543,451		$	560,711
Vehicles		101,183			105,057
Furniture, fixtures and equipment		1,597,143			1,632,654
Computers and software		142,216			149,005
		2,383,993			2,447,427
Less: Accumulated depreciation and amortization		(805,952	)		(690,214	)
Total	$	1,578,041		$	1,757,213

17

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

NOTE 5 – GOODWILL AND INTANGIBLE ASSETS, NET

Intangible assets, net consist of the following at:

	June 30, 2021			December 31, 2020
License	$	50,000		$	50,000
Trade name / mark		36,997			36,997
Customer base		176,793			176,793
		263,790			263,790
Less: Accumulated amortization		(99,388	)		(82,981	)
Subtotal		164,402			180,809
Goodwill		49,697			49,697
Total	$	214,099		$	230,506

NOTE 6 – INCOME TAXES

The Company is incorporated in the United States of America and is subject to United States federal taxation. No provisions for income taxes have been made as the Company had no U.S. taxable income for the three and six months ended June 30, 2021 and 2020.

The Company’s Greece subsidiaries are governed by the income tax laws of Greece. The corporate tax rate in Greece is 22% on income reported in the statutory financial statements after appropriate tax adjustments.

The Company’s United Kingdom subsidiaries are governed by the income tax laws of the United Kingdom. The corporate tax rate in the United Kingdom is 19% on income reported in the statutory financial statements after appropriate tax adjustments.

As of June 30, 2021 and 2020, the Company’s effective tax rate differs from the US federal statutory tax rate primarily due to a valuation allowance recorded against net deferred tax assets in in the United States.

We regularly review deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if we do not consider it to be more likely than not that the deferred tax assets will be realized. Our review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets. As of June 30, 2021 and December 31, 2020, the Company has maintained a valuation allowance against all net deferred tax assets in the United States only. Foreign valuation allowances had been reversed as of December 31, 2020.

As of June 30, 2021 and December 31, 2020, the Company has a benefit for tax recorded in any jurisdiction where it is subject to income tax, in the amount of $286,329 and $178,430, respectively, which is included in Deferred tax assets on the condensed consolidated balance sheets.

NOTE 7 – CAPITAL STRUCTURE

Preferred Stock

The Company is authorized to issue 100 million shares of preferred stock, which may be issued from time to time in one or more series authorized by the Board of Directors. As of June 30, 2021, no preferred shares have been issued.

Common Stock

The Company is authorized to issue 300 million shares of common stock. As of June 30, 2021 and December 31, 2020, the Company had 16,566,947 and 13,485,128 shares of our common stock issued and 16,216,619 and 13,069,800 shares outstanding, respectively.

18

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

Purchase of Treasury Shares

On July 31, 2020, the Company entered into a Stock Purchase Agreement (the “July SPA”) with a stockholder. The July SPA provides for the Company’s purchase of 10,000 shares of the Company’s common stock at $4.00 per share or an aggregate of $40,000. As of December 31, 2020, the Company made $40,000 in payments.

On August 31, 2020, the Company entered into two Stock Purchase Agreements (the “August SPAs”) with a stockholder. The August SPAs provide for the Company’s purchase of an aggregate total of 10,000 shares of the Company’s common stock at $4.00 per share or an aggregate of $40,000. As of December 31, 2020, the Company made $40,000 in payments.

On September 30, 2020, the Company entered into a Stock Purchase Agreement (the “July SPA”) with a stockholder. The July SPA provides for the Company’s purchase of 10,000 shares of the Company’s common stock at $4.00 per share or an aggregate of $40,000. As of December 31, 2020, the Company made $40,000 in payments.

On October 31, 2020, the Company entered into a Stock Purchase Agreement (the “July SPA”) with a stockholder. The July SPA provides for the Company’s purchase of 10,000 shares of the Company’s common stock at $4.00 per share or an aggregate of $40,000. As of December 31, 2020, the Company made $40,000 in payments.

On November 30, 2020, the Company entered into a Stock Purchase Agreement (the “July SPA”) with a stockholder. The July SPA provides for the Company’s purchase of 10,000 shares of the Company’s common stock at $4.00 per share or an aggregate of $40,000. As of December 31, 2020, the Company made $40,000 in payments.

Sale of Treasury Shares

On February 5, 2021, the Company entered into a Stock Purchase Agreement (the “February SPA”) with an unaffiliated third-party. The February SPA provides for the Company’s to sell 65,000 shares of the Company’s common stock held in treasury at $3.85 per share or a total of $250,000.

Consulting Agreement

The Company entered into a Consulting Agreement (the “Agreement”) effective as of February 5, 2021, with a non-affiliated consultant (the “Consultant”). The Company engaged the Consultant to perform consulting services relating to Company management, debt structure, business plans and business development in connection with any capitalization transactions involving the Company and any newly created or existing entities. The Agreement is for a term of nine (9) months with an initial term of ninety (90) days (the “Initial Term”). The Agreement is terminable by the Company for any reason upon written notice at any time after the Initial Term.

The Company agreed to pay Consultant and its assignees an aggregate of 1,800,000 restricted shares of Common Stock, earned at the rate of 200,000 shares per month, which shall be issued and fully paid for in consideration of the Consultant’s considerable expertise and experience and its commitment to work for the Company. However, in the event the Agreement is terminated for any reason after the Initial Term, the shares are subject to a claw back for any months remaining after the Termination Date. The Consultant retained 800,000 of the 1,800,000 shares and agreed with an assignee and the Company that 1,600,000 of the 1,800,000 shares shall be held in book entry for six (6) months from the date of this Agreement, subject to the above claw back. The shares valued on the date of the agreement at $3.28 per share or $5,904,000, which will be amortized over the term of the agreement. As of June 30, 2021, the Company has recorded $3,157,451 in stock-based compensation for the 1,000,000 shares earned through the end of the period.

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COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

Debt Exchange Agreement

On June 23, 2021, the Company entered into a Debt Exchange Agreement (the “June Debt Exchange Agreement”) to exchange various loans pursuant to which the related party Lender has made (See Note 8), in the aggregate principal amount of $3,000,000 (the “Debt”). The Company agreed to issue the Lender shares of common stock of the Company at an exchange rate of $6.00 per share (the “Exchange Shares”) in exchange for the principal amount of Debt of $3,000,000 or 500,000 shares of common stock (exchange rate of $6.00 per share). On June 23, 2021, the fair value of the Company’s shares of common stock was $5.00 per share. For the three and six months ended June 30, 2021, the Company recorded $3,000,000 as a capital contribution and an increase in equity in accordance with ASC 850-10-20 due to the related party relationship and ASC 470-50-40-20 which provides guidance on extinguishments of related party debt. Accordingly, extinguishment transactions between related entities are in essence capital transaction, and no gain is recorded in the consolidated statements of operations for the difference between the fair value of $5.00 per share and the exchange rate of $6.00 per share.

Potentially Dilutive Securities

No options, warrants or other potentially dilutive securities have been issued as of June 30, 2021 and December 31, 2020, respectively.

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 June 30, 2021, the Company has a prepaid balance of $2,917,334 and an accounts payable balance of $177,161, resulting in a net prepaid balance of $2,740,173 to Doc Pharma S.A. related to purchases of inventory. Additionally, the Company has a receivable balance of $3,135,184. As of December 31, 2020, the Company has a prepaid balance of $3,468,653 to Doc Pharma S.A. related to purchases of inventory. Additionally, the Company had a receivable balance of $3,468,564.

During the three months ended June 30, 2021 and 2020, the Company purchased a total of $1,091,118 and $644,643 of products from Doc Pharma S.A., respectively. During the three months ended June 30, 2021 and 2020 the Company had $523,712 and $1,107,822, in revenue from Doc Pharma S.A., respectively.

During the six months ended June 30, 2021 and 2020, the Company purchased a total of $1,413,924 and $1,315,274, respectively, of products from Doc Pharma S.A. During the six months ended June 30, 2021 and 2020 the Company had $796,917 and $1,469,365, in revenue from Doc Pharma S.A., respectively.

On October 10, 2020, the Company entered into a contract manufacturer outsourcing agreement with DOC Pharma whereby DOC Pharma is responsible for the development and manufacturing of pharmaceutical products and nutritional supplements according to the Company’s specifications based on strict pharmaceutical standards and GMP (Good Manufacturing Practice) protocols, as the National Organization for Medicines requires. The Company has the exclusive ownership rights for trading and distribution of its own branded nutritional supplements named “Sky Premium Life” (“SPL”). The duration of the agreement is for 5 years however either party may terminate the agreement at any time giving six-months advance notice. DOC Pharma is exclusively responsible for supplying the raw materials and packaging required to manufacture the final product. However, they are not responsible for potential delays that may arise, concerning their import. DOC Pharma is obliged to store the raw and packaging materials. The delivery of raw and packaging materials should be purchased at least 30 and 25 days, respectively, before the delivery date of the final product. The Manufacturer solely delivers the finished product to the Company. There is a minimum order quantity (MoQ) of 1,000 pieces per product code. Both parties have agreed that the Company will deposit 60% of the total cost upon agreement and assignment and 40% of the total cost including VAT charge upon the delivery date. The prices are indicative and are subject to amendments if the cost of the raw material or the production cost change. As of June 30, 2021, the Company has purchased €505,861 ($599,344) in inventory related to this agreement.

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 S.A. in the past.

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COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

Notes Payable – Related Party

A summary of the Company’s related party notes payable as of June 30, 2021 and December 31, 2020 is presented below:

	2021			2020
Beginning Balance	$	501,675		$	1,375,532
Payments		-			(996,136	)
Foreign currency translation		(15,670	)		122,279
Ending Balance	$	486,005		$	501,675

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 matured on March 18, 2019 pursuant to the original agreement. The note is not in default and the maturity date has been extended until December 31, 2021. As of December 31, 2020, the note had an outstanding principal balance of €400,000 ($489,200) and accrued interest of €158,287 ($193,585). As of June 30, 2021, the Company has an outstanding balance of €400,000 ($473,920) and accrued interest of €203,017 ($240,535).

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 has no maturity date and is non-interest bearing. As of December 31, 2020, the Company had a principal balance of €10,200 ($12,475). A principal balance of €10,200 ($12,085) remained as of June 30, 2021.

Dimitrios Goulielmos is a current director and former CEO of the Company.

The above balances are adjusted for the foreign currency rate as of the balance sheet date. For the six months ended June 30, 2021 the Company recorded a loss of $15,670.

Loans Payable – Related Party

A summary of the Company’s related party loans payable during the six months ended June 30, 2021, and the year ended December 31, 2020 is presented below:

	2021			2020
Beginning Balance	$	1,629,246		$	1,026,264
Proceeds		2,811,062			725,563
Payments		(125,589	)		(149,695	)
Conversion of debt		(3,000,000	)		-
Settlement of lawsuit		(600,000	)		-
Foreign currency translation		(10,316	)		27,114
Ending Balance	$	704,403		$	1,629,246

Grigorios Siokas

From time to time, Grigorios Siokas loans the Company funds in the form of non-interest bearing, no-term loans. As of December 31, 2020, the Company had an outstanding principal balance under these loans of $1,629,246 in loans payable to Grigorios Siokas.

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COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

On May 10, 2021, the Company entered into a Debt Exchange agreement (“May Debt Exchange”) related to a lawsuit from on or about July 25, 2019, whereby Mark Rubenstein, individually and as a shareholder of the Company, brought the action styled Rubenstein v. Siokas, et al., Case No. 1:19-cv-06976-KPF (S.D.N.Y.) against Grigorios Siokas for recovery of alleged profits earned under Section 16(b) of the Securities Exchange Act of 1934. Although recovery was sought only from Mr. Siokas, the Company was also named as a nominal defendant. Both the Company and Mr. Siokas vigorously defended the lawsuit. On or about September, 18, 2020, in an effort to avoid the uncertainty of litigation and further legal expense, Mr. Siokas agreed to settle the lawsuit by agreeing to reimburse the Company a total of six hundred thousand ($600,000) dollars, payable as a combination of: (1) Mr. Siokas reimbursing the Company for Plaintiff’s attorneys’ fees, in an amount subsequently determined by the Court to be $120,000 plus $4,137 of litigation costs to be paid in cash, and (2) Mr. Siokas relieving the Company of certain debt owed to him. Mr. Siokas and the Company strongly opposed Plaintiff’s motion for attorneys’ fees. The Company has accrued the Plaintiff’s attorney’s fees and the balance as of June 30, 2021 was $124,137 and is included in accounts payable and accrued expenses on the balance condensed consolidated balance sheet. Pursuant to the terms of the May Debt Exchange the Company forgave $600,000 of the existing loan payable and recorded the forgiveness to additional paid in capital.

On June 23, 2021, the Company entered into an exchange agreement (“June Exchange Agreement”) with Mr. Siokas whereby an aggregate total of $3,000,000 of these outstanding loans were converted into 500,000 shares of the Company’s common stock. During the six months ended June 30, 2021, the Company borrowed additional proceeds of €1,080,000 ($1,281,562) and $1,529,500 and repaid €106,000 ($125,589) of these loans. As of June 30, 2021, the Company had an outstanding balance under these loans of $704,403.

The above balances are adjusted for the foreign currency rate as of the balance sheet date. For the six months ended June 30, 2021 the Company recorded a loss of $10,316.

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.

NOTE 9 – LINES OF CREDIT

A summary of the Company’s lines of credit as of June 30, 2021 and December 31, 2020 is presented below:

	June 30, 2021		December 31, 2020
National	$	3,093,644	$	3,540,550
Alpha		1,019,368		1,106,894
Pancretan		532,191		-
National - COVID		393,709		429,240
Total	$	5,038,912	$	5,076,684

The line of credit with National Bank of Greece is being renewed annually with current interest rates of 6.00%, 4.35% (“COSME 2”) and 4.35% (plus the 6-month Euribor plus any contributions currently in force by law on certain lines of credit), (“COSME 1”). The maximum borrowing allowed for the 6% line of credit was $2,606,560 and $2,690,600 as of June 30, 2021 and December 31, 2020, respectively for the 6% line of credit. The outstanding balance was $2,103,897 and $2,411,182 as of June 30, 2021 and December 31, 2020, respectively.

The maximum borrowing allowed was $1,184,800 and $1,223,000 as of June 30, 2021 and December 31, 2020, respectively, for the 4.35% lines of credit. The outstanding balance was $989,746 and $1,129,368 as of June 30, 2021 and December 31, 2020, respectively.

The line of credit with Alpha Bank of Greece is renewed annually with a current interest rate of 6.00%. The maximum borrowing allowed was $1,184,800 and $1,123,000 as of June 30, 2021 and December 31, 2020, respectively. The outstanding balance was $1,019,368 and $1,106,894 as of June 30, 2021 and December 31, 2020, respectively.

The Company entered into a line of credit with Pancreta bank on February 23,2021. The line of credit is renewed annually with a current interest rate of 6.10%. The maximum borrowing allowed was $592,400 at June 30, 2021. The outstanding balance was $532,191 as of June 30, 2021.

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COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

Interest expense for the three month period ended June 30, 2021 and 2020, was $137,088.11 and $92,747, respectively.

Interest expense for the six months ended June 30, 2021 and 2020, was $153,589 and $110,420, respectively.

Under the agreements, the Company is required to maintain certain financial ratios and covenants. These lines of credit were assumed in the Company’s acquisition of Cosmofarm. During the three and six months ended June 30, 2021 and December 31, 2020, the Company was in compliance with these ratios and covenants.

COVID-19 Government Funding

On June 23, 2020, the Company’s subsidiary, Cosmofarm, entered into an agreement with the “National Bank of Greece SA” (the “Bank”) to borrow a maximum of €500,000 ($611,500) under a proposed plan which will operate the same as the line of credit above. The proposed plan has a maturity date of sixty (60) months from the date of the first disbursement, which includes a grace period of nine months. The total amount of the initial proceeds were paid in 3 equal monthly installments. The line of credit is interest bearing from the date of receipt and is payable every three (3) months at an interest rate of 2.7%. The outstanding balance was $393,709 and $429,240 at June 30, 2021 and December 31, 2020.

Interest expense for the three and six months ended June 30, 2021 was $0.

NOTE 10 – CONVERTIBLE DEBT

A summary of the Company’s convertible debt during the six months ended June 30, 2021 and the year ended December 31, 2020 is presented below:

	2021			2020
Beginning balance convertible notes		1,447,000			1,500,000
New notes		100,000			540,000
Payments		(362,000	)		(593,000	)
Subtotal notes		1,185,000			1,447,000
Debt discount at year end		(418,504	)		(494,973	)
Convertible note payable net of discount		766,496			952,027

All of the convertible debt is classified as short-term within the consolidated balance sheet as it all matures and will be paid back within fiscal year 2021.

Securities Purchase Agreement executed on May 15, 2019

On May 15, 2019, the Company entered into a Securities Purchase Agreement with an institutional investor (the “Buyer”). Upon the closing of this financing, on May 17, 2019, the Company issued for a purchase price of $1,500,000 in principal amount a Senior Convertible Note (the “May 2019 Note”) to the Buyer. The May 2019 Note provided that the Company will repay the principal amount of the May 2019 Note on or before March 15, 2020.

On March 23, 2020, the Company entered into a Forbearance and Amendment Agreement (the “Agreement”) with an institutional investor (the “Buyer”). The Agreement provides that the Buyer will (a) forbear (i) from taking any action with respect to the Existing Default and (ii) from issuing any demand for redemption of the Note on the basis of the Existing Default until the earlier of: (1): (September 16, 2020 (or, if earlier, such date when all amounts outstanding under the Note shall be paid in full or converted into shares of Common Stock in accordance therewith) and (2) the time of any breach by the Company of the Agreement or the occurrence of an Event of Default that is not an Existing Default (the “Forbearance Expiration Date”), (b) during the Forbearance Period waive the prepayment premium to any Company Optional Redemption, and (c) during the Forbearance Period, waive the repayment in full of the Note other than the Required Payments (as defined) prior to September 16, 2020. The Scheduled Required Prepayments are $100,000 upon signing the Agreement and five (5) monthly payments thereafter aggregating $200,000 with all amounts outstanding under the Note due on September 16, 2020. In addition, there are mandatory prepayments in the event the Company completes a Subsequent Placement (as defined) or long-term debt (other than from the Buyer or from officers and directors and advisors of the Company) or factoring and purchase order indebtedness, the Company shall effect a Company Optional Redemption amount equal to 50% of the gross proceeds (less reasonable expenses of counsel and any investment bank) together with all Scheduled Required Payments.

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COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

On September 23, 2020, the Company entered into a Second Forbearance and Amendment Agreement (the “Agreement”) with the Buyer. Pursuant to the March 23, 2020, Forbearance and Amendment Agreement. The Note was due to be paid in full on or before September 16, 2020 and was not paid (the “Existing Default”). The Note provides that upon an Event of Default, the Buyer may, among other things, require the Company to redeem all or a portion of the Note at a redemption premium of 120%, multiplied by the product of the conversion rate ($6.00per share) and the then current market price. 

The Agreement provides that the Buyer will (a) forbear (i) from taking any action with respect to the Existing Default and (ii) from issuing any demand for redemption of the Note on the basis of the Existing Default until the earlier of: (1): June 16, 2021 (or, if earlier, such date when all amounts outstanding under the Note shall be paid in full or converted into shares of Common Stock in accordance therewith) and (2) the time of any breach by the Company of the Agreement or the occurrence of an Event of Default that is not an Existing Default (the “Forbearance Expiration Date), (b) during the Forbearance Period (as defined) waive the prepayment premium to any Company Optional Redemption (which will result in the 120% redemption premium effectively replaced with 100%), and (c) during the Forbearance Period, waive the repayment in full of the Note other than the Required Payments (as defined) prior to June 16, 2021. The Scheduled Required Prepayments are $63,000 upon signing the Agreement and eight (8) monthly payments thereafter aggregating $480,000 with the remaining $607,000 outstanding under the Note due on June 16, 2021. In addition, there are mandatory prepayments in the event the Company completes a Subsequent Placement (as defined) or long-term debt (other than from the Buyer or from officers, directors and 10% or greater shareholders of the Company) or factoring and purchase order indebtedness, the Company shall effect a Company Optional Redemption amount equal to 50% of the gross proceeds (less reasonable expenses of counsel and any investment bank) together with all Scheduled Required Payments.

On June 18, 2021, the Company modified the terms of its outstanding debt by entering into a Third Forbearance Agreement (the “Third Agreement”) whereby the Company agreed to make certain payments to the creditor and the creditor will accept such payments as full discharge of the outstanding debt. The Agreement provides that the Buyer will (a) forbear (i) from taking any action with respect to the Existing Default and (ii) from issuing any demand for redemption of the Note on the basis of the Existing Default until the earlier of: (1): November 16, 2021 (or, if earlier, such date when all amounts outstanding under the Note shall be paid in full or converted into shares of Common Stock in accordance therewith) and (2) the time of any breach by the Company of the Agreement or the occurrence of an Event of Default that is not an Existing Default (the “Forbearance Expiration Date), (b) during the Forbearance Period (as defined) waive the prepayment premium to any Company Optional Redemption (which will result in the 120% redemption premium effectively replaced with 100%), and (c) during the Forbearance Period, waive the repayment in full of the Note other than the Required Payments (as defined) prior to November 16, 2021. The Scheduled Required Prepayments are $62,000 upon the first scheduled required prepayment and five (5) payments thereafter aggregating $287,000 with the remainder outstanding under the Note due on November 16, 2021. In addition, there are mandatory prepayments in the event the Company completes a Subsequent Placement (as defined) or long-term debt (other than from the Buyer or from officers, directors and 10% or greater shareholders of the Company) or factoring and purchase order indebtedness, the Company shall effect a Company Optional Redemption amount equal to 50% of the gross proceeds (less reasonable expenses of counsel and any investment bank) together with all Scheduled Required Payments. The Company performed an analysis to determine if at least a 10% difference between the present value of the new loan’s cash flows and the present value of the old loan’s remaining cash flows and determined that yes there is more than a 10% difference. The Company will experience a cash flow increase of approximately 15% due to the modification; therefore, the cash flow is considered substantially different, and the Company has applied extinguishment accounting.

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COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

The May 2019 Note is convertible at any time by the Holder into 250,000 shares of common stock, par value $0.001 per share at the rate of $6.00 per share, subject to adjustment (the “Conversion Price”). Upon an Event of Default (regardless of whether such event has been cured), the Buyer may convert at an alternative conversion price equal to the lower of the then applicable Conversion Price or seventy-five (75%) percent of the then Volume-Weighted Average Price (as defined, the “VWAP”). The Company considered the need for the conversion feature to be bifurcated under ASC 815 and determined that it does not meet the requirements. Additionally, the Company determined the effective conversion rate under ASC 470-20 and determined that the instrument is out of the money and no beneficial conversion feature was recorded.

The May 2019 Note is senior in right of payment to all other existing and future indebtedness of the Company except Permitted Senior Indebtedness (as defined in the May 2019 Note), including $12 million of senior secured indebtedness of the Company and its subsidiaries under an existing senior loan agreement, plus defined amounts of purchase money indebtedness in connection with bona fide acquisitions.

The May 2019 Note includes customary Events of Default and provides that the Buyer may require the Company to redeem (regardless of whether the Event of Default has been cured) all or a portion of the Note at a redemption premium equal to the greater of: (i) the product of the redemption premium of one hundred twenty-five (125%) percent, multiplied by the conversion amount, and (ii) the product of the conversion rate ($6.00 per share) multiplied by the product of 125% multiplied by the then current market price. The Buyer may also require redemption of the May 2019 Note upon a Change of Control (as defined) at a premium of one hundred twenty-five (125%) percent. The Company has the right to redeem the May 2019 Note at any time, in whole or in part, in cash at a price equal to 120% of the then outstanding conversion amount.

Conversion of the May 2019 Note is subject to a blocker provision which prevents any holder from converting the May 2019 Note into shares of common stock if its beneficial ownership of the common stock would exceed 9.99% of the Company’s issued and outstanding common stock.

As of December 31, 2019, the Company had a principal balance of $907,000 on the May 2019 Note and the Company had accrued $15,420 in interest expense. During the six months ended June 30, 2021, the Company repaid $362,000 such that as of June 30, 2021, the Company had a principal balance $545,000 on the May 2019 Note and the Company had accrued $18,102 in interest expense.

Roth Capital Partners, LLC (“Roth”), as the Company’s exclusive placement agent, received a cash commission for this transaction equal to six (6%) percent of the total gross proceeds of the offering. This 6% fee or $90,000 was recorded as debt discount along with the $30,000 in legal fees associated with the May 2019 Note. These fees will be amortized over the term of the note. The Company amortized $90,491 in the year ended December 31, 2019 and the remaining $29,509 was amortized during the year ended December 31, 2020.

December 21, 2020 Securities Purchase Agreement

On December 21, 2020 (the “Issue Date”), Cosmos Holdings, Inc. (“Cosmos”, the “Borrower” or the “Company”) entered into a convertible promissory note with Platinum Point Capital, LLC (the “Holder”, “Lender” or “Platinum”).

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) have not been converted or have not been otherwise satisfied in full or (ii) an Event of Default 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 below) or (iii), an Event of Default (as defined below) (collectively, the “Maturity Date”). As of June 30, 2021, the Company had a principal balance of $540,000 and had accrued $23,400 in interest expense.

The Note may be prepaid in whole or part beginning from the issue date until a date not later than 180 days thereafter, the Company shall have the right to prepay the full amount outstanding under the Note (principal and accrued interest), in full by making a payment to the Holder in an amount equal to one hundred twenty (120%) multiplied by the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of the Note plus (y) Default Interest, if any.

25

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

The Holder shall have the right at any time from the Issue Date to convert all or part of the outstanding and unpaid principal amount of the Note into Common Stock at the Conversion Price of as defined below.

a)	The Conversion Price. The Conversion Price shall equal the Variable Conversion Price (subject to stock splits, dividends, rights offerings or similar events) shall mean seventy-five percent (75%) multiplied by the Market Price defined as the average of the three (3) lowest trading prices for common stock during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date.
b)	Conversion upon Qualified Financing. If the Company engaged in a registered offering resulting in an “uplisting” to a higher-tiered trading market (a “Qualified Financing”), the Holder has the option to convert any outstanding debt due under this Note at seventy-five (75%) of the per share offering price.
c)	Conversion Price During Major Announcements. In the event the Borrower (i) makes a public announcement that it intends to consolidate or merge with any other Company (other than a merger in which the Borrower is the surviving or continuing Company and its capital stock is unchanged or sell or transfer all or substantially all of the assets of the Borrower or (ii) any person, group or entity (including the Borrower) publicly announces a tender offer to purchase fifty percent (50%) or more of the Borrower’s Common Stock (or any other takeover scheme), then the Conversion Price shall, effective upon the announcement date shall be equal to the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in effect.

The Company determined that the embedded conversion feature of the convertible promissory note meets the definition of a beneficial conversion feature and a derivative liability which is accounted for separately. The Company measured the beneficial conversion feature’s intrinsic value on December 16, 2020 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. For the three and six months ended June 30, 2021, $71,641 and $109,865, respectively has been amortized. As of June 30, 2021, the fair value of the derivative liability was $394,941 and for the three and six months ended June 30, 2021, the Company recorded a gain of $21,572 and $65,787, respectively from the change in fair value of derivative liability as other income in the consolidated statements of operations and comprehensive income (loss).

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 bears an interest rate of 8% per annum and matures on the earlier of (i) consummation of the Company listing its common shares on the NEO Stock Exchange or October 31, 2021.

Upon the consummation of a NEO listing, the total principal and accrued interest outstanding on the note will convert into shares of the Company’s common stock at a 25% discount to the prices of the common shares sold in the financing to be conducted in conjunction with the NEO listing. In the event that a NEO listing is not consummated on or before October 31, 2021, the note holder will have the option, in part or in full, to have the note repaid with interest, or convert the note into Company common stock at a 25% discount to the 30-day volume-weighted average price of the Common Shares on the most senior stock exchange in North American on which the common shares are trading prior to conversion. As of June 30, 2021, the Company had a principal balance of $100,000 and had accrued $3,735 in interest expense.

26

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

The Company determined that the embedded conversion feature of the convertible promissory note meets the definition of a beneficial conversion feature and a derivative liability which is accounted for separately. The Company measured the beneficial conversion feature’s intrinsic value on January 7, 2021 and determined that the embedded derivative was valued at $62,619 which was recorded as a debt discount and is being amortized over the life of the loan. For the six months ended June 30, 2021, $29,223 has been amortized. As of June 30, 2021, the fair value of the derivative liability was $40,537 and for the three and six months ended June 30, 2021, the Company recorded a gain of $4,924 and $22,082, respectively from the change in fair value of derivative liability as other income in the consolidated statements of operations and comprehensive income (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 and six months ended June 30, 2021:

	Amount
Balance on December 31, 2020	$	460,728
Issuances to debt discount		62,619
Change in fair value of derivative liabilities		(85,869	)
Balance on June 30, 2021	$	437,478

The fair value of the derivative conversion features and warrant liabilities as of June 30, 2021 were calculated using a Monte-Carlo option model valued with the following assumptions:

	June 30, 2021
Dividend yield		0	%
Expected volatility	113.8%-139.0		%
Risk free interest rate	0.15%-0.18		%
Contractual terms (in years)	0.34 – 0.89

NOTE 11 – DEBT

A summary of the Company’s third-party debt during the six months ended June 30, 2021 and the year ended December 31, 2020 is presented below:

June 30, 2021	Loan Facility			Trade Facility			Third Party			COVID Loans			Total
Beginning balance		3,302,100			6,446,000			12,631,284			435,510			22,814,594
Proceeds		-			-			-			-			-
Payments		(20,000	)		-			-			-			(20,000	)
Conversion of debt		-			-			(3,010,000	)		-			(3,010,000	)
Foreign currency translation		(106,836	)		(76,400	)		(19,460	)		(10,740	)		(213,382	)
Subtotal		3,175,264			6,369,600			9,601,878			424,470			19,571,212
Reclass of long-term portion of debt		(2,582,864	)		(2,191,880	)		(5,460,759	)		-			(10,235,503	)
Ending Balance		592,400			4,177,720			4,141,119			424,470			9,335,709

27

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

December 31, 2020	Loan Facility			Bridge Loans			Trade Facility			Third Party			COVID Loans		Total
Beginning balance		3,078,442			191,287			6,245,400			2,514,595			-		12,029,724
Proceeds		-			-			-			16,121,500			435,210		16,556,710
Payments		-			(191,287	)		-			(5,006,115	)		-		(5,230,725	)
Conversion of debt											(807,795	)				(807,795	)
Debt extinguishment		(12,066	)		-			-			(192,205	)		-		(204,271	)
Foreign currency translation		269,047			-			200,600			1,304			-		470,951
Subtotal		3,302,100			-			6,446,000			12,631,284			435,210		22,814,594
Reclass of long-term portion of debt		(2,843,475	)		-			(2,384,850	)		(5,543,557	)		-		(10,771,882	)
Ending Balance		458,625			-			4,061,150			7,087,727			435,210		12,042,712

Loan Facility Agreement

On June 30, 2020, SkyPharm entered into a settlement agreement on an existing loan facility agreement with Synthesis Peer-to-Peer Income Fund, whereby the Company agreed to make certain payments to the creditor and the creditor will accept such payments as full discharge of outstanding debt. In accordance with the settlement agreement, interest will accrue from June 30, 2020 until repayment in full at a rate of 6% per annum for the first year and 5.25% per annum for the second year calculated on the balance outstanding from day to day during such period. Interest is due on the 10^th day of each calendar month. If any amount of principal or interest is unpaid on its due date interest shall accrue from the due date until the date of its payment until the date of its payment in full at the rate of 7.25% per annum. The Company will make quarterly payments of €125,000 beginning May 6, 2021 with a final payment of €2,200,000 on May 6, 2022. The Company evaluated the settlement agreement for debt modification in accordance with ASC 470-50 and concluded that the debt qualified for debt extinguishment as the 10% cash flow test was met. As a result, the $3,828,630 of principal and accrued interest of $168,732, or an aggregate of $3,997,362 was written off and the new debt was recorded at fair value as of June 30, 2020 in the amount of $3,033,990. As of December 31, 2020, the Company has accrued interest expense of $33,021 and the principal balance of the debt is $3,302,100, of which $2,843,475 is classified as Notes payable – long term portion on the consolidated balance sheet. As of June 30, 2021, the Company repaid $23,696 and the principal balance of the debt is $3,175,264, of which $2,582,864 is classified as Notes payable – long term portion on the condensed, consolidated balance sheet.

The debt is subject to acceleration in an Event of Default (as defined in the Notes). This agreement is secured by a personal guaranty of Grigorios Siokas, which is secured by a pledge of 1,000,000 shares of common stock of the Company owned by Mr. Siokas.

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COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

Trade Facility Agreements

On May 12, 2017, SkyPharm entered into a Trade Finance Facility Agreement (the “SkyPharm Facility”) with Synthesis Structured Commodity Trade Finance Limited (the “Lender”). The SkyPharm Facility provides the following material terms:

• The Lender will provide SkyPharm a facility of up to €2,000,000 ($2,369,600) secured against SkyPharm’s receivables from the sale of branded and generic pharmaceutical sales. In the event that accounts receivable become uncollectible, the Company will be obligated to pay back the notes in full.

• The total facility will be calculated as 95% of the agreed upon value of Decahedron’s receivables.

• The term of the SkyPharm Facility will be for 12 months.

• The obligations of SkyPharm are guaranteed by the Company pursuant to a Cross Guarantee and Indemnity Agreement.

• The Lender has the right to make payments directly to SkyPharm’s suppliers.

• The following fees should be paid in connection with the SkyPharm Facility:

o 2% of the maximum principal amount as an origination fee.

o A one percent (1%) monthly fee.

The Company obtained consents from Synthesis Peer-to-Peer Income Fund in connection with obtaining the Lender.

On November 16, 2017, SkyPharm signed an amended agreement with Synthesis Structured Commodity Trade Finance Limited that increased the maximum aggregate facility limit from €2,000,000 ($2,291,200) to €6,000,000 ($6,736,200). All other terms of the original agreement remain the same. The Company also obtained consents from Synthesis Peer-to-Peer Income Fund in connection with obtaining the November 2017 convertible debt financing.

On May 12, 2018, the Company borrowed an additional €270,000 ($247,117) in funds.

