Accounts Receivables and Other Receivables

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Accounts Receivables and Other Receivables

Note 5 – Accounts Receivables and Other Receivables

As disclosed in Note 1, the Company subleases three properties in Colorado to Royal Asset Management. At March 31, 2020, the Company had outstanding receivables from the subleases totaling $465,596, and during the three months ended March 31, 2020, the Company’s subleases with Royal Asset Management accounted for 100% of the Company’s revenues.

In addition to the receivables from the subleases, the Company has agreed to provide Royal Asset Management and affiliates of Royal Asset Management up to aggregate amount of $1,030,000 in financing. These notes accrue interest at the rates ranging from 12% to 18% per annum. As of March 31, 2020 and December 31, 2019, the outstanding balance of these notes receivable total $1,226,301 and $1,017,143, respectively, including accrued interest of $186,355 and $153,509. The amount presented in our balance sheet is $997,435 and $788,177, which represents the $1,226,301 and $1,017,143 due to us, less $228,966 and $228,966 that we owe to Royal Asset Management for leasehold improvements. The notes are secured by a UCC filing and also $400,000 of the balance is personally guaranteed by the managing member of Royal Asset Management. During the three months ended March 31, 2020, we loaned additional $214,394 and received payment of $38,082 under these contracts.

If we do acquire Royal Asset Management, part of the purchase price will be paid through receivables that are owed to us.