EQUITY INVESTMENT AND ADVANCE

12 Months Ended

Dec. 31, 2016

Equity Method Investments and Joint Ventures [Abstract]

NOTE 9. - EQUITY INVESTMENT AND ADVANCE

On April 11, 2014, the Company, through its wholly-owned subsidiary, Botanical Genetics, LLC, entered into an investment agreement (the “Agreement”) with Anandia Laboratories, Inc., a Canadian plant biotechnology company (“Anandia”). The Agreement provided for the Company to make an initial investment of $250,000 in Anandia in return for (i) a ten percent (10%) equity interest in Anandia, and (ii) certain rights granted to the Company for four patent families (the “Intellectual Property”). The $250,000 investment was made on April 14, 2014. On September 15, 2014, certain milestones were achieved triggering an additional cash investment in Anandia in the amount of $450,000 in return for (i) an additional fifteen percent (15%) equity interest in Anandia, and (ii) a worldwide sublicense agreement to the Intellectual Property, including exclusive rights within the U.S. In addition, the Company issued 150,000 unregistered shares of the Company’s common stock to Anandia with a value on the day of issuance of September 15, 2014 in the amount of $394,500, and on March 31, 2015, the Company issued to Anandia an additional 377,906 unregistered shares of the Company’s common stock with an aggregate market value of $325,000 at the time of the issuance in accordance with the Agreement.

The Company uses the equity method of accounting to record its 24.4% ownership interest in Anandia (ownership was 25% prior to a dilutive event on September 8, 2016). As of December 31, 2016, and December 31, 2015, the Company’s equity investment balance in Anandia was $1,020,313 and $1,222,651, respectively, and is classified within Other assets on the accompanying Consolidated Balance Sheets. As of September 15, 2014, the carrying value of our investment in Anandia was approximately $1,199,000 in excess of our share of the book value of the net assets of Anandia, with such difference being attributable to intangible assets. This intangible asset is being amortized over the expected benefit period and this amortization expense of $57,648, $57,648 and $16,815 for the years ended December 31, 2016, 2015 and 2014, respectively, has been included in the Loss on equity investment in the accompanying Consolidated Statements of Operations. In addition, the Company has recorded an equity loss of $144,690, 38,036 and $84,350 for the years ended December 31, 2016, 2015 and 2014, respectively, representing the Company’s portion of Anandia’s net losses, resulting in a total loss on equity investment of $202,338, $95,684 and $101,165 for the years ended December 31, 2016, 2015 and 2014, respectively.