On May 16, 2018, SkyPharm S.A., as Commodity Buyer, entered into a Supplemental Deed of Amendment (the “Deed”) relating to a Trade Finance Facility dated May 12, 2017, as amended, with Synthesis Structured Commodity Trade Finance Limited (“Synthesis”), as Loan Receivables Originator. Under the Trade Finance Facility (the “TFF”) first entered into on May 12, 2017, as amended, there was a principal balance of €5,866,910 ($5,369,678) outstanding as of June 30, 2018. SkyPharm made a payment of €1,000,000 ($1,123,600) of interest and principal on May 31, 2018 under the terms and conditions of the Deed. Additionally, the maturity date for the facility has been amended such that, the full principal amount is to be repaid no later than May 31, 2021, subject to a repayment schedule to be agreed upon by SkyPharm and Synthesis Structure Commodity Trade Finance Limited. Synthesis Structure Commodity Trade Finance Limited may extend this final repayment date at its sole discretion.

The TFF was amended to provide, among other things:

• A listing of approved purchasers;

• To permit SkyPharm to request Synthesis to make payments under the TFF directly to SkyPharm so that SkyPharm can discharge its obligations to a commodity seller directly;

• To prohibit SkyPharm from entering into a commodity contract which grants more than seventy-five (75) days delay between the payment for products and receipt of the purchase price and placed other limitations on terms of commodity contracts;

• If Grigorios Siokas, CEO of Cosmos Holdings Inc. (“Cosmos”), ceases to own or control at least fifty-one (51%) percent of the shares of Cosmos, or SkyPharm ceases to be a wholly-owned subsidiary of Cosmos, either event shall constitute an Event of Default (as defined);

• The maximum aggregate amount of the TFF is €15,000,000, although there is no commitment for any future loans under the TFF;

• The interest rate on the TFF for: (i) all lending in U.S. dollars is the one-month LIBOR plus six (6%) percent margin; and (ii) for all lending in Euro, the one-month Euribor Rate plus six (6%) percent per annum, commencing June 1, 2018.

• Synthesis is permitted to terminate the TFF at any time and demand repayment of all outstanding principal and interest in full within six (6) months from the date of notification.

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COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

The Deed is conditioned upon, among other things, execution and perfection of a Bulgarian Amended Pledge (“BAP”) having priority over the Bulgarian Pledge Accounts with Unicredit Bulbank AD; and the Approved Purchasers are to make all payments to SkyPharm directly to the BAP.

On May 16, 2018, SkyPharm and Synthesis also entered into an Account Merge Agreement (the “Pledge”) as a requirement under the above-described Deed. Under the Pledge, Synthesis is to receive a first ranking securities interest in SkyPharm’s outstanding receivables under the Bulgarian bank account.

On October 17, 2018, the Company entered into a further amended agreement with Synthesis whereby the current balance on the TFF as of October 1, 2018, which was €4,866,910 ($5,629,555) and related accrued interest of €453,094 ($524,094) would be split into two principal balances of Euro €2,000,000 and USD $4,000,000. Interest on the new balances commenced on October 1, 2018 at 6% per annum plus one-month Euribor, when it is positive, on the Euro balance and 6% per annum plus one-month Libor on the USD balance. The Company will repay the principal amounts of each balance beginning no later than August 31, 2018 in quarterly installments of €125,000 and US $150,000. The loan matures on August 31, 2021. The Company evaluated the amended agreement under ASC 470-50 and concluded that it did not meet the 10% cash flow test and recorded debt modification expense of $138,110.

As of December 31, 2020, the Company had principal balances of €2,000,000 ($2,446,000), of which $2,384,850 is classified as Notes payable – long term portion on the consolidated balance sheet, and $4,000,000 under the agreements and the Company had accrued $402 and $16,185 respectively, in interest expense related to these agreements. As of June 30, 2021, the Company had principal balances of €2,000,000 ($2,369,600), of which $2,191,880 is classified as Notes payable – long term portion on the consolidated balance sheet, and $4,000,000 under the agreements and the Company had accrued $11,250 and $26,231 respectively, in interest expense related to these agreements.

Third Party Debt

On November 16, 2015, the Company entered into a Loan Agreement with Panagiotis Drakopoulos, former Director and former Chief Executive Officer, pursuant to which the Company borrowed €40,000 ($42,832) as a note payable from Mr. Drakopoulos. The note bears an interest rate of 6% per annum and was due and payable in full on November 15, 2016. As of December 31, 2020, the Company had an outstanding principal balance of €8,000 ($9,784) and accrued interest of €4,785 ($5,852). As of June 30, 2021, the Company had an outstanding principal balance of €8,000 ($9,478) and accrued interest of €6,066 ($7,187).

Conversion of Prior Year Senior Promissory Notes

In the years ending December 31, 2019 and 2020, the Company executed Senior Promissory Notes (the “Debt”) in an aggregate total of $3,010,000 to an unaffiliated third-party lender (the “Lender”). As of December 31, 2020, the Company had a principal balance of $3,010.00 on this Debt and the Company had accrued $527,604 in interest expense. As of February 5, 2021, The Company entered into an Amended and Restated Debt Exchange Agreement (the “Agreement”) with the “Lender that provided for the issuance by the Company of 781,819 shares of common stock (the “Exchange Shares”), at the rate of $3.85 per share, in exchange for an aggregate of $3,010,000 principal amount of existing loans made by the Lender to the Company. The market price at the time this Agreement was negotiated was $3.28 per share and the Company recorded a gain on debt extinguishment of $445,636.

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COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

All accrued and unpaid interest, $563,613 as of June 30, 2021, as well as any unpaid fees, shall be paid in three (3) equal monthly installments following the closing of a planned Canadian public offering. Pursuant to this Agreement, Grigorios Siokas, the Company’s Chief Executive Officer and principal shareholder, will be released from all personal guarantees on the Debt.

May 18, 2020 and July 3, 2020 Senior Promissory Notes

May 18, 2020 Senior Promissory Note

On May 18, 2020, the Company executed a Senior Promissory Note (the “May 18 Note”) in the principal amount of $2,000,000 payable to an unaffiliated third-party lender. The May 18 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The May 18 Note matured on December 31, 2020. The note is not in default and the Company is currently in negotiations with the lender to extend the maturity date.

The May 18 Note is subject to acceleration in an Event of Default. Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the May 18 Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection. As of June 30, 2021 and December 31, 2020, the Company had a principal balance of $2,000,000 on this note.

July 3, 2020 Senior Promissory Note

On July 3, 2020, the Company executed a Senior Promissory Note (the “July 3 Note”) in the principal amount of $5,000,000 payable to an unaffiliated third-party lender. The July 3 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The July 3 Note matures on June 30, 2022 unless in default.

The July 3 Note is subject to acceleration in an Event of Default (as defined). Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the July 3 Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection.

As of June 30, 2021 and December 31, 2020, the Company had a principal balance of $5,000,000 on this note, which is classified as long-term on the consolidated balance sheet.

As of June 30, 2021 and December 31, 2020, the Company has accrued an aggregate total of $259,149 and $146,685 in accrued interest expense related to these loans.

August 4, 2020 Senior Promissory Note

On August 4, 2020, the Company executed a Senior Promissory Note (the “August 4 Note”) in the principal amount of $3,000,000 payable to an unaffiliated third-party lender. The August 4 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The August 4 Note matured on December 31, 2020 unless in default. The note is not in default and the Company is in negotiations with the lender to extend the maturity date.

The August 4 Note is subject to acceleration in an Event of Default (as defined). Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the August 4 Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection.

On October 29, 2020, the Company entered into a debt exchange agreement with the lender whereby the Company issued 259,741 shares of common stock at the rate of $3.85 per share in exchange for an aggregate of $1,000,000 principal amount of the existing loan. The fair market value of the Company’s common stock on the date of exchange was $3.11 per share and as such, the Company recorded a gain of $192,205. Interest will continue to accrue on the remaining debt and the converted amount until December 31, 2020. As of December 31, 2020, the Company had a principal balance of $2,000,000 on this note and prepaid interest of $8,514. As of June 30, 2021, the Company had a principal balance of $2,000,000 on this note and $0 in accrued interest expense. The note is not in default and the Company is in negotiations with the lender to extend the maturity date.

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COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

November 19, 2020 Debt Agreement

On November 19, 2020, the Company entered into an agreement with a third-party lender in the principal amount of €500,000 ($611,500). The note matures on November 18, 2025 and bears an annual interest rate, based on a 360-day year, of 3.3% plus .6% plus 6-month Euribor when Euribor is positive. Pursuant to the terms of the agreement, there is a six-month grievance from the first deposit date, which was November 19, 2020, for principal repayment. The principal is to be repaid in 18 quarterly installments of €27,000 with the first payment due 9 months from the first deposit. As of December 31, 2020, the Company had no accrued interest and a principal balance of €500,000 ($611,500), of which $543,557 is classified as Notes payable – long term portion on the consolidated balance sheet. As of June 30, 2021, the Company had no accrued interest and a principal balance of €500,000 ($592,400), of which $460,759 is classified as Notes payable – long term portion on the consolidated balance sheet. As of June 30, 2021 the Company has $8,856 in accrued interest expenses related to this note.

COVID-19 Government Loans

On May 12, 2020, the Company was granted and on May 22, 2020 the Company received a €300,000 ($337,110) loan from the Greek government. The loan will be repaid in 40 equal monthly instalments beginning on January 1, 2022 and bears an interest rate of 0.94% per annum. As a condition to the loan, the company is required to retain the same number of employees until October 31, 2020. The balance as of June 30, 2021 was $355,440.

On June 24, 2020, the Company received a loan £50,000 ($61,845) from the United Kingdom government. The loan has a six-year maturity and bears interest at a rate of 2.5% per annum beginning 12-months after the initial disbursement. The Company may prepay this loan without penalty at any time. The balance as of June 30, 2021 was $69,030.

Distribution and Equity Agreement

As discussed in Note 3 above, the Company entered into a Distribution and Equity Acquisition Agreement with Marathon. The Company was appointed the exclusive distributor of the Products (as defined) initially throughout Europe and on a non-exclusive basis wherever else lawfully permitted. As consideration for its services, Company received: (a) a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services; and (b) received cash of CAD $2,000,000, subject to repayment in Common Shares of the Company if it fails to meet certain performance milestones. The Company is entitled to receive an additional CAD $2,750,000 upon the Company’s receipt of gross sales of CAD $6,500,000 and an additional CAD $2,750,000 upon receipt of gross sales of CAD $13,000,000.

As discussed in Note 3, the Company attributed no value to the shares received in Marathon pursuant to (a) above. In relation to the CAD $2 million cash received noted in (b) above, the Company accounted for its obligation to issue a variable number of the Company’s Common Shares as Share-settled debt obligation in accordance with ASC 480 measured at fair value or the settlement amount of $1,554,590 (CAD $2 million). If settlement were to occur on December 31, 2019, the Company would be required to issue 261,891 common shares to settle its debt obligation. The Company could be obligated to potentially issue an unlimited number of common shares to settle its Share-settled debt obligation. If such events were to occur, the Company would be required to increase its authorized share capital and since increasing the authorized share capital is within the control of the Company, as our CEO controls greater than 50% of the outstanding common stock of the Company, the original classification of equity-classified financial 

None of the above loans were made by any related parties.

NOTE 12 – LEASES

The Company has various lease agreements with terms up to 10 years, comprising leases of office space. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised.

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COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

The assets and liabilities from operating and finance leases are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet.

The Company’s operating leases do not provide an implicit rate that can readily be determined. Therefore, we use a discount rate based on our incremental borrowing rate, which is determined using the interest rate of our long-term debt on the date of inception.

The Company’s weighted-average remaining lease term relating to its operating leases is 6.71 years, with a weighted-average discount rate of 6.74%.

The Company incurred lease expense for its operating leases of $99,610 and $104,588 which was included in “General and administrative expenses,” for the six months ended June 30, 2021 and 2020, respectively.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of June 30, 2021.

Maturity of Lease Liability
Remainder of 2021	$	115,368
2022		228,112
2023		203,409
2024		118,978
2025		114,856
Thereafter		431,790
Total undiscounted operating lease payments	$	1,212,513
Less: Imputed interest		(243,054	)
Present value of operating lease liabilities	$	969,459

The Company’s weighted-average remaining lease term relating to its finance leases is 2.7 years, with a weighted-average discount rate of 6.74%.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s finance leases as of June 30, 2021.

Maturity of Lease Liability
Remainder of 2021	$	51,377
2022		86,663
2023		74,113
2024		55,762
2025		24,823
Thereafter		589
Total undiscounted finance lease payments	$	293,327
Less: Imputed interest		(32,302	)
Present value of finance lease liabilities	$	261,025

The Company had operating cash flows used in finances leases of $4,453 and $2,301 for the six months ended June 30, 2021 and 2020, respectively.

33

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

The Company incurred interest expense on its finance leases of $5,250 which was included in “Interest expense,” for the six months ended June 30, 2021. The Company incurred amortization expense on its finance leases of $49,267 which was included in “Depreciation and amortization expense,” for the six months ended June 30, 2021.

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Legal Matters

From time to time, the Company may be involved in litigation relating to claims arising out of the Company’s operations in the normal course of business. As of June 30, 2021, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s operations.

Advisory Agreement

On April 18, 2018, SkyPharm S.A. entered into a ten-year Advisory Agreement with Synthesis Management Limited (the “Advisor”). The Advisor was retained to assist SkyPharm to secure corporate finance capital. The Advisor shall be paid €104,000 per year during the ten-year term.

Related Party Research and Development Agreement

On May 17, 2021, Doc Pharma and the Company entered into a Research and Development agreement whereby DOC Pharma will be responsible for the research, development and design of 250 nutritional supplements for the final products called “Sky Premium Life”. These products will be sold in Greece and abroad. The total cost of this project will be €1,425,000 plus VAT and will be done over three phases as follows: Design & Development (€725,000); Control and Product Manufacturing (€250,000) and Clinical Study and Research (€450,000) The agreement terminates on December 31, 2025.

NOTE 14 – STOCK OPTIONS AND WARRANTS

As of June 30, 2021, there were 37,000 options outstanding and 37,000 options exercisable with expiration dates of January 2022.

A summary of the Company’s option activity during the six months ended June 30, 2021 is presented below:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
Options	Shares			Price		Term		Value
Balance Outstanding, December 31, 2020		62,000		$	1.19		0.60	$	242,200
Granted		-			-		-		-
Forfeited		-			-		-		-
Exercised		-			-		-		-
Expired		(25,000	)		-		-		-
Balance Outstanding, June 30, 2021		37,000		$	1.32		0.51	$	147,100
Exercisable, June 30, 2021		37,000		$	1.32		0.51	$	147,100

As of June 30, 2021, there were 1,164,673 warrants outstanding and 1,164,673 warrants exercisable with expiration dates from May 2023 through March 2024.

34

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

A summary of the Company’s warrant activity during the six months ended June 30, 2021 is presented below:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Number of		Exercise		Contractual		Intrinsic
Warrants	Shares		Price		Term		Value
Balance Outstanding, December 31, 2020		1,164,673	$	6.41		3.01	$	5,360
Granted		-		-		-		-
Forfeited		-		-		-		-
Exercised		-		-		-		-
Expired		-		-		-		-
Balance Outstanding, June 30, 2021		1,164,673	$	6.41		2.52	$	16,080
Exercisable, June 30, 2021		1,164,673	$	6.41		2.52	$	16,080

NOTE 15 – DISAGGREGATION OF REVENUE

ASC 606-10-50-5 requires that entities disclose disaggregated revenue information in categories (such as type of good or service, geography, market, type of contract, etc.). ASC 606-10-55-89 explains that the extent to which an entity’s revenue is disaggregated depends on the facts and circumstances that pertain to the entity’s contracts with customers and that some entities may need to use more than one type of category to meet the objective for disaggregating revenue.

The Company disaggregates revenue by country to depict the nature and economic characteristics affecting revenue.

The following table presents our revenue disaggregated by country for the three months ended:

	June 30,		June 30,
Country	2021		2020
France	$	-		-
Germany		3		125,238
Greece		14,504,869		11,967,758
Hungary		-		100
Ireland		-		(9	)
Italy		4		16,007
Jordan		-		(95	)
Denmark		14		-
Cyprus		64,225		-
UK		265,828		697,609
Croatia		11,982		8,617
Libya		-		-
Netherlands		-		4,797
Poland		-		(50	)
Total	$	14,846,925	$	12,819,972

35

COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

The following table presents our revenue disaggregated by country for the six months ended:

Country	June 30, 2021		June 30, 2020
Croatia	$	11,982	$	8,617
Denmark		54,700		-
France		-		1,091
Germany		13,617		792,540
Greece		25,958,364		22,657,446
Hungary		-		36,240
Ireland		-		35,104
Italy		15,731		22,048
Jordan		-		9,322
Libya				41,972
Netherlands		-		38,252
Poland		-		28,352
Cyprus		78,948		-
UK		332,659		1,082,236
Total	$	26,466,001	$	24,753,220

NOTE 16 – SUBSEQUENT EVENTS

Advisory Agreements

On July 1, 2021, the Company entered into a two-year advisory agreement with a third party (the “Consultant”) for advisory and consulting services related to the Company’s intention to become listed on NASDAQ. Peter Goldstein, a director of the Company is a principal of the Consultant. As consideration for services rendered, the Company will pay the consultant $4,000 a month until the Company commences trading on NASDAQ. Upon NASDAQ listing, the Company shall pay $10,000 per month, with $4,000 per month paid on a monthly basis and $6,000 per month accrued until such time as the Company raises an aggregate of $10,000,000. In addition, the consultant will receive a $100,000 bonus upon NASDAQ listing and when the Company has raised an aggregate of $10,000,000. Finally, the Company has agreed that the Consultant shall receive a total of 250,000 shares of the Company’s common stock, 50,000 of such shares that have been previously issued pursuant to previous agreements and 200,000 shares to be issued when the Company commences trading on NASDAQ.

On July 7, 2021, the Company entered into an agreement with a non-exclusive financial advisor and placement agent. The term of the agreement is a minimum of 45 days and will continue until 5 business days following the date in which a party receives written notice from the other party of termination. As consideration for services rendered, the Company shall pay: a) a cash fee equal to 10% of the gross proceeds of any securities sold in the offering payable at closing of the offering from the gross proceeds of the offering; b) 1% of the gross proceeds of any securities sold in the offering payable at closing of the offering from the gross proceeds of the offering for unaccountable expenses; c) warrants to purchase shares of the Company’s common stock equal to 10% of the number of shares issued in the offering or to be issued thereafter upon conversion of any convertible securities issued in the offering. These warrants will have a 5-year term and an exercise price equal to the price per share of common stock sold in the offering or conversion or exercise price into common stock of any convertible security sold and will have the same provisions, terms, conditions, rights and preferences as the securities sold in the offering; d) a cash fee equal to 10% of the exercise price of all securities constituting warrants, options or other rights to purchase securities sold in the offering payable only upon exercise.

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COSMOS HOLDINGS, INC.

Notes to Unaudited Condensed Consolidated Financial Statement

June 30, 2021

On July 7, 2021, the Company entered into a 6-month agreement with a non-exclusive agent, advisor or underwriter in any offering of securities of the Company. At the closing of any offering the company will compensate the agent: a) a cash fee or as an underwritten offering an underwriter discount equal to 7% of the aggregate gross proceeds raised in each offering. For all investors referred directly to the Company by the agent, a cash fee or as an underwritten offering an underwriter discount equal to 5% of the aggregate gross proceeds invested by such investors. b) The Company shall issue to Spartan or its designees at each closing, warrants to purchase shares of the Company’s common stock equal to 5% of the aggregate number of shares of common stock placed in each offering. c) Out of the proceeds of each closing, the Company also agreed to pay the agent up to $35,000 for non-accountable expenses (up to $50,000 for a public offering) along with up to $50,000 for fees and expenses of legal counsel and other out-of-pocket expenses (increase to up to $100,000 for public offerings) plus additional miscellaneous costs. The agent would also have the right of first refusal from the date of the agreement until the 12-month anniversary following consummation of any offerings for total proceeds of at least $3 million raised by investors introduced by the agent.

Related Party Debt Exchange Agreements

On July 13, 2021, the Company entered into a Debt Exchange Agreement (the “Agreement”) with Grigorios Siokas, the Company’s Chief Executive Officer. The Agreement provided for the issuance by the Company of 166,667 shares of common stock, at the rate of $6.00 per share, or an aggregate of $1,000,000, in exchange for $1,000,000 of existing loans by Mr. Siokas to the Company.

On July 19, 2021, the Company entered into a Debt Exchange Agreement (the “July 19 Agreement”) with Grigorios Siokas, the Company’s Chief Executive Officer. The July 19 Agreement provided for the issuance by the Company of 208,333 shares of common stock, at the rate of $6.00 per share, or an aggregate of $1,250,000, in exchange for $1,250,000 of existing loans by Mr. Siokas to the Company.

Conversion of Convertible Debt

On July 14, 2021, pursuant to a conversion notice, $150,000 in principal and $24,144 in interest were converted at $3.165 into 55,021 shares of common stock.

Related Party Convertible Note

On July 20, 2021, the Company entered into a Convertible Promissory Note with Greg Siokas, CEO, in the principal amount of $2,000,000 memorializing outstanding loans to the Company. The note is due on demand and will not bear interest if it is paid before the maturity date. The note may be prepaid without penalty at any time and is convertible at the option of the holder at any time at any time at above the then current market price. Pursuant to the July 20, 2021 Agreement, an aggregate of $1,250,000 of indebtedness was converted into equity.

Debt Exchange Agreement

On August 4, 2021, the Company entered into a debt exchange agreement (the “Agreement”) with a senior institutional lender and Grigorios Siokas, CEO, as guarantor. The parties to the Agreement had entered into a senior loan, as amended, as of June 30, 2020 (the "Loan") pursuant to which the Loan had been reduced to €2,700,000 (See note 11). The Agreement provides for the issuance by the Company of 321,500 shares of common stock (the "Exchange Shares"), at the rate of $5.00 per share, in exchange for the repayment of €1,350,000 ($1,599,480) principal amount effective upon the closing of the Agreement and 238,000 shares at an exchange rate of $5.00 per share, or at market value if the price is above $5.00 per share effective upon approval of listing of the Company’s common stock on NASDAQ in exchange for €1,000,000 ($1,184,800) of the debt.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Available Information

The following discussion should be read in conjunction with our interim Condensed Consolidated Financial Statements and the related notes and other financial information appearing elsewhere in this report as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Form 10-K for the year ended December 31, 2020 (“Form 10-K”) and this Quarterly Report on Form 10-Q for the quarter ended June 30, 2021.

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions.

We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain.

Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

Overview

Summary

Cosmos Holdings, Inc. was formed as a Nevada incorporation on July 07, 2009, under the name of Prime Estates & Developments Inc. Effective September 27, 2013, we acquired 100% ownership of Amplerissimo Ltd., a private company whose principal activities included providing consulting services to various industries. On November 14, 2013, we changed our name to Cosmos Holdings, Inc. and changed our focus and business strategy to the healthcare and pharmaceutical industry. The Company, through Amplerissimo Ltd, formed SkyPharm S.A. on August 01, 2014, a Greek Corporation which focuses on pharmaceutical products and is engaged in the trading of branded and generic pharmaceutical products and medicines across the European Union member states. On February 10, 2017, we acquired 100% ownership of Decahedron Ltd., a United Kingdom company whose principal activity is the same as the business of SkyPharm S.A. In addition, on December 19, 2018, the Company acquired 100% ownership of Cosmofarm Ltd, a Greek company which is a pharmaceutical wholesaler and networks with over 1,500 pharmacies.

Business Segments

The Company operates in the import/export and wholesale distribution of branded pharmaceutical products, generic pharmaceuticals, over the counter (OTC) products and a variety of nutraceuticals, including its own branded label.

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Wholesale Import/Export

We conduct wholesale import and export of branded pharmaceutical products throughout Europe by our subsidiaries, SkyPharm S.A. and Decahedron Ltd. We source licensed pharmaceuticals from wholesalers at a lower cost, primarily in Greece and the U.K. and sell to other European wholesalers.

Full-line Wholesale

We conduct direct distribution and sales of pharmaceuticals, medical devices, generic pharmaceuticals and OTC products through our subsidiary, Cosmofarm S.A. Our distribution network exceeds over 1,500 pharmacies in Greece. We have created an upgraded and high-end distribution center in Greece due to our Robotic systems and integrated automations (ROWA robotics).

Nutraceutical

We have created and developed our own proprietary branded nutraceutical products, named “Sky Premium Life” which was launched in 2018. Our portfolio includes at least 67 product codes including vitamins, minerals and other herbal extracts. We expect to reach the number of 71 product codes by the end of 2021. Our nutraceutical products are manufactured exclusively by Doc Pharma S.A., a related party of the Company. Our nutraceutical products have penetrated the UK, Germany and China markets within 2021 and increased our digital channels such as Amazon and Tmall (B2C).

We focus on nutraceutical products because we foresee it as a relatively under-penetrated market throughout Europe with potential of high growth opportunities due to its large market size and margin contribution as the demand for nutraceutical products is increasing globally.

Generics

We are engaged in the distribution and sale of generic pharmaceutical products throughout Europe. Through our related company, Doc Pharma, we have the distribution rights to over 47 generic licenses of fast-moving product codes.

Regulations and Licenses

Our subsidiaries’ licenses help us establish and enhance our market share. SkyPharm received its Authorization for the Wholesale Distribution of Medical Products for humans use on July 22, 2015, from the Hellenic Republic National Organization for Medicines in accordance with Law 1316/1983, and the inspection by the National Organization for Medicines dated July 16, 2015 in accordance with the Guidelines 2013/C31/01. The license is valid for five years and expires on July 22, 2020. Pursuant to the EU directive of (2013/C 343/01), the Company is subject to fulfill the Guidelines of the Good Distribution Practices of medical products for human use. The Company submitted its application for renewal one month before the license expiration to the Hellenic Republic National Organization, but according to the EMA (eudragmdp.ema.europa.eu/inspections/view/wda/WDAHomePage.xhtml): “Due to the restrictions caused by COVID-19, the period of validity of MIA’s, WDA’s, GMP and GDP certificates is automatically extended until the end of 2021. On-site inspections will resume as soon as there is a consensus that the period of the public health crisis has passed. The clarifying remark section of individual MIA’s, WDA’s, GMP and GDP certificates will indicate any exceptions. Competent authorities reserve the right to inspect a manufacturing site should the need arise.” Therefore, the Company is eligible to continue its operations until at least the end of 2021 and expects to receive a temporary license by the end of 2021.

Our subsidiary, Decahedron, was granted the license for the wholesale of medicinal products for human use in February 2021 pursuant to the regulation of 18 of The Human Medicines Regulations 2012 (SI 2012/1916). It fulfills the guidelines of the Wholesale Distribution Authorisation (Human). Finally, our subsidiary, Cosmofarm S.A., was granted the license for the wholesale of pharmaceutical products for human use on February 2019 pursuant to the EU directive of (2013/C 343/01). It fulfils the Guidelines of the Good Distribution Practices of medical products for human use. All licenses were granted based on inspections and are valid unless current inspections occur which will revise their status.

The Company uses a differentiated operating model based on a lean, nimble and decentralized structure, an emphasis on low-risk license acquisition, as well as research & development and our ability to be better owners of pharmaceutical assets than others. This operating model and the execution of our Corporate Strategy are enabling the Company to achieve sustainable growth and create shareholder value.

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We are currently focusing our existing operations on expanding the business of our subsidiaries. Our operating model and the execution of our corporate strategy are designed to enable the Company to achieve sustainable growth and create shareholder value.

Risks

Supply chain disruption is a growing concern for the European pharmaceutical industry as it increasingly looks to cut costs by relying on ‘emerging markets’, where standards can be lower in terms of compliance, ethics and health and safety.

Hikes in the price of medicine and their impact on the sustainability of the healthcare systems are garnering more and more attention. European regulators are willing to play their part in safeguarding continued access to safe and effective medicines. Regulators can speed up the approval of generics and biosimilars to boost competition and drive down prices.

Cuts in healthcare spending keep occurring since the financial crises of the late of 2000s. Europe’s slow recovery has been uneven, with austerity and economic uncertainty, especially in the EU’s poorer member states, such as Greece.

The Effects of COVID-19 on Our 2021 Operations

The World Health Organization (WHO) declared the coronavirus outbreak a pandemic on March 11, 2020. Since the outbreak in China in December 2019, COVID-19 has expanded its impact to Europe, where all of our operations reside as well as our employees, suppliers and customers. To date, our operations have been adversely affected by the following Covid-19 risks:

Adverse Risks

· Drug shortages due to ban of exports

· Problems/restrictions in supply chain

· Logistics delays

· National or EU long lasting recession   · Restrictions on employees’ ability to work · Liquidity issues (AR/AP) – payment delays and new government regulations for freezing payment terms   Subsequent to year-end, management has identified opportunities as listed below, that could balance, at least in part, the adverse effects of COVID-19 during the fiscal year-end 2020 and 2021. However, there can be no assurance that this will occur prior to a vaccine and treatment becoming effective.   Opportunities   · Sales increase of OTC products branded · Sales increase of food supplements (Vitamin D3, Vitamin C, multivitamins) · Sales increase of antibacterial products and medicine masks · Obtain exclusive distribution rights for detection test kits for COVID-19 · Governmental financing incentives related to liquidity · Governmental financial support related to furlough schemes

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Management’s Expectations Regarding Covid-19

Management believes that there could be a positive long-term outcome from Covid-19, which could result in an increase in sales of OTC branded products, nutraceuticals, antibacterial products, gloves, oximeters, thermometers and medical masks. However, there is no guarantee of such results. Therefore, we will increase R&D as we are aiming to innovate and create new products in order to help combat against Covid-19. We have adapted our strategy in response to Covid-19 and will continue to do so, since we are expecting the impact of Covid-19 to continue for the next 18-24 months.

What Effect Will Covid-19 Have on the Company’s Disclosure Controls

Management does not believe COVID-19 will have a significant effect on our disclosure controls as there have been no changes to date. Our operations have continued at a normal pace, at least 90% of our staff continue to work on site and those staff who are working remotely have no impact on our disclosure controls.

Results of Operations

Three and Six-Months Period Ended June 30, 2021 and 2020

Revenue

The Company had revenue of $14,846,925 and $12,819,972 (an increase of 15.81%) for the three months ended June 30, 2021 and 2020, respectively, and $26,466,001 and $24,753,220 (an increase of 6.92%) for the six months ended June 30, 2021 and 2020, respectively. This increase is mainly due to the organic growth attributed to our subsidiary, Cosmofarm, which continued the expansion and sales programs in local level. In addition, there was an increased demand during this quarter for our own brand of nutraceuticals; “Sky Premium Life” and full-line wholesale. Our subsidiary, Skypharm, was focused this quarter on the sales of “Sky Premium Life” products. The Company had a net loss of $2,379,056 on revenue $14,846,925 versus a net profit of $1,377,311 on revenue $12,819,972 for the three months ended June 30, 2021 and 2020, respectively. The Company had a net loss of $4,552,959 on revenue of $26,466,001 versus a net income of $894,001 on revenue of $24,753,220 for the six months ended June 30, 2021 and 2020, respectively.

Cost of Goods Sold

The Company had costs of goods sold of $12,810,082 versus $10,471,841 (an increase of 22.33%) for the three months ended June 30, 2021 and 2020, respectively. In addition, the Company had costs of goods sold of $23,427,823 versus $21,211,918 (an increase of 10.45%) for the six months ended June 30, 2021 and 2020, respectively. This increase is in line with the revenue increase due to higher demand of “Sky Premium Life” nutraceutical products and the full-line wholesale. However, the increase of the cost of goods sold is disproportionate to the revenue increase due to the fact that the increase of full-line wholesale products have low margins in comparison to nutraceutical products.

Our future revenue growth is expected to continue to be affected by various factors such as industry growth trends, including drug utilization, the introduction of new innovative brand therapies, the likely increase in the number of generic drugs that will be available over the next few years as a result of the expiration of certain drug patents held by brand-name pharmaceutical manufacturers and the rate of conversion from brand products to those generic drugs, price increases and price deflation, general economic conditions, including the effects of the coronavirus in the member states of European Union, competition within the industry, customer consolidation, changes in pharmaceutical manufacturer pricing and distribution policies and practices, increased downward pressure on government and other third party reimbursement rates to our customers, and changes in government rules and regulations.

Gross Profit

The Company had gross profit of $2,036,843 versus $2,348,131 (a decrease of 13.26%) for the three months ended June 30, 2021 and 2020, respectively. In addition, the Company had gross profit of $3,038,178 versus $3,541,302 (a decrease of 14.21%) for the six months ended June 30, 2021 and 2020, respectively. The decrease in gross profit is due to a disproportionate increase in demand for full line wholesale and nutraceutical products and the increase of COGS.

Operating Expenses

The Company had general and administrative costs of $3,165,268 and $870,704, sales and marketing expenses of $139,633 and $380,326 and depreciation and amortization expense of $108,413 and $110,788 for a net operating loss of $1,376,470 and a net operating income of $986,313 (a decrease of 239.58%) for the three months ended June 30, 2021 and 2020 respectively. The decrease is primarily a result of the increase in stock-based compensation related to a consulting agreement entered into in February 2021, as well as an increase in legal, consulting and outsourced accounting costs in the current year.

The Company had general and administrative costs of $5,385,535 and $1,684,573, sales and marketing expenses of $544,725 and $434,056 and depreciation and amortization expense of $215,486 and $210,796 for a net operating loss of $3,107,568 and a net operating income of $1,211,877 (a decrease of 356.43%) for the six months ended June 30, 2021 and 2020 respectively. The increase in expenses is mainly due to the stock-based compensation ($3,157,451) consulting agreement entered into during the six months ended June 30, 2021.

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Other Income (Expense)

The Company’s other income (expense) was primarily comprised of interest expense related to notes payable and convertible notes payable $780,608 versus $651,867, non-cash interest expense related to the amortization of debt discount of $88,979 versus $0, a loss on equity investments of $161 versus gain of $32,418, a gain on extinguishment of debt of $0 versus $779,224 due to an amended debt exchange agreement dated as of February 5, 2021, a change in fair value of derivative liability of $26,496 versus $0 due to agreements on convertible debentures, and a foreign currency gain of $96,584 versus of $194,828 for the three months ended June 30, 2021 and 2020, respectively. Also, The Company’s other expense was $39,415 versus other income of $39,383 for the three months ended June 30, 2021 and 2020, respectively.

The Company’s other income (expense) was primarily comprised of interest expense related to notes payable and convertible notes payable $,1,512,433 versus $1,063,988, non-cash interest expense related to the amortization of debt discount of $139,088 versus $29,509, a gain on equity investments of $279 versus $10,246, a gain on extinguishment of debt of $445,636 versus $779,224 due to an amended debt exchange agreement dated as of February 5, 2021, a change in fair value of derivative liability of $87,869 versus $0 due to agreements on convertible debentures, and a foreign currency loss of $209,436 versus a loss of $32,306 for the six months ended June 30, 2021 and 2020, respectively. Also, The Company’s other expense was $217,626 versus other income of $27,949 for the six-months ended June 30, 2021 and 2020, respectively.

