Commitments and contingencies

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and contingencies

17. Commitments and contingencies

a. Contingency related to outstanding penalties

The Company has provided for potential US penalties of $250,000 due to noncompliance with the filing of certain required returns. The actual liability may be higher due to interest and penalties assessed by these taxing authorities.

b. Operating leases

The Company has assumed operating leases for certain vehicles and office equipment.

On May 23, 2018, the Company entered into a Lease Agreement pursuant to which it leased from the AREP 5400 East Avenue LLP (the “Landlord”), the premises located at 5400, 5402, and 5410 East Avenue, West Palm Beach, Florida (the “Property”). The Lease has an initial term of 10 years and provides for 2 additional 10 year extensions. The Company has the option to purchase the property initially for $17,250,000, which amount has increased to $19,500,000 as of October 31, 2018, plus any landlord funded improvements. The option to purchase increases by $750,000 per calendar month, the next increase of $750,000 will occur on November 30, 2018. The initial base rental is $146,337 per month, plus any taxes imposed on the premises or the base rental.

The future commitment of these operating leases and the property lease are as follows: 

	Amount
Within 1 year	$	1,783,727
1 to 2 years		1,862,467
2 - 3 years		1,942,287
3 - 4 years		2,022,107
5 years and thereafter		10,642,667
Total	$	18,253,253

c. Mortgage bonds

The company has two mortgage loans as disclosed in note 11 above. The future commitments under these loans are as follows:

	Amount
Within 1 year		162,805
1 to 2 years		3,025,469
2 to 3 years		112,598
3 to 4 years		116,163
Thereafter		3,707,158
Total	$	7,124,193

d. Other

The Company has principal and interest payment commitments under the Convertible notes disclosed under Note 10 above. Conversion of these notes are at the option of the investor, if not converted these notes may need to be repaid.

From time to time, the Company and its subsidiaries enter into legal disputes in the ordinary course of business. The Company believes there are no material legal or administrative matters pending that are likely to have, individually or in the aggregate, a material adverse effect on its business or results of operations.