Related Party Transactions | NOTE 8. RELATED PARTY TRANSACTIONS Related party transactions consists of the following: September 30, 2020 December 31, 2019 Note payable, short term $ 21,000 $ 21,000 Less: unamortized discount -- (796 ) 21,000 20,204 Notes payable, convertible, short-term 1,599,964 1,234,151 Less: unamortized discounts (216,887 ) (134,903 ) 1,383,077 1,099,248 Notes payable, convertible, long-term 3,359,501 3,477,310 Less: unamortized discounts (660,609 ) (620,754 ) 2,698,892 2,856,556 Total notes payable, net of unamortized discounts 4,102,969 3,976,008 Accrued compensation 255,360 134,566 Reimbursable expenses/cash advances payable 144,878 152,400 Total related party payable 400,238 289,068 Total related party transactions $ 4,503,207 4,262,974 Related party notes payable consists of the following convertible notes payable at September 30, 2020, and December 31, 2019: Description Principal Interest Rate Conversion Price Maturity Date Short-term: Huntington Chase Financial Group $ 324,976 7 $0.05 1 year from demand [1] Huntington Chase LLC 460,000 5 $0.05 12/31/2023 William Nesbitt 85,817 5 $0.05 Funding [2] Kasper Group, Ltd. 188,755 7 $0.05 1 year from demand David Rocke 100,000 5 20-day average [3] Funding [2] Michael Gabriele 242,916 5 20-day average [3] Funding [2] Clive Oosthuizen 197,500 5 $0.05 Funding [2] Total short-term 1,599,964 Long-term: Huntington Chase Financial Group 1,123,000 5 $0.05 12/31/2021 E. William Withrow Jr. 893,256 5 $0.05 12/31/2021 Calli R. Bucci 812,670 5 $0.05 12/31/2024 Kyle W. Withrow 320,580 5 $0.05 12/31/2024 Yinuo Jiang 209,995 5 $0.05 12/31/2024 Total long-term 3,359,501 Total convertible notes payable $ 4,959,465 [1] No demand has been made [2] The requisite funding goals for repayment have not been met. [3] Shares issuable upon conversion not to exceed one percent (1%) of the Company’s issued and outstanding shares of Common Stock. Effective conversion price at 09/30/2020 is $0.10-$0.23 per share. All outstanding promissory notes to related parties bear interest at a rate of 5 to 7 percent per annum, are due and payable within between one (1) year of written demand to December 31, 2024, or upon certain equity funding, and are convertible into the Company’s common stock at a price of between $0.05 to $0.25 per share, or the 20-day average trading price. As of September 30, 2020, and December 31, 2019, respectively, affiliates and related parties are due a total of $4,503,207 and $4,262,974, which is comprised of promissory notes to related parties, net of unamortized discounts, in the amount of $4,102,969 and $3,976,008; accrued compensation in the amount of $255,360 and $134,566; and reimbursable expenses/cash advances to the Company in the amount of $144,878 and $152,400; for a net increase of $240,233 and $292,008. During the nine months ended September 30, 2020, and the year ended December 31, 2019, respectively, promissory notes to related parties increased by $248,004 and $1,559,756, unamortized discounts increased by $121,043 and $756,453, accrued compensation increased (decreased) by $120,794 and ($510,989), and reimbursable expenses cash advances decreased by $7,522 and $306. During the nine months ended September 30, 2020, and the year ended December 31, 2019, respectively, promissory notes to related parties, net of unamortized discounts, increased by $126,961 and $803,303, as a result of an increase in accrued compensation owed to related parties in the amount of $757,405 and $1,465,261 converted to convertible promissory notes; $0 and $110,995 converted from non-related party accrued compensation; $426,464 and $0 reclassified to non-related party promissory notes; $0 and $50,000 in cash loans to the Company; $82,937 and $66,500 in cash repayments; and an increase (decrease) in unamortized discount in the amount of $121,043 and $756,453. During the nine months ended September 30, 2020, and the year ended December 31, 2019, respectively, $987,171 and $959,772 in related party compensation was accrued, $757,405 and $1,465,261 was converted into convertible promissory notes; $55,000 and $0 was reclassified to non-related party accrued compensation; and $53,972 and $5,500 in cash payments were made; for a net increase (decrease) in accrued compensation in the amount of $120,794 and ($510,989). During the nine months ended September 30, 2020, and the year ended December 31, 2019, respectively, reimbursable expenses/cash advances owed to related parties decreased by $7,522 and $306 as a result of an increase in cash loans to the Company and expenses paid by related parties on behalf of the Company in the amount of $500 and $3,281; repayments to related parties in the amount of $3,000 and $3,587; and $5,022 and $0 reclassified to non-related party accrued expenses. During the nine months ended September 30, 2020, and the year ended December 31, 2019, respectively, $178,147 and $176,428 in interest on related party loans was expensed; $62,880 and $0 was reclassified to non-related party accrued interest; and $16,610 and $15,339 was paid to the note holder. As of September 30, 2020, and December 31, 2019, respectively, $806,071 and $707,414 in interest on related party loans has been accrued, and is included as part of accrued expenses on the accompanying consolidated balance sheets. |