Unrealized Foreign Currency losses

The Company had an unrealized foreign currency gain of $284 versus a gain of $182,840 and a net comprehensive loss of $2,378,772 versus profit of $1,560,151 for the three months ended June 30, 2021 and 2020, respectively. The Company had an unrealized foreign currency loss of $473,294 versus gain of $39,078 and a net comprehensive loss of $5,026,253 versus profit of $933,079 for the six months ended June 30, 2021 and 2020, respectively.

Liquidity and Capital Resources

As of June 30, 2021, the Company had working capital of $10,417,725 compared to $5,979,870 as of December 31, 2020.

The Company had cash of $805,772 versus $628,395 as of June 30, 2021 and December 2020, respectively. The Company had net cash used in operating activities of $2,519,394 and $5,876,080 for the six months ended June 30, 2021 and 2020, respectively. The Company has devoted substantially all of its cash resources to expand through organic business growth and, where appropriate, through the execution of selective company acquisitions, and has incurred significant general and administrative expenses in order to enable the financing and growth of its business and operations.

The Company had net cash used in investing activities of $12,100 and $86,378 during the six months ended June 30, 2021 and 2020, respectively. For the six months ended June 30, 2021 and 2021 this was due to the purchase of fixed assets.

The Company had net cash provided by financing activities of $2,724,871 versus $8,301,764 during the six months ended June 30, 2021 and 2020, respectively.

For the quarter ended June 30, 2021, the Company also received proceeds from lines of credit of $12,311,882 and payments of lines of credit of $12,189,057, for a net decrease on the line of credit of $122,825.

We anticipate using cash in our bank account as of June 30, 2021, cash generated from the operations of the Company and its operating subsidiaries and from debt or equity financing, or from a loan from management, to the extent that funds are available to do so to conduct our business in the upcoming year. Management is not obligated to provide these or any other funds. If we fail to meet these requirements, we may lose the qualification for quotation and our securities would no longer trade on the over-the-counter markets. Further, as a consequence we would fail to satisfy our reporting obligations with the Securities and Exchange Commission (“SEC”), and investors would then own stock in a company that does not provide the disclosure available in quarterly and annual reports filed with the SEC and investors may have increased difficulty in selling their stock as we will be non-reporting.

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Plan of Operation in the Next Twelve Months

The pharmaceutical industry is a dynamic industry full of challenges. The fast-changing environment requires our company to have effective strategic planning and monitoring in order to be responsive and adaptable to such challenges.

Our multi-targeted approach is trying to mitigate obstacles by setting out an objective evaluation of the organization’s goals. We set achievable future targets based on past performance, segments and drivers. In addition, we plan and model different scenarios and assess the impact of later strategic decisions on the business in both short and long term.

Our focus for the next twelve months is intended to be as follows:

Organic Growth

We are planning to develop and expand our business organically by securing new clients, as well as, expanding the amount of business we do with our existing clients. Our resources, industry knowledge, skills, equipment and long-term relationships with clients provide us the opportunity to focus on the increase of our distribution channels. In addition, our organic growth will be driven by distributing more profitable pharmaceutical products, OTC medicines, and nutraceuticals. We are committed to capitalizing on sales growth opportunities by expanding our customer pipeline across the European market, as well as entering markets outside the European Union.

We also intend to acquire additional companies that are operating in the pharmaceutical industry which would add value to our Company and its shareholders giving us the opportunity to penetrate into new markets and products.

Nutraceutical Products

The Company intends to expand and enhance the sales of its own branded nutraceutical products, “Sky Premium Life”, through digital channels across Europe. Also, the plan for the next twelve months is to penetrate into the UK market and utilize the current distribution channel of its UK subsidiary, Decahedron. The existing portfolio of our own branded nutraceutical products reached the number of 67 SGUs as of today and the Company plans to increase it to 150 SGUs within the next twelve months.

Generics

We intend to expand our business within the generic pharmaceutical products market and obtain more exclusive distribution rights in Europe. These industries are highly competitive and may significantly affect the Company’s sales of these products, including, but not limited to, price and cost-effectiveness, marketing effectiveness, product labeling, quality control and quality assurance. Through our related party, Doc Pharma which is the owner of 47 plus generic licenses of fast-moving product codes we will use innovative products distribution.

B2B/B2C Platforms

We intend to develop platforms for Business-to-Business and Business-to-Customers transactions. We expect our relationships with our customers and suppliers to be redefined, our supply chain management to be improved and our customers loyalty to be increased, as a result, improved sales. We hope the platforms will lead to lower costs and errors avoidance through the automated process.

Robotic Automation Systems

The Company acquired within current quarter one more robotic system for fast move items which will essentially result in cost savings, time efficiency, errors avoidance and effectiveness. This is expected to lead us to increased productivity, minimization of delivery time by 2/3, improved safety and make our subsidiary, Cosmofarm S.A., one of the leaders in pharmaceutical products distribution.

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The pharmaceutical sector offers a large growth potential within the European pharmaceutical market, if service, price and quality are strictly directed towards the customer requirements. We will continue to encounter the competition in the market by product, service, reliability and a high level of quality. On the procurement side we can access a wide range of supply possibilities. To minimize business risks, we diversify our sources of supply all over Europe. We secure our high-quality demands through careful supplier qualification and selection as well as active suppliers’ system management.

We assess the foreseeable development of the Company as being positive. Over the medium term we assume that we will be able to further expand our market shares. However, during the course of further organizational optimization there may be associated extraordinary additional costs.

We still see the risks for the future development in a difficult and competitive environment, increasing purchase prices and the stagnating selling price level. On the background of our financial stability we however see ourselves as being well-equipped for managing the future risks. Risks that could endanger the survival of the Company are currently not able to be identified.

Off Balance Sheet Arrangements

As of June 30, 2021, there were no off-balance sheet arrangements.

Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” under the Management’s Discussion and Analysis section. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Revenue Recognition: The Company adopted Topic 606 Revenue from Contracts with Customers on January 1, 2018. As a result, it has changed its accounting policy for revenue recognition as detailed above.

Foreign Currency. Assets and liabilities of all foreign operations are translated at year-end rates of exchange, and the statements of operations are translated at the average rates of exchange for the year. Gains or losses resulting from translating foreign currency financial statements are accumulated in a separate component of stockholders’ equity until the entity is sold or substantially liquidated. Gains or losses from foreign currency transactions (transactions denominated in a currency other than the entity’s local currency) are included in net (loss) earnings.

Income Taxes. The Company accounts for income taxes under the asset and liability method, as required by the accounting standard for income taxes, ASC 740. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as net operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company is liable for income taxes in Greece and the United Kingdom. The corporate income tax rate is 22% in Greece (tax losses are carried forward for five years effective January 1, 2013) and 19% in United Kingdom. Losses may also be subject to limitation under certain rules regarding change of ownership.

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We regularly review deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if we do not consider it to be more likely than not that the deferred tax assets will be realized. Our review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets.

We recognize the impact of an uncertain tax position in our financial statements if, in management’s judgment, the position is not more-likely-then-not sustainable upon audit based on the position’s technical merits. This involves the identification of potential uncertain tax positions, the evaluation of applicable tax laws and an assessment of whether a liability for an uncertain tax position is necessary. We operate and are subject to audit in multiple taxing jurisdictions.

We record interest and penalties related to income taxes as a component of interest and other expense, respectively.

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740 “Accounting for Income Taxes” as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in this financial statement because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

The Company has net operating loss carry-forwards in our parent, Cosmos Holdings Inc., which are applicable to future taxable income in the United States (if any). Additionally, the Company has income tax liabilities in the United Kingdom. The income tax assets and liabilities are not able to be netted. We therefore reserve the income tax assets applicable to the United States but recognize the income tax liabilities in Greece and the United Kingdom. Losses may also be subject to limitation under certain rules regarding change of ownership.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable. A smaller reporting company is not required to provide the information required by this Item.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act) that are designed to ensure that information required to be disclosed in the Company’s Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Principal Executive Officer/Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Principal Executive Officer and the Principal Financial Officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were partially effective. The Internal Auditor of the Company has already developed and remediated some of the existing internal controls and processes. The Company has hired one more person to join the internal audit team within current quarter in order to empower the reassurance of regulatory compliance with SEC reporting requirements.

Changes in Internal Controls Over Financial Reporting

The Company has increased its personnel resources in order to eliminate the material weaknesses which have been identified so far. The Company has hired an Internal Auditor Assistant in order to remediate and strengthen existing procedures, examine and improve operating practices, financial risk management processes, as well as to define and develop new policies and controls in order to improve the accuracy of the disclosures.

We have appointed a new member on board within the fiscal year ending December 31, 2021 in order to advise and help us to ensure the completeness, integrity, reliability and accuracy of our systems, controls and procedures. Our existing Audit Committee is in process of evaluating our existing controls and procedures, whilst communicating with the Management on quarterly basis. We are in process of appointing Nominate and Compensation Committees and preparing the relevant procedures and charters.

45

Audit Committee

We have a separately-designated standing audit committee, which is appointed by the Board of Directors of Cosmos Holdings Inc. Our three independent directors, John Hoidas, Demetrios Demetriades and Peter Goldstein serve on the Audit Committee. Primary function of the committee is to assist the Board of Directors in overseeing (1) the financial reporting and accounting processes of the Company, and (2) the financial statements audits of the Company. The Committee also prepares a written report to be included in the annual proxy statement of the Company pursuant to the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”). In furtherance of these purposes, the Committee shall maintain direct communication among the Company’s independent auditors and the Board of Directors. The independent auditors and any other registered public accounting firm engaged in preparing or issuing an audit report or performing other audit review or attest services for the Company shall report directly to the Committee and are ultimately accountable to the Committee and the Board of Directors.

In discharging its oversight role, the Committee is authorized to investigate any matter brought to its attention with full access to all books, records, facilities and personnel of the Company. The Committee shall have the sole authority to retain at the Company’s expense outside legal, accounting or other advisors to advise the Committee and to receive appropriate funding, as determined by the Committee, from the Company for the payment of the compensation of such advisors and for the payment of ordinary administrative expenses of the Committee that are necessary to carry out its duties. The Committee may request any officer or employee of the Company or the Company’s outside counsel or independent auditors to attend a meeting of the Committee or to meet with any member of, or advisors to, the Committee. The Committee may also meet with the Company’s investment bankers or financial analysts who follow the Company.

The Committee shall meet no less frequently than four times per year, with additional meetings as circumstances warrant. The Committee shall also meet periodically with management, the internal auditors, if any, and the independent auditors in separate executive sessions. The Committee shall record the minutes of all such meetings and shall submit the minutes of its meetings to, or discuss the matters deliberated at each meeting with, the Board of Directors. The Company’s chief financial or accounting officer shall function as the management liaison officer to the Committee.

46

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

As previously disclosed on Form 10-Q filed on May 17, 2021, Company entered into a Debt Exchange Agreement (the “Agreement”) dated as of May 10, 2021, with Grigorios Siokas, its Chief Executive Officer. Under the Agreement, which was filed as Exhibit 10.1 to the Form 10-Q, Mr. Siokas agreed to forego repayment of $600,000 of indebtedness owed to him by the Company pursuant to a September 18, 2020 Settlement of a Section 16(b) lawsuit. Mr. Siokas settled the lawsuit in an effort to avoid the uncertainty of litigation and further legal expenses. During the quarter ended June 30, 2021, the Company received $600,000 of additional paid-in-capital and decreased the related party loan by $600,000.

Item 1A. Risk Factors

Not applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None. Previously reported on Form 8-K.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

47

Item 6. Exhibits.

(a) Exhibits.

Exhibit No.	Document Description
10.1	Capital Market Advisory Agreement dated July 1, 2021
31.1*	Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document**
101.SCH	XBRL Taxonomy Extension Schema Document**
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB	XBRL Taxonomy Extension Label Linkbase Document**
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document**

_____________

*

This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

**

XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

48

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Cosmos Holdings Inc.
Date: August 16, 2021	By:	/s/ Grigorios Siokas
		Grigorios Siokas
		Chief Executive Officer
		(Principal Executive Officer)

Date: August 16, 2021	By:	/s/ Georgios Terzis
		Georgios Terzis
		Chief Financial Officer
		(Principal Financial Officer, And Principal Accounting Officer)

49

EXHIBIT INDEX

Exhibit No.	Document Description
10.1	Capital Market Advisory Agreement dated July 1, 2021
31.1*	Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document**
101.SCH	XBRL Taxonomy Extension Schema Document**
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB	XBRL Taxonomy Extension Label Linkbase Document**
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document**
Exhibit 101	Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.**

___________

*

This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

**

XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

50

EX-10.1

EXHIBIT 10.1

CAPITAL MARKET

ADVISORY AGREEMENT

THIS AGREEMENT, dated as of July 1, 2021, between Cosmos Holdings, Inc. (the “Company”), having its place of business at 141 West Jackson Blvd., Suite 4236, Chicago, Illinois 60604 and Exchange Listing, LLC (“Consultant”), having its principal place of business at 515 E. Las Olas Blvd, Suite 120, Fort Lauderdale, Florida 33301.

RECITALS

WHEREAS, Consultant is engaged in the business of providing advisory services and advising companies in connection with their business; and

WHEREAS, the Company desires to engage Consultant to perform certain advisory and consulting services for the Company and Consultant desires to perform the services for the Company, subject to the terms and conditions of this Agreement;

WHEREAS, the Company and Greg Siokas, the Chief Executive Officer of the Company, have previously entered into advisory/consulting agreements with the Consultant (“Previous Agreements”);

WHEREAS, this Agreement shall replace and supercede all Previous Agreements and no further consideration shall be owed by the Company or Greg Siokas under the Previous Agreements.

THEREFORE, for the mutual promises contained herein, the parties hereto agree as follows:

AGREEMENT

1. ENGAGEMENT BY CONSULTANT. Company hereby engages Consultant and Consultant hereby agrees to hold himself available to render, and to render at the reasonable request of the Company, independent advisory and consulting services for the Company to the best of his ability (the “Services”), upon the terms and conditions hereinafter set forth.

A. Duties. Consultant shall perform those services as reasonably requested by the Company, including but not limited to the Services described herein. Consultant shall devote Consultant’s commercially reasonable efforts and attention to the performance of the Services for the Company on a timely basis. Consultant shall also make himself available to answer questions, provide advice and Services to the Company upon reasonable request and notice from the Company. It is mutually understood that the Consultant shall not be accountable for operational duties.

B. Responsibilities. Assist with the strategic analysis of the Company’s business objectives and specific advice on balancing these objectives with the expectations of the US capital markets.

C. Scope of Work-NASDAQ Listing.

1.	Capital Market Advisory – Provide an array of capital markets services enabling the Company to better achieve its financial goals of trading on NASDAQ Capital Markets (the “NASDAQ Listing”).
	Specific scope of services:

1.1.	Assist the Company with a capital market road map that includes strategy, development and execution;
1.2.	Assisting the Company with structuring its capitalization table and preparing for the NASDAQ Listing;
1.3.	Introducing the Company to the best of class service providers, including Investment Bankers, investor relations firms, legal counsel, accounting, auditing, transfer agent, EDGAR agent and others;

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1.4.	Assisting the Company with its filings with the Securities and Exchange Commission (“SEC”) for the NASDAQ Listing;
1.5.	Manage the NASDAQ Listing application process;
1.6.	Rendering advice on methods of structuring financing, assisting the Company in identifying and working with selected investors, placement agents and/or underwriters; and
1.7.	Reviewing the Company’s financial position and projections relating to the Company’s capital requirements, analyzing the pro forma effects of a financing on such projections;

2. Corporate Governance.

2.1	Assisting the Company with development of its Corporate Governance Policy;
2.2	Assisting the Company with creation and adoption of a Corporate Governance Manual; and
2.3	Assisting the Company with development of its complete corporate governance certification documents.

3. Organizational Meetings. Organizational meetings with the working team to review developments, discuss any potential challenges and establish action steps, results, timelines and responsibilities.

D. Scope of Work-Post NASDAQ Listing

1. Capital Market Advisory – Provide an array of capital markets service including the following:

1.1	Assist the Company with a capital market road map that includes strategy, development and execution;
1.2	Assist the Company with its filings with the Securities and Exchange Commission (“SEC”);
1.3	Rendering advice on methods of structuring financing, assisting the Company in identifying and working with selected investors, placement agents and/or underwriters;
1.4	Assist the Company with its market awareness, after market support, research & analyst coverage;
1.5	Reviewing the Company’s financial position and projections relating to the Company’s ongoing capital requirements, analyzing the pro forma effects of a financing on such projections;

2. Corporate Governance

2.1	Ongoing update of the Company’s Corporate Governance Policy;
2.2	Assist with ongoing compliance and management of boards and committees along with best practices;
2.3	Assist management of the Company in complying with all exchange regulations in regards to fulfilling governance requirements;
2.4	Assist with the preparation of materials to and presenting to the Board of Directors.

3. Financing Services

3.1	Using reasonable efforts to identify and introduce the Company to prospective financial investors, senior lenders, strategic corporate investors, acquirers of assets, merger partners and/or other sources of capital (“Transaction”);
3.2	Evaluating Transaction proposals on behalf of the Company and providing guidance with respect to the Transaction structure and valuation;
3.3	Assisting in any discussions or negotiations of any Transaction, as requested by the Company;
3.4	Working with the Company and its professionals in closing any Transaction as deemed appropriate and necessary.

4. Merger and Acquisition Services

4.1	Using reasonable efforts in identifying and introducing the Company to prospective acquisition candidates, including target acquisitions, merger partners and strategic partners (collectively, “Targets”);
4.2	Providing advice and assistance in connection with structuring and negotiating of any merger or acquisition;
4.3	** Performing financial, strategic and valuation analyses of Targets of the Company;
4.4	** Working with the Company and its professionals in closing any Merger or Acquisition as deemed appropriate and necessary.

** It is mutually understood that additional compensation may be warranted based around the depth and scope of our involvement.

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5. Organizational Meetings

5.1	Weekly Organizational meetings with the “working” team to review developments, discuss any potential challenges and establish action steps, results, timelines and responsibilities;
5.2	Quarterly Strategic Planning Meetings to review a capital market road map that includes strategy, development and execution;
5.3	Board Meetings as requested by the Chairman of the Board;

2. TERM. The term of this Agreement shall commence on the execution date and shall continue for a minimum of twenty-four (24) months from the date the Company commences trading on NASDAQ.

3. COMPENSATION. The Company agrees to compensate the Consultant in the following manner as consideration of the Services to be rendered hereunder:

A.	$4,000 per month from the date of the execution of this Agreement until the Company commences trading on NASDAQ.
B.	Upon NASDAQ listing, the Company shall pay $10,000 per month with $4,000 per month paid on a monthly basis and $6,000 per month accrued until such time as the Company raises an aggregate of $10,000,000 (with such amount to be aggregated commencing with the date of this Agreement). At such time as the Company has raised an aggregate of $10,000,000 then the Company shall pay the $10,000 on a monthly basis going forward with no fees accrued.
C.	$100,000 bonus upon NASDAQ listing and when the Company has raised an aggregate of $10,000,000;
D.	The Company agrees that the Consultant, or its designees, shall receive a total of 250,000 shares of the Company’s common stock to be issued in the following manner: (i) 50,000 shares previously issued pursuant to the Previous Agreements; and (ii) 200,000 shares to be issued when the Company commences trading on NASDAQ; and
E.	The Company shall promptly reimburse Consultant for any pre-approved costs and expenses incurred by Consultant in connection with any Services specifically requested by Company and performed by Consultant pursuant to the terms of the Agreement.

4. INDEPENDENT CONTRACTOR.

It is expressly agreed that Consultant is acting as an independent contractor in performing its services hereunder, and this Agreement is not intended to, nor does it create, an employer-employee relationship nor shall it be construed as creating any joint venture or partnership between the Company and Consultant. Consultant shall be responsible for all applicable federal, state and other taxes related to Consultant’s compensation hereunder and Company shall not withhold or pay any such taxes on behalf of Consultant, including without limitation social security, federal, state and other local income taxes. Since Consultant is acting solely as an independent contractor under this Agreement, Consultant shall not be entitled to insurance or other benefits normally provided by Company to its employees. While the foregoing Duties and Responsibilities of Consultant may in a technical legal sense cause Consultant to be deemed an agent of Company, Consultant shall have no authority to, nor shall he in any way attempt to, bind the Company to any agreements nor be responsible for its operations.

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5. ASSIGNMENT.

This Agreement is being entered into in reliance upon and in consideration of the singular skill and qualifications of Consultant. Neither Consultant nor the Company shall voluntarily, or by operation of law assign or otherwise transfer the obligations incurred on its part pursuant to terms of this Agreement without the prior written consent of the other party, except that Company may assign this Agreement to its parent or any successor without the prior written consent of Consultant which shall be considered given by Consultant’s entry into this Agreement. Except as aforesaid, any attempt at assignment or transfer by either party of its obligations hereunder, without such consent, shall be null and void.

6. PROPRIETARY INFORMATION; WORK PRODUCT; NON-DISCLOSURE.

A. Company has conceived, developed and owns, and continues to conceive and develop, certain property rights and information, including but not limited to its business plans and objectives, client and customer information, financial projections, marketing plans, marketing materials, logos, and designs, and technical data, processes, know-how, formulae, databases, computer programs, and other trade secrets, intangible assets and industrial or proprietary property rights which may or may not be related directly or indirectly to Company’s business and all documentation, media or other tangible embodiment of or relating to any of the foregoing and all proprietary rights therein of Company are hereinafter referred to as “Proprietary Information”

B. General Restrictions on Use. Consultant agrees to hold all Proprietary Information in confidence and not to, directly or indirectly, disclose, use, copy, publish, summarize, or remove from Company’s premises and/or control any Proprietary Information (or remove from the control of Company any other property of Company), except (i) during the consulting relationship to the extent authorized and necessary to carry out Consultant’s responsibilities under this Agreement, and (ii) after termination of the consulting relationship, only as specifically authorized in writing by Company. Notwithstanding the foregoing, such restrictions shall not apply to: (x) information which Consultant can show was rightfully in Consultant’s possession at the time of disclosure by Company; (y) information which Consultant can show was received from a third party who lawfully developed the information independently of Company or obtained such information from Company under conditions which did not require that it be held in confidence; or (z) information which, at the time of disclosure, is generally available to the public.

C. Ownership of Work Product. All Work Product as defined hereinafter shall be considered work(s) made by Consultant for hire for Company and shall belong exclusively to Company and its designees. If by operation of law, any of the Work Product, including all related intellectual property rights, is not owned in its entirety by Company automatically upon creation thereof, then Consultant agrees to assign, and hereby assigns, to Company and its designees the ownership of such Work Product, including all related intellectual property rights. “Work Product” shall mean any writings (including excel, power point, emails, etc.), programming, documentation, data compilations, reports, and any other media, materials, or other objects produced as a result of Consultant’s work or delivered by Consultant in the course of performing that work.

7. TERMINATION. This Agreement may be terminated on the occurrence of any one of the following events:

A.	The expiration of the Term hereof;
B.	A material breach of this Agreement by Consultant, which breach has not been cured within thirty (30) days after a written demand for such performance is delivered to Consultant by the Company that specifically identifies the manner in which the Company believes that Consultant has breached this Agreement;
C.	Any material acts or events which inhibit Consultant from fully performing its responsibilities to the Company in good faith, such as (i) a felony criminal conviction; (ii) any other criminal conviction involving Consultant’s lack of honesty or Consultant’s moral turpitude; (iii) drug or alcohol abuse; or (iv) acts of dishonesty, gross carelessness or gross misconduct.

8. DISCLAIMER OF RESPONSIBILITY FOR ACTS OF COMPANY.

The obligations of the Consultant described in this Agreement consist solely of the furnishing of information and advice to the Company. All final decisions with respect to acts of the Company or its affiliates, whether or not made pursuant to or in reliance on information or advice furnished by Consultant hereunder, shall be those of the Company or such affiliates and Consultant shall under no circumstances be liable for any expenses incurred or loss suffered by the Company as a consequence of such decisions.

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9. GENERAL PROVISIONS.

A. Governing Law and Jurisdiction. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Florida. Each of the parties hereto consents to such jurisdiction for the enforcement of this Agreement and matters pertaining to the transaction and activities contemplated hereby.

B. Attorneys’ Fees. In the event a dispute arises with respect to this Agreement, the party prevailing in such dispute shall be entitled to recover all expenses, including, without limitation, reasonable attorneys’ fees and expenses incurred in ascertaining such party’s rights, in preparing to enforce or in enforcing such party’s rights under this Agreement, whether or not it was necessary for such party to institute suit.

C. Complete Agreement. This Agreement supersedes any and all of the other agreements, either oral or in writing, between the Parties with respect to the subject matter hereof and contains all of the covenants and agreements between the parties with respect to such subject matter in any manner whatsoever. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, oral or otherwise, have been made by any party, or anyone herein, and that no other agreement, statement or promise not contained in this Agreement shall be valid or binding. This Agreement may be changed or amended only by an amendment in writing signed by all of the Parties or their respective successors-in-interest.

D. Binding. Except as aforesaid, this Agreement shall be binding upon and inure to the benefit of the successors-in-interest, assigns and personal representatives of the respective Parties.

E. Notices. All notices and other communications provided for or permitted hereunder shall be made by hand delivery, first class mail, telex or telecopied, addressed as follows:

Company:	Cosmos Holdings, Inc. 141 West Jackson Blvd. Suite 4236 Chicago, Illinois 60604 Attn: Greg Siokas Greg.ceo@cosmoshold.com
Advisor:	Exchange Listing, LLC 515 E. Las Olas Blvd Suite 120 Fort Lauderdale, Florida 33301 Attn: Peter Goldstein peter@exchangelistingllc.com

All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; five (5) business days after deposit in any Post Office in the continental United States or Canada, postage prepaid, if mailed; when answered back, if telexed; and when receipt is acknowledged or confirmed, if telefaxed. No notices may be sent via computer generated electronic mail (so-called “email”).

F. Unenforceable Terms. Any provision hereof prohibited by law or unenforceable under the law of any jurisdiction in which such provision is applicable shall as to such jurisdiction only be ineffective without affecting any other provision of this Agreement. To the full extent, however, that such applicable law may be waived to the end that this Agreement be deemed to be a valid and binding agreement enforceable in accordance with its terms, the Parties hereto hereby waive such applicable law knowingly and understanding the effect of such waiver.

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G. Execution in Counterparts. This Agreement may be executed in several counterparts and when so executed shall constitute one agreement binding on all the Parties, notwithstanding that all the Parties are not signatory to the original and same counterpart.

H. Further Assurance. From time to time each Party will execute and deliver such further instruments and will take such other action as any other Party may reasonably request in order to discharge and perform their obligations and agreements hereunder and to give effect to the intentions expressed in this Agreement.

I. Miscellaneous Provisions. The various headings and numbers herein and the grouping of provisions of this Agreement into separate articles and paragraphs are for the purpose of convenience only and shall not be considered a party hereof. The language in all parts of this Agreement shall in all cases be construed in accordance with its fair meaning as if prepared by all Parties to the Agreement and not strictly for or against any of the Parties.

J. Entire Agreement. This Agreement, together with the documents and exhibits referred to herein, embodies the entire understanding among the parties and merges all prior discussions or communications among them, and no party shall be bound by any definitions, conditions, warranties, or representations other than as expressly stated in this Agreement, or as subsequently set forth in writing, signed by the duly authorized representatives of all of the parties hereto. This agreement, when executed shall supersede and render null and void any and all preceding oral or written understandings and agreements.

K. No Oral Change; Waiver. This Agreement may only be changed, modified, or amended in writing by the mutual consent of the parties hereto. The provisions of this Agreement may only be waived in or by a writing signed by the party against whom enforcement of any waiver is sought.

L. Non-Circumvent. The Company hereby expressly covenants and agrees not to engage in any discussions or negotiations or to execute any agreement, understanding or undertaking whatsoever with any person or entity that introduced by the Consultant, without the consent and approval of the Consultant including third parties who may be interested in providing or receiving financing of any kind (a “Financing”) or in entering into a transaction, including, without limitation, a merger, acquisition or sale of stock or assets (in which the Company may be the acquiring or the acquired entity), joint venture, collaboration, strategic alliance or other similar transaction (any such transaction, a”Transaction”).

M. Not Acting as a Broker-Dealer/Legal. The Company hereby acknowledges that Consultant is not a licensed broker-dealer and is not raising capital for the Company. The Company also acknowledges that the Consultant is not providing any legal services on behalf of the Company.

10. INDEMNIFICATION.

Consultant agrees to indemnify and hold harmless the Company and its affiliates and their directors, officers and employees from and against all taxes, losses, damages, liabilities, costs and expenses, including attorneys’ fees and other legal expenses, arising directly or indirectly from or in connection with (i) any negligent, reckless or intentionally wrongful act of Consultant or Consultant’s assistants, employees, contractors or agents, (ii) a determination by a court or agency that the Consultant is not an independent contractor, (iii) any material breach by the Consultant or Consultant’s assistants, employees, contractors or agents of any of the covenants contained in this Agreement and corresponding Confidential Information and Invention Assignment Agreement, (iv) any failure of Consultant to perform the Services in accordance with all applicable laws, rules and regulations, or (v) any violation of a third party’s rights resulting in whole or in part from the Company’s use of the Inventions or other deliverables of Consultant under this Agreement.

Company agrees to indemnify and hold harmless the Consultant and its affiliates and their directors, officers and employees from and against all taxes, losses, damages, liabilities, costs and expenses, including attorneys’ fees and other legal expenses, arising directly or indirectly from or in connection with any negligent, reckless or intentionally wrongful act of the Company or the Company’s officers, directors, employees, contractors or agents.

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11. WARRANTIES AND REPRESENTATIONS.

Consultant’s advisory services are provided on a best-efforts basis and are based on his personal experience and expertise. There are no guarantees, warranties or representations of any kind that Consultant’s advice or services will produce any specific results for the benefit of the Company. Actual results may substantially and materially differ from those suggested by Consultant. Consultant represents and warrants to Company that (a) he is under no contractual restriction or other restrictions or obligations that are inconsistent with this Agreement, the performance of his duties and the covenants hereunder, and (b) he is under no physical or mental disability that would interfere with his keeping and performing all of the agreements, covenants and conditions to be kept or performed hereunder.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.

