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ADVANCES ON FUTURE RECEIPTS
12 Months Ended
Dec. 31, 2018
Advances On Future Receipts [Abstract]  
ADVANCES ON FUTURE RECEIPTS

18. ADVANCES ON FUTURE RECEIPTS

 

During 2017, the Company received funding as a result of entering into multiple Agreements for the Purchase and Sale of Future Receipts (collectively, the “Agreements on Future Receipts”) pursuant to which the Company sold in the aggregate $4,068,352 in future receipts of the Company for $2,889,175. Future receipts include cash, check, ACH, credit card, debit card, bank card, charge card or other form of monetary payment. During 2017, the Company had repaid $1,525,547 and during the year ended December 31, 2018, the Company entered into a total of nine additional Agreements on Future Receipts pursuant to which the Company sold up to $5,632,400 in future receipts for a purchase price in the amount of $4,100,000. The Agreements on Future Receipts have been personally guaranteed by the Company’s Chief Executive Officer and in one instance has also been guaranteed by Philou. 

 

During 2018, the Company recorded a discount in the amount of $1,651,193 in connection with these nine additional agreements, based upon the difference between the amount of future receipts sold and the actual proceeds received by the Company. Under the terms of these agreements, the Company also issued warrants to purchase an aggregate of 5,625 shares of common stock at an exercise price of $45.00 per share of common stock and warrants to purchase 8,125 shares of common stock at an exercise price of $50.00 per share of common stock. The Company recorded an additional discount of $258,370 based on the estimated fair value of these warrants. The Company computed the fair value of these warrants using the Black-Scholes option pricing model. These discounts are reflected as a reduction on the outstanding liability and are being amortized as non-cash interest expense over the term of the agreement. During the years ended December 31, 2018 and 2017, non-cash interest expense of $2,489,403 and $599,337, respectively, was recorded from the amortization of debt discounts.