Commitments and contingencies

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and contingencies

18. Commitment and contingencies

a) Contingency related to outstanding penalties

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

b) Option to purchase lease property

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 $25,500,000 as of July 31, 2019, plus any landlord funded improvements. The option to purchase increases by $750,000 per calendar month. The initial base rental is $146,337 per month, plus any taxes imposed on the premises or the base rental.

c) Future minimum operating lease payments

In terms of the lease agreement mentioned above the Company is obligated to make the following minimum undiscounted lease payments:

	Amount
Remainder of 2019	$	917,930
2020		1,882,422
2021		1,962,242
2022		2,042,062
2023 and thereafter		12,436,420
Total undiscounted minimum future lease payments	$	19,241,076

d) Mortgage payments

The Company is obligated to make the following mortgage loans payments:

	Amount
Within one year	$	110,815
One to two years		110,225
Two to three years		114,903
Three to four years		3,680,999
Total	$	4,016,942

e) Other

The Company has principal and interest payment commitments under the Convertible notes disclosed under Note 11 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.