“COMPANY” COSMOS HOLDINGS, INC.		“CONSULTANT” EXCHANGE LISTING, LLC
By:	/s/ Grigorios Siokas	By:	/s/ Peter Goldstein
Date:	07/14/2021	Date:	07/14/2021

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EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Grigorios Siokas, the Chief Executive Officer of Cosmos Holdings, Inc., certify that:

1.	I have reviewed this report on Form 10-Q of Cosmos Holdings Inc. for the quarter ended June 30, 2021;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	Cosmos Holdings Inc.
Date: August 16, 2021	By:	/s/ Grigorios Siokas
		Grigorios Siokas, Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Georgios Terzis, the Chief Financial Officer of Cosmos Holdings, Inc., certify that:

1.	I have reviewed this report on Form 10-Q of Cosmos Holdings Inc., for the quarter ended June 30, 2021;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	Cosmos Holdings Inc.
Date: August 16, 2021	By:	/s/ Georgios Terzis
		Georgios Terzis, Chief Financial Officer
		(Chief Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. § 1350, as adopted pursuant to Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned hereby certifies that the Quarterly Report on Form 10-Q for the period ended June 30, 2021 of Cosmos Holdings Inc. (the “Company”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	Cosmos Holdings Inc.
Date: August 16, 2021	By:	/s/ Grigorios Siokas
		Grigorios Siokas
		Principal Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Cosmos Holdings Inc. and will be retained by Cosmos Holdings Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. § 1350, as adopted pursuant to Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned hereby certifies that the Quarterly  Report on Form 10-Q for the period ended June 30, 2021 of Cosmos Holdings Inc. (the “Company”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	Cosmos Holdings Inc.
Date: August 16, 2021	By:	/s/ Georgios Terzis
		Georgios Terzis
		Principal Financial Officer and Principal Accounting Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Cosmos Holdings Inc. and will be retained by Cosmos Holdings Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover - shares	6 Months Ended
	Jun. 30, 2021	Aug. 16, 2021
Cover [Abstract]
Entity Registrant Name	COSMOS HOLDINGS INC
Entity Central Index Key	0001474167
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Jun. 30, 2021
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2021
Entity Common Stock Shares Outstanding		16,968,140
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Entity File Number	000-54436
Entity Incorporation State Country Code	NV
Entity Tax Identification Number	27-0611758
Entity Address Address Line 1	141 West Jackson Blvd
Entity Address Address Line 2	Suite 4236
Entity Address City Or Town	Chicago
Entity Address State Or Province	IL
Entity Address Postal Zip Code	60604
City Area Code	312
Local Phone Number	536-3102
Security 12b Title	Common Stock, $.001 par value
Trading Symbol	COSM

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2021	Dec. 31, 2020
CURRENT ASSETS:
Cash and cash equivalents	$ 805,772	$ 628,395
Accounts receivable, net	25,544,240	23,440,650
Accounts receivable - related party	3,135,184	3,468,564
Marketable securities	216,107	222,792
Inventory	3,530,874	3,292,557
Prepaid expenses and other current assets	4,931,366	5,148,441
Prepaid expenses and other current assets - related party	2,917,334	3,468,653
Operating lease right-of-use asset	983,849	833,763
Financing lease right-of-use asset	250,534	269,131
TOTAL CURRENT ASSETS	42,315,260	40,772,946
Property and equipment, net	1,578,041	1,757,213
Goodwill and intangible assets, net	214,099	230,506
Other assets	763,645	905,318
Deferred tax assets	286,329	178,430
TOTAL ASSETS	45,157,374	43,844,413
CURRENT LIABILITIES:
Accounts payable and accrued expenses	12,449,944	11,973,981
Accounts payable and accrued expenses - related party	193,894	1,733
Accrued interest	953,625	742,374
Customer advances	19,378	22,340
Convertible notes payable, net of unamortized discount of $418,504 and $494,973, respectively	766,496	952,027
Derivative liability - convertible note	435,478	460,728
Notes payable	9,335,709	12,042,712
Notes payable - related party	486,005	501,675
Lines of credit	5,038,912	5,076,684
Loans payable - related party	704,403	1,629,246
Taxes payable	764,140	760,446
Operating lease liability, current portion	168,216	200,204
Financing lease liability, current portion	80,891	89,926
Other current liabilities	500,444	339,000
TOTAL CURRENT LIABILITIES	31,897,535	34,793,076
Share settled debt obligation	1,554,590	1,554,590
Notes payable - long term portion	10,235,503	10,771,882
Operating lease liability, net of current portion	801,243	590,538
Financing lease liability, net of current portion	180,134	188,172
Other liabilities	103,821	107,168
TOTAL LIABILITIES	44,772,826	48,005,426
Commitments and Contingencies (see Note 13)	0	0
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $0.001 par value; 100,000,000 shares authorized; 0 shares issued and outstanding as of June 30, 2021 and December 31, 2020	0	0
Common stock, $0.001 par value; 300,000,000 shares authorized; 16,566,947 and 13,485,128 shares issued and 16,216,619 and 13,069,800 outstanding as of June 30, 2021 and December 31, 2020, respectively	16,566	13,484
Additional paid-in capital	23,901,367	14,333,285
Treasury stock, 350,328 and 415,328 shares as of June 30, 2021 and December 31, 2020, respectively	(611,204)	(611,854)
Accumulated deficit	(23,303,783)	(18,750,824)
Accumulated other comprehensive income	381,602	854,896
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)	384,548	(4,161,013)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$ 45,157,374	$ 43,844,413

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
CURRENT LIABILITIES:
Convertible notes payable, net of unamortized discount	$ 418,504	$ 494,973
STOCKHOLDERS' DEFICIT
Common stock, shares par value	$ 0.001	$ 0.001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	16,566,947	13,485,128
Common stock, shares outstanding	16,216,619	13,069,800
Preferred stock, shares par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Treasury stock	350,328	415,328

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited)
REVENUE	$ 14,846,925	$ 12,819,972	$ 26,466,001	$ 24,753,220
COST OF GOODS SOLD	12,810,082	10,471,841	23,427,823	21,211,918
GROSS PROFIT	2,036,843	2,348,131	3,038,178	3,541,302
OPERATING EXPENSES
General and administrative expenses	3,165,268	870,704	5,385,536	1,684,573
Sales and marketing expenses	139,633	380,326	544,725	434,056
Depreciation and amortization expense	108,413	110,788	215,486	210,796
TOTAL OPERATING EXPENSES	3,413,314	1,361,818	6,145,747	2,329,425
INCOME (LOSS) FROM OPERATIONS	(1,376,471)	986,313	(3,107,569)	1,211,877
OTHER INCOME (EXPENSE)
Other expense, net	(39,415)	39,383	(217,626)	27,949
Interest income (expense)	(780,607)	(651,867)	(1,512,433)	(1,063,988)
Non-cash interest expense	(88,979)	0	(139,088)	(29,509)
Gain (loss) on equity investments, net	(161)	32,418	279	10,246
Gain on extinguishment of debt	0	779,224	445,636	779,224
Change in fair value of derivative liability	26,496	0	87,869	0
Foreign currency transaction, net	96,584	194,828	(209,436)	(32,306)
TOTAL OTHER INCOME (EXPENSE), NET	(786,082)	393,986	(1,544,799)	(308,384)
LOSS BEFORE INCOME TAXES	(2,162,553)	1,380,299	(4,652,368)	903,493
BENEFIT FROM (PROVISION FOR) INCOME TAXES	(216,503)	(2,988)	99,409	(9,492)
NET INCOME (LOSS)	(2,379,056)	1,377,311	(4,552,959)	894,001
OTHER COMPREHENSIVE INCOME(LOSS)
Foreign currency translation adjustment, net	284	182,840	(473,294)	39,078
TOTAL COMPREHENSIVE INCOME (LOSS)	$ (2,378,772)	$ 1,560,151	$ (5,026,253)	$ 933,079
BASIC NET INCOME (LOSS) PER SHARE	$ (0.15)	$ 0.10	$ (0.29)	$ 0.07
DILUTED NET INCOME (LOSS) PER SHARE	$ (0.15)	$ 0.10	$ (0.29)	$ 0.07
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic	16,105,409	13,225,387	15,572,773	13,225,387
Diluted	16,105,409	13,254,116	15,572,773	13,254,953

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS DEFICIT (Unaudited) - USD ($)	Total	Common Stock	Treasury Stock	Additional Paid-In Capital	Retained Earnings (Accumulated Deficit)	Accumulated other comprehensive loss
Balance, shares at Dec. 31, 2019		13,225,387	(365,328)
Balance, amount at Dec. 31, 2019	$ (6,460,829)	$ 13,225	$ (411,854)	$ 13,525,749	$ (19,571,610)	$ (16,339)
Foreign currency translation adjustment, net	(143,762)	0	0	0	0	(143,762)
Net loss	(483,310)	$ 0	$ 0	0	(483,310)	0
Balance, shares at Mar. 31, 2020		13,225,387	(365,328)
Balance, amount at Mar. 31, 2020	(7,087,901)	$ 13,225	$ (411,854)	13,525,749	(20,054,920)	(160,101)
Balance, shares at Dec. 31, 2019		13,225,387	(365,328)
Balance, amount at Dec. 31, 2019	(6,460,829)	$ 13,225	$ (411,854)	13,525,749	(19,571,610)	(16,339)
Net loss	894,001
Balance, shares at Jun. 30, 2020		13,225,387	(365,328)
Balance, amount at Jun. 30, 2020	(5,527,750)	$ 13,225	$ (411,854)	13,525,749	(18,677,609)	22,739
Balance, shares at Mar. 31, 2020		13,225,387	(365,328)
Balance, amount at Mar. 31, 2020	(7,087,901)	$ 13,225	$ (411,854)	13,525,749	(20,054,920)	(160,101)
Foreign currency translation adjustment, net	182,840	0	0	0	0	182,840
Net loss	1,377,311	$ 0	$ 0	0	1,377,311	0
Balance, shares at Jun. 30, 2020		13,225,387	(365,328)
Balance, amount at Jun. 30, 2020	(5,527,750)	$ 13,225	$ (411,854)	13,525,749	(18,677,609)	22,739
Balance, shares at Dec. 31, 2020		13,485,128	(415,328)
Balance, amount at Dec. 31, 2020	(4,161,013)	$ 13,484	$ (611,854)	14,333,285	(18,750,824)	854,896
Foreign currency translation adjustment, net	(473,578)	0	0	0	0	(473,578)
Net loss	(2,173,903)	0	$ 0	0	(2,173,903)	0
Sale of treasury stock to third party, shares			65,000
Sale of treasury stock to third party, amount	250,000	$ 0	$ 650	249,350	0	0
Restriced stock issued to a consultant, shares		1,800,000
Restriced stock issued to a consultant, amount	1,189,450	$ 1,800		1,187,650
Conversion of notes payable into shares of common stock, shares		781,819
Conversion of notes payable into shares of common stock, amount	2,564,364	$ 782	$ 0	2,563,582	0	0
Balance, shares at Mar. 31, 2021		16,066,947	(350,328)
Balance, amount at Mar. 31, 2021	(2,804,680)	$ 16,066	$ (611,204)	18,333,867	(20,924,727)	381,318
Balance, shares at Dec. 31, 2020		13,485,128	(415,328)
Balance, amount at Dec. 31, 2020	(4,161,013)	$ 13,484	$ (611,854)	14,333,285	(18,750,824)	854,896
Net loss	(4,552,959)
Balance, shares at Jun. 30, 2021		16,566,947	(350,328)
Balance, amount at Jun. 30, 2021	384,548	$ 16,566	$ (611,204)	23,901,367	(23,303,783)	381,602
Balance, shares at Mar. 31, 2021		16,066,947	(350,328)
Balance, amount at Mar. 31, 2021	(2,804,680)	$ 16,066	$ (611,204)	18,333,867	(20,924,727)	381,318
Foreign currency translation adjustment, net	284	$ 0	0	0	0	284
Net loss	(2,379,056)				(2,379,056)
Restriced stock issued to a consultant, amount	1,968,000			1,968,000	0	0
Conversion of related party debt, shares		500,000
Conversion of related party debt, amount	3,000,000	$ 500	$ 0	2,999,500	0	0
Forgiveness of related party debt	600,000			600,000
Balance, shares at Jun. 30, 2021		16,566,947	(350,328)
Balance, amount at Jun. 30, 2021	$ 384,548	$ 16,566	$ (611,204)	$ 23,901,367	$ (23,303,783)	$ 381,602

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (4,552,959)	$ 894,001
Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities:
Depreciation and amortization expense	166,219	140,748
Amortization of right-of-use assets	49,267	70,048
Amortization of debt discounts	139,088	29,509
Lease expense	99,610	104,588
Interest on finance leases	5,250	5,251
Loss on disposal of fixed asset		21,624
Stock-based compensation	3,157,450	0
Deferred income taxes	(107,646)	0
Gain on extinguishment of debt	(445,636)	(779,224)
Change in fair value of the derivative liability	(87,869)	0
Loss on change in fair value of equity investments	(1,318)	(13,517)
Changes in Assets and Liabilities:
Accounts receivable, net	(2,839,680)	(5,960,027)
Accounts receivable - related party	324,536	(53,620)
Inventory	(336,047)	(214,909)
Prepaid expenses and other current assets	(1,415,455)	(4,448,671)
Prepaid expenses and other current assets - related party	450,454	2,914,042
Other assets	153,055	(12,084)
Accounts payable and accrued expenses	2,249,153	2,052,075
Accounts payable and accrued expenses - related party	195,151	(237,809)
Accrued interest	211,251	(260,347)
Customer advances	(2,312)	(92,751)
Other current liabilities	161,444	49,165
Lease liabilities	(71,436)	(84,425)
Taxes payable	0	156
Other liabilities	(20,964)	97
NET CASH USED IN OPERATING ACTIVITIES	(2,519,394)	(5,876,080)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets	(12,100)	(86,378)
NET CASH USED IN INVESTING ACTIVITIES	(12,100)	(86,378)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of convertible note payable	(362,000)	(200,000)
Proceeds from convertible note payable	100,000	0
Payment of related party note payable	0	(789,961)
Payment of note payable	(20,000)	(171,614)
Proceeds from note payable	0	7,908,955
Payment of related party loan	(125,589)	(102,257)
Proceeds from related party loan	2,811,062	586,759
Payment of lines of credit	(12,189,057)	(8,100,149)
Proceeds from lines of credit	12,311,882	9,208,750
Payments of finance lease liability	(51,427)	(38,719)
Proceeds from sale of treasury stock	250,000	0
NET CASH PROVIDED BY FINANCING ACTIVITIES	2,724,871	8,301,764
Effect of exchange rate changes on cash	(16,000)	28,665
NET CHANGE IN CASH	177,377	2,367,971
CASH AT BEGINNING OF PERIOD	628,395	38,537
CASH AT END OF PERIOD	805,772	2,406,508
Cash paid during the period:
Interest	208,565	124,178
Income tax	0	11,605
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Conversion of notes payable to common stock	$ 2,564,364	$ 0

XML

BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2021

BASIS OF PRESENTATION

NOTE 1- BASIS OF PRESENTATION

NOTE 1 – BASIS OF PRESENTATION

The terms “COSM,” “we,” “the Company,” and “us” as used in this report refer to Cosmos Holdings, Inc. The accompanying unaudited condensed consolidated balance sheet as of June 30, 2021 and unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2021 have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management of COSM, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2021, are not necessarily indicative of the results that may be expected for the year ending December 31, 2021, or any other period. These unaudited consolidated financial statements and notes should be read in conjunction with the financial statements for each of the two years ended December 31, 2020 and 2019, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (“Form 10-K”). The accompanying condensed consolidated balance sheet as of December 31, 2020 has been derived from the audited financial statements filed in our Form 10-K and is included for comparison purposes in the accompanying balance sheet.

XML

ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN

6 Months Ended

Jun. 30, 2021

ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN

NOTE 2 - ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN

NOTE 2 – ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN

Overview

Cosmos Holdings Inc. (“us”, “we”, or the “Company”) is a multinational pharmaceutical company. The Company imports, exports and distributes pharmaceutical products of brand-name and generic pharmaceuticals, over-the-counter (OTC) medicines, and a variety of dietary and vitamin supplements through its established network. Currently, the Company operates its business through its three wholly-owned subsidiaries: (i) SkyPharm, headquartered in Thessaloniki, Greece; (ii) Decahedron Ltd., head-quartered in Harlow, United Kingdom; and (iii) Cosmofarm, headquartered in Athens, Greece. Cosmofarm was acquired in 2018 and we believe this expansion has increased our sales and profit margins as we vertically integrate our business model. The Company also has an extensive and established distribution direct and indirect network within the European Union (EU).

The Company’s cross-border pharmaceutical business serves wholesale pharmaceutical distributors and independent retail pharmacies across the EU through a network of three strategic distribution centers, as well as an additional warehousing facility. Pharmaceutical manufacturers generally implement variable pricing strategies within the EU market. Identifying and evaluating price spreads between EU member states enables the Company to source brand-name pharmaceuticals from countries where ex-factory prices are comparatively low and export to countries where the same products are priced higher. The Company focuses on leveraging its growing purchasing scale and supplier relationships to secure discounts and provide pharmaceuticals at reduced prices and on continuing to drive organic growth at attractive margins for its cross-border pharmaceutical wholesale business.

The Company regularly evaluates and undertakes strategic initiatives to expand its distribution reach, improve its profit margins, and strengthen its competitive position. In 2018, the Company entered the vitamins and dietary supplements segment and in the fourth quarter of 2018, the Company posted the first sales of its own brand of nutraceuticals: Sky Premium Life. Through the December 2018 acquisition of Cosmofarm, the Company entered the full-line pharmaceutical wholesale distribution segment. Cosmofarm now serves approximately 1500 independent retail pharmacies and 40 pharmaceutical wholesalers in the greater Athens, Greece region by providing brand-name and generic pharmaceuticals, over-the-counter medicines, vitamins, and dietary supplements. We invest in technology to enhance safety, distribution and warehousing efficiency and reliability. Cosmofarm operates two robotic ROWA, a German fully automated warehouse system, that ensure 0% error selection rate, accelerate order fulfillment, and yield higher cost-efficiency in our Athens distribution center.

We make use of analytics and customer feedback from our EU-wide network of wholesale pharmaceutical distributors and independent retail pharmacies to identify and evaluate which nutraceutical product codes to develop to add to our SkyPremium Life portfolio. We intend to continue to bring SkyPremium Life products to market primarily through our existing network of over 160 pharmaceutical wholesale clients and vendors and approximately 370 independent retail pharmacies in the EU. There is growing demand for vitamins and food supplements and we are committed to developing quality products and creating enhanced customer value.

We are also closely monitoring the legal framework for prescription and non-prescription derivatives of cannabis products as it develops in Europe. As the legal framework and processes are developed and implemented in each respective EU country, we intend to utilize our existing network to distribute both prescription and non-prescription derivatives of cannabis products to our current customer base. We currently intend to only distribute prescription and non-prescription derivatives of cannabis products to approved EU countries and not in the US.

We regularly evaluate acquisition targets that would allow us to expand our distribution reach and/or vertically integrate into the supply chain of the products that we currently distribute. We believe that the demand for reasonably priced medicines, delivered on time and in the highest quality is set to increase in the years to come, as the population’s life expectancy increases. With our product portfolio of patented and non-patented medicines, we contribute to the optimization of efficient medicinal care, and thereby lowering cost for health insurance funds, companies, and patients. We also believe that the demand for non-prescription wellness products such as food and dietary supplements will continue to increase as individuals are increasingly supplementing their nutritional intake.

We believe the EU pharmaceutical import/export market will continue to grow. We continue to encounter competition in the market as we grow. The competition comes in the form of level of service, reliability, and product quality. On the procurement side, we continue to expand our vendor base. In order to minimize business risks, we diversify our sources of supply. We maintain our high-quality standards by carefully selecting and qualifying our suppliers, as well as actively ensuring that our suppliers meet our standard of quality control on an ongoing basis.

On July 22, 2015, the Hellenic Ministry of Health and more specifically the National Organization for Medicines granted SkyPharm a license for the wholesale of pharmaceutical products for human use. The license is valid for a period of five years and pursuant to the EU directive of (2013/C343/01). Pursuant to the EU directive of (2013/C 343/01), the Company is subject to fulfill the Guidelines of the Good Distribution Practices of medical products for human use. The Company submitted its application for renewal one month before the license expiration to the Hellenic Republic National Organization, but according to the EMA (eudragmdp.ema.europa.eu/inspections/view/wda/WDAHomePage.xhtml): “Due to the restrictions caused by COVID-19, the period of validity of MIA’s, WDA’s, GMP and GDP certificates is automatically extended until the end of 2021. On-site inspections will resume as soon as there is a consensus that the period of the public health crisis has passed. The clarifying remark section of individual MIA’s, WDA’s, GMP and GDP certificates will indicate any exceptions. Competent authorities reserve the right to inspect a manufacturing site should the need arise.” Therefore, the Company is eligible to continue its operations until at least the end of 2021and expects to receive a temporary license by the end of 2021.

Decahedron received its Wholesale Distribution Authorization for human use on November 7, 2013, from the UK Medicines and Healthcare Products Regulatory Agency (MHRA) in accordance with Regulation 18 of the Human Medicines Regulations 2012 (SI 2012/1916) and it is subject to the provision of those Regulations and the Medicines Act 1971. This license will continue to remain in force from the date of issue by the Licensing Authority unless cancelled, suspended, revoked or varied as to the period of its validity or relinquished by the authorization holder.

Our subsidiaries are ISO 9001 certified for a management system for the trade and distribution of pharmaceuticals. As part of the certification process by the International Organization for Standardization, we need to be compliant with the General Data Protection Regulation (GDPR) adopted by the European Union. GDPR applies to the processing of personal data of persons in the EU by a controller or processor neither of which apply to our operations.

Corporate History and Structure

Cosmos Holdings, Inc. was incorporated in the State of Nevada under the name Prime Estates and Developments, Inc. on July 21, 2009. On November 14, 2013, we changed our name to Cosmos Holdings, Inc.

On September 27, 2013, the Company acquired one hundred (100%) percent of the outstanding common stock of Amplerissimo Ltd., a company incorporated in Cyprus (“Amplerissimo”), which became a wholly-owned subsidiary of the Company.

On November 21, 2017, the Company effected a one-for-ten (1:10) reverse stock split whereby the Company decreased, by a ratio of one-for-ten (1:10) the number of issued and outstanding shares of common stock. Proportional adjustments for the reverse stock split were made to the Company’s outstanding stock options, and warrants including all share and per-share data, for all amounts and periods presented in the consolidated financial statements.

On December 19, 2018, the Company completed the purchase of all of the capital stock of Cosmofarm Ltd. (“Cosmofarm”), a pharmaceutical wholesaler based in Athens, Greece. The principal of the selling shareholder is Panagiotis Kozaris, who remained with Cosmofarm as a director and chief operating officer once it became a wholly owned subsidiary of the Company. Grigorios Siokas, the Company’s CEO, became the new CEO of Cosmofarm. Mr. Kozaris had no prior relationship to the Company other than as an independent shareholder. The purchase price payable is €200,000 evidenced by a promissory note.

Going Concern

The Company’s consolidated financial statements are prepared in conformity with U.S. GAAP, which contemplates the continuation of the Company as a going concern. For the six months ended June 30, 2021, the Company had revenue of $26,466,001, net loss of $4,552,959 and net cash used in operations of $2,519,394. Additionally, as of June 30, 2021, the Company had working capital of $10,417,725, an accumulated deficit of $23,303,783, and stockholders’ equity of $384,548. It is management’s opinion that these conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date of this filing.

The Company has undergone strategic review processes to help find a definitive solution to the Company’s accumulated deficit constraints. Options under consideration in the strategic review process include, but are not limited to, securing new debt, exchange debt to equity, restructuring current debt facilities from short term to long term and taking the proper actions for new fund raising.

The condensed consolidated financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of this uncertainty.

The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund its operations. If the Company is unable to obtain adequate capital, it could be forced to cease development of operations.

In order to continue as a going concern, develop a reliable source of revenues, and achieve a profitable level of operations, the Company will need, among other things, additional capital resources. Management’s plans to continue as a going concern include raising additional capital through increased sales of product and by sale of equity and/or debt. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described herein and eventually secure other sources of financing and attain profitable operations.

Summary of Significant Accounting Policies

Basis of Financial Statement Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

Principles of Consolidation

Our condensed consolidated accounts include our accounts and the accounts of our wholly-owned subsidiaries, SkyPharm S.A., Decahedron Ltd. and Cosmofarm Ltd. All significant intercompany balances and transactions have been eliminated.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The Effects of COVID-19

Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of August 16, 2021, the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change, as new events occur, and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of June 30, 2021, and December 31, 2020, there were no cash equivalents.

The Company maintains bank accounts in the United States denominated in U.S. Dollars and in Greece and in Bulgaria all of them denominated in Euros. The Company also maintains bank accounts in the United Kingdom, denominated in Euros and Great Britain Pounds (British Pounds Sterling).

Reclassifications to Prior Period Financial Statements and Adjustments

Certain reclassifications have been made in the Company’s financial statements of the prior period to conform to the current year presentation. For the three and six months ended June 30, 2020, $380,326 and $434,056, respectively, in sales and marketing expenses were reclassified from general and administrative expenses. Additionally, for the six months ended June 30, 2020, $260,347 was reclassified from accounts payable and accrued expenses to accrued interest on the Statement of Cash Flows. These reclassifications have no impact on previously reported net income.

Account Receivable, net

Accounts receivable are stated at their net realizable value. The allowance for doubtful accounts against gross accounts receivable reflects the best estimate of probable losses inherent in the receivables’ portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available information. As of June 30, 2021, and December 31, 2020, the Company’s allowance for doubtful accounts was $693,485 and $715,845, respectively.

Tax Receivable

The Company pays Value Added Tax (“VAT”) or similar taxes (“input VAT”), income taxes, and other taxes within the normal course of its business in most of the countries in which it operates related to the procurement of merchandise and/or services it acquires and/or on sales and taxable income. The Company also collects VAT or similar taxes on behalf of the government (“output VAT”) for merchandise and/or services it sells. If the output VAT exceeds the input VAT, this creates a VAT payable to the government. If the input VAT exceeds the output VAT, this creates a VAT receivable from the government. The VAT tax return is filed on a monthly basis offsetting the payables against the receivables. In observance of EU regulations for intra-EU cross-border sales, our subsidiaries in Greece, SkyPharm and Cosmofarm, do not charge VAT for sales to wholesale drug distributors registered in other European Union member states. The net VAT receivable is recorded in prepaid expense and other current assets on the condensed consolidated balance sheets.

Inventory

Inventory is stated at net realizable value using the weighted average method. Inventory consists primarily of finished goods and packaging materials, i.e., packaged pharmaceutical products and the wrappers and containers they are sold in. A periodic inventory system is maintained by 100% count. Inventory is replaced periodically to maintain the optimum stock on hand available for immediate shipment.

The Company writes down inventories to net realizable value based on physical condition, expiration date, current market conditions, as well as forecasted demand. The Company’s inventories are not highly susceptible to obsolescence. Many of the Company’s inventory items are eligible for return to our suppliers when pre-agreed product requirements, including, but not limited to, physical condition and expiration date, are not met.

Property and Equipment, net

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated on a straight-line basis over the useful lives (except for leasehold improvements which are depreciated over the lesser of the lease term or the useful life) of the assets as follows:

	Estimated Useful Life
Leasehold improvements and technical works		Lesser of lease term or 40 years
Vehicles		6 years
Machinery		20 years
Furniture, fixtures and equipment		5–10 years
Computers and software		3-5 years

Depreciation expense was $78,341 and $70,739 for the three months ended June 30, 2021 and 2020, respectively and $149,812 and $124,251 for the six months ended June 30, 2021 and 2020, respectively.

Impairment of Long-Lived Assets

In accordance with ASC 360-10, long-lived assets, property and equipment and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.

Goodwill and Intangibles, net

The Company periodically reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist. Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. Specifically, goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses level 3 inputs and a discounted cash flow methodology to estimate the fair value of a reporting unit. A discounted cash flow analysis requires one to make various judgmental assumptions including assumptions about future cash flows, growth rates, and discount rates. The assumptions about future cash flows and growth rates are based on the Company’s budget and long-term plans. Discount rate assumptions are based on an assessment of the risk inherent in the respective reporting units. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit.

On December 19, 2018, as a result of the acquisition of Cosmofarm, the Company recorded $49,697 of goodwill.

Intangible assets with definite useful lives are recorded on the basis of cost and are amortized on a straight-line basis over their estimated useful lives. The Company uses a useful life of 5 years for an import/export license. The Company evaluates the remaining useful life of intangible assets annually to determine whether events and circumstances warrant a revision to the remaining amortization period. If the estimate of the intangible asset’s remaining useful life is changed, the remaining carrying amount of the intangible asset will be amortized prospectively over that revised remaining useful life. As of June 30, 2021, no revision to the remaining amortization period of the intangible assets was made.

Amortization expense was $8,249 and $8,249 for the three months ended June 30, 2021 and 2020, respectively and $16,407 and $16,497 for the six months ended June 30, 2021 and 2020, respectively.

Equity Method Investment

For those investments in common stock or in-substance common stock in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, the investment is accounted for under the equity method. The Company will record its share in the earnings of the investee and will include it within the condensed consolidated statement of operations. The Company assesses its investment for other-than-temporary impairment when events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable and recognizes an impairment loss to adjust the investment to its then current fair value.

Investments in Equity Securities

Investments in equity securities are accounted for at fair value with changes in fair value recognized in net income (loss). Equity securities are classified as short-term or long-term based on the nature of the securities and their availability to meet current operating requirements. Equity securities that are readily available for use in current operations are reported as a component of current assets in the accompanying consolidated balance sheets. Equity securities that are not considered available for use in current operations would be reported as a component of long-term assets in the accompanying consolidated balance sheets. For equity securities with no readily determinable fair value, the Company elects a measurement alternative to fair value. Under this alternative, the Company measures the investments at cost, less any impairment, and adjusted for changes resulting from observable price changes in transactions for identical or similar investments of the investee. The election to use the measurement alternative is made for each eligible investment.

As of June 30, 2021, investments consisted of 3,000,000 shares, which traded at a closing price of $0 per share or a value of $0 of ICC International Cannabis Corp, 40,000 shares which traded at a closing price of $5.30 per share, or value of $211,368 of Diversa S.A. and 16,666 shares which traded at a closing price of $0.28 per share or value of $4,739 of National Bank of Greece. Additionally, the Company has $4,623 in equity securities of Pancreta Bank, which are not publicly traded and recorded at cost. See Note 3, for additional investments in equity securities.

Fair Value Measurement

The Company applies FASB ASC 820, Fair Value Measurements and Disclosures, (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

The following tables presents assets that are measured and recognized at fair value as of June 30, 2021 and December 31, 2020, on a recurring basis:

	June 30, 2021						Total Carrying
	Level 1		Level 2		Level 3		Value
Marketable securities – ICC International Cannabis Corp.	$	-		-		-	$	-
Marketable securities – Divsersa S.A.		211,368		-		-		211,368
Marketable securities – National Bank of Greece		4,739		-		-		4,739
	$	216,107					$	216,107

	December 31, 2020						Total Carrying
	Level 1		Level 2		Level 3		Value
Marketable securities – ICC International Cannabis Corp.	$	-		-		-	$	-
Marketable securities – Divsersa S.A.		218,183		-		-		218,183
Marketable securities – National Bank of Greece		4,609		-		-		4,609
	$	222,792					$	222,792

In addition, FASB ASC 825-10-25, Fair Value Option, (“ASC 825-10-25”), expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.

Customer Advances

The Company receives prepayments from certain customers for pharmaceutical products prior to those customers taking possession of the Company’s products; the Company records these receipts as customer advances until it has met all the criteria for recognition of revenue including passing control of the products to its customer, at such point the Company will reduce the customer and deposits balance and credit the Company’s revenues.

Revenue Recognition

In accordance with ASC 606, Revenue from Contracts with Customers, the Company uses a five-step model for recognizing revenue by applying the following steps: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the performance obligations are satisfied by transferring the promised goods to the customer. Once these steps are met, revenue is recognized upon transfer of the product to the customer.

Stock-based Compensation

The Company records stock-based compensation in accordance with ASC 718, Stock Compensation (“ASC 718”) and Staff Accounting Bulletin No. 107 (“SAB 107”) regarding its interpretation of ASC 718. ASC 718 requires the fair value of all stock-based employee compensation awarded to employees to be recorded as an expense over the related requisite service period. The Company values any employee or non-employee stock-based compensation at fair value using the Black-Scholes Option Pricing Model.

The Company accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASU 2018-07, “Compensation-Stock Compensation-Improvements to Nonemployee Share-Based Payment Accounting.”

Foreign Currency Translations and Transactions

Assets and liabilities of all foreign operations are translated at year-end rates of exchange, and the statements of operations are translated at the average rates of exchange for the year. Gains or losses resulting from translating foreign currency financial statements are accumulated in a separate component of stockholders’ deficit until the entity is sold or substantially liquidated.

Gains or losses from foreign currency transactions (transactions denominated in a currency other than the entity’s local currency) are included in net earnings.

Income Taxes

The Company accounts for income taxes under the asset and liability method, as required by the accounting standard for income taxes ASC 740. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as net operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company is liable for income taxes in Greece and the United Kingdom The corporate income tax rate is 22% in Greece and 19% in United Kingdom. Losses may also be subject to limitation under certain rules regarding change of ownership.

We regularly review deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if we do not consider it to be more likely than not that the deferred tax assets will be realized. Our review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets. At June 30, 2021 the Company has maintained a valuation allowance against all net deferred tax assets in each jurisdiction in which it is subject to income tax.

The Company periodically reviews the uncertainties and judgments related to the application of complex income tax regulations to determine income tax liabilities in several jurisdictions. The Company uses a “more likely than not” criterion for recognizing the income tax benefit of uncertain tax positions and establishing measurement criteria for income tax benefits. The Company has evaluated the impact of these positions and due to the fact that the fiscal years 2013 - 2014 are unaudited by the Greek tax authorities, a potential tax liability has not been identified because there is a limitation on periods that the Tax authorities can audit retrospectively 5 years prior to the current fiscal year. Therefore, no prospective tax audit from tax authorities may arise.

Retirement and Termination Benefits

Under Greek labor law, employees are entitled to lump-sum compensation in the event of termination or retirement. The amount depends on the employee’s work experience and renumeration as of the day of termination or retirement. If an employee remains with the company until full-benefit retirement, the employee is entitled to a lump-sum equal to 40% of the compensation to be received if the employee were to be dismissed on the same day. The Company periodically reviews the uncertainties and judgments related to the application of the relevant labor law regulations to determine retirement and termination benefits obligations of its Greek subsidiaries. The Company has evaluated the impact of these regulations and has identified a potential retirement and termination benefits liability. The amount of the liability as of June 30, 2021 and December 31, 2020, was $102,901 and $107,167 respectively, and has been recorded as a long-term liability within the condensed consolidated balance sheets.

Basic and Diluted Net Loss per Common Share

Basic income per share is calculated by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted income per share is calculated by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period and, when dilutive, potential shares from stock options and warrants to purchase common stock, using the treasury stock method. In accordance with ASC 260, Earnings Per Share, the following table reconciles basic shares outstanding to fully diluted shares outstanding.

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Weighted average number of common shares outstanding Basic		16,105,409		13,225,387		15,572,773		13,225,387
Potentially dilutive common stock equivalents		-		28,729		-		29,566
Weighted average number of common and equivalent shares outstanding - Diluted		16,105,409		13,254,116		15,572,773		13,254,953

Common stock equivalents are included in the diluted income per share calculation only when option exercise prices are lower than the average market price of the common shares for the period presented.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective January 1, 2024, for the Company. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. Management is currently evaluating the effect of the adoption of ASU 2020-06 on the consolidated financial statements.

Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements.

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MARKETABLE SECURITIES

6 Months Ended

Jun. 30, 2021

MARKETABLE SECURITIES

NOTE 3 - MARKETABLE SECURITIES

NOTE 3 – MARKETABLE SECURITIES

Distribution and Equity Agreement

On March 19, 2018, the Company entered into a Distribution and Equity Acquisition Agreement (the “Distribution and Equity Acquisition Agreement”) with Marathon Global Inc. (“Marathon”), a company incorporated in the Province of Ontario, Canada. Marathon was formed to be a global supplier of cannabis, cannabidiol (CBD) and/or any cannabis extract products, extracts, ancillaries and derivatives (collectively, the “Products”). The Company was appointed the exclusive distributor of the Products initially throughout Europe and on a non-exclusive basis wherever else lawfully permitted. The Company has no present intention to distribute any Products under this Agreement in the United States or otherwise participate in cannabis operations in the United States. The Company intends to await further clarification from the U.S. Government on cannabis regulation prior to determining whether to enter the domestic market.

The Distribution and Equity Acquisition Agreement is to remain in effect indefinitely unless Marathon fails to provide Market Competitive (as defined) product pricing and Marathon has not become profitable within five (5) years of the agreement. The transaction closed on May 22, 2018 after the due diligence period, following which the Company received: (a) a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services; and (b) received cash of CAD $2,000,000, subject to repayment in common shares of the Company if it fails to meet certain performance milestones. The Company is entitled to receive an additional CAD $2,750,000 upon the Company’s receipt of gross sales of CAD $6,500,000 and an additional CAD $2,750,000 upon receipt of gross sales of CAD $13,000,000. The Company was also given the right to nominate one director to the Marathon board of directors.

Since Marathon was a newly formed entity with no assets and no activity, the Company attributed no value to the 5 million shares in Marathon which was received as consideration for the distribution services. As described below, the Company exchanged the Marathon shares in May and July 2018.

Share Exchange Agreements

On May 17, 2018, the Company entered into a Share Exchange Agreement (the “SEA”) with Marathon, ICC International Cannabis Corp (“ICC”) formerly known as Kaneh Bosm Biotechnology Inc. (“KBB”) and certain other sellers of Marathon capital stock. Under the SEA, the Company transferred 2.5 million shares in Marathon to ICC, a corporation incorporated under the laws of the Province of British Columbia and a public reporting issuer on the Canadian Securities Exchange, in exchange for 5 million shares of ICC. The Company accounted for the exchange at fair value and recognized a gain on exchange of its investment in Marathon of $1,953,000 in the year ended December 31, 2018.

On July 16, 2018, the Company completed a Share Exchange Agreement (the “New SEA”) with Marathon, ICC, and certain other sellers of Marathon capital stock whereby the Company transferred its remaining one-half interest (2.5 million shares) in Marathon to KBB for an additional 5 million shares of ICC. The Company accounted for the exchange at fair value and recognized a gain on exchange of its investment in Marathon of $2,092,200 in the year ended December 31, 2018. The ten million shares of ICC owned by the Company constituted approximately 7% of the 141,219,108 shares of capital stock of KBB then issued and outstanding. The Company does not have the ability to exercise significant influence over ICC.

The Company determined the fair value of both exchanges based on an actively quoted stock price of ICC received in exchange for the Marathon shares. The Company continues to fair value its investment in ICC with changes recognized in earnings each period and was recorded as an unrealized gain on exchange of investment during the six months ended June 30, 2021 of $0. The value of the investments as of June 30, 2021 and December 31, 2020, was $0 and $0, respectively.

