Quarterly report pursuant to Section 13 or 15(d)

Notes Payable - Related Parties

v3.20.2
Notes Payable - Related Parties
6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Notes Payable - Related Parties
7. NOTES PAYABLE – RELATED PARTIES

 

The Company has the following related parties notes payable as of June 30, 2020 and December 31, 2019:

 

Note   Issuance Date   Maturity Date   Interest Rate     Original Borrowing     Balance at
June 30, 2020
    Balance at
December 31, 2019
 
Note 1 (A)   December 1, 2015   February 8, 2021     12.0 %   $ 1,249,000     $ 825,000     $ 825,000  
Note 2 (B)   December 1, 2015   April 1, 2017     12.0 %     112,000       112,000       112,000  
Note 3 (C)   April 4, 2016   June 4, 2021     12.0 %     343,000       240,000       240,000  
Total notes payable – related parties                     1,177,000       1,177,000  
Non-current                             -       (1,065,000 )
Current                           $ 1,177,000     $ 112,000  

 

  (A) On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company’s majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company’s assets, and will mature on February 8, 2021, as amended.

 

As of June 30, 2020, and December 31, 2019, the outstanding balance of the note amounted to $825,000, respectively.

 

  (B) On December 1, 2015, the Company issued a note payable to a former member of the Company’s board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of June 30, 2020, and December 31, 2019, the outstanding principal balance of the note was equal to $112,000, respectively. As of June 30, 2020, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note.
     
  (C)

On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $343,000, to consolidate all advances made by Mr. Cutaia to the Company during the period December 2015 through March 2016. The note bears interest at a rate of 12% per annum, is secured by the Company’s assets, and will mature on June 4, 2021, as amended.

 

As of June 30, 2020, and December 31, 2019, the outstanding balance of the note amounted to $240,000, respectively.

 

Total interest expense for notes payable to related parties was $70,000 for six months ended June 30, 2020 and 2019, respectively. The Company paid $72,000 and $63,000 in interest for the six months ended June 30, 2020 and 2019, respectively.