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Note 7. Related Party Transactions
6 Months Ended
Jun. 30, 2016
Notes  
Note 7. Related Party Transactions

Note 7.  Related Party Transactions

 

As of June 30, 2016, the President of the Company is owed deferred salary in the amount of $1,416,996. As of June 30, 2016, a Vice President and the current Chairman of the Board of Directors of the Company is owed deferred salary in the amount of $121,140. The Board of directors agreed to pay interest at 9% on the foregoing amounts owed. Accrued interest under this agreement for the six months ended June 30, 2016 and 2015 amounted to $64,751 and $54,142, respectively.

 

Effective September 1, 2011, the Company entered into a month-to-month lease with the President and then-Chairman of the Board of Directors of the Company, for office space in a furnished and fully equipped townhouse office building owned by the President in Alexandria, Virginia. The lease calls for monthly base rent in the amount of $4,534 and payment of associated costs of insurance, real estate taxes, utilities and other expenses. Rent expense associated with this lease amounted to base rent in the amount of $27,204 and associated rental costs of $5,953 for a total of $33,157 for the six months ended June 30, 2016 and base rent in the amount of $27,204 and associated rental costs of $7,083 for a total of $34,287 for the six months ended June 30, 2015. In the first six months of 2016, the Company paid $22,670 of the base rent due for that period. In the first six months of 2015, the Company paid $27,204 for base rent. In addition, during the first six months of 2016, the Company reimbursed the President for associated rental costs totaling $7,744 which had been paid personally by the President in prior periods. At June 30, 2016 and 2015, amounts owing for base rent and associated rental costs totaled $80,290 and $67,608, respectfully.

 

Directors of the Company are entitled to a director's fee of $15,000 per year for their services. The Company has been unable to pay directors' fees to date. A total of $266,250 and $221,250 was due and owing to the Company's current and former directors as of June 30, 2016 and December 31, 2015, respectively. Directors have previously been compensated and may, in the future, be compensated for their services with cash, common stock, or options to purchase common stock of the Company.

 

In June of 2016, the Company paid a Director $15,000 in connection with his efforts associated with certain litigation which resulted in the Company collecting net settlement proceeds of $150,000 in the second quarter of 2016.

 

In the second quarter of 2016, the Chairman of the Board of Directors and the President advanced funds to the Company totaling $15,000 with no interest, contingent upon an assignment of $15,000 from the above-referenced settlement proceeds.   These advances were repaid to them in the second quarter of 2016.