Since no value was attributed to the 33 1/3% equity ownership interest in Marathon received as consideration for the distribution services, the Company would receive variable consideration in future for its services under the Distribution and Equity Acquisition Agreement, if certain milestones are achieved. Refer to Note 11 for the accounting associated with the cash of CAD $2 million received upfront. Variable consideration to be received in the future upon achieving the gross sales milestones described above, is constrained as the Company estimates that it is probable that a significant reversal of revenue could occur. In assessing the constraint, the Company considered its limited experience with the Products, new geographic markets and similar transactions, which affect the Company’s ability to estimate the likelihood of a probable revenue reversal. Therefore, no revenue has been recognized for the period ended June 30, 2021. The Company will continue to reassess variable consideration at each reporting period and update the transaction price when it becomes probable that a significant revenue reversal would not occur.

As of June 30, 2021, in addition to the 3,000,000 ICC shares valued at $0, as noted above, marketable securities also consisted of the following: 40,000 shares which traded at a closing price of $5.30 per share, or value of $211,368 of Diversa S.A. and 16,666 shares which traded at a closing price of $0.28 per share or value of $4,739 of National Bank of Greece. The Company recorded a net unrealized gain on the fair value of these investments of $279 during the six months ended June 30, 2021.

CosmoFarmacy LP

In June 2019, the Company entered into an agreement with an unaffiliated third party to incorporate CosmoFarmacy L.P. for the purpose of providing strategic management consulting services and the retail trade of pharmaceutical products, and OTC to pharmacies. CosmoFarmacy was incorporated with a 30-year term through May 31, 2049. The unaffiliated third party is the general partner (the “GP”) of the limited partnership and is responsible for management and decision-making associated with CosmoFarmacy. The initial share capital was set to EUR 150,000 which was later increased to EUR 500,000. The GP contributed the pharmacy license (the “License”) valued at EUR 350,000 (30-year term) to operate the business of CosmoFarmacy in exchange for a 70% equity ownership. The Company is a limited partner and contributed cash of EUR 150,000 for the remaining 30% equity ownership. CosmoFarmacy is not publicly traded and the Company’s investment has been recorded using the equity method of accounting. The value of the investment as of June 30, 2021 was $177,720 and is included in “Other assets” on the Company’s condensed consolidated balance sheet.

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PROPERTY AND EQUIPMENT, NET

6 Months Ended

Jun. 30, 2021

PROPERTY AND EQUIPMENT, NET

NOTE 4 - PROPERTY AND EQUIPMENT, NET

NOTE 4 – PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following:

	June 30, 2021			December 31, 2020
Leasehold improvements	$	543,451		$	560,711
Vehicles		101,183			105,057
Furniture, fixtures and equipment		1,597,143			1,632,654
Computers and software		142,216			149,005
		2,383,993			2,447,427
Less: Accumulated depreciation and amortization		(805,952	)		(690,214	)
Total	$	1,578,041		$	1,757,213

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GOODWILL AND INTANGIBLE ASSETS, NET

6 Months Ended

Jun. 30, 2021

GOODWILL AND INTANGIBLE ASSETS, NET

NOTE 5 - GOODWILL AND INTANGIBLE ASSETS NET

NOTE 5 – GOODWILL AND INTANGIBLE ASSETS, NET

Intangible assets, net consist of the following at:

	June 30, 2021			December 31, 2020
License	$	50,000		$	50,000
Trade name / mark		36,997			36,997
Customer base		176,793			176,793
		263,790			263,790
Less: Accumulated amortization		(99,388	)		(82,981	)
Subtotal		164,402			180,809
Goodwill		49,697			49,697
Total	$	214,099		$	230,506

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INCOME TAXES

6 Months Ended

Jun. 30, 2021

INCOME TAXES

NOTE 6 - INCOME TAXES

NOTE 6 – INCOME TAXES

The Company is incorporated in the United States of America and is subject to United States federal taxation. No provisions for income taxes have been made as the Company had no U.S. taxable income for the three and six months ended June 30, 2021 and 2020.

The Company’s Greece subsidiaries are governed by the income tax laws of Greece. The corporate tax rate in Greece is 22% on income reported in the statutory financial statements after appropriate tax adjustments.

The Company’s United Kingdom subsidiaries are governed by the income tax laws of the United Kingdom. The corporate tax rate in the United Kingdom is 19% on income reported in the statutory financial statements after appropriate tax adjustments.

As of June 30, 2021 and 2020, the Company’s effective tax rate differs from the US federal statutory tax rate primarily due to a valuation allowance recorded against net deferred tax assets in in the United States.

We regularly review deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if we do not consider it to be more likely than not that the deferred tax assets will be realized. Our review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets. As of June 30, 2021 and December 31, 2020, the Company has maintained a valuation allowance against all net deferred tax assets in the United States only. Foreign valuation allowances had been reversed as of December 31, 2020.

As of June 30, 2021 and December 31, 2020, the Company has a benefit for tax recorded in any jurisdiction where it is subject to income tax, in the amount of $286,329 and $178,430, respectively, which is included in Deferred tax assets on the condensed consolidated balance sheets.

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CAPITAL STRUCTURE

6 Months Ended

Jun. 30, 2021

CAPITAL STRUCTURE

NOTE 7 - CAPITAL STRUCTURE

NOTE 7 – CAPITAL STRUCTURE

Preferred Stock

The Company is authorized to issue 100 million shares of preferred stock, which may be issued from time to time in one or more series authorized by the Board of Directors. As of June 30, 2021, no preferred shares have been issued.

Common Stock

The Company is authorized to issue 300 million shares of common stock. As of June 30, 2021 and December 31, 2020, the Company had 16,566,947 and 13,485,128 shares of our common stock issued and 16,216,619 and 13,069,800 shares outstanding, respectively.

Purchase of Treasury Shares

On July 31, 2020, the Company entered into a Stock Purchase Agreement (the “July SPA”) with a stockholder. The July SPA provides for the Company’s purchase of 10,000 shares of the Company’s common stock at $4.00 per share or an aggregate of $40,000. As of December 31, 2020, the Company made $40,000 in payments.

On August 31, 2020, the Company entered into two Stock Purchase Agreements (the “August SPAs”) with a stockholder. The August SPAs provide for the Company’s purchase of an aggregate total of 10,000 shares of the Company’s common stock at $4.00 per share or an aggregate of $40,000. As of December 31, 2020, the Company made $40,000 in payments.

On September 30, 2020, the Company entered into a Stock Purchase Agreement (the “July SPA”) with a stockholder. The July SPA provides for the Company’s purchase of 10,000 shares of the Company’s common stock at $4.00 per share or an aggregate of $40,000. As of December 31, 2020, the Company made $40,000 in payments.

On October 31, 2020, the Company entered into a Stock Purchase Agreement (the “July SPA”) with a stockholder. The July SPA provides for the Company’s purchase of 10,000 shares of the Company’s common stock at $4.00 per share or an aggregate of $40,000. As of December 31, 2020, the Company made $40,000 in payments.

On November 30, 2020, the Company entered into a Stock Purchase Agreement (the “July SPA”) with a stockholder. The July SPA provides for the Company’s purchase of 10,000 shares of the Company’s common stock at $4.00 per share or an aggregate of $40,000. As of December 31, 2020, the Company made $40,000 in payments.

Sale of Treasury Shares

On February 5, 2021, the Company entered into a Stock Purchase Agreement (the “February SPA”) with an unaffiliated third-party. The February SPA provides for the Company’s to sell 65,000 shares of the Company’s common stock held in treasury at $3.85 per share or a total of $250,000.

Consulting Agreement

The Company entered into a Consulting Agreement (the “Agreement”) effective as of February 5, 2021, with a non-affiliated consultant (the “Consultant”). The Company engaged the Consultant to perform consulting services relating to Company management, debt structure, business plans and business development in connection with any capitalization transactions involving the Company and any newly created or existing entities. The Agreement is for a term of nine (9) months with an initial term of ninety (90) days (the “Initial Term”). The Agreement is terminable by the Company for any reason upon written notice at any time after the Initial Term.

The Company agreed to pay Consultant and its assignees an aggregate of 1,800,000 restricted shares of Common Stock, earned at the rate of 200,000 shares per month, which shall be issued and fully paid for in consideration of the Consultant’s considerable expertise and experience and its commitment to work for the Company. However, in the event the Agreement is terminated for any reason after the Initial Term, the shares are subject to a claw back for any months remaining after the Termination Date. The Consultant retained 800,000 of the 1,800,000 shares and agreed with an assignee and the Company that 1,600,000 of the 1,800,000 shares shall be held in book entry for six (6) months from the date of this Agreement, subject to the above claw back. The shares valued on the date of the agreement at $3.28 per share or $5,904,000, which will be amortized over the term of the agreement. As of June 30, 2021, the Company has recorded $3,157,451 in stock-based compensation for the 1,000,000 shares earned through the end of the period.

Debt Exchange Agreement

On June 23, 2021, the Company entered into a Debt Exchange Agreement (the “June Debt Exchange Agreement”) to exchange various loans pursuant to which the related party Lender has made (See Note 8), in the aggregate principal amount of $3,000,000 (the “Debt”). The Company agreed to issue the Lender shares of common stock of the Company at an exchange rate of $6.00 per share (the “Exchange Shares”) in exchange for the principal amount of Debt of $3,000,000 or 500,000 shares of common stock (exchange rate of $6.00 per share). On June 23, 2021, the fair value of the Company’s shares of common stock was $5.00 per share. For the three and six months ended June 30, 2021, the Company recorded $3,000,000 as a capital contribution and an increase in equity in accordance with ASC 850-10-20 due to the related party relationship and ASC 470-50-40-20 which provides guidance on extinguishments of related party debt. Accordingly, extinguishment transactions between related entities are in essence capital transaction, and no gain is recorded in the consolidated statements of operations for the difference between the fair value of $5.00 per share and the exchange rate of $6.00 per share.

Potentially Dilutive Securities

No options, warrants or other potentially dilutive securities have been issued as of June 30, 2021 and December 31, 2020, respectively.

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RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2021

RELATED PARTY TRANSACTIONS

NOTE 8 - 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 June 30, 2021, the Company has a prepaid balance of $2,917,334 and an accounts payable balance of $177,161, resulting in a net prepaid balance of $2,740,173 to Doc Pharma S.A. related to purchases of inventory. Additionally, the Company has a receivable balance of $3,135,184. As of December 31, 2020, the Company has a prepaid balance of $3,468,653 to Doc Pharma S.A. related to purchases of inventory. Additionally, the Company had a receivable balance of $3,468,564.

During the three months ended June 30, 2021 and 2020, the Company purchased a total of $1,091,118 and $644,643 of products from Doc Pharma S.A., respectively. During the three months ended June 30, 2021 and 2020 the Company had $523,712 and $1,107,822, in revenue from Doc Pharma S.A., respectively.

During the six months ended June 30, 2021 and 2020, the Company purchased a total of $1,413,924 and $1,315,274, respectively, of products from Doc Pharma S.A. During the six months ended June 30, 2021 and 2020 the Company had $796,917 and $1,469,365, in revenue from Doc Pharma S.A., respectively.

On October 10, 2020, the Company entered into a contract manufacturer outsourcing agreement with DOC Pharma whereby DOC Pharma is responsible for the development and manufacturing of pharmaceutical products and nutritional supplements according to the Company’s specifications based on strict pharmaceutical standards and GMP (Good Manufacturing Practice) protocols, as the National Organization for Medicines requires. The Company has the exclusive ownership rights for trading and distribution of its own branded nutritional supplements named “Sky Premium Life” (“SPL”). The duration of the agreement is for 5 years however either party may terminate the agreement at any time giving six-months advance notice. DOC Pharma is exclusively responsible for supplying the raw materials and packaging required to manufacture the final product. However, they are not responsible for potential delays that may arise, concerning their import. DOC Pharma is obliged to store the raw and packaging materials. The delivery of raw and packaging materials should be purchased at least 30 and 25 days, respectively, before the delivery date of the final product. The Manufacturer solely delivers the finished product to the Company. There is a minimum order quantity (MoQ) of 1,000 pieces per product code. Both parties have agreed that the Company will deposit 60% of the total cost upon agreement and assignment and 40% of the total cost including VAT charge upon the delivery date. The prices are indicative and are subject to amendments if the cost of the raw material or the production cost change. As of June 30, 2021, the Company has purchased €505,861 ($599,344) in inventory related to this agreement.

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 S.A. in the past.

Notes Payable – Related Party

A summary of the Company’s related party notes payable as of June 30, 2021 and December 31, 2020 is presented below:

	2021			2020
Beginning Balance	$	501,675		$	1,375,532
Payments		-			(996,136	)
Foreign currency translation		(15,670	)		122,279
Ending Balance	$	486,005		$	501,675

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 matured on March 18, 2019 pursuant to the original agreement. The note is not in default and the maturity date has been extended until December 31, 2021. As of December 31, 2020, the note had an outstanding principal balance of €400,000 ($489,200) and accrued interest of €158,287 ($193,585). As of June 30, 2021, the Company has an outstanding balance of €400,000 ($473,920) and accrued interest of €203,017 ($240,535).

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 has no maturity date and is non-interest bearing. As of December 31, 2020, the Company had a principal balance of €10,200 ($12,475). A principal balance of €10,200 ($12,085) remained as of June 30, 2021.

Dimitrios Goulielmos is a current director and former CEO of the Company.

The above balances are adjusted for the foreign currency rate as of the balance sheet date. For the six months ended June 30, 2021 the Company recorded a loss of $15,670.

Loans Payable – Related Party

A summary of the Company’s related party loans payable during the six months ended June 30, 2021, and the year ended December 31, 2020 is presented below:

	2021			2020
Beginning Balance	$	1,629,246		$	1,026,264
Proceeds		2,811,062			725,563
Payments		(125,589	)		(149,695	)
Conversion of debt		(3,000,000	)		-
Settlement of lawsuit		(600,000	)		-
Foreign currency translation		(10,316	)		27,114
Ending Balance	$	704,403		$	1,629,246

Grigorios Siokas

From time to time, Grigorios Siokas loans the Company funds in the form of non-interest bearing, no-term loans. As of December 31, 2020, the Company had an outstanding principal balance under these loans of $1,629,246 in loans payable to Grigorios Siokas.

On May 10, 2021, the Company entered into a Debt Exchange agreement (“May Debt Exchange”) related to a lawsuit from on or about July 25, 2019, whereby Mark Rubenstein, individually and as a shareholder of the Company, brought the action styled Rubenstein v. Siokas, et al., Case No. 1:19-cv-06976-KPF (S.D.N.Y.) against Grigorios Siokas for recovery of alleged profits earned under Section 16(b) of the Securities Exchange Act of 1934. Although recovery was sought only from Mr. Siokas, the Company was also named as a nominal defendant. Both the Company and Mr. Siokas vigorously defended the lawsuit. On or about September, 18, 2020, in an effort to avoid the uncertainty of litigation and further legal expense, Mr. Siokas agreed to settle the lawsuit by agreeing to reimburse the Company a total of six hundred thousand ($600,000) dollars, payable as a combination of: (1) Mr. Siokas reimbursing the Company for Plaintiff’s attorneys’ fees, in an amount subsequently determined by the Court to be $120,000 plus $4,137 of litigation costs to be paid in cash, and (2) Mr. Siokas relieving the Company of certain debt owed to him. Mr. Siokas and the Company strongly opposed Plaintiff’s motion for attorneys’ fees. The Company has accrued the Plaintiff’s attorney’s fees and the balance as of June 30, 2021 was $124,137 and is included in accounts payable and accrued expenses on the balance condensed consolidated balance sheet. Pursuant to the terms of the May Debt Exchange the Company forgave $600,000 of the existing loan payable and recorded the forgiveness to additional paid in capital.

On June 23, 2021, the Company entered into an exchange agreement (“June Exchange Agreement”) with Mr. Siokas whereby an aggregate total of $3,000,000 of these outstanding loans were converted into 500,000 shares of the Company’s common stock. During the six months ended June 30, 2021, the Company borrowed additional proceeds of €1,080,000 ($1,281,562) and $1,529,500 and repaid €106,000 ($125,589) of these loans. As of June 30, 2021, the Company had an outstanding balance under these loans of $704,403.

The above balances are adjusted for the foreign currency rate as of the balance sheet date. For the six months ended June 30, 2021 the Company recorded a loss of $10,316.

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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LINES OF CREDIT

6 Months Ended

Jun. 30, 2021

LINES OF CREDIT

NOTE 9 - LINES OF CREDIT

NOTE 9 – LINES OF CREDIT

A summary of the Company’s lines of credit as of June 30, 2021 and December 31, 2020 is presented below:

	June 30, 2021		December 31, 2020
National	$	3,093,644	$	3,540,550
Alpha		1,019,368		1,106,894
Pancretan		532,191		-
National - COVID		393,709		429,240
Total	$	5,038,912	$	5,076,684

The line of credit with National Bank of Greece is being renewed annually with current interest rates of 6.00%, 4.35% (“COSME 2”) and 4.35% (plus the 6-month Euribor plus any contributions currently in force by law on certain lines of credit), (“COSME 1”). The maximum borrowing allowed for the 6% line of credit was $2,606,560 and $2,690,600 as of June 30, 2021 and December 31, 2020, respectively for the 6% line of credit. The outstanding balance was $2,103,897 and $2,411,182 as of June 30, 2021 and December 31, 2020, respectively.

The maximum borrowing allowed was $1,184,800 and $1,223,000 as of June 30, 2021 and December 31, 2020, respectively, for the 4.35% lines of credit. The outstanding balance was $989,746 and $1,129,368 as of June 30, 2021 and December 31, 2020, respectively.

The line of credit with Alpha Bank of Greece is renewed annually with a current interest rate of 6.00%. The maximum borrowing allowed was $1,184,800 and $1,123,000 as of June 30, 2021 and December 31, 2020, respectively. The outstanding balance was $1,019,368 and $1,106,894 as of June 30, 2021 and December 31, 2020, respectively.

The Company entered into a line of credit with Pancreta bank on February 23,2021. The line of credit is renewed annually with a current interest rate of 6.10%. The maximum borrowing allowed was $592,400 at June 30, 2021. The outstanding balance was $532,191 as of June 30, 2021.

Interest expense for the three month period ended June 30, 2021 and 2020, was $137,088.11 and $92,747, respectively.

Interest expense for the six months ended June 30, 2021 and 2020, was $153,589 and $110,420, respectively.

Under the agreements, the Company is required to maintain certain financial ratios and covenants. These lines of credit were assumed in the Company’s acquisition of Cosmofarm. During the three and six months ended June 30, 2021 and December 31, 2020, the Company was in compliance with these ratios and covenants.

COVID-19 Government Funding

On June 23, 2020, the Company’s subsidiary, Cosmofarm, entered into an agreement with the “National Bank of Greece SA” (the “Bank”) to borrow a maximum of €500,000 ($611,500) under a proposed plan which will operate the same as the line of credit above. The proposed plan has a maturity date of sixty (60) months from the date of the first disbursement, which includes a grace period of nine months. The total amount of the initial proceeds were paid in 3 equal monthly installments. The line of credit is interest bearing from the date of receipt and is payable every three (3) months at an interest rate of 2.7%. The outstanding balance was $393,709 and $429,240 at June 30, 2021 and December 31, 2020.

Interest expense for the three and six months ended June 30, 2021 was $0.

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CONVERTIBLE DEBT

6 Months Ended

Jun. 30, 2021

CONVERTIBLE DEBT

NOTE 10 - CONVERTIBLE DEBT

NOTE 10 – CONVERTIBLE DEBT

A summary of the Company’s convertible debt during the six months ended June 30, 2021 and the year ended December 31, 2020 is presented below:

	2021			2020
Beginning balance convertible notes		1,447,000			1,500,000
New notes		100,000			540,000
Payments		(362,000	)		(593,000	)
Subtotal notes		1,185,000			1,447,000
Debt discount at year end		(418,504	)		(494,973	)
Convertible note payable net of discount		766,496			952,027

All of the convertible debt is classified as short-term within the consolidated balance sheet as it all matures and will be paid back within fiscal year 2021.

Securities Purchase Agreement executed on May 15, 2019

On May 15, 2019, the Company entered into a Securities Purchase Agreement with an institutional investor (the “Buyer”). Upon the closing of this financing, on May 17, 2019, the Company issued for a purchase price of $1,500,000 in principal amount a Senior Convertible Note (the “May 2019 Note”) to the Buyer. The May 2019 Note provided that the Company will repay the principal amount of the May 2019 Note on or before March 15, 2020.

On March 23, 2020, the Company entered into a Forbearance and Amendment Agreement (the “Agreement”) with an institutional investor (the “Buyer”). The Agreement provides that the Buyer will (a) forbear (i) from taking any action with respect to the Existing Default and (ii) from issuing any demand for redemption of the Note on the basis of the Existing Default until the earlier of: (1): (September 16, 2020 (or, if earlier, such date when all amounts outstanding under the Note shall be paid in full or converted into shares of Common Stock in accordance therewith) and (2) the time of any breach by the Company of the Agreement or the occurrence of an Event of Default that is not an Existing Default (the “Forbearance Expiration Date”), (b) during the Forbearance Period waive the prepayment premium to any Company Optional Redemption, and (c) during the Forbearance Period, waive the repayment in full of the Note other than the Required Payments (as defined) prior to September 16, 2020. The Scheduled Required Prepayments are $100,000 upon signing the Agreement and five (5) monthly payments thereafter aggregating $200,000 with all amounts outstanding under the Note due on September 16, 2020. In addition, there are mandatory prepayments in the event the Company completes a Subsequent Placement (as defined) or long-term debt (other than from the Buyer or from officers and directors and advisors of the Company) or factoring and purchase order indebtedness, the Company shall effect a Company Optional Redemption amount equal to 50% of the gross proceeds (less reasonable expenses of counsel and any investment bank) together with all Scheduled Required Payments.

On September 23, 2020, the Company entered into a Second Forbearance and Amendment Agreement (the “Agreement”) with the Buyer. Pursuant to the March 23, 2020, Forbearance and Amendment Agreement. The Note was due to be paid in full on or before September 16, 2020 and was not paid (the “Existing Default”). The Note provides that upon an Event of Default, the Buyer may, among other things, require the Company to redeem all or a portion of the Note at a redemption premium of 120%, multiplied by the product of the conversion rate ($6.00per share) and the then current market price. 

The Agreement provides that the Buyer will (a) forbear (i) from taking any action with respect to the Existing Default and (ii) from issuing any demand for redemption of the Note on the basis of the Existing Default until the earlier of: (1): June 16, 2021 (or, if earlier, such date when all amounts outstanding under the Note shall be paid in full or converted into shares of Common Stock in accordance therewith) and (2) the time of any breach by the Company of the Agreement or the occurrence of an Event of Default that is not an Existing Default (the “Forbearance Expiration Date), (b) during the Forbearance Period (as defined) waive the prepayment premium to any Company Optional Redemption (which will result in the 120% redemption premium effectively replaced with 100%), and (c) during the Forbearance Period, waive the repayment in full of the Note other than the Required Payments (as defined) prior to June 16, 2021. The Scheduled Required Prepayments are $63,000 upon signing the Agreement and eight (8) monthly payments thereafter aggregating $480,000 with the remaining $607,000 outstanding under the Note due on June 16, 2021. In addition, there are mandatory prepayments in the event the Company completes a Subsequent Placement (as defined) or long-term debt (other than from the Buyer or from officers, directors and 10% or greater shareholders of the Company) or factoring and purchase order indebtedness, the Company shall effect a Company Optional Redemption amount equal to 50% of the gross proceeds (less reasonable expenses of counsel and any investment bank) together with all Scheduled Required Payments.

On June 18, 2021, the Company modified the terms of its outstanding debt by entering into a Third Forbearance Agreement (the “Third Agreement”) whereby the Company agreed to make certain payments to the creditor and the creditor will accept such payments as full discharge of the outstanding debt. The Agreement provides that the Buyer will (a) forbear (i) from taking any action with respect to the Existing Default and (ii) from issuing any demand for redemption of the Note on the basis of the Existing Default until the earlier of: (1): November 16, 2021 (or, if earlier, such date when all amounts outstanding under the Note shall be paid in full or converted into shares of Common Stock in accordance therewith) and (2) the time of any breach by the Company of the Agreement or the occurrence of an Event of Default that is not an Existing Default (the “Forbearance Expiration Date), (b) during the Forbearance Period (as defined) waive the prepayment premium to any Company Optional Redemption (which will result in the 120% redemption premium effectively replaced with 100%), and (c) during the Forbearance Period, waive the repayment in full of the Note other than the Required Payments (as defined) prior to November 16, 2021. The Scheduled Required Prepayments are $62,000 upon the first scheduled required prepayment and five (5) payments thereafter aggregating $287,000 with the remainder outstanding under the Note due on November 16, 2021. In addition, there are mandatory prepayments in the event the Company completes a Subsequent Placement (as defined) or long-term debt (other than from the Buyer or from officers, directors and 10% or greater shareholders of the Company) or factoring and purchase order indebtedness, the Company shall effect a Company Optional Redemption amount equal to 50% of the gross proceeds (less reasonable expenses of counsel and any investment bank) together with all Scheduled Required Payments. The Company performed an analysis to determine if at least a 10% difference between the present value of the new loan’s cash flows and the present value of the old loan’s remaining cash flows and determined that yes there is more than a 10% difference. The Company will experience a cash flow increase of approximately 15% due to the modification; therefore, the cash flow is considered substantially different, and the Company has applied extinguishment accounting.

The May 2019 Note is convertible at any time by the Holder into 250,000 shares of common stock, par value $0.001 per share at the rate of $6.00 per share, subject to adjustment (the “Conversion Price”). Upon an Event of Default (regardless of whether such event has been cured), the Buyer may convert at an alternative conversion price equal to the lower of the then applicable Conversion Price or seventy-five (75%) percent of the then Volume-Weighted Average Price (as defined, the “VWAP”). The Company considered the need for the conversion feature to be bifurcated under ASC 815 and determined that it does not meet the requirements. Additionally, the Company determined the effective conversion rate under ASC 470-20 and determined that the instrument is out of the money and no beneficial conversion feature was recorded.

The May 2019 Note is senior in right of payment to all other existing and future indebtedness of the Company except Permitted Senior Indebtedness (as defined in the May 2019 Note), including $12 million of senior secured indebtedness of the Company and its subsidiaries under an existing senior loan agreement, plus defined amounts of purchase money indebtedness in connection with bona fide acquisitions.

The May 2019 Note includes customary Events of Default and provides that the Buyer may require the Company to redeem (regardless of whether the Event of Default has been cured) all or a portion of the Note at a redemption premium equal to the greater of: (i) the product of the redemption premium of one hundred twenty-five (125%) percent, multiplied by the conversion amount, and (ii) the product of the conversion rate ($6.00 per share) multiplied by the product of 125% multiplied by the then current market price. The Buyer may also require redemption of the May 2019 Note upon a Change of Control (as defined) at a premium of one hundred twenty-five (125%) percent. The Company has the right to redeem the May 2019 Note at any time, in whole or in part, in cash at a price equal to 120% of the then outstanding conversion amount.

Conversion of the May 2019 Note is subject to a blocker provision which prevents any holder from converting the May 2019 Note into shares of common stock if its beneficial ownership of the common stock would exceed 9.99% of the Company’s issued and outstanding common stock.

As of December 31, 2019, the Company had a principal balance of $907,000 on the May 2019 Note and the Company had accrued $15,420 in interest expense. During the six months ended June 30, 2021, the Company repaid $362,000 such that as of June 30, 2021, the Company had a principal balance $545,000 on the May 2019 Note and the Company had accrued $18,102 in interest expense.

Roth Capital Partners, LLC (“Roth”), as the Company’s exclusive placement agent, received a cash commission for this transaction equal to six (6%) percent of the total gross proceeds of the offering. This 6% fee or $90,000 was recorded as debt discount along with the $30,000 in legal fees associated with the May 2019 Note. These fees will be amortized over the term of the note. The Company amortized $90,491 in the year ended December 31, 2019 and the remaining $29,509 was amortized during the year ended December 31, 2020.

December 21, 2020 Securities Purchase Agreement

On December 21, 2020 (the “Issue Date”), Cosmos Holdings, Inc. (“Cosmos”, the “Borrower” or the “Company”) entered into a convertible promissory note with Platinum Point Capital, LLC (the “Holder”, “Lender” or “Platinum”).

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) have not been converted or have not been otherwise satisfied in full or (ii) an Event of Default 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 below) or (iii), an Event of Default (as defined below) (collectively, the “Maturity Date”). As of June 30, 2021, the Company had a principal balance of $540,000 and had accrued $23,400 in interest expense.

The Note may be prepaid in whole or part beginning from the issue date until a date not later than 180 days thereafter, the Company shall have the right to prepay the full amount outstanding under the Note (principal and accrued interest), in full by making a payment to the Holder in an amount equal to one hundred twenty (120%) multiplied by the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of the Note plus (y) Default Interest, if any.

The Holder shall have the right at any time from the Issue Date to convert all or part of the outstanding and unpaid principal amount of the Note into Common Stock at the Conversion Price of as defined below.

a)	The Conversion Price. The Conversion Price shall equal the Variable Conversion Price (subject to stock splits, dividends, rights offerings or similar events) shall mean seventy-five percent (75%) multiplied by the Market Price defined as the average of the three (3) lowest trading prices for common stock during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date.
b)	Conversion upon Qualified Financing. If the Company engaged in a registered offering resulting in an “uplisting” to a higher-tiered trading market (a “Qualified Financing”), the Holder has the option to convert any outstanding debt due under this Note at seventy-five (75%) of the per share offering price.
c)	Conversion Price During Major Announcements. In the event the Borrower (i) makes a public announcement that it intends to consolidate or merge with any other Company (other than a merger in which the Borrower is the surviving or continuing Company and its capital stock is unchanged or sell or transfer all or substantially all of the assets of the Borrower or (ii) any person, group or entity (including the Borrower) publicly announces a tender offer to purchase fifty percent (50%) or more of the Borrower’s Common Stock (or any other takeover scheme), then the Conversion Price shall, effective upon the announcement date shall be equal to the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in effect.

The Company determined that the embedded conversion feature of the convertible promissory note meets the definition of a beneficial conversion feature and a derivative liability which is accounted for separately. The Company measured the beneficial conversion feature’s intrinsic value on December 16, 2020 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. For the three and six months ended June 30, 2021, $71,641 and $109,865, respectively has been amortized. As of June 30, 2021, the fair value of the derivative liability was $394,941 and for the three and six months ended June 30, 2021, the Company recorded a gain of $21,572 and $65,787, respectively from the change in fair value of derivative liability as other income in the consolidated statements of operations and comprehensive income (loss).

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 bears an interest rate of 8% per annum and matures on the earlier of (i) consummation of the Company listing its common shares on the NEO Stock Exchange or October 31, 2021.

Upon the consummation of a NEO listing, the total principal and accrued interest outstanding on the note will convert into shares of the Company’s common stock at a 25% discount to the prices of the common shares sold in the financing to be conducted in conjunction with the NEO listing. In the event that a NEO listing is not consummated on or before October 31, 2021, the note holder will have the option, in part or in full, to have the note repaid with interest, or convert the note into Company common stock at a 25% discount to the 30-day volume-weighted average price of the Common Shares on the most senior stock exchange in North American on which the common shares are trading prior to conversion. As of June 30, 2021, the Company had a principal balance of $100,000 and had accrued $3,735 in interest expense.

The Company determined that the embedded conversion feature of the convertible promissory note meets the definition of a beneficial conversion feature and a derivative liability which is accounted for separately. The Company measured the beneficial conversion feature’s intrinsic value on January 7, 2021 and determined that the embedded derivative was valued at $62,619 which was recorded as a debt discount and is being amortized over the life of the loan. For the six months ended June 30, 2021, $29,223 has been amortized. As of June 30, 2021, the fair value of the derivative liability was $40,537 and for the three and six months ended June 30, 2021, the Company recorded a gain of $4,924 and $22,082, respectively from the change in fair value of derivative liability as other income in the consolidated statements of operations and comprehensive income (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 and six months ended June 30, 2021:

	Amount
Balance on December 31, 2020	$	460,728
Issuances to debt discount		62,619
Change in fair value of derivative liabilities		(85,869	)
Balance on June 30, 2021	$	437,478

The fair value of the derivative conversion features and warrant liabilities as of June 30, 2021 were calculated using a Monte-Carlo option model valued with the following assumptions:

	June 30, 2021
Dividend yield		0	%
Expected volatility	113.8%-139.0		%
Risk free interest rate	0.15%-0.18		%
Contractual terms (in years)	0.34 – 0.89

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DEBT

6 Months Ended

Jun. 30, 2021

DEBT

NOTE 11 - DEBT

NOTE 11 – DEBT

A summary of the Company’s third-party debt during the six months ended June 30, 2021 and the year ended December 31, 2020 is presented below:

June 30, 2021	Loan Facility			Trade Facility			Third Party			COVID Loans			Total
Beginning balance		3,302,100			6,446,000			12,631,284			435,510			22,814,594
Proceeds		-			-			-			-			-
Payments		(20,000	)		-			-			-			(20,000	)
Conversion of debt		-			-			(3,010,000	)		-			(3,010,000	)
Foreign currency translation		(106,836	)		(76,400	)		(19,460	)		(10,740	)		(213,382	)
Subtotal		3,175,264			6,369,600			9,601,878			424,470			19,571,212
Reclass of long-term portion of debt		(2,582,864	)		(2,191,880	)		(5,460,759	)		-			(10,235,503	)
Ending Balance		592,400			4,177,720			4,141,119			424,470			9,335,709

December 31, 2020	Loan Facility			Bridge Loans			Trade Facility			Third Party			COVID Loans		Total
Beginning balance		3,078,442			191,287			6,245,400			2,514,595			-		12,029,724
Proceeds		-			-			-			16,121,500			435,210		16,556,710
Payments		-			(191,287	)		-			(5,006,115	)		-		(5,230,725	)
Conversion of debt											(807,795	)				(807,795	)
Debt extinguishment		(12,066	)		-			-			(192,205	)		-		(204,271	)
Foreign currency translation		269,047			-			200,600			1,304			-		470,951
Subtotal		3,302,100			-			6,446,000			12,631,284			435,210		22,814,594
Reclass of long-term portion of debt		(2,843,475	)		-			(2,384,850	)		(5,543,557	)		-		(10,771,882	)
Ending Balance		458,625			-			4,061,150			7,087,727			435,210		12,042,712

Loan Facility Agreement

On June 30, 2020, SkyPharm entered into a settlement agreement on an existing loan facility agreement with Synthesis Peer-to-Peer Income Fund, whereby the Company agreed to make certain payments to the creditor and the creditor will accept such payments as full discharge of outstanding debt. In accordance with the settlement agreement, interest will accrue from June 30, 2020 until repayment in full at a rate of 6% per annum for the first year and 5.25% per annum for the second year calculated on the balance outstanding from day to day during such period. Interest is due on the 10^th day of each calendar month. If any amount of principal or interest is unpaid on its due date interest shall accrue from the due date until the date of its payment until the date of its payment in full at the rate of 7.25% per annum. The Company will make quarterly payments of €125,000 beginning May 6, 2021 with a final payment of €2,200,000 on May 6, 2022. The Company evaluated the settlement agreement for debt modification in accordance with ASC 470-50 and concluded that the debt qualified for debt extinguishment as the 10% cash flow test was met. As a result, the $3,828,630 of principal and accrued interest of $168,732, or an aggregate of $3,997,362 was written off and the new debt was recorded at fair value as of June 30, 2020 in the amount of $3,033,990. As of December 31, 2020, the Company has accrued interest expense of $33,021 and the principal balance of the debt is $3,302,100, of which $2,843,475 is classified as Notes payable – long term portion on the consolidated balance sheet. As of June 30, 2021, the Company repaid $23,696 and the principal balance of the debt is $3,175,264, of which $2,582,864 is classified as Notes payable – long term portion on the condensed, consolidated balance sheet.

