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Due to Related Party and Related Party Transactions
 12 Months Ended
Dec. 31, 2018
Notes Payable and Other Amounts Due to Related Party [Abstract]  
DUE TO RELATED PARTY AND RELATED PARTY TRANSACTIONS

NOTE 6 – DUE TO RELATED PARTY AND RELATED PARTY TRANSACTIONS

 

Amounts due to related parties as of December 31, 2018 and 2017 were comprised of the following:

 

   December 31, 
   2018   2017 
Due to related party:        
Deferred compensation, Dr. Michael Dent  $300,600   $300,600 
Accrued interest payable to Dr. Michael Dent   129,117    63,245 
Total due to related party   429,717    363,845 
           
Notes payable to related party:          
Notes payable to Dr. Michael Dent, current portion   672,471    553,550 

  

Notes Payable to Dr. Michael Dent

 

Prior to August 2014, NWC was owned and controlled by the Company’s Chief Executive Officer, Dr. Michael Dent (“DMD”). DMD first provided an up to $175,000 unsecured note payable to the Company with a 0% interest rate. During 2013 the limit on the unsecured Note Payable was increased up to $500,000 and during 2014 it was increased to $750,000 with a maturity date of December 31, 2017. All principal and interest is due at maturity of the $750k DMD Note on December 31, 2019. Interest accrued on the $750k DMD Note as of December 31, 2018 and 2017 was $66,859 and $43,963, respectively.

 

The carrying values of notes payable to Dr. Michael Dent as of December 31, 2018 and 2017 were as follows:

 

          Interest   Balance as of December 31, 
Inception Date  Maturity Date  Borrower   Rate   2018   2017 
January 12, 2017  January 13, 2019  HLYK    10%  $40,560*  $35,000 
January 18, 2017  January 19, 2019  HLYK    10%   23,165*   20,000 
January 24, 2017  January 15, 2019  HLYK    10%   57,839*   50,000 
February 9, 2017  February 10, 2019  HLYK    10%   34,586*   30,000 
April 20, 2017  April 21, 2019  HLYK    10%   11,357*   10,000 
June 15, 2017  June 16, 2019  HLYK    10%   36,464*   32,500 
August 17, 2017  August 18, 2018  HLYK    10%   20,000    20,000 
August 24, 2017  August 25, 2018  HLYK    10%   37,500    37,500 
September 7, 2017  September 8, 2018  HLYK    10%   35,000    35,000 
September 21, 2017  September 22, 2018  HLYK    10%   26,500    26,500 
September 29, 2017  September 30, 2018  HLYK    10%   12,000    12,000 
December 21, 2017  December 22, 2018  HLYK    10%   14,000    14,000 
January 8, 2018  January 9, 2019  HLYK    10%   75,000    --- 
January 11, 2018  January 12, 2019  HLYK    10%   9,000    --- 
January 26, 2018  January 27, 2019  HLYK    10%   17,450    --- 
January 3, 2014  December 31, 2018  NWC    10%   222,050    231,050 
                       
               $672,471   $553,550 

 

On July 18, 2018, in connection with a $2,000,000 private placement by a third party investor, Dr. Dent agreed to extend the maturity date on all of the above notes until December 31, 2019. Interest accrued on the above unsecured promissory notes as of and December 31, 2018 and 2017 was $62,258 and $19,350, respectively.

 

On February 12, 2018, the Company issued a warrant to purchase 6,678,462 shares of common stock to DMD as an inducement to (i) extend the maturity dates of up to $439,450 loaned by Dr. Dent to the Company in 2017 and 2018 in the form of unsecured promissory notes, including $75,000 loaned from Dr. Dent to the Company in January 2018 to allow the Company to retire an existing convertible promissory note payable to Power-up Lending Group Ltd. before such convertible promissory note became eligible for conversion, and (ii) provide continued loans to the Company. The warrant is immediately exercisable at an exercise price of $0.065 per share, subject to adjustment, and expires five years after the date of issuance. The fair value of the warrants was calculated using the Black-Scholes pricing model at $337,466, with the following assumptions: risk-free interest rate of 2.56%, expected life of 5 years, volatility of 268.90%, and expected dividend yield of zero. On March 28, 2012, DMD agreed to extend the maturity dates of promissory notes with an aggregate face value of $177,500, which were originally scheduled to mature before September 30, 2018, by one year from the original maturity date. Because the fair value of the warrants was greater than 10% of the present value of the remaining cash flows under the modified promissory notes, the transaction was treated as a debt extinguishment and reissuance of new debt instruments pursuant to the guidance of ASC 470-50 “Debt – Modifications and Extinguishments” (“ASC 470-50”). A loss on debt extinguishment was recorded in the amount of $348,938, equal to the fair value of the warrants of $337,466, plus the excess of $11,472 of the fair value of the reissued debt instruments over the carrying value of the existing debt instruments. The change in fair value of the reissued debt instruments subsequent to the reissuance date was $15,029 in the year ended December 31, 2018 and is included on the statement of operations in “Change in fair value of debt.”

  

MedOffice Direct

 

During 2017, the Company entered into an agreement with MedOffice Direct (“MOD”), a company majority-owned by the Company’s CEO and largest shareholder, Dr. Michael Dent, pursuant to which the Company agreed to pay rent to MOD in the amount of $2,040 per month for office space in MOD’s facility used by the Company and its employees for the period from January 1, 2017 through July 31, 2018. The agreement terminated on July 31, 2018. During the years ended December 31, 2018 and 2017, the Company recognized rent expense to MOD in the amount of $30,457 and $-0-, respectively, pursuant to this agreement including $16,177 recognized in 2018 to write of the balance of a prepayment to MOD to be applied toward future rent.

 

During 2017, the Company entered into a separate Marketing Agreement with MOD pursuant to which MOD agreed to market the HealthLynked Network to its physician practice clients, in exchange for a semi-annual fee of $25,000. This agreement was terminated effective April 1, 2018. During the years ended December 31, 2018 and 2017, the Company recognized general and administrative expense in the amount of $12,500 and $27,500, respectively, pursuant to this agreement. On July 1, 2018 HLYK and MOD signed a marketing and service agreement where HLYK will include MOD offering as part of its product offering to physicians and HLYK will receive 8% of revenue for new sales related to MOD products sold by the HLYK sales team.

 

Stock Repurchase

 

On October 3, 2018, the Company bought back 100,000 shares of common stock from a shareholder for a total purchase price of $5,000. The shares were retired. The selling shareholder was the brother of our CEO Dr. Michael Dent.