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Related Party Transactions
6 Months Ended
Jun. 30, 2015
Notes to Financial Statements  
Note 8. Related Party Transactions

During the three months ended March 31, 2015, the Company allocated an aggregate of $43,240 of compensation paid to the Company's General Counsel to an entity that is owned partially by certain officers and directors of the Company. During the six months ended June 30, 2015, the Company was reimbursed the entire amount of compensation of the Company's General Counsel that had been allocated to the entity that is owned partially by certain officers and directors of the Company during the prior two quarters in the amount of $93,240. The balance due from the entity was $0 and $50,000 as of June 30, 2015 and December 31, 2014, respectively. 

 

As of June 30, 2015 and December 31, 2014, $21,403 and $43,134, respectively, is owed to officers and directors of the Company or entities controlled by these individuals. This amount is included in accounts payable - related parties on the accompanying condensed consolidated balance sheet. 

 

On January 15, 2015, the Company issued a two-year promissory note in exchange for cash proceeds of $100,000 from an entity of which 35% ownership is controlled by an individual that is a director and former Chief Executive Officer of the Company. The note is unsecured, bears interest at 7.0% and requires 18 monthly payments of interest only commencing at the beginning of month seven. The note includes a provision that in the event of default the interest rate would increase to the default interest rate of 18%. The first six months of interest is deferred until maturity. The outstanding principal balance along with all accrued and unpaid interest is due at maturity (See Note 4). 

 

Commencing January 1, 2013 through January 31, 2014, the Company occupied office space on a month-to-month basis for its corporate headquarters for $500 a month from Crestview Farm, an entity controlled by an individual that is a director and former Chief Executive Officer of the Company. The individual serves as the Manager of Crestview Farm. Rent expense for these facilities was $0 and $500 for the six months ended June 30, 2015 and 2014, respectively. 

 

During the period from inception through June 30, 2015, several members of the Company’s management provided services at no charge to the Company. The financial statements do not include an estimate of the fair value of these services.