The debt is subject to acceleration in an Event of Default (as defined in the Notes). This agreement is secured by a personal guaranty of Grigorios Siokas, which is secured by a pledge of 1,000,000 shares of common stock of the Company owned by Mr. Siokas.

Trade Facility Agreements

On May 12, 2017, SkyPharm entered into a Trade Finance Facility Agreement (the “SkyPharm Facility”) with Synthesis Structured Commodity Trade Finance Limited (the “Lender”). The SkyPharm Facility provides the following material terms:

• The Lender will provide SkyPharm a facility of up to €2,000,000 ($2,369,600) secured against SkyPharm’s receivables from the sale of branded and generic pharmaceutical sales. In the event that accounts receivable become uncollectible, the Company will be obligated to pay back the notes in full.

• The total facility will be calculated as 95% of the agreed upon value of Decahedron’s receivables.

• The term of the SkyPharm Facility will be for 12 months.

• The obligations of SkyPharm are guaranteed by the Company pursuant to a Cross Guarantee and Indemnity Agreement.

• The Lender has the right to make payments directly to SkyPharm’s suppliers.

• The following fees should be paid in connection with the SkyPharm Facility:

o 2% of the maximum principal amount as an origination fee.

o A one percent (1%) monthly fee.

The Company obtained consents from Synthesis Peer-to-Peer Income Fund in connection with obtaining the Lender.

On November 16, 2017, SkyPharm signed an amended agreement with Synthesis Structured Commodity Trade Finance Limited that increased the maximum aggregate facility limit from €2,000,000 ($2,291,200) to €6,000,000 ($6,736,200). All other terms of the original agreement remain the same. The Company also obtained consents from Synthesis Peer-to-Peer Income Fund in connection with obtaining the November 2017 convertible debt financing.

On May 12, 2018, the Company borrowed an additional €270,000 ($247,117) in funds.

On May 16, 2018, SkyPharm S.A., as Commodity Buyer, entered into a Supplemental Deed of Amendment (the “Deed”) relating to a Trade Finance Facility dated May 12, 2017, as amended, with Synthesis Structured Commodity Trade Finance Limited (“Synthesis”), as Loan Receivables Originator. Under the Trade Finance Facility (the “TFF”) first entered into on May 12, 2017, as amended, there was a principal balance of €5,866,910 ($5,369,678) outstanding as of June 30, 2018. SkyPharm made a payment of €1,000,000 ($1,123,600) of interest and principal on May 31, 2018 under the terms and conditions of the Deed. Additionally, the maturity date for the facility has been amended such that, the full principal amount is to be repaid no later than May 31, 2021, subject to a repayment schedule to be agreed upon by SkyPharm and Synthesis Structure Commodity Trade Finance Limited. Synthesis Structure Commodity Trade Finance Limited may extend this final repayment date at its sole discretion.

The TFF was amended to provide, among other things:

• A listing of approved purchasers;

• To permit SkyPharm to request Synthesis to make payments under the TFF directly to SkyPharm so that SkyPharm can discharge its obligations to a commodity seller directly;

• To prohibit SkyPharm from entering into a commodity contract which grants more than seventy-five (75) days delay between the payment for products and receipt of the purchase price and placed other limitations on terms of commodity contracts;

• If Grigorios Siokas, CEO of Cosmos Holdings Inc. (“Cosmos”), ceases to own or control at least fifty-one (51%) percent of the shares of Cosmos, or SkyPharm ceases to be a wholly-owned subsidiary of Cosmos, either event shall constitute an Event of Default (as defined);

• The maximum aggregate amount of the TFF is €15,000,000, although there is no commitment for any future loans under the TFF;

• The interest rate on the TFF for: (i) all lending in U.S. dollars is the one-month LIBOR plus six (6%) percent margin; and (ii) for all lending in Euro, the one-month Euribor Rate plus six (6%) percent per annum, commencing June 1, 2018.

• Synthesis is permitted to terminate the TFF at any time and demand repayment of all outstanding principal and interest in full within six (6) months from the date of notification.

The Deed is conditioned upon, among other things, execution and perfection of a Bulgarian Amended Pledge (“BAP”) having priority over the Bulgarian Pledge Accounts with Unicredit Bulbank AD; and the Approved Purchasers are to make all payments to SkyPharm directly to the BAP.

On May 16, 2018, SkyPharm and Synthesis also entered into an Account Merge Agreement (the “Pledge”) as a requirement under the above-described Deed. Under the Pledge, Synthesis is to receive a first ranking securities interest in SkyPharm’s outstanding receivables under the Bulgarian bank account.

On October 17, 2018, the Company entered into a further amended agreement with Synthesis whereby the current balance on the TFF as of October 1, 2018, which was €4,866,910 ($5,629,555) and related accrued interest of €453,094 ($524,094) would be split into two principal balances of Euro €2,000,000 and USD $4,000,000. Interest on the new balances commenced on October 1, 2018 at 6% per annum plus one-month Euribor, when it is positive, on the Euro balance and 6% per annum plus one-month Libor on the USD balance. The Company will repay the principal amounts of each balance beginning no later than August 31, 2018 in quarterly installments of €125,000 and US $150,000. The loan matures on August 31, 2021. The Company evaluated the amended agreement under ASC 470-50 and concluded that it did not meet the 10% cash flow test and recorded debt modification expense of $138,110.

As of December 31, 2020, the Company had principal balances of €2,000,000 ($2,446,000), of which $2,384,850 is classified as Notes payable – long term portion on the consolidated balance sheet, and $4,000,000 under the agreements and the Company had accrued $402 and $16,185 respectively, in interest expense related to these agreements. As of June 30, 2021, the Company had principal balances of €2,000,000 ($2,369,600), of which $2,191,880 is classified as Notes payable – long term portion on the consolidated balance sheet, and $4,000,000 under the agreements and the Company had accrued $11,250 and $26,231 respectively, in interest expense related to these agreements.

Third Party Debt

On November 16, 2015, the Company entered into a Loan Agreement with Panagiotis Drakopoulos, former Director and former Chief Executive Officer, pursuant to which the Company borrowed €40,000 ($42,832) as a note payable from Mr. Drakopoulos. The note bears an interest rate of 6% per annum and was due and payable in full on November 15, 2016. As of December 31, 2020, the Company had an outstanding principal balance of €8,000 ($9,784) and accrued interest of €4,785 ($5,852). As of June 30, 2021, the Company had an outstanding principal balance of €8,000 ($9,478) and accrued interest of €6,066 ($7,187).

Conversion of Prior Year Senior Promissory Notes

In the years ending December 31, 2019 and 2020, the Company executed Senior Promissory Notes (the “Debt”) in an aggregate total of $3,010,000 to an unaffiliated third-party lender (the “Lender”). As of December 31, 2020, the Company had a principal balance of $3,010.00 on this Debt and the Company had accrued $527,604 in interest expense. As of February 5, 2021, The Company entered into an Amended and Restated Debt Exchange Agreement (the “Agreement”) with the “Lender that provided for the issuance by the Company of 781,819 shares of common stock (the “Exchange Shares”), at the rate of $3.85 per share, in exchange for an aggregate of $3,010,000 principal amount of existing loans made by the Lender to the Company. The market price at the time this Agreement was negotiated was $3.28 per share and the Company recorded a gain on debt extinguishment of $445,636.

All accrued and unpaid interest, $563,613 as of June 30, 2021, as well as any unpaid fees, shall be paid in three (3) equal monthly installments following the closing of a planned Canadian public offering. Pursuant to this Agreement, Grigorios Siokas, the Company’s Chief Executive Officer and principal shareholder, will be released from all personal guarantees on the Debt.

May 18, 2020 and July 3, 2020 Senior Promissory Notes

May 18, 2020 Senior Promissory Note

On May 18, 2020, the Company executed a Senior Promissory Note (the “May 18 Note”) in the principal amount of $2,000,000 payable to an unaffiliated third-party lender. The May 18 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The May 18 Note matured on December 31, 2020. The note is not in default and the Company is currently in negotiations with the lender to extend the maturity date.

The May 18 Note is subject to acceleration in an Event of Default. Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the May 18 Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection. As of June 30, 2021 and December 31, 2020, the Company had a principal balance of $2,000,000 on this note.

July 3, 2020 Senior Promissory Note

On July 3, 2020, the Company executed a Senior Promissory Note (the “July 3 Note”) in the principal amount of $5,000,000 payable to an unaffiliated third-party lender. The July 3 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The July 3 Note matures on June 30, 2022 unless in default.

The July 3 Note is subject to acceleration in an Event of Default (as defined). Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the July 3 Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection.

As of June 30, 2021 and December 31, 2020, the Company had a principal balance of $5,000,000 on this note, which is classified as long-term on the consolidated balance sheet.

As of June 30, 2021 and December 31, 2020, the Company has accrued an aggregate total of $259,149 and $146,685 in accrued interest expense related to these loans.

August 4, 2020 Senior Promissory Note

On August 4, 2020, the Company executed a Senior Promissory Note (the “August 4 Note”) in the principal amount of $3,000,000 payable to an unaffiliated third-party lender. The August 4 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The August 4 Note matured on December 31, 2020 unless in default. The note is not in default and the Company is in negotiations with the lender to extend the maturity date.

The August 4 Note is subject to acceleration in an Event of Default (as defined). Grigorios Siokas, the Company’s CEO, personally guaranteed repayment of the August 4 Note. The guaranty is unconditional and irrevocable and constitutes a guaranty of performance and of payment when due, and not just of collection.

On October 29, 2020, the Company entered into a debt exchange agreement with the lender whereby the Company issued 259,741 shares of common stock at the rate of $3.85 per share in exchange for an aggregate of $1,000,000 principal amount of the existing loan. The fair market value of the Company’s common stock on the date of exchange was $3.11 per share and as such, the Company recorded a gain of $192,205. Interest will continue to accrue on the remaining debt and the converted amount until December 31, 2020. As of December 31, 2020, the Company had a principal balance of $2,000,000 on this note and prepaid interest of $8,514. As of June 30, 2021, the Company had a principal balance of $2,000,000 on this note and $0 in accrued interest expense. The note is not in default and the Company is in negotiations with the lender to extend the maturity date.

November 19, 2020 Debt Agreement

On November 19, 2020, the Company entered into an agreement with a third-party lender in the principal amount of €500,000 ($611,500). The note matures on November 18, 2025 and bears an annual interest rate, based on a 360-day year, of 3.3% plus .6% plus 6-month Euribor when Euribor is positive. Pursuant to the terms of the agreement, there is a six-month grievance from the first deposit date, which was November 19, 2020, for principal repayment. The principal is to be repaid in 18 quarterly installments of €27,000 with the first payment due 9 months from the first deposit. As of December 31, 2020, the Company had no accrued interest and a principal balance of €500,000 ($611,500), of which $543,557 is classified as Notes payable – long term portion on the consolidated balance sheet. As of June 30, 2021, the Company had no accrued interest and a principal balance of €500,000 ($592,400), of which $460,759 is classified as Notes payable – long term portion on the consolidated balance sheet. As of June 30, 2021 the Company has $8,856 in accrued interest expenses related to this note.

COVID-19 Government Loans

On May 12, 2020, the Company was granted and on May 22, 2020 the Company received a €300,000 ($337,110) loan from the Greek government. The loan will be repaid in 40 equal monthly instalments beginning on January 1, 2022 and bears an interest rate of 0.94% per annum. As a condition to the loan, the company is required to retain the same number of employees until October 31, 2020. The balance as of June 30, 2021 was $355,440.

On June 24, 2020, the Company received a loan £50,000 ($61,845) from the United Kingdom government. The loan has a six-year maturity and bears interest at a rate of 2.5% per annum beginning 12-months after the initial disbursement. The Company may prepay this loan without penalty at any time. The balance as of June 30, 2021 was $69,030.

Distribution and Equity Agreement

As discussed in Note 3 above, the Company entered into a Distribution and Equity Acquisition Agreement with Marathon. The Company was appointed the exclusive distributor of the Products (as defined) initially throughout Europe and on a non-exclusive basis wherever else lawfully permitted. As consideration for its services, Company received: (a) a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services; and (b) received cash of CAD $2,000,000, subject to repayment in Common Shares of the Company if it fails to meet certain performance milestones. The Company is entitled to receive an additional CAD $2,750,000 upon the Company’s receipt of gross sales of CAD $6,500,000 and an additional CAD $2,750,000 upon receipt of gross sales of CAD $13,000,000.

As discussed in Note 3, the Company attributed no value to the shares received in Marathon pursuant to (a) above. In relation to the CAD $2 million cash received noted in (b) above, the Company accounted for its obligation to issue a variable number of the Company’s Common Shares as Share-settled debt obligation in accordance with ASC 480 measured at fair value or the settlement amount of $1,554,590 (CAD $2 million). If settlement were to occur on December 31, 2019, the Company would be required to issue 261,891 common shares to settle its debt obligation. The Company could be obligated to potentially issue an unlimited number of common shares to settle its Share-settled debt obligation. If such events were to occur, the Company would be required to increase its authorized share capital and since increasing the authorized share capital is within the control of the Company, as our CEO controls greater than 50% of the outstanding common stock of the Company, the original classification of equity-classified financial 

None of the above loans were made by any related parties.

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LEASES

6 Months Ended

Jun. 30, 2021

LEASES

NOTE 12 - LEASES

The Company has various lease agreements with terms up to 10 years, comprising leases of office space. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised.

The assets and liabilities from operating and finance leases are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet.

The Company’s operating leases do not provide an implicit rate that can readily be determined. Therefore, we use a discount rate based on our incremental borrowing rate, which is determined using the interest rate of our long-term debt on the date of inception.

The Company’s weighted-average remaining lease term relating to its operating leases is 6.71 years, with a weighted-average discount rate of 6.74%.

The Company incurred lease expense for its operating leases of $99,610 and $104,588 which was included in “General and administrative expenses,” for the six months ended June 30, 2021 and 2020, respectively.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of June 30, 2021.

Maturity of Lease Liability
Remainder of 2021	$	115,368
2022		228,112
2023		203,409
2024		118,978
2025		114,856
Thereafter		431,790
Total undiscounted operating lease payments	$	1,212,513
Less: Imputed interest		(243,054	)
Present value of operating lease liabilities	$	969,459

The Company’s weighted-average remaining lease term relating to its finance leases is 2.7 years, with a weighted-average discount rate of 6.74%.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s finance leases as of June 30, 2021.

Maturity of Lease Liability
Remainder of 2021	$	51,377
2022		86,663
2023		74,113
2024		55,762
2025		24,823
Thereafter		589
Total undiscounted finance lease payments	$	293,327
Less: Imputed interest		(32,302	)
Present value of finance lease liabilities	$	261,025

The Company had operating cash flows used in finances leases of $4,453 and $2,301 for the six months ended June 30, 2021 and 2020, respectively.

The Company incurred interest expense on its finance leases of $5,250 which was included in “Interest expense,” for the six months ended June 30, 2021. The Company incurred amortization expense on its finance leases of $49,267 which was included in “Depreciation and amortization expense,” for the six months ended June 30, 2021.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2021

COMMITMENTS AND CONTINGENCIES

NOTE 13 - COMMITMENTS AND CONTINGENCIES

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Legal Matters

From time to time, the Company may be involved in litigation relating to claims arising out of the Company’s operations in the normal course of business. As of June 30, 2021, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s operations.

Advisory Agreement

On April 18, 2018, SkyPharm S.A. entered into a ten-year Advisory Agreement with Synthesis Management Limited (the “Advisor”). The Advisor was retained to assist SkyPharm to secure corporate finance capital. The Advisor shall be paid €104,000 per year during the ten-year term.

Related Party Research and Development Agreement

On May 17, 2021, Doc Pharma and the Company entered into a Research and Development agreement whereby DOC Pharma will be responsible for the research, development and design of 250 nutritional supplements for the final products called “Sky Premium Life”. These products will be sold in Greece and abroad. The total cost of this project will be €1,425,000 plus VAT and will be done over three phases as follows: Design & Development (€725,000); Control and Product Manufacturing (€250,000) and Clinical Study and Research (€450,000) The agreement terminates on December 31, 2025.

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STOCK OPTIONS AND WARRANTS

6 Months Ended

Jun. 30, 2021

STOCK OPTIONS AND WARRANTS

NOTE 14 - STOCK OPTIONS AND WARRANTS

NOTE 14 – STOCK OPTIONS AND WARRANTS

As of June 30, 2021, there were 37,000 options outstanding and 37,000 options exercisable with expiration dates of January 2022.

A summary of the Company’s option activity during the six months ended June 30, 2021 is presented below:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
Options	Shares			Price		Term		Value
Balance Outstanding, December 31, 2020		62,000		$	1.19		0.60	$	242,200
Granted		-			-		-		-
Forfeited		-			-		-		-
Exercised		-			-		-		-
Expired		(25,000	)		-		-		-
Balance Outstanding, June 30, 2021		37,000		$	1.32		0.51	$	147,100
Exercisable, June 30, 2021		37,000		$	1.32		0.51	$	147,100

As of June 30, 2021, there were 1,164,673 warrants outstanding and 1,164,673 warrants exercisable with expiration dates from May 2023 through March 2024.

A summary of the Company’s warrant activity during the six months ended June 30, 2021 is presented below:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Number of		Exercise		Contractual		Intrinsic
Warrants	Shares		Price		Term		Value
Balance Outstanding, December 31, 2020		1,164,673	$	6.41		3.01	$	5,360
Granted		-		-		-		-
Forfeited		-		-		-		-
Exercised		-		-		-		-
Expired		-		-		-		-
Balance Outstanding, June 30, 2021		1,164,673	$	6.41		2.52	$	16,080
Exercisable, June 30, 2021		1,164,673	$	6.41		2.52	$	16,080

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DISAGGREGATION OF REVENUE

6 Months Ended

Jun. 30, 2021

DISAGGREGATION OF REVENUE

NOTE 15 - DISAGGREGATION OF REVENUE

NOTE 15 – DISAGGREGATION OF REVENUE

ASC 606-10-50-5 requires that entities disclose disaggregated revenue information in categories (such as type of good or service, geography, market, type of contract, etc.). ASC 606-10-55-89 explains that the extent to which an entity’s revenue is disaggregated depends on the facts and circumstances that pertain to the entity’s contracts with customers and that some entities may need to use more than one type of category to meet the objective for disaggregating revenue.

The Company disaggregates revenue by country to depict the nature and economic characteristics affecting revenue.

The following table presents our revenue disaggregated by country for the three months ended:

	June 30,		June 30,
Country	2021		2020
France	$	-		-
Germany		3		125,238
Greece		14,504,869		11,967,758
Hungary		-		100
Ireland		-		(9	)
Italy		4		16,007
Jordan		-		(95	)
Denmark		14		-
Cyprus		64,225		-
UK		265,828		697,609
Croatia		11,982		8,617
Libya		-		-
Netherlands		-		4,797
Poland		-		(50	)
Total	$	14,846,925	$	12,819,972

The following table presents our revenue disaggregated by country for the six months ended:

Country	June 30, 2021		June 30, 2020
Croatia	$	11,982	$	8,617
Denmark		54,700		-
France		-		1,091
Germany		13,617		792,540
Greece		25,958,364		22,657,446
Hungary		-		36,240
Ireland		-		35,104
Italy		15,731		22,048
Jordan		-		9,322
Libya				41,972
Netherlands		-		38,252
Poland		-		28,352
Cyprus		78,948		-
UK		332,659		1,082,236
Total	$	26,466,001	$	24,753,220

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2021

SUBSEQUENT EVENTS

NOTE 16 - SUBSEQUENT EVENTS

NOTE 16 – SUBSEQUENT EVENTS

Advisory Agreements

On July 1, 2021, the Company entered into a two-year advisory agreement with a third party (the “Consultant”) for advisory and consulting services related to the Company’s intention to become listed on NASDAQ. Peter Goldstein, a director of the Company is a principal of the Consultant. As consideration for services rendered, the Company will pay the consultant $4,000 a month until the Company commences trading on NASDAQ. Upon NASDAQ listing, the Company shall pay $10,000 per month, with $4,000 per month paid on a monthly basis and $6,000 per month accrued until such time as the Company raises an aggregate of $10,000,000. In addition, the consultant will receive a $100,000 bonus upon NASDAQ listing and when the Company has raised an aggregate of $10,000,000. Finally, the Company has agreed that the Consultant shall receive a total of 250,000 shares of the Company’s common stock, 50,000 of such shares that have been previously issued pursuant to previous agreements and 200,000 shares to be issued when the Company commences trading on NASDAQ.

On July 7, 2021, the Company entered into an agreement with a non-exclusive financial advisor and placement agent. The term of the agreement is a minimum of 45 days and will continue until 5 business days following the date in which a party receives written notice from the other party of termination. As consideration for services rendered, the Company shall pay: a) a cash fee equal to 10% of the gross proceeds of any securities sold in the offering payable at closing of the offering from the gross proceeds of the offering; b) 1% of the gross proceeds of any securities sold in the offering payable at closing of the offering from the gross proceeds of the offering for unaccountable expenses; c) warrants to purchase shares of the Company’s common stock equal to 10% of the number of shares issued in the offering or to be issued thereafter upon conversion of any convertible securities issued in the offering. These warrants will have a 5-year term and an exercise price equal to the price per share of common stock sold in the offering or conversion or exercise price into common stock of any convertible security sold and will have the same provisions, terms, conditions, rights and preferences as the securities sold in the offering; d) a cash fee equal to 10% of the exercise price of all securities constituting warrants, options or other rights to purchase securities sold in the offering payable only upon exercise.

On July 7, 2021, the Company entered into a 6-month agreement with a non-exclusive agent, advisor or underwriter in any offering of securities of the Company. At the closing of any offering the company will compensate the agent: a) a cash fee or as an underwritten offering an underwriter discount equal to 7% of the aggregate gross proceeds raised in each offering. For all investors referred directly to the Company by the agent, a cash fee or as an underwritten offering an underwriter discount equal to 5% of the aggregate gross proceeds invested by such investors. b) The Company shall issue to Spartan or its designees at each closing, warrants to purchase shares of the Company’s common stock equal to 5% of the aggregate number of shares of common stock placed in each offering. c) Out of the proceeds of each closing, the Company also agreed to pay the agent up to $35,000 for non-accountable expenses (up to $50,000 for a public offering) along with up to $50,000 for fees and expenses of legal counsel and other out-of-pocket expenses (increase to up to $100,000 for public offerings) plus additional miscellaneous costs. The agent would also have the right of first refusal from the date of the agreement until the 12-month anniversary following consummation of any offerings for total proceeds of at least $3 million raised by investors introduced by the agent.

Related Party Debt Exchange Agreements

On July 13, 2021, the Company entered into a Debt Exchange Agreement (the “Agreement”) with Grigorios Siokas, the Company’s Chief Executive Officer. The Agreement provided for the issuance by the Company of 166,667 shares of common stock, at the rate of $6.00 per share, or an aggregate of $1,000,000, in exchange for $1,000,000 of existing loans by Mr. Siokas to the Company.

On July 19, 2021, the Company entered into a Debt Exchange Agreement (the “July 19 Agreement”) with Grigorios Siokas, the Company’s Chief Executive Officer. The July 19 Agreement provided for the issuance by the Company of 208,333 shares of common stock, at the rate of $6.00 per share, or an aggregate of $1,250,000, in exchange for $1,250,000 of existing loans by Mr. Siokas to the Company.

Conversion of Convertible Debt

On July 14, 2021, pursuant to a conversion notice, $150,000 in principal and $24,144 in interest were converted at $3.165 into 55,021 shares of common stock.

Related Party Convertible Note

On July 20, 2021, the Company entered into a Convertible Promissory Note with Greg Siokas, CEO, in the principal amount of $2,000,000 memorializing outstanding loans to the Company. The note is due on demand and will not bear interest if it is paid before the maturity date. The note may be prepaid without penalty at any time and is convertible at the option of the holder at any time at any time at above the then current market price. Pursuant to the July 20, 2021 Agreement, an aggregate of $1,250,000 of indebtedness was converted into equity.

Debt Exchange Agreement

On August 4, 2021, the Company entered into a debt exchange agreement (the “Agreement”) with a senior institutional lender and Grigorios Siokas, CEO, as guarantor. The parties to the Agreement had entered into a senior loan, as amended, as of June 30, 2020 (the "Loan") pursuant to which the Loan had been reduced to €2,700,000 (See note 11). The Agreement provides for the issuance by the Company of 321,500 shares of common stock (the "Exchange Shares"), at the rate of $5.00 per share, in exchange for the repayment of €1,350,000 ($1,599,480) principal amount effective upon the closing of the Agreement and 238,000 shares at an exchange rate of $5.00 per share, or at market value if the price is above $5.00 per share effective upon approval of listing of the Company’s common stock on NASDAQ in exchange for €1,000,000 ($1,184,800) of the debt.

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ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN (Policies)

6 Months Ended

Jun. 30, 2021

ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN

Overview

Cosmos Holdings Inc. (“us”, “we”, or the “Company”) is a multinational pharmaceutical company. The Company imports, exports and distributes pharmaceutical products of brand-name and generic pharmaceuticals, over-the-counter (OTC) medicines, and a variety of dietary and vitamin supplements through its established network. Currently, the Company operates its business through its three wholly-owned subsidiaries: (i) SkyPharm, headquartered in Thessaloniki, Greece; (ii) Decahedron Ltd., head-quartered in Harlow, United Kingdom; and (iii) Cosmofarm, headquartered in Athens, Greece. Cosmofarm was acquired in 2018 and we believe this expansion has increased our sales and profit margins as we vertically integrate our business model. The Company also has an extensive and established distribution direct and indirect network within the European Union (EU).

The Company’s cross-border pharmaceutical business serves wholesale pharmaceutical distributors and independent retail pharmacies across the EU through a network of three strategic distribution centers, as well as an additional warehousing facility. Pharmaceutical manufacturers generally implement variable pricing strategies within the EU market. Identifying and evaluating price spreads between EU member states enables the Company to source brand-name pharmaceuticals from countries where ex-factory prices are comparatively low and export to countries where the same products are priced higher. The Company focuses on leveraging its growing purchasing scale and supplier relationships to secure discounts and provide pharmaceuticals at reduced prices and on continuing to drive organic growth at attractive margins for its cross-border pharmaceutical wholesale business.

The Company regularly evaluates and undertakes strategic initiatives to expand its distribution reach, improve its profit margins, and strengthen its competitive position. In 2018, the Company entered the vitamins and dietary supplements segment and in the fourth quarter of 2018, the Company posted the first sales of its own brand of nutraceuticals: Sky Premium Life. Through the December 2018 acquisition of Cosmofarm, the Company entered the full-line pharmaceutical wholesale distribution segment. Cosmofarm now serves approximately 1500 independent retail pharmacies and 40 pharmaceutical wholesalers in the greater Athens, Greece region by providing brand-name and generic pharmaceuticals, over-the-counter medicines, vitamins, and dietary supplements. We invest in technology to enhance safety, distribution and warehousing efficiency and reliability. Cosmofarm operates two robotic ROWA, a German fully automated warehouse system, that ensure 0% error selection rate, accelerate order fulfillment, and yield higher cost-efficiency in our Athens distribution center.

We make use of analytics and customer feedback from our EU-wide network of wholesale pharmaceutical distributors and independent retail pharmacies to identify and evaluate which nutraceutical product codes to develop to add to our SkyPremium Life portfolio. We intend to continue to bring SkyPremium Life products to market primarily through our existing network of over 160 pharmaceutical wholesale clients and vendors and approximately 370 independent retail pharmacies in the EU. There is growing demand for vitamins and food supplements and we are committed to developing quality products and creating enhanced customer value.

We are also closely monitoring the legal framework for prescription and non-prescription derivatives of cannabis products as it develops in Europe. As the legal framework and processes are developed and implemented in each respective EU country, we intend to utilize our existing network to distribute both prescription and non-prescription derivatives of cannabis products to our current customer base. We currently intend to only distribute prescription and non-prescription derivatives of cannabis products to approved EU countries and not in the US.

We regularly evaluate acquisition targets that would allow us to expand our distribution reach and/or vertically integrate into the supply chain of the products that we currently distribute. We believe that the demand for reasonably priced medicines, delivered on time and in the highest quality is set to increase in the years to come, as the population’s life expectancy increases. With our product portfolio of patented and non-patented medicines, we contribute to the optimization of efficient medicinal care, and thereby lowering cost for health insurance funds, companies, and patients. We also believe that the demand for non-prescription wellness products such as food and dietary supplements will continue to increase as individuals are increasingly supplementing their nutritional intake.

We believe the EU pharmaceutical import/export market will continue to grow. We continue to encounter competition in the market as we grow. The competition comes in the form of level of service, reliability, and product quality. On the procurement side, we continue to expand our vendor base. In order to minimize business risks, we diversify our sources of supply. We maintain our high-quality standards by carefully selecting and qualifying our suppliers, as well as actively ensuring that our suppliers meet our standard of quality control on an ongoing basis.

On July 22, 2015, the Hellenic Ministry of Health and more specifically the National Organization for Medicines granted SkyPharm a license for the wholesale of pharmaceutical products for human use. The license is valid for a period of five years and pursuant to the EU directive of (2013/C343/01). Pursuant to the EU directive of (2013/C 343/01), the Company is subject to fulfill the Guidelines of the Good Distribution Practices of medical products for human use. The Company submitted its application for renewal one month before the license expiration to the Hellenic Republic National Organization, but according to the EMA (eudragmdp.ema.europa.eu/inspections/view/wda/WDAHomePage.xhtml): “Due to the restrictions caused by COVID-19, the period of validity of MIA’s, WDA’s, GMP and GDP certificates is automatically extended until the end of 2021. On-site inspections will resume as soon as there is a consensus that the period of the public health crisis has passed. The clarifying remark section of individual MIA’s, WDA’s, GMP and GDP certificates will indicate any exceptions. Competent authorities reserve the right to inspect a manufacturing site should the need arise.” Therefore, the Company is eligible to continue its operations until at least the end of 2021and expects to receive a temporary license by the end of 2021.

Decahedron received its Wholesale Distribution Authorization for human use on November 7, 2013, from the UK Medicines and Healthcare Products Regulatory Agency (MHRA) in accordance with Regulation 18 of the Human Medicines Regulations 2012 (SI 2012/1916) and it is subject to the provision of those Regulations and the Medicines Act 1971. This license will continue to remain in force from the date of issue by the Licensing Authority unless cancelled, suspended, revoked or varied as to the period of its validity or relinquished by the authorization holder.

Our subsidiaries are ISO 9001 certified for a management system for the trade and distribution of pharmaceuticals. As part of the certification process by the International Organization for Standardization, we need to be compliant with the General Data Protection Regulation (GDPR) adopted by the European Union. GDPR applies to the processing of personal data of persons in the EU by a controller or processor neither of which apply to our operations.

Corporate History and Structure

Cosmos Holdings, Inc. was incorporated in the State of Nevada under the name Prime Estates and Developments, Inc. on July 21, 2009. On November 14, 2013, we changed our name to Cosmos Holdings, Inc.

On September 27, 2013, the Company acquired one hundred (100%) percent of the outstanding common stock of Amplerissimo Ltd., a company incorporated in Cyprus (“Amplerissimo”), which became a wholly-owned subsidiary of the Company.

On November 21, 2017, the Company effected a one-for-ten (1:10) reverse stock split whereby the Company decreased, by a ratio of one-for-ten (1:10) the number of issued and outstanding shares of common stock. Proportional adjustments for the reverse stock split were made to the Company’s outstanding stock options, and warrants including all share and per-share data, for all amounts and periods presented in the consolidated financial statements.

On December 19, 2018, the Company completed the purchase of all of the capital stock of Cosmofarm Ltd. (“Cosmofarm”), a pharmaceutical wholesaler based in Athens, Greece. The principal of the selling shareholder is Panagiotis Kozaris, who remained with Cosmofarm as a director and chief operating officer once it became a wholly owned subsidiary of the Company. Grigorios Siokas, the Company’s CEO, became the new CEO of Cosmofarm. Mr. Kozaris had no prior relationship to the Company other than as an independent shareholder. The purchase price payable is €200,000 evidenced by a promissory note.

Going Concern

The Company’s consolidated financial statements are prepared in conformity with U.S. GAAP, which contemplates the continuation of the Company as a going concern. For the six months ended June 30, 2021, the Company had revenue of $26,466,001, net loss of $4,552,959 and net cash used in operations of $2,519,394. Additionally, as of June 30, 2021, the Company had working capital of $10,417,725, an accumulated deficit of $23,303,783, and stockholders’ equity of $384,548. It is management’s opinion that these conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date of this filing.

The Company has undergone strategic review processes to help find a definitive solution to the Company’s accumulated deficit constraints. Options under consideration in the strategic review process include, but are not limited to, securing new debt, exchange debt to equity, restructuring current debt facilities from short term to long term and taking the proper actions for new fund raising.

The condensed consolidated financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of this uncertainty.

The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund its operations. If the Company is unable to obtain adequate capital, it could be forced to cease development of operations.

In order to continue as a going concern, develop a reliable source of revenues, and achieve a profitable level of operations, the Company will need, among other things, additional capital resources. Management’s plans to continue as a going concern include raising additional capital through increased sales of product and by sale of equity and/or debt. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described herein and eventually secure other sources of financing and attain profitable operations.

