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Related Party Matters
9 Months Ended
Sep. 30, 2021
Related Party Transactions [Abstract]  
Related Party Matters Related Party Matters
Emerald Health Sciences
In January 2018, the Company entered into a securities purchase agreement with Sciences pursuant to which Sciences purchased a majority of the equity interest in the Company, resulting in a change in control transaction. While Sciences no
longer maintains a controlling interest in the Company, it holds a significant equity interest and has provided the Company with financing under the Amended Credit Agreement (Note 4).
On December 19, 2019, the Company entered into an Independent Contractor Services Agreement with Dr. Avtar Dhillon, a member of Sciences Board of Directors and its CEO, pursuant to which Dr. Dhillon provides ongoing corporate finance and strategic business advisory services to the Company. In exchange for his services, Dr. Dhillon received a monthly fee of $10,000, per month for his services.

Under the Independent Contractor Agreement, for the three and nine months ended September 30, 2021, the Company incurred fees of $30,000 and $90,000, respectively. For the three and nine months ended September 30, 2020, the Company incurred fees of $31,000 and $97,387, respectively. As of September 30, 2021 and December 31, 2020, the Company has accrued $20,000 of consulting fees and $7,032 in expense related to the Independent Contractor Services Agreement, respectively. On September 14, 2021, Dr. Dhillon provided his notice to terminate the Independent Contractor Services Agreement, with an effective termination date of October 14, 2021. As of October 14, 2021, the Company no longer has any obligations or business relationship with Dr. Dhillon (Note 6).
In addition, the Board Observer Agreement in place with Sciences was amended in September 2021 to allow any board member or officer of Sciences to act as a representative of Sciences on a non-voting observer basis in meetings of the Board.
Emerald Health Pharmaceuticals, Inc.
On April 30, 2021, the Company entered into a month-to-month lease agreement with Emerald Health Pharmaceuticals, an affiliate of the Company with a significant common shareholder, as the sublessor and the Company as the sublessee. The Company shared the same office location as Emerald Health Pharmaceuticals in San Diego, California until the termination of the sublease on August 31, 2021. Under the sublease agreement, the Company paid monthly base rent of $4,000 in addition to its share of common area expenses and utilities. For the three and nine months ended September 30, 2021, the Company recognized $8,830 and $15,453, respectively, in expense under the sublease.
Emerald Health Biotechnology España, S.L.U.
In January 2021 and April 2021, the Company entered into two separate Collaborative Research Agreements pursuant to a Master Services Agreement with Emerald Health Biotechnology España, S.L.U ("EHBE"), a research and development entity with substantial expertise in cannabinoid science and a subsidiary of Emerald Health Research, Inc. which is 100% owned by Sciences. Under the agreements, Emerald Health Biotechnology España, S.L.U. will provide research and development services pursuant to agreed upon project plans for the research and development of CBDVHS and the preclinical development services for novel analogues. The term of each agreement is initially for a one-year period. The agreements will terminate upon delivery and acceptance of the final deliverables under the project plans or if either party is in breach of the terms of the contract and such breach remains uncured for 45 days. Payment for services are based on the negotiated amounts for the completion of agreed upon objectives as provided in the Collaborative Research Agreements. For the three and nine months ended September 30, 2021, the Company incurred $62,940 and $206,218, respectively, in expenses under the Collaborative Research Agreements. As of September 30, 2021, the Company has recognized prepaid asset in the amount of $18,125 to be offset against future research and development costs under the Collaborative Research Agreements (Note 10).

Board Members
As of September 30, 2021, Jim Heppell and Punit Dhillon are board members of the Company and Emerald Health Pharmaceuticals, a subsidiary of Sciences. As of September 30, 2021, Jim Heppell is also a board member of Sciences and Emerald Health Biotechnology España, S.L.U. The Company’s CEO, Punit Dhillon also served as a board member of Sciences and Emerald Health Biotechnology España, S.L.U. until he tendered his resignation from such boards on August 10, 2020 and September 22, 2021, respectively.