| Notes Payable - Related Parties |
| 5. |
NOTES PAYABLE – RELATED PARTIES |
The Company has the following
related parties notes payable as of March 31, 2019 and December 31, 2018:
| Note |
|
Issuance Date |
|
Maturity Date |
|
Interest Rate |
|
|
Original Borrowing |
|
|
Balance at
March 31, 2019
|
|
|
Balance at
December 31, 2018
|
|
| 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 |
|
| Note 4 (D) |
|
March 22, 2019 |
|
April 30, 2019 |
|
|
5.0 |
% |
|
|
58,000 |
|
|
|
58,000 |
|
|
|
- |
|
| Total notes payable – related parties |
|
|
|
|
|
|
|
|
|
|
1,235,000 |
|
|
|
1,177,000 |
|
| Non-current |
|
|
|
|
|
|
|
|
|
|
|
|
(1,065,000 |
) |
|
|
(1,065,000 |
) |
| Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
170,000 |
|
|
$ |
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 March 31, 2019, and
December 31, 2018, 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 March 31, 2019, and December 31, 2018, the outstanding principal balance of the note was equal to $112,000, respectively. As of March 31, 2019, 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, secured by the Company’s
assets, and will mature on June 4, 2021, as amended.
As of March 31, 2019, and
December 31, 2018, the outstanding balance of the note amounted to $240,000, respectively.
|
| |
|
|
| |
(D) |
On March 22, 2019, the Company issued
a note payable to Mr. Jeff Clayborne, the Company’s Chief Financial Officer, in the amount of $58,000. The note is unsecured,
bears interest at a rate of 5% per annum, and matures on April 30, 2019.
As of March 31, 2019, the outstanding
balance of the note amounted to $58,000. The note was subsequently paid in full in April 2019.
|
Total interest expense for notes payable
to related parties was $35,000 and $58,000 for three months ended March 31, 2019 and 2018, respectively. The Company paid $32,000
and $126,000 in interest for the three months ended March 31, 2019 and 2018, respectively.
|