Basis of Financial Statement Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

Principles of Consolidation

Our condensed consolidated accounts include our accounts and the accounts of our wholly-owned subsidiaries, SkyPharm S.A., Decahedron Ltd. and Cosmofarm Ltd. All significant intercompany balances and transactions have been eliminated.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The Effects of COVID-19

Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of August 16, 2021, the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change, as new events occur, and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of June 30, 2021, and December 31, 2020, there were no cash equivalents.

The Company maintains bank accounts in the United States denominated in U.S. Dollars and in Greece and in Bulgaria all of them denominated in Euros. The Company also maintains bank accounts in the United Kingdom, denominated in Euros and Great Britain Pounds (British Pounds Sterling).

Reclassifications to Prior Period Financial Statements and Adjustments

Certain reclassifications have been made in the Company’s financial statements of the prior period to conform to the current year presentation. For the three and six months ended June 30, 2020, $380,326 and $434,056, respectively, in sales and marketing expenses were reclassified from general and administrative expenses. Additionally, for the six months ended June 30, 2020, $260,347 was reclassified from accounts payable and accrued expenses to accrued interest on the Statement of Cash Flows. These reclassifications have no impact on previously reported net income.

Account receivable, net

Accounts receivable are stated at their net realizable value. The allowance for doubtful accounts against gross accounts receivable reflects the best estimate of probable losses inherent in the receivables’ portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available information. As of June 30, 2021, and December 31, 2020, the Company’s allowance for doubtful accounts was $693,485 and $715,845, respectively.

Tax Receivables

The Company pays Value Added Tax (“VAT”) or similar taxes (“input VAT”), income taxes, and other taxes within the normal course of its business in most of the countries in which it operates related to the procurement of merchandise and/or services it acquires and/or on sales and taxable income. The Company also collects VAT or similar taxes on behalf of the government (“output VAT”) for merchandise and/or services it sells. If the output VAT exceeds the input VAT, this creates a VAT payable to the government. If the input VAT exceeds the output VAT, this creates a VAT receivable from the government. The VAT tax return is filed on a monthly basis offsetting the payables against the receivables. In observance of EU regulations for intra-EU cross-border sales, our subsidiaries in Greece, SkyPharm and Cosmofarm, do not charge VAT for sales to wholesale drug distributors registered in other European Union member states. The net VAT receivable is recorded in prepaid expense and other current assets on the condensed consolidated balance sheets.

Inventory

Inventory is stated at net realizable value using the weighted average method. Inventory consists primarily of finished goods and packaging materials, i.e., packaged pharmaceutical products and the wrappers and containers they are sold in. A periodic inventory system is maintained by 100% count. Inventory is replaced periodically to maintain the optimum stock on hand available for immediate shipment.

The Company writes down inventories to net realizable value based on physical condition, expiration date, current market conditions, as well as forecasted demand. The Company’s inventories are not highly susceptible to obsolescence. Many of the Company’s inventory items are eligible for return to our suppliers when pre-agreed product requirements, including, but not limited to, physical condition and expiration date, are not met.

Property and Equipment, net

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated on a straight-line basis over the useful lives (except for leasehold improvements which are depreciated over the lesser of the lease term or the useful life) of the assets as follows:

	Estimated Useful Life
Leasehold improvements and technical works		Lesser of lease term or 40 years
Vehicles		6 years
Machinery		20 years
Furniture, fixtures and equipment		5–10 years
Computers and software		3-5 years

Depreciation expense was $78,341 and $70,739 for the three months ended June 30, 2021 and 2020, respectively and $149,812 and $124,251 for the six months ended June 30, 2021 and 2020, respectively.

Impairment of Long-Lived Assets

In accordance with ASC 360-10, long-lived assets, property and equipment and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.

Goodwill and Intangibles, net

The Company periodically reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist. Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. Specifically, goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses level 3 inputs and a discounted cash flow methodology to estimate the fair value of a reporting unit. A discounted cash flow analysis requires one to make various judgmental assumptions including assumptions about future cash flows, growth rates, and discount rates. The assumptions about future cash flows and growth rates are based on the Company’s budget and long-term plans. Discount rate assumptions are based on an assessment of the risk inherent in the respective reporting units. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit.

On December 19, 2018, as a result of the acquisition of Cosmofarm, the Company recorded $49,697 of goodwill.

Intangible assets with definite useful lives are recorded on the basis of cost and are amortized on a straight-line basis over their estimated useful lives. The Company uses a useful life of 5 years for an import/export license. The Company evaluates the remaining useful life of intangible assets annually to determine whether events and circumstances warrant a revision to the remaining amortization period. If the estimate of the intangible asset’s remaining useful life is changed, the remaining carrying amount of the intangible asset will be amortized prospectively over that revised remaining useful life. As of June 30, 2021, no revision to the remaining amortization period of the intangible assets was made.

Amortization expense was $8,249 and $8,249 for the three months ended June 30, 2021 and 2020, respectively and $16,407 and $16,497 for the six months ended June 30, 2021 and 2020, respectively.

Equity Method Investment

For those investments in common stock or in-substance common stock in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, the investment is accounted for under the equity method. The Company will record its share in the earnings of the investee and will include it within the condensed consolidated statement of operations. The Company assesses its investment for other-than-temporary impairment when events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable and recognizes an impairment loss to adjust the investment to its then current fair value.

Investments in Equity Securities

Investments in equity securities are accounted for at fair value with changes in fair value recognized in net income (loss). Equity securities are classified as short-term or long-term based on the nature of the securities and their availability to meet current operating requirements. Equity securities that are readily available for use in current operations are reported as a component of current assets in the accompanying consolidated balance sheets. Equity securities that are not considered available for use in current operations would be reported as a component of long-term assets in the accompanying consolidated balance sheets. For equity securities with no readily determinable fair value, the Company elects a measurement alternative to fair value. Under this alternative, the Company measures the investments at cost, less any impairment, and adjusted for changes resulting from observable price changes in transactions for identical or similar investments of the investee. The election to use the measurement alternative is made for each eligible investment.

As of June 30, 2021, investments consisted of 3,000,000 shares, which traded at a closing price of $0 per share or a value of $0 of ICC International Cannabis Corp, 40,000 shares which traded at a closing price of $5.30 per share, or value of $211,368 of Diversa S.A. and 16,666 shares which traded at a closing price of $0.28 per share or value of $4,739 of National Bank of Greece. Additionally, the Company has $4,623 in equity securities of Pancreta Bank, which are not publicly traded and recorded at cost. See Note 3, for additional investments in equity securities.

Fair Value Measurement

The Company applies FASB ASC 820, Fair Value Measurements and Disclosures, (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

The following tables presents assets that are measured and recognized at fair value as of June 30, 2021 and December 31, 2020, on a recurring basis:

	June 30, 2021						Total Carrying
	Level 1		Level 2		Level 3		Value
Marketable securities – ICC International Cannabis Corp.	$	-		-		-	$	-
Marketable securities – Divsersa S.A.		211,368		-		-		211,368
Marketable securities – National Bank of Greece		4,739		-		-		4,739
	$	216,107					$	216,107

	December 31, 2020						Total Carrying
	Level 1		Level 2		Level 3		Value
Marketable securities – ICC International Cannabis Corp.	$	-		-		-	$	-
Marketable securities – Divsersa S.A.		218,183		-		-		218,183
Marketable securities – National Bank of Greece		4,609		-		-		4,609
	$	222,792					$	222,792

In addition, FASB ASC 825-10-25, Fair Value Option, (“ASC 825-10-25”), expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.

Customer Advances

The Company receives prepayments from certain customers for pharmaceutical products prior to those customers taking possession of the Company’s products; the Company records these receipts as customer advances until it has met all the criteria for recognition of revenue including passing control of the products to its customer, at such point the Company will reduce the customer and deposits balance and credit the Company’s revenues.

Revenue Recognition

In accordance with ASC 606, Revenue from Contracts with Customers, the Company uses a five-step model for recognizing revenue by applying the following steps: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the performance obligations are satisfied by transferring the promised goods to the customer. Once these steps are met, revenue is recognized upon transfer of the product to the customer.

Stock-based Compensation

The Company records stock-based compensation in accordance with ASC 718, Stock Compensation (“ASC 718”) and Staff Accounting Bulletin No. 107 (“SAB 107”) regarding its interpretation of ASC 718. ASC 718 requires the fair value of all stock-based employee compensation awarded to employees to be recorded as an expense over the related requisite service period. The Company values any employee or non-employee stock-based compensation at fair value using the Black-Scholes Option Pricing Model.

The Company accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASU 2018-07, “Compensation-Stock Compensation-Improvements to Nonemployee Share-Based Payment Accounting.”

Foreign Currency Translations and Transactions

Assets and liabilities of all foreign operations are translated at year-end rates of exchange, and the statements of operations are translated at the average rates of exchange for the year. Gains or losses resulting from translating foreign currency financial statements are accumulated in a separate component of stockholders’ deficit until the entity is sold or substantially liquidated.

Gains or losses from foreign currency transactions (transactions denominated in a currency other than the entity’s local currency) are included in net earnings.

Income Taxes

The Company accounts for income taxes under the asset and liability method, as required by the accounting standard for income taxes ASC 740. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as net operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company is liable for income taxes in Greece and the United Kingdom The corporate income tax rate is 22% in Greece and 19% in United Kingdom. Losses may also be subject to limitation under certain rules regarding change of ownership.

We regularly review deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if we do not consider it to be more likely than not that the deferred tax assets will be realized. Our review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets. At June 30, 2021 the Company has maintained a valuation allowance against all net deferred tax assets in each jurisdiction in which it is subject to income tax.

The Company periodically reviews the uncertainties and judgments related to the application of complex income tax regulations to determine income tax liabilities in several jurisdictions. The Company uses a “more likely than not” criterion for recognizing the income tax benefit of uncertain tax positions and establishing measurement criteria for income tax benefits. The Company has evaluated the impact of these positions and due to the fact that the fiscal years 2013 - 2014 are unaudited by the Greek tax authorities, a potential tax liability has not been identified because there is a limitation on periods that the Tax authorities can audit retrospectively 5 years prior to the current fiscal year. Therefore, no prospective tax audit from tax authorities may arise.

Retirement and Termination Benefits

Under Greek labor law, employees are entitled to lump-sum compensation in the event of termination or retirement. The amount depends on the employee’s work experience and renumeration as of the day of termination or retirement. If an employee remains with the company until full-benefit retirement, the employee is entitled to a lump-sum equal to 40% of the compensation to be received if the employee were to be dismissed on the same day. The Company periodically reviews the uncertainties and judgments related to the application of the relevant labor law regulations to determine retirement and termination benefits obligations of its Greek subsidiaries. The Company has evaluated the impact of these regulations and has identified a potential retirement and termination benefits liability. The amount of the liability as of June 30, 2021 and December 31, 2020, was $102,901 and $107,167 respectively, and has been recorded as a long-term liability within the condensed consolidated balance sheets.

Basic and Diluted Net Loss per Common Share

Basic income per share is calculated by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted income per share is calculated by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period and, when dilutive, potential shares from stock options and warrants to purchase common stock, using the treasury stock method. In accordance with ASC 260, Earnings Per Share, the following table reconciles basic shares outstanding to fully diluted shares outstanding.

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Weighted average number of common shares outstanding Basic		16,105,409		13,225,387		15,572,773		13,225,387
Potentially dilutive common stock equivalents		-		28,729		-		29,566
Weighted average number of common and equivalent shares outstanding - Diluted		16,105,409		13,254,116		15,572,773		13,254,953

Common stock equivalents are included in the diluted income per share calculation only when option exercise prices are lower than the average market price of the common shares for the period presented.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective January 1, 2024, for the Company. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. Management is currently evaluating the effect of the adoption of ASU 2020-06 on the consolidated financial statements.

Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements.

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ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN (Tables)

6 Months Ended

Jun. 30, 2021

ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN

Schedule of Property and equipment

	Estimated Useful Life
Leasehold improvements and technical works		Lesser of lease term or 40 years
Vehicles		6 years
Machinery		20 years
Furniture, fixtures and equipment		5–10 years
Computers and software		3-5 years

Fair value a measured and recognized asset

	June 30, 2021						Total Carrying
	Level 1		Level 2		Level 3		Value
Marketable securities – ICC International Cannabis Corp.	$	-		-		-	$	-
Marketable securities – Divsersa S.A.		211,368		-		-		211,368
Marketable securities – National Bank of Greece		4,739		-		-		4,739
	$	216,107					$	216,107

	December 31, 2020						Total Carrying
	Level 1		Level 2		Level 3		Value
Marketable securities – ICC International Cannabis Corp.	$	-		-		-	$	-
Marketable securities – Divsersa S.A.		218,183		-		-		218,183
Marketable securities – National Bank of Greece		4,609		-		-		4,609
	$	222,792					$	222,792

Basic and Diluted Net Loss per Common Share

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Weighted average number of common shares outstanding Basic		16,105,409		13,225,387		15,572,773		13,225,387
Potentially dilutive common stock equivalents		-		28,729		-		29,566
Weighted average number of common and equivalent shares outstanding - Diluted		16,105,409		13,254,116		15,572,773		13,254,953

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PROPERTY AND EQUIPMENT NET (Tables)

6 Months Ended

Jun. 30, 2021

PROPERTY AND EQUIPMENT, NET

Schedule of Property and equipment, net

	June 30, 2021			December 31, 2020
Leasehold improvements	$	543,451		$	560,711
Vehicles		101,183			105,057
Furniture, fixtures and equipment		1,597,143			1,632,654
Computers and software		142,216			149,005
		2,383,993			2,447,427
Less: Accumulated depreciation and amortization		(805,952	)		(690,214	)
Total	$	1,578,041		$	1,757,213

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GOODWILL AND INTANGIBLE ASSETS, NET (Tables)

6 Months Ended

Jun. 30, 2021

GOODWILL AND INTANGIBLE ASSETS, NET

Schedule of Goodwill and Intangible assets

	June 30, 2021			December 31, 2020
License	$	50,000		$	50,000
Trade name / mark		36,997			36,997
Customer base		176,793			176,793
		263,790			263,790
Less: Accumulated amortization		(99,388	)		(82,981	)
Subtotal		164,402			180,809
Goodwill		49,697			49,697
Total	$	214,099		$	230,506

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RELATED PARTY TRANSACTIONS (Tables)

6 Months Ended

Jun. 30, 2021

RELATED PARTY TRANSACTIONS

Schedule of related party notes payable

	2021			2020
Beginning Balance	$	501,675		$	1,375,532
Payments		-			(996,136	)
Foreign currency translation		(15,670	)		122,279
Ending Balance	$	486,005		$	501,675

Summary of related party loans payable

	2021			2020
Beginning Balance	$	1,629,246		$	1,026,264
Proceeds		2,811,062			725,563
Payments		(125,589	)		(149,695	)
Conversion of debt		(3,000,000	)		-
Settlement of lawsuit		(600,000	)		-
Foreign currency translation		(10,316	)		27,114
Ending Balance	$	704,403		$	1,629,246

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LINES OF CREDIT (Tables)

6 Months Ended

Jun. 30, 2021

LINES OF CREDIT

Summary of lines of credit

	June 30, 2021		December 31, 2020
National	$	3,093,644	$	3,540,550
Alpha		1,019,368		1,106,894
Pancretan		532,191		-
National - COVID		393,709		429,240
Total	$	5,038,912	$	5,076,684

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CONVERTIBLE DEBT (Tables)

6 Months Ended

Jun. 30, 2021

CONVERTIBLE DEBT

Summary of convertible debt

	2021			2020
Beginning balance convertible notes		1,447,000			1,500,000
New notes		100,000			540,000
Payments		(362,000	)		(593,000	)
Subtotal notes		1,185,000			1,447,000
Debt discount at year end		(418,504	)		(494,973	)
Convertible note payable net of discount		766,496			952,027

Derivative Liabilities

	Amount
Balance on December 31, 2020	$	460,728
Issuances to debt discount		62,619
Change in fair value of derivative liabilities		(85,869	)
Balance on June 30, 2021	$	437,478

Fair value of the derivative conversion features and warrant liabilities

	June 30, 2021
Dividend yield		0	%
Expected volatility	113.8%-139.0		%
Risk free interest rate	0.15%-0.18		%
Contractual terms (in years)	0.34 – 0.89

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DEBT (Tables)

6 Months Ended

Jun. 30, 2021

DEBT

Summary of debt

June 30, 2021	Loan Facility			Trade Facility			Third Party			COVID Loans			Total
Beginning balance		3,302,100			6,446,000			12,631,284			435,510			22,814,594
Proceeds		-			-			-			-			-
Payments		(20,000	)		-			-			-			(20,000	)
Conversion of debt		-			-			(3,010,000	)		-			(3,010,000	)
Foreign currency translation		(106,836	)		(76,400	)		(19,460	)		(10,740	)		(213,382	)
Subtotal		3,175,264			6,369,600			9,601,878			424,470			19,571,212
Reclass of long-term portion of debt		(2,582,864	)		(2,191,880	)		(5,460,759	)		-			(10,235,503	)
Ending Balance		592,400			4,177,720			4,141,119			424,470			9,335,709

December 31, 2020	Loan Facility			Bridge Loans			Trade Facility			Third Party			COVID Loans		Total
Beginning balance		3,078,442			191,287			6,245,400			2,514,595			-		12,029,724
Proceeds		-			-			-			16,121,500			435,210		16,556,710
Payments		-			(191,287	)		-			(5,006,115	)		-		(5,230,725	)
Conversion of debt											(807,795	)				(807,795	)
Debt extinguishment		(12,066	)		-			-			(192,205	)		-		(204,271	)
Foreign currency translation		269,047			-			200,600			1,304			-		470,951
Subtotal		3,302,100			-			6,446,000			12,631,284			435,210		22,814,594
Reclass of long-term portion of debt		(2,843,475	)		-			(2,384,850	)		(5,543,557	)		-		(10,771,882	)
Ending Balance		458,625			-			4,061,150			7,087,727			435,210		12,042,712

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LEASES (Tables)

6 Months Ended

Jun. 30, 2021

LEASES

Summary of operating leases

Maturity of Lease Liability
Remainder of 2021	$	115,368
2022		228,112
2023		203,409
2024		118,978
2025		114,856
Thereafter		431,790
Total undiscounted operating lease payments	$	1,212,513
Less: Imputed interest		(243,054	)
Present value of operating lease liabilities	$	969,459

Summary of finance leases

Maturity of Lease Liability
Remainder of 2021	$	51,377
2022		86,663
2023		74,113
2024		55,762
2025		24,823
Thereafter		589
Total undiscounted finance lease payments	$	293,327
Less: Imputed interest		(32,302	)
Present value of finance lease liabilities	$	261,025

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STOCK OPTIONS AND WARRANTS (Tables)

6 Months Ended

Jun. 30, 2021

STOCK OPTIONS AND WARRANTS

Summary of warrant activity during year

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
Options	Shares			Price		Term		Value
Balance Outstanding, December 31, 2020		62,000		$	1.19		0.60	$	242,200
Granted		-			-		-		-
Forfeited		-			-		-		-
Exercised		-			-		-		-
Expired		(25,000	)		-		-		-
Balance Outstanding, June 30, 2021		37,000		$	1.32		0.51	$	147,100
Exercisable, June 30, 2021		37,000		$	1.32		0.51	$	147,100

Schedule of option activity after three year

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Number of		Exercise		Contractual		Intrinsic
Warrants	Shares		Price		Term		Value
Balance Outstanding, December 31, 2020		1,164,673	$	6.41		3.01	$	5,360
Granted		-		-		-		-
Forfeited		-		-		-		-
Exercised		-		-		-		-
Expired		-		-		-		-
Balance Outstanding, June 30, 2021		1,164,673	$	6.41		2.52	$	16,080
Exercisable, June 30, 2021		1,164,673	$	6.41		2.52	$	16,080

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DISAGGREGATION OF REVENUE (Tables)

6 Months Ended

Jun. 30, 2021

DISAGGREGATION OF REVENUE

Schedule of Revenue disaggregated by country

	June 30,		June 30,
Country	2021		2020
France	$	-		-
Germany		3		125,238
Greece		14,504,869		11,967,758
Hungary		-		100
Ireland		-		(9	)
Italy		4		16,007
Jordan		-		(95	)
Denmark		14		-
Cyprus		64,225		-
UK		265,828		697,609
Croatia		11,982		8,617
Libya		-		-
Netherlands		-		4,797
Poland		-		(50	)
Total	$	14,846,925	$	12,819,972

Country	June 30, 2021		June 30, 2020
Croatia	$	11,982	$	8,617
Denmark		54,700		-
France		-		1,091
Germany		13,617		792,540
Greece		25,958,364		22,657,446
Hungary		-		36,240
Ireland		-		35,104
Italy		15,731		22,048
Jordan		-		9,322
Libya				41,972
Netherlands		-		38,252
Poland		-		28,352
Cyprus		78,948		-
UK		332,659		1,082,236
Total	$	26,466,001	$	24,753,220

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ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN (Details)	6 Months Ended
	Jun. 30, 2021
Furniture, fixtures and equipment [Member] | Minimum [Member]
Estimated Useful Life	5 years
Furniture, fixtures and equipment [Member] | Maximum [Member]
Estimated Useful Life	10 years
Computers and software [Member] | Minimum [Member]
Estimated Useful Life	3 years
Computers and software [Member] | Maximum [Member]
Estimated Useful Life	5 years
Leasehold improvements and technical works [Member]
Estimated useful life, description	Lesser of lease term or 40 years
Machinery [Member]
Estimated Useful Life	20 years
Vehicles [Member]
Estimated Useful Life	6 years

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ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN (Details 1) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Fair value of assets and liabilities	$ 216,107	$ 222,792
Level 1 [Member]
Fair value of assets and liabilities	216,107	222,792
Marketable securities - ICC International Cannabis Corp. [Member]
Fair value of assets and liabilities	0	0
Marketable securities - ICC International Cannabis Corp. [Member] | Level 2 [Member]
Fair value of assets and liabilities	0	0
Marketable securities - ICC International Cannabis Corp. [Member] | Level 3 [Member]
Fair value of assets and liabilities	0	0
Marketable securities - ICC International Cannabis Corp. [Member] | Level 1 [Member]
Fair value of assets and liabilities	0	0
Marketable securities - National Bank of Greece [Member]
Fair value of assets and liabilities	4,739	4,609
Marketable securities - National Bank of Greece [Member] | Level 2 [Member]
Fair value of assets and liabilities	0	0
Marketable securities - National Bank of Greece [Member] | Level 3 [Member]
Fair value of assets and liabilities	0	0
Marketable securities - National Bank of Greece [Member] | Level 1 [Member]
Fair value of assets and liabilities	4,739	4,609
Marketable securities - Divsersa S.A. [Member]
Fair value of assets and liabilities	211,368	218,183
Marketable securities - Divsersa S.A. [Member] | Level 2 [Member]
Fair value of assets and liabilities	0	0
Marketable securities - Divsersa S.A. [Member] | Level 3 [Member]
Fair value of assets and liabilities	0	0
Marketable securities - Divsersa S.A. [Member] | Level 1 [Member]
Fair value of assets and liabilities	$ 211,368	$ 218,183

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ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN (Details 2) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
BASIS OF PRESENTATION
Weighted average number of common shares outstanding Basic	16,105,409	13,225,387	15,572,773	13,225,387
Potentially dilutive common stock equivalents		28,729		29,566
Weighted average number of common and equivalent shares outstanding - Diluted	16,105,409	13,254,116	15,572,773	13,254,953

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ORGANIZATION NATURE OF BUSINESS AND GOING CONCERN (Details Narrative) - USD ($)	3 Months Ended				6 Months Ended		12 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Account payable accrued expense	$ 260,347				$ 260,347
Accrued interest expense					188,923
Revenue	14,846,925		$ 12,819,972		$ 26,466,001	$ 24,753,220
Income tax term					5 years
Allowance for doubtful accounts					$ 687,340		$ 715,845
Sales and marketing expenses	139,633		380,326		544,725	434,056
Net loss	(2,379,056)	$ (2,173,903)	1,377,311	$ (483,310)	(4,552,959)	894,001
Working capital deficit	(10,417,725)				(10,417,725)
Cash used in operation					2,519,394
Accumulated deficit	(23,303,783)				(23,303,783)		(18,750,824)
Depreciation expense	78,341		70,739		149,812	124,251
Amortization expense	8,249		8,249		16,407	16,497
Goodwill	49,697				49,697		49,697
Potential retirement and termination benefits liability	102,901				$ 102,901		$ 107,167
Import/export license [Member]
Estimated Useful Life					5 years
Greece [Member]
Revenue	14,504,869		$ 11,967,758		$ 25,958,364	$ 22,657,446
Income tax rate					22
United Kingdom Of England [Member]
Income tax rate					19
Pancreta Bank [Member]
Additional investments in equity securities					$ 4,623
Diversa S.A. [Member]
Equity method investment shares acquired, shares					40,000
Equity method investment shares acquired, value	211,368				$ 211,368
Closing price					5.30
National Bank of Greece [Member]
Equity method investment shares acquired, shares					16,666
Equity method investment shares acquired, value	4,739				$ 4,739
Closing price					0.28
ICC International Cannabis Corp [Member]
Equity method investment shares acquired, shares					3,000,000
Equity method investment shares acquired, value	$ 0				$ 0
Closing price					5.30

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MARKETABLE SECURITIES (Details Narrative)	1 Months Ended		6 Months Ended
	Jul. 16, 2018 USD ($) shares	May 17, 2018 USD ($) shares	Jun. 30, 2021 USD ($) $ / shares shares	Jun. 30, 2021 CAD ($)	Jun. 30, 2021 EUR (€)	Dec. 31, 2020 USD ($)	Jun. 30, 2019
Net unrealized loss on fair value investment			$ 440
Marketable securities - Divsersa S.A. [Member]
Closing price of shares | $ / shares			$ 5.24
Shares issued as marketable securities | shares			40,000
Marketable securities - National Bank of Greece [Member]
Closing price of shares | $ / shares			$ 0.29
Marketable securities			$ 4,854
Shares issued as marketable securities | shares			16,666
Stock issued during the period, amount			$ 209,495
Cosmo Farmacy LP [Member]
Investement			$ 176,145
Initial share capital | €					€ 150,000
Initial share capital increased | €					500,000
Pharmacy license value | €					€ 350,000
Maturity period of license			30 years	30 years	30 years
Ownership equity							70.00%
cash contributed to limited partner | €					€ 150,000
Equity ownership remaining							30.00%
Marathon Global Inc [Member] | Distribution and Equity Acquisition Agreement [Member]
Upfront cash received				$ 2,000,000
Equity interest acquired description			a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services	a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services	a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services
Agreement term			5 years	5 years	5 years
Marathon Global Inc [Member] | Distribution and Equity Acquisition Agreement [Member] | Gross Sales One [Member]
Cash received upon gross sales				$ 2,750,000
Gross sales				13,000,000
Marathon Global Inc [Member] | Distribution and Equity Acquisition Agreement [Member] | Gross Sales [Member]
Upfront cash received				$ 2,000,000
Equity interest acquired description			a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services	a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services	a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services
Agreement term			5 years	5 years	5 years
Cash received upon gross sales				$ 2,750,000
Gross sales				6,500,000
Marathon Global Inc [Member] | Share Exchange Agreement [Member]
Shares of Marathon transferred by company to KBB | shares	2,500,000
Gain on exchange of investment	$ 2,092,200	$ 1,953,000
ICC [Member] | Share Exchange Agreement [Member]
Net unrealized loss on fair value investment			$ 0
Upfront cash received				$ 2,000,000
Investement			$ 0			$ 0
Equity method investment shares acquired | shares	5,000,000
Description for ownership percentage	The ten million shares of ICC owned by the Company constituted approximately 7% of the 141,219,108 shares of capital stock of KBB then issued and outstanding. The Company does not have the ability to exercise significant influence over ICC		Since no value was attributed to the 33 1/3% equity ownership interest in Marathon received as consideration for the distribution services, the Company would receive variable consideration in future for its services under the Distribution and Equity Acquisition Agreement	Since no value was attributed to the 33 1/3% equity ownership interest in Marathon received as consideration for the distribution services, the Company would receive variable consideration in future for its services under the Distribution and Equity Acquisition Agreement	Since no value was attributed to the 33 1/3% equity ownership interest in Marathon received as consideration for the distribution services, the Company would receive variable consideration in future for its services under the Distribution and Equity Acquisition Agreement
Additional shares issued, shares | shares			3,000,000
Additional shares issued, amount			$ 0
Kaneh Bosm Biotechnology Inc [Member] | Share Exchange Agreement [Member]
Transfer of shares | shares		2,500,000
Kaneh Bosm Biotechnology Inc [Member] | Share Exchange Agreement [Member] | Canadian Securities Exchange [Member]
Exchange of shares | shares		5,000,000
May and July 2018 [Member] | Marathon Global Inc [Member]
Consideration for the distribution services, shares			$ 5,000,000

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PROPERTY PLANT AND EQUIPMENT (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Property plant and equipment	$ 2,383,993	$ 2,447,427
Less: Accumulated depreciation	(805,952)	690,214
Total	1,578,041	1,757,213
Computers and software [Member]
Property plant and equipment	142,216	149,005
Leasehold Improvements [Member]
Property plant and equipment	543,451	560,711
Vehicles [Member]
Property plant and equipment	101,183	105,057
Furniture, fixtures and equipment [Member]
Property plant and equipment	$ 1,597,143	$ 1,632,654

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GOODWILL AND INTANGIBLE ASSETS, NET (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Goodwill and intangible assets, gross	$ 263,790	$ 263,790
Less: Accumulated Amortization	(99,388)	(82,981)
Subtotal	164,402	180,809
Goodwill	49,697	49,697
Total	214,099	230,506
Customer Base [Member]
Goodwill and intangible assets, gross	176,793	176,793
Trade name / mark [Member]
Goodwill and intangible assets, gross	36,997	36,997
License [Member]
Goodwill and intangible assets, gross	$ 50,000	$ 50,000

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INCOME TAXES (Details Narrative) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Deferred tax assets	$ (107,646)	$ 0
United States [Member]
Deferred tax assets	$ 286,329		$ 178,430
Federal Statutory Income Tax Rate, description			The corporate tax rate in the United Kingdom is 19% on income reported in the statutory financial statements after appropriate tax adjustments

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CAPITAL STRUCTURE (Details Narrative) - USD ($)		1 Months Ended							3 Months Ended		6 Months Ended
	Feb. 05, 2021	Jun. 23, 2021	Nov. 30, 2020	Oct. 31, 2020	Sep. 30, 2020	Aug. 31, 2020	Jul. 31, 2020	Jun. 20, 2019	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2021	Dec. 31, 2020	Oct. 29, 2020
Common stock, shares, outstanding									16,216,619		16,216,619	13,069,800
Common stock, shares issued									16,566,947		16,566,947	15,716,619
Common stock shares authorized									300,000,000		300,000,000	300,000,000
Restricted shares of Common stock										1,800,000
Stock earned per month										200,000
Stock-based compensation									$ 3,157,451		$ 3,157,451
Stock-based compensation, shares earned										1,000,000
Retained agreement descriptions										The Consultant retained 800,000 of the 1,800,000 shares and agreed with an assignee and the Company that 1,600,000 of the 1,800,000 shares shall be held in book entry for six (6) months from the date of this Agreement, subject to the above claw back. The shares valued on the date of the agreement at $3.28 per share or $5,904,000, which will be amortized over the term of the agreement
Preferred stock shares authorized									100,000,000		100,000,000	100,000,000
Debt Exchange Agreement [Member]
Common stock, shares issued													259,741
Principal amount		$ 3,000,000
Exchange rate		$ 6.00
Share issued price per share													$ 3.85
Debt Exchange Agreement [Member] | Lender [Member]
Principal amount		$ 3,000,000
Exchange rate		$ 6.00
Exchange share of common stock		500,000
Capital contribution									$ 3,000,000		$ 3,000,000
Share issued price per share		$ 5.00
Stock Purchase Agreement [Member] | Shareholder [Member] | February [Member]
Treasury stock sell	65,000
Stock held in treasury, value	$ 250,000
Share price	$ 3.85
Stock Purchase Agreement [Member] | Shareholder [Member] | Sepetember [Member]
Payment made against shares purchased												$ 40,000
Common stock, shares purchased					10,000
Common stock, purchase price					$ 4.00
Aggregate common stock value					$ 40,000
Stock Purchase Agreement [Member] | Shareholder [Member] | July [Member]
Payment made against shares purchased												40,000
Common stock, shares purchased							10,000
Common stock, purchase price							$ 4.00
Aggregate common stock value							$ 40,000
Stock Purchase Agreement [Member] | Shareholder [Member] | August [Member]
Payment made against shares purchased												40,000
Common stock, shares purchased						10,000
Common stock, purchase price						$ 4.00
Aggregate common stock value						$ 40,000
Stock Purchase Agreement [Member] | Shareholder [Member] | October [Member]
Payment made against shares purchased												40,000
Common stock, shares purchased				10,000
Common stock, purchase price				$ 4.00
Aggregate common stock value				$ 40,000
Stock Purchase Agreement [Member] | Shareholder [Member] | November [Member]
Payment made against shares purchased												$ 40,000
Common stock, shares purchased			10,000
Common stock, purchase price			$ 4.00
Aggregate common stock value			$ 40,000
Stock Purchase Agreement [Member] | Former Officer and Director [Member]
Consideration for stock purchase								$ 15,000

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RELATED PARTY TRANSACTIONS (Details) - Notes Payable - Related Party [Member] - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Beginning Balance	$ 501,675	$ 1,375,532
Payments	0	(996,136)
Foreign currency translation	(15,670)	122,279
Ending Balance	$ 486,005	$ 501,675

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RELATED PARTY TRANSACTIONS (Details 1) - USD ($)		6 Months Ended		12 Months Ended
	Jul. 14, 2021	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Conversion of debt	$ (150,000)	$ (2,564,364)	$ 0
Loans Payable - Related Party [Member]
Beginning Balance		1,629,246		$ 1,026,264
Proceeds		2,811,062		725,563
Payments		(125,589)		(149,695)
Conversion of debt		(3,000,000)		0
Settlement of lawsuit		(600,000)		0
Foreign currency translation		(10,316)		27,114
Ending Balance		$ 704,403		$ 1,629,246

