7. Long-term Liabilities- Related Party

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Long-term Liabilities- Related Party

NOTE 7 – LONG-TERM LIABILITIES – RELATED PARTY

On October 1, 2017, the Company acquired from Gemini Southern, LLC a 2006 Ultra-Comp 53” NASCAR type vehicle transport hauler (the “Hauler”) to be used for promotional / advertising services. The purchase price of the Hauler was $165,000. The Company paid for the Hauler with a promissory note (the “Hauler Note”). The Hauler Note bears interest at 12% per annum and is payable as follows: (i) interest only from October 1, 2017 through February 28, 2018; (ii) $ $3,670 per month from March 1, 2018 through February 28, 2022; and $45,000 on February 1, 2022. The trailer is collateral for the promissory note. The balance of the loan was $122,962 and $143,866 as of September 30, 2019 and December 31, 2018, respectively. Accrued interest was $0 at September 30, 2019 and December 31, 2018.

Future principal payments will be as follows:

2019	$	7,395
2020		31,888
2021		35,932
2022		47,747
Total	$	122,962

On December 22, 2018, the Company leased a vehicle from the majority shareholder. The term of the lease is 84 months with payments of $423 per month. At the end of the lease the Company can purchase the vehicle for $2,500. As of September 30, 2019, it is reasonably expected that the Company will exercise the purchase option. The value of the asset and corresponding liability at the date of inception was $30,089, the net present value of the lease payments, including the purchase option, using an interest rate of 6.649% in accordance with the provisions of ASC 842. The balance of the lease liability at September 30, 2019 and December 31, 2018 was $27,284 and $29,666, respectively.

Future lease payments will be as follows:

2019 (remainder of year)	$	1,269
2020		5,078
2021		5,078
2022		5,078
2023		5,078
Thereafter		12,233
Total payments		33,814
Less deferred interest		(6,530	)
Total	$	27,284

There are no commitments or contingencies related to the long-term liabilities that are not disclosed above.