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RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)			1 Months Ended	3 Months Ended				6 Months Ended		12 Months Ended
	May 10, 2021	Oct. 10, 2020	Jun. 23, 2021	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 20, 2018	Dec. 31, 2020
Borrowing				$ 1,184,800				$ 1,184,800			$ 1,123,000
Accounts payable and accrued expenses				12,449,944				12,449,944			11,973,981
Accrued interest				953,625				953,625			742,374
Net loss				(2,379,056)	$ (2,173,903)	$ 1,377,311	$ (483,310)	(4,552,959)	$ 894,001
Revenue				14,846,925		12,819,972		26,466,001	24,753,220
Grigorios Siokas Four [Member]
Borrowing				1,529,500				1,529,500
Grigorios Siokas [Member]
Borrowing										$ 1,718,400
Litigation settlement	$ 600,000
Plantiff attorney fees	120,000
Litigation cost	$ 4,137
Accounts payable and accrued expenses				124,137				124,137
Forgiveness to additional paid in capital				600,000				600,000
Outstanding principal balance				473,920				473,920			489,200
Accrued interest				240,535				240,535			193,585
Interest rate										4.70%
Maturity date										Mar. 18, 2019
Grigorios Siokas Three [Member]
Outstanding principal balance				704,403				704,403			1,629,246
Convertible share description			Mr. Siokas whereby an aggregate total of $3,000,000 of these outstanding loans were converted into 500,000 shares of the Company’s common stock
Net loss								10,316
Additional proceeds from debt				1,281,562
Repayment of loans				(125,589)
Foreign curreny translation				(20,577)
Dimitrios Goulielmos [Member]
Outstanding principal balance				12,085				12,085			12,475
Foreign curreny translation				(19,977)
DOC Pharma S.A. [Member]
Payments to purchase products				1,091,118		644,643		1,413,924	1,315,274
Accounts payable balance				177,161				177,161
Accounts receivable balance				3,135,184				3,135,184			3,468,564
Prepaid balance				3,522,041				3,522,041			$ 3,468,653
Net prepaid balance				2,740,173				2,740,173
Revenue				$ 523,712		$ 1,107,822		$ 796,917	$ 1,469,365
DOC Pharma S.A. [Member] | Outsourcing Agreement [Member]
Pieces per product		1,000
Inventroy purchase		$ 599,344
Agreement term		5 years

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LINES OF CREDIT (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Lines of credit	$ 5,038,912	$ 5,076,684
National - COVID [Member]
Lines of credit	393,709	429,240
Pancretan [Member]
Lines of credit	532,191	0
Alpha [Member]
Lines of credit	1,019,368	1,106,894
National [Member]
Lines of credit	$ 3,093,644	$ 3,540,550

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LINES OF CREDIT (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Jun. 23, 2020
Borrowing	$ 1,184,800		$ 1,184,800		$ 1,123,000
Interest rate			4.35%
Lines of credit	5,038,912		$ 5,038,912		5,076,684
Line of Credit [Member]
Interest expense	0		0
Line of Credit [Member] | National Bank of Greece One [Member]
Borrowing	2,606,560		$ 2,606,560		$ 2,690,600
Interest rate			4.35%		6.00%
Outstanding debt balance	2,103,897		$ 2,103,897		$ 2,411,182
National Bank of Greece Two [Member] | Line of Credit [Member]
Borrowing						$ 611,500
Interest rate			2.70%
Lines of credit	393,709		$ 393,709		429,240
Line of credit, description			The proposed plan has a maturity date of sixty (60) months from the date of the first disbursement, which includes a grace period of nine months. The total amount of the initial proceeds were paid in 3 equal monthly installments. The line of credit is interest bearing from the date of receipt and is payable every three (3) months at an interest rate of 2.7%
Eurobank Bank of Greece [Member] | Line of Credit [Member]
Borrowing	592,400		$ 592,400
Lines of credit	532,191		$ 532,191
Interest rate			6.10%
Interest expense	137,089	$ 92,747	$ 153,589	$ 110,420
Alpha Bank of Greece [Member] | Line of Credit [Member]
Borrowing	1,184,800		1,184,800		1,223,000
Lines of credit	1,019,368		1,019,368		1,106,894
Outstanding debt balance	$ 989,746		$ 989,746		$ 1,129,368

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CONVERTIBLE DEBT (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
DEBT
Beginning balance notes	$ 1,447,000	$ 1,500,000
New notes	100,000	540,000
Payments	(362,000)	(593,000)
Subtotal notes	1,185,000	1,447,000
Debt discount at year end	(418,504)	(494,973)
Convertible note payable net of discount	$ 766,496	$ 952,027

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CONVERTIBLE DEBT (Details 1)	6 Months Ended
	Jun. 30, 2021 USD ($)
DEBT
Change in fair value of derivative liabilities	$ (85,869)
Balance on June 30, 2021, ending balance	437,478
Balance on December 31, 2020, beginning balance	460,728
Issuances to debt discount	$ 62,619

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CONVERTIBLE DEBT (Details 2)	6 Months Ended
	Jun. 30, 2021
Dividend yield	0.00%
Maximum [Member]
Expected life	10 months 20 days
Risk-free interest rate	0.18%
Expected volatility	139.00%
Minimum [Member]
Expected life	4 months 2 days
Risk-free interest rate	0.15%
Expected volatility	113.80%

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CONVERTIBLE DEBT (Details Narrative) - USD ($)		1 Months Ended					3 Months Ended	6 Months Ended		12 Months Ended
	Sep. 04, 2018	Jun. 18, 2021	Dec. 21, 2020	Sep. 23, 2020	Mar. 23, 2020	Jun. 17, 2019	Jun. 30, 2021	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Jul. 14, 2021	Jan. 07, 2021	May 17, 2019
Interest expense							$ 3,735	$ 3,735
Forbearance period description		The Scheduled Required Prepayments are $62,000 upon the first scheduled required prepayment and five (5) payments thereafter aggregating $287,000 with the remainder outstanding under the Note due on November 16, 2021
Convertible notes payable, principal amount													$ 100,000
Conversion price												$ 3.165
Amortization of debt discount								$ 139,088	$ 29,509
Common stock, par value							$ 0.001	$ 0.001		$ 0.001
Change in fair value of derivative liability								$ (85,869)
Forbearance and Amendment Agreement [Member]
Exercise price					$ 6.0
Prepayment amount				$ 63,000	$ 100,000
Aggregate outstanding amount				480,000	$ 200,000
Remaining outstanding amount				$ 607,000
Event of default descriptions				The Note provides that upon an Event of Default, the Buyer may, among other things, require the Company to redeem all or a portion of the Note at a redemption premium of 120%, multiplied by the product of the conversion rate ($6.00per share) and the then current market price.
Breach of agreement description				the time of any breach by the Company of the Agreement or the occurrence of an Event of Default that is not an Existing Default (the “Forbearance Expiration Date), (b) during the Forbearance Period (as defined) waive the prepayment premium to any Company Optional Redemption (which will result in the 120% redemption premium effectively replaced with 100%), and (c) during the Forbearance Period, waive the repayment in full of the Note other than the Required Payments (as defined) prior to June 16, 2021
December 16, 2020 [Member]
Amortization amount								499,570
Amortization of debt discount							$ 71,641	109,865
Change in fair value of derivative liability							21,572	65,787
Debt original issue discount							43,000	43,000
Fair value of derivative liability							394,941	394,941
Embedded derivative liability								456,570
January 7, 2021 [Member]
Amortization amount								29,223
Change in fair value of derivative liability							4,924	22,082
Fair value of derivative liability							40,537	40,537
Embedded derivative liability								$ 62,619
Subscription Agreement [Member]
Convertible notes payable, principal amount													$ 100,000
Discount Price								25.00%
Interest rate								8.00%
Securities Purchase Agreement [Member] | Convertible Promissory Note [Member]
Interest expense							23,400	$ 23,400
Convertible notes payable, principal amount							540,000	540,000
Event of default conversion price, description			The Conversion Price shall equal the Variable Conversion Price (subject to stock splits, dividends, rights offerings or similar events) shall mean seventy-five percent (75%) multiplied by the Market Price defined as the average of the three (3) lowest trading prices for common stock during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date.
Debt original issue discount			$ 40,000
Event of default descriptions			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 below) or (iii), an Event of Default (as defined below) (collectively, the “Maturity Date
Financing cost			$ 3,000
Interest rate			8.00%
Note issued			$ 540,000
Note issued upon exchange for cash			$ 500,000
Securities Purchase Agreement [Member] | Holder [Member] | May 2019 Note [Member]
Interest expense							18,102	18,102
Convertible notes payable, principal amount							545,000	545,000			$ 907,000
Accrued expense							$ 15,420	$ 15,420			$ 15,420
Common stock shares issuable upon conversion of debt/convertible securities							250,000	250,000
Conversion price							$ 6.00	$ 6.00
Event of default conversion price, description								Upon an Event of Default (regardless of whether such event has been cured), the Buyer may convert at an alternative conversion price equal to the lower of the then applicable Conversion Price or seventy-five (75%) percent of the then Volume-Weighted Average Price (as defined, the “VWAP”).
Payment amount to related party								$ 12,000,000
Customary events of default, description								The May 2019 Note includes customary Events of Default and provides that the Buyer may require the Company to redeem (regardless of whether the Event of Default has been cured) all or a portion of the Note at a redemption premium equal to the greater of: (i) the product of the redemption premium of one hundred twenty-five (125%) percent, multiplied by the conversion amount, and (ii) the product of the conversion rate ($6.00 per share) multiplied by the product of 125% multiplied by the then current market price. The Buyer may also require redemption of the May 2019 Note upon a Change of Control (as defined) at a premium of one hundred twenty-five (125%) percent. The Company has the right to redeem the May 2019 Note at any time, in whole or in part, in cash at a price equal to 120% of the then outstanding conversion amount
Terms of Blocker Provision								common stock would exceed 9.99% of the Company’s issued and outstanding common stock
Repayment of amount								$ 362,000
Securities Purchase Agreement [Member] | Holder [Member] | September 2018 Notes [Member]
Event of default conversion price, description	Upon an Event of Default (regardless of whether such event has been cured), the Buyers may convert at an alternative conversion price equal to the lower of the then applicable Conversion Price or seventy-five (75%) percent of the then Volume-Weighted Average Price (as defined, the “VWAP”).
Customary events of default, description	The Note at a redemption premium of one hundred twenty-five (125%) percent, multiplied by the greater of the conversion rate and the then current market price. The Buyer may also require redemption of the May 2019 Note upon a Change of Control (as defined) at a premium of one hundred twenty-five (125%) percent. The Company has the right to redeem the May 2019 Note at any time, in whole or in part, in cash at a price equal to 120% of the then outstanding conversion amount.
Common stock, par value	$ 6.00
Securities Purchase Agreement [Member] | Institutional Investor [Member]
Convertible notes payable, principal amount														$ 1,500,000
Amortization amount								90,491
Amortization of debt discount								$ 38,224		$ 29,509
Common stock, par value														$ 0.001
Legal fees						$ 30,000
Cash commission description											Roth Capital Partners, LLC (“Roth”), as the Company’s exclusive placement agent, received a cash commission for this transaction equal to six (6%) percent of the total gross proceeds of the offering. This 6% fee or $90,000 was recorded as debt discount along with the $30,000 in legal fees associated with the May 2019 Note

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DEBT (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Beginning balance loans			$ 22,814,594		$ 12,029,724
Proceeds			0		16,556,710
Payments			(20,000)		(5,230,725)
Conversion of debt			(3,010,000)		807,795
Debt extinguishment			(204,271)		(204,271)
Foreign currency translation	$ 284	$ 182,840	(473,294)	$ 39,078	470,951
Subtotal			19,571,212		22,814,594
Reclass of long-term portion of debt			(10,235,503)		(10,771,882)
Ending balance loans			9,335,709		12,042,712
Bridge Loans [Member]
Proceeds			0		0
Conversion of debt			0
Debt extinguishment			0
Foreign currency translation			0		0
Subtotal			0		0
Reclass of long-term portion of debt			0		0
Beginning balance loans			0		191,287
Payments					(191,287)
Ending balance loans			0		0
Loan Facility [Member]
Proceeds			0		0
Conversion of debt			0
Debt extinguishment			0		(12,066)
Foreign currency translation			(106,836)		269,047
Subtotal			3,175,264		3,302,100
Reclass of long-term portion of debt			(2,582,864)		(2,843,475)
Payments			(20,000)		0
Beginning balance loans			3,302,100		3,078,442
Ending balance loans			592,400		458,625
Third Party [Member]
Conversion of debt			(3,010,000)		(807,795)
Debt extinguishment			0		(192,205)
Foreign currency translation			(19,460)		1,304
Subtotal			9,601,878		12,631,284
Reclass of long-term portion of debt			(5,460,759)		(5,543,557)
Payments			0		(5,006,115)
Beginning balance loans			12,631,284		2,514,595
Proceeds			0		16,121,500
Ending balance loans			4,141,119		7,087,727
COVID Loans [Member]
Beginning balance loans			435,510		0
Proceeds			0		435,210
Payments			0		0
Conversion of debt			0
Debt extinguishment			0		0
Foreign currency translation			(10,740)		0
Subtotal			424,470		435,210
Reclass of long-term portion of debt			0		0
Ending balance loans			424,470		435,210
Trade Facility [Member]
Proceeds			0		0
Payments			0		0
Debt extinguishment			0		0
Foreign currency translation			(76,400)		200,600
Subtotal			6,369,600		6,446,000
Reclass of long-term portion of debt			(2,191,880)		(2,384,850)
Beginning balance loans			6,446,000		6,245,400
Ending balance loans			$ 4,177,720		$ 4,061,150

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DEBT (Details Narrative)									1 Months Ended						3 Months Ended	6 Months Ended			12 Months Ended
	Feb. 05, 2021 USD ($) shares	Aug. 04, 2020 USD ($)	May 12, 2020 USD ($)	May 08, 2020 USD ($)	May 05, 2020 USD ($)	May 12, 2018 USD ($)	May 12, 2017 USD ($)	Aug. 04, 2016	Nov. 19, 2020 USD ($)	Jun. 24, 2020 USD ($)	May 18, 2020 USD ($)	Feb. 25, 2020 USD ($)	Oct. 17, 2018 USD ($)	May 31, 2018 USD ($)	Mar. 31, 2021 shares	Jun. 30, 2021 USD ($) shares	Jun. 30, 2021 CAD ($) shares	Jun. 30, 2021 EUR (€) shares	Dec. 31, 2020 USD ($) shares	Dec. 31, 2019 USD ($)	Dec. 20, 2018	Jan. 07, 2021 USD ($)	Oct. 29, 2020 USD ($) $ / shares shares	Jul. 03, 2020 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Nov. 16, 2017 USD ($)	Nov. 16, 2015 USD ($)
Loan received from related party			$ 337,110							$ 69,030						$ 355,440			$ (807,795)	$ 3,010,000
Decription of loan payment for interest	the Company of 781,819 shares of common stock (the “Exchange Shares”), at the rate of $3.85 per share, in exchange for an aggregate of $3,010,000 principal amount of existing loans made by the Lender to the Company. The market price at the time this Agreement was negotiated was $3.28 per share		The loan will be repaid in 40 equal monthly instalments beginning on January 1, 2022 and bears an interest rate of 0.94% per annum							the Company received a loan £50,000 ($61,845) from the United Kingdom government. The loan has a six-year maturity and bears interest at a rate of 2.5% per annum beginning 12-months after the initial disbursement
Common stock exchange shares | shares	781,819
Gain on debt extinguisment	$ 445,636
Unpaid interest	$ 563,613
Accrued expenses																260,347
Accrued interest expense																$ 188,923
Restricted shares | shares															1,800,000
Convertible notes payable, principal amount																						$ 100,000
Common stock share issued | shares																16,566,947			15,716,619
Distribution and Equity Acquisition Agreement [Member] | Marathon Global Inc [Member] | Gross Sales [Member]
Cash received upon gross sales																	$ 2,750,000
Gross sales																	$ 13,000,000
Equity interest acquired description																a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services	a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services	a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services
Upfront cash received																	$ 2,000,000
Agreement term																5 years	5 years	5 years
Distribution and Equity Acquisition Agreement [Member] | Marathon Global Inc [Member]
Equity interest acquired description																a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services	a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services	a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services
Upfront cash received																	$ 2,000,000
Agreement term																5 years	5 years	5 years
Distribution and Equity Acquisition Agreement [Member] | Marathon Global Inc [Member] | Gross Sales One [Member]
Cash received upon gross sales																	$ 2,750,000
Gross sales																	$ 6,500,000
Trade Facility [Member]
Payment of interest and principal														$ 1,123,600
Synthesis facility agreement [Member] | TFF [Member]
Debt outstanding amount													$ 5,629,555
Accrued expenses													$ 524,094			$ 402
Description for amendment to agreement under ASU 470-50													The Company evaluated the amended agreement under ASC 470-50 and concluded that it did not meet the 10% cash flow test and recorded debt modification expense of $138,110.
Debt modification expense													$ 138,110
Synthesis facility agreement [Member] | TFF [Member] | Principal balance 2 [Member]
Accrued expenses																14,800			$ 16,185
Notes payable long term																2,191,880			2,384,850
Maturity date													Aug. 31, 2021
Convertible notes payable, principal amount																2,369,600			2,446,000
Debt split, balance													$ 4,000,000			$ 4,000,000			4,000,000
Interest rate description													6% per annum plus one-month Libor on the USD balance			the Company had accrued $11,250 and $26,231 respectively, in interest expense related to these agreements.	the Company had accrued $11,250 and $26,231 respectively, in interest expense related to these agreements.	the Company had accrued $11,250 and $26,231 respectively, in interest expense related to these agreements.
Repayment of debt, periodic payments													$ 150,000
Frequency of periodic payments													quarterly
Debt Exchange Agreement [Member]
Debt outstanding amount									$ 611,500							$ 592,400							$ 2,000,000
Accrued expenses																8,856							8,514
Notes payable long term									543,557							489,294
Convertible notes payable, principal amount									$ 611,500							2,000,000			2,000,000				$ 1,000,000
Agreement description									The note matures on November 18, 2025 and bears an annual interest rate, based on a 360-day year, of 3.3% plus .6% plus 6-month Euribor when Euribor is positive. Pursuant to the terms of the agreement, there is a six-month grievance from the first deposit date, which was November 19, 2020, for principal repayment. The principal is to be repaid in 18 quarterly installments of €27,000 with the first payment due 9 months from the first deposit
Common stock share issued | shares																							259,741
Share issued price per share | $ / shares																							$ 3.85
Gain on shares																							$ 192,205
July 3, 2020 [Member] | Senior Promissory Notes [Member]
Debt outstanding amount																$ 5,000,000			5,000,000					$ 5,000,000
Interest rate																18.00%	18.00%	18.00%
Accrued expenses																$ 259,149			146,685
October 23, 2019 [Member] | Senior Promissory Notes [Member]
Maturity date																Oct. 23, 2020	Oct. 23, 2020	Oct. 23, 2020
Interest rate																15.00%	15.00%	15.00%
August 4, 2020 [Member] | Senior Promissory Notes [Member]
Interest rate																18.00%	18.00%	18.00%
Convertible notes payable, principal amount																$ 3,000,000
On April 18, 2018 [Member]
Libor rate description																Additionally, the interest rate was amended such that the interest rate for all advances is 4% plus the 3-Month Libor rate	Additionally, the interest rate was amended such that the interest rate for all advances is 4% plus the 3-Month Libor rate	Additionally, the interest rate was amended such that the interest rate for all advances is 4% plus the 3-Month Libor rate
Loan Facility [Member]
Debt outstanding amount																$ 3,175,264			3,302,100
Notes payable long term																2,582,864			2,843,475
Accrued interest expense																$ 0			33,021
Description of loan repayement																The Company will make quarterly payments of €125,000 beginning May 6, 2021 with a final payment of €2,200,000 on May 6, 2022. The Company evaluated the settlement agreement for debt modification in accordance with ASC 470-50 and concluded that the debt qualified for debt extinguishment as the 10% cash flow test was met. As a result, the $3,828,630 of principal and accrued interest of $168,732, or an aggregate of $3,997,362 was written off and the new debt was recorded at fair value as of June 30, 2020 in the amount of $3,033,990	The Company will make quarterly payments of €125,000 beginning May 6, 2021 with a final payment of €2,200,000 on May 6, 2022. The Company evaluated the settlement agreement for debt modification in accordance with ASC 470-50 and concluded that the debt qualified for debt extinguishment as the 10% cash flow test was met. As a result, the $3,828,630 of principal and accrued interest of $168,732, or an aggregate of $3,997,362 was written off and the new debt was recorded at fair value as of June 30, 2020 in the amount of $3,033,990	The Company will make quarterly payments of €125,000 beginning May 6, 2021 with a final payment of €2,200,000 on May 6, 2022. The Company evaluated the settlement agreement for debt modification in accordance with ASC 470-50 and concluded that the debt qualified for debt extinguishment as the 10% cash flow test was met. As a result, the $3,828,630 of principal and accrued interest of $168,732, or an aggregate of $3,997,362 was written off and the new debt was recorded at fair value as of June 30, 2020 in the amount of $3,033,990
Repayment of debt																$ 23,696
Restricted shares | shares																1,000,000	1,000,000	1,000,000
Bridge Loans [Member]
Gain on debt extinguisment																				0
Marathon [Member]
Cash received																				$ 2,000,000
Grigorios Siokas [Member]
Interest rate																					4.70%
Maturity date																					Mar. 18, 2019
Grigorios Siokas [Member] | Senior Promissory Note [Member] | February Note [Member]
Debt outstanding amount												$ 1,000,000
Interest rate												18.00%
Panagiotis Drakopoulos [Member] | Loan Agreement [Member]
Debt outstanding amount																$ 9,784												$ 9,478
Short term debt borrowing capacity																												42,832
Accrued expenses																$ 7,187												$ 5,852
Unaffiliated Third Party [Member] | Senior Promissory Notes [Member]
Debt outstanding amount		$ 3,000,000		$ 2,000,000	$ 2,000,000						$ 2,000,000								$ 2,000,000
Loans payable				$ 3,000,000	$ 1,000,000
Description of loan repayment		The August 4 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The August 4 Note matures on December 31, 2020 unless in default.		The May 8 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The May 8 Note matured on June 8, 2020.	The May 5 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The May 5 Note matured on December 31, 2020.						The May 18 Note bears interest at the rate of eighteen (18%) percent per annum, paid quarterly in arrears. The May 18 Note matured on December 31, 2020. The note is not in default and the Company is currently in negotiations with the lender to extend the maturity date.					the CAD $2 million cash received noted in (b) above, the Company accounted for its obligation to issue a variable number of the Company’s Common Shares as Share-settled debt obligation in accordance with ASC 480 measured at fair value or the settlement amount of $1,554,590 (CAD $2 million). If settlement were to occur on December 31, 2019, the Company would be required to issue 261,891 common shares to settle its debt obligation. The Company could be obligated to potentially issue an unlimited number of common shares to settle its Share-settled debt obligation. If such events were to occur, the Company would be required to increase its authorized share capital and since increasing the authorized share capital is within the control of the Company, as our CEO controls greater than 50% of the outstanding common stock of the Company, the original classification of equity-classified financial	the CAD $2 million cash received noted in (b) above, the Company accounted for its obligation to issue a variable number of the Company’s Common Shares as Share-settled debt obligation in accordance with ASC 480 measured at fair value or the settlement amount of $1,554,590 (CAD $2 million). If settlement were to occur on December 31, 2019, the Company would be required to issue 261,891 common shares to settle its debt obligation. The Company could be obligated to potentially issue an unlimited number of common shares to settle its Share-settled debt obligation. If such events were to occur, the Company would be required to increase its authorized share capital and since increasing the authorized share capital is within the control of the Company, as our CEO controls greater than 50% of the outstanding common stock of the Company, the original classification of equity-classified financial	the CAD $2 million cash received noted in (b) above, the Company accounted for its obligation to issue a variable number of the Company’s Common Shares as Share-settled debt obligation in accordance with ASC 480 measured at fair value or the settlement amount of $1,554,590 (CAD $2 million). If settlement were to occur on December 31, 2019, the Company would be required to issue 261,891 common shares to settle its debt obligation. The Company could be obligated to potentially issue an unlimited number of common shares to settle its Share-settled debt obligation. If such events were to occur, the Company would be required to increase its authorized share capital and since increasing the authorized share capital is within the control of the Company, as our CEO controls greater than 50% of the outstanding common stock of the Company, the original classification of equity-classified financial
SkyPharm [Member] | Trade Facility [Member]
Debt outstanding amount																									$ 5,369,678
Proceeds from debt						$ 247,117
Comodity contract description																grants more than seventy-five (75) days delay between the payment for products	grants more than seventy-five (75) days delay between the payment for products	grants more than seventy-five (75) days delay between the payment for products
Ownership control																51.00%	51.00%	51.00%
Commitment amount | €																		€ 15,000,000
Interest rate description																(i) all lending in U.S. dollars is the one-month LIBOR plus six (6%) percent margin; and (ii) for all lending in Euro, the one-month Euribor Rate plus six (6%) percent per annum, commencing June 1, 2018	(i) all lending in U.S. dollars is the one-month LIBOR plus six (6%) percent margin; and (ii) for all lending in Euro, the one-month Euribor Rate plus six (6%) percent per annum, commencing June 1, 2018	(i) all lending in U.S. dollars is the one-month LIBOR plus six (6%) percent margin; and (ii) for all lending in Euro, the one-month Euribor Rate plus six (6%) percent per annum, commencing June 1, 2018
Facility provided by lender							$ 2,369,600
Facility percentage							95.00%
Originated fee							2.00%
Monthly fee							1.00%
SkyPharm [Member] | Trade Facility [Member] | Minimum [Member]
Short term debt borrowing capacity																											$ 2,291,200
SkyPharm [Member] | Trade Facility [Member] | Maximum [Member]
Short term debt borrowing capacity																											$ 6,736,200
SkyPharm [Member] | Loan Facility [Member]
Interest rate								10.00%
Description for the repayment								No prepayment is permitted pursuant to the terms of the Loan Facility. The Synthesis Facility Agreement as amended is secured by a personal guaranty of Grigorios Siokas, which is secured by a pledge of 1,000,000 shares of common stock of the Company owned by Mr. Siokas.
SkyPharm [Member] | Second amendment to loan facility agreement [Member]
Short term debt borrowing capacity																										$ 70,000

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LEASES (Details) - Operating Lease [Member]	Jun. 30, 2021 USD ($)
Remainder of 2021	$ 115,368
2022	228,112
2023	203,409
2024	118,978
2025	114,856
Thereafter	431,790
Total undiscounted operating lease payments	1,212,513
Less: Imputed interest	(243,054)
Present value of operating lease liabilities	$ 969,459

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LEASES (Details 1) - Finance Lease [Member]	Jun. 30, 2021 USD ($)
Remainder of 2021	$ 51,377
2022	86,663
2023	74,113
2024	55,762
2025	24,823
Thereafter	589
Total undiscounted finance lease payments	293,327
Less: Imputed interest	(32,302)
Present value of finance lease liabilities	$ 261,025

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LEASES (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
LEASES
Operating lease, term of agreements	The Company has various lease agreements with terms up to 10 years, comprising leases of office space
Operating lease expense	$ 99,610	$ 104,588
Operating lease weighted-average remaining lease term	6.71 years
Operating lease, weighted average discount rate	6.74
Finance lease, weighted average remaining lease term	2.7 years
Finance lease, weighted average discount rate	6.74
Operating lease cash flows used in finance lease	$ 4,453	2,301
Amortization of right-of-use assets	49,267	70,048
Finance lease, interest expense	$ 5,250	$ 5,251

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COMMITMENTS AND CONTINGENCIES (Details Narrative)	1 Months Ended
	Apr. 18, 2018
LEASES
Advisory description	The Advisor shall be paid €104,000 per year during the ten-year term.

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STOCK OPTIONS AND WARRANTS (Details ) - Warrants [Member]	6 Months Ended
	Jun. 30, 2021 USD ($) $ / shares shares
Number of Shares Outstanding, Beginning	$ 62,000
Expired | shares	(25,000)
Number of Shares Outstanding, Ending	$ 37,000
Number of Shares Exercisable | shares	37,000
Weighted Average Exercise Price
Weighted Average Exercise Price Outstanding, Beginning | $ / shares	$ 1.19
Weighted Average Exercise Price Outstanding, Ending | $ / shares	1.32
Weighted Average Exercise Price Exercisable | $ / shares	$ 1.32
Weighted average remainning contractual term
Weighted Average Remaining Contractual Term Outstanding, Beginning	7 months 6 days
Weighted Average Remaining Contractual Term Outstanding, Ending	6 months 3 days
Weighted Average Remaining Contractual Term Exercisable	6 months 3 days
Aggregate Intrinsic Value
Aggregate Intrinsic Value Outstanding, Beginning Balance	$ 242,200
Aggregate Intrinsic Value Outstanding, Ending Balance	147,100
Aggregate Intrinsic Value Exercisable	$ 147,100

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STOCK OPTIONS AND WARRANTS (Details 1) - Stock Options [Member]	6 Months Ended
	Jun. 30, 2021 USD ($) $ / shares shares
Number of Shares Outstanding, Beginning | shares	1,164,673
Number of Shares Outstanding, Ending | shares	1,164,673
Number of Shares Exercisable | shares	1,164,673
Weighted Average Exercise Price
Weighted Average Exercise Price Outstanding, Beginning | $ / shares	$ 6.41
Weighted Average Exercise Price Outstanding, Ending | $ / shares	6.41
Weighted Average Exercise Price Exercisable | $ / shares	$ 6.41
Weighted average remainning contractual term
Weighted Average Remaining Contractual Term Outstanding, Beginning	3 years 3 days
Weighted Average Remaining Contractual Term Outstanding, Ending	2 years 6 months 7 days
Weighted Average Remaining Contractual Term Exercisable	2 years 6 months 7 days
Aggregate Intrinsic Value
Aggregate Intrinsic Value Outstanding, Beginning | $	$ 5,360
Aggregate Intrinsic Value Outstanding, Ending | $	16,080
Aggregate Intrinsic Value Exercisable | $	$ 16,080

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STOCK OPTIONS AND WARRANTS (Details Narrative)	6 Months Ended
	Jun. 30, 2021 shares
Warrants [Member]
Number of Shares Exercisable	1,164,673
Number of Shares Outstanding, Beginning	1,164,673
Expired dates description	from May 2023 through March 2024
Options [Member]
Number of Shares Exercisable	37,000
Number of Shares Outstanding, Beginning	37,000
Expiration dates	January 2022

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DISAGGREGATION OF REVENUE (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Revenue	$ 14,846,925	$ 12,819,972	$ 26,466,001	$ 24,753,220
France [Member]
Revenue	0	0	0	1,091
Germany [Member]
Revenue	3	125,238	13,617	792,540
Hungary [Member]
Revenue	0	100	0	36,240
Ireland [Member]
Revenue	0	(9)	0	35,104
Italy [Member]
Revenue	4	16,007	15,731	22,048
Jordan [Member]
Revenue	0	(95)	0	9,322
Denmark [Member]
Revenue	14	0	54,700	0
Cyprus [Member]
Revenue	64,225	0	78,948	0
Libya [Member]
Revenue		0	0	41,972
Netherlands [Member]
Revenue	0	4,797	0	38,252
Poland [Member]
Revenue	0	(50)	0	28,352
UK [Member]
Revenue	265,828	697,609	332,659	1,082,236
Croatia [Member]
Revenue	11,982	8,617	11,982	8,617
Greece [Member]
Revenue	$ 14,504,869	$ 11,967,758	$ 25,958,364	$ 22,657,446

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SUBSEQUENT EVENTS (Details Narrative) - USD ($)						1 Months Ended		6 Months Ended
	Aug. 04, 2021	Jul. 14, 2021	Jul. 13, 2021	Jul. 07, 2021	Feb. 05, 2021	Jul. 20, 2021	Jul. 19, 2021	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Debt conversion, amount converted, principal		$ 150,000						$ 2,564,364	$ 0
Debt conversion, amount converted, accrued interest		$ 24,144
Debt conversion, converted instrument, shares issued		55,021
Debt conversion, conversion price		$ 3.165
Amount of debt extinguished					$ 445,636
Convertible notes payable								766,496		$ 952,027
Subsequent Event [Member] | Grigorios Siokas [Member] | Related Party Convertible Note [Member]
Debt conversion, amount converted, principal						$ 1,250,000
Convertible notes payable						$ 2,000,000
Advisory Agreement [Member] | Subsequent Event [Member] | Non-exclusive agent, advisor or underwriter [Member]
Description for advisory agreement				The term of the agreement is a minimum of 45 days and will continue until 5 business days following the date in which a party receives written notice from the other party of termination. As consideration for services rendered, the Company shall pay: a) a cash fee equal to 10% of the gross proceeds of any securities sold in the offering payable at closing of the offering from the gross proceeds of the offering; b) 1% of the gross proceeds of any securities sold in the offering payable at closing of the offering from the gross proceeds of the offering for unaccountable expenses; c) warrants to purchase shares of the Company’s common stock equal to 10% of the number of shares issued in the offering or to be issued thereafter upon conversion of any convertible securities issued in the offering. These warrants will have a 5-year term
Advisory Agreement [Member] | Subsequent Event [Member] | Non-exclusive agent, advisor or underwriter 1 [Member]
Description for advisory agreement				On July 7, 2021, the Company entered into a 6-month agreement with a non-exclusive agent, advisor or underwriter in any offering of securities of the Company. At the closing of any offering the company will compensate the agent: a) a cash fee or as an underwritten offering an underwriter discount equal to 7% of the aggregate gross proceeds raised in each offering. For all investors referred directly to the Company by the agent, a cash fee or as an underwritten offering an underwriter discount equal to 5% of the aggregate gross proceeds invested by such investors. b) The Company shall issue to Spartan or its designees at each closing, warrants to purchase shares of the Company’s common stock equal to 5% of the aggregate number of shares of common stock placed in each offering. c) Out of the proceeds of each closing, the Company also agreed to pay the agent up to $35,000 for non-accountable expenses (up to $50,000 for a public offering) along with up to $50,000 for fees and expenses of legal counsel and other out-of-pocket expenses (increase to up to $100,000 for public offerings) plus additional miscellaneous costs. The agent would also have the right of first refusal from the date of the agreement until the 12-month anniversary following consummation of any offerings for total proceeds of at least $3 million raised by investors introduced by the agent.
Advisory Agreement [Member] | July 1, 2021 [Member]
Consulting fee payable until benchmark funding, amount								10,000,000
Bonus payable upon benchmark funding								100,000
Consulting fee payable per month after listing on NASDAQ, on accrual basis								6,000
Consulting fees payable per month								4,000
Consulting fee payable per month after listing on NASDAQ								$ 10,000
Shares issuable upon benchmark funding raised								250,000
Related Party Debt Exchange Agreements [Member] | Subsequent Event [Member] | Grigorios Siokas [Member]
Common stock shares issuable upon extinguishment of debt	321,500		166,667				208,333
Share price	$ 5.00		$ 6.00				$ 6.00
Amount of debt extinguished	$ 1,599,480		$ 1,000,000				$ 1,250,000
Common stock shares issuable upon approval of listing	238,000
Common stock shares issuable upon approval of listing, share price	$ 5.00
Amount of debt extinguished, upon approval of listing	$ 1,184,800