Note 7 - Notes Payable Related Party | NOTE 7 NOTES PAYABLE RELATED PARTY On May 19, 2015, the Company issued Kae Yong Park and her spouse Howard Baer (together, Park) a non-interest bearing, unsecured demand promissory note to evidence all unpaid advances received by the Company to that point and to cover all additional advances received afterward. Unpaid principal under the note is due and payable upon the earlier of (i) an event of default (as defined), (ii) written demand and (iii) the Companys receipt of capital (to the extent of net proceeds received) from any capital raising transaction after May 15, 2015, whether in the form of debt, equity or otherwise. On September 30, 2015, the Company amended and restated its promissory note to Park to include all advances to date and provide certain assets, including all internet domain names, websites and related assets as collateral. Repayment terms remain the same, and Park has to date not enforced the provision requiring repayment upon receipt of net proceeds from capital raising transactions. During the nine months ended September 30, 2018, Park advanced an aggregate of $259,550 on an unsecured basis to the Company for short-term capital needs. During this period, the Company also repaid $142,650 of its debt to Park and recaptured $60,000 worth of payroll expenses for Parks use of Company personnel. At September 30, 2018, the Company had a note payable to Park for these advances of $1,349,252 which is secured by the assets of the Company. Parks security interest in certain of the Companys domains, websites and other assets has been subordinated to the security interest granted to John Lemak (and affiliated persons), who is an affiliate of Sandor capital, a significant shareholder, in connection with advances Mr. Lemak and related persons made to the company. Due to the on-demand nature of the amount owed to Park, the company has classified it as a current liability. The following table summarizes the Companys balance for these advances for the nine months ended September 30, 2018: Amount due - December 31, 2017 $ 1,292,357 Advances received from Park 259,550 Repayments made to Park (142,655) Recapture of company expenses (60,000) Balance due September 30, 2018 $ 1,349,252 On June 23, 2014, the Company issued a $500,000 promissory note in conjunction with the purchase of approximately 7,500 cannabis-related internet domain names. The note originally bore interest at the rate of 3.25% per annum and the first $100,000 of which was payable upon the Companys receipt of an aggregate of $1,000,000 in funding (whether debt or equity). The remaining $400,000 is payable in thirty-six equal monthly installments, commencing on the fifteenth day following the first month the Company realizes at least $150,000 in gross revenue (see Note 15 - Commitments and Contingencies). On July 25, 2014, the Company amended and restated its promissory note in the principal amount of $500,000 owing to Kae Yong Park (the Companys then majority shareholder) to provide that it would make the first $100,000 installment payment due under the Note on July 25, 2014 (earlier than required), in exchange for which Kae Yong Park agreed to waive all interest due over the term of the note. Thereafter, Kae Yong Park waived the requirement that the Company pay the $100,000 due under the Amended and Restated Note until August 25, 2014, at which time it was paid. The Company subsequently recaptured all previously recorded interest expense related to the note. Between December 1, 2016 and March 16, 2017, the Company received aggregate proceeds of $101,299 from John Lemak, an affiliate of Sandor Capital, a related party and significant shareholder, for which notes were issued bearing 8% interest annually. On April 1, 2017, the Company issued a note for $102,465 consisting of $101,000 in principal and $1,465 in accrued interest for the previous notes. The $299 forgiven as part of the note restructure was recorded as a gain on extinguishment of debt. The note is non-interest bearing, matures on September 30, 2018, as amended, and is unsecured. Between December 15, 2016 and January 13, 2017, the Company received aggregate proceeds of $41,550 from Sandor Capital, a related party and significant shareholder, for which notes were issued bearing 8% interest annually. On April 1, 2017, the Company issued a note for $42,374 consisting of $41,550 in principal and $824 in accrued interest for the previous notes. The note is non-interest bearing, matures on September 30, 2018, as amended, and is unsecured. On April 1, 2017, the company renegotiated a $65,000 note to Sandor Capital, a related party and significant shareholder, with interest tied to the performance of its joint venture agreement into a new $71,097 note. The note is non-interest bearing, matures on September 30, 2018, as amended, and is unsecured. At the time of the refinance, the joint venture had not produced positive income, so no interest was due on the note. The $6,097 consideration given on the new note was recorded as a loss on extinguishment of debt. Between May 1, 2017 and June 29, 2017, the Company received aggregate proceeds of $140,000 from John Lemak, an affiliate of Sandor Capital, a related party and significant shareholder, for which notes were issued bearing 8% interest annually. On April 1, 2017, the Company issued a note for $140,000 to restructure the previous notes. The note is non-interest bearing, matures on January 31, 2019 as amended, and is secured by certain domain names and websites owned by the Company. Between August 1, 2017 and September 28, 2017, the Company received aggregate proceeds of $182,000 from John Lemak, an affiliate of Sandor Capital, a related party and significant shareholder, for which several notes were issued bearing 8% interest annually. The notes are non-interest bearing, mature on January 31, 2019, as amended, and secured by certain of the companys domain name and websites. Between October 1, 2017 and December 22, 2017, the Company received aggregate proceeds of $170,000 from John Lemak, an affiliate of Sandor Capital, a related party and significant shareholder, for which several notes were issued bearing 8% interest annually. The notes mature on January 31, 2019, as amended, and are secured by certain of the companys domain name and websites. On February 15, 2018, the Company received $40,000 from John Lemak, an affiliate of Sandor Capital, a related party and significant shareholder, for which a note was issued bearing 8% interest annually. The note matures on January 31, 2019, as amended, and is secured by certain of the companys domain name and websites. On March 29, 2018, the Company received $25,000 from John Lemak, an affiliate of Sandor Capital, a related party and significant shareholder, for which a note was issued bearing 8% interest annually. The note matures on January 31, 2019, 2018, as amended, and is secured by the Companys equity interests in Crush Mobile LLC (pari passu with Park). On March 29, 2018, the Company received $50,000 from Kae Yong Park and her spouse Howard Baer (together, Park), a related party and significant shareholder, for which a note was issued bearing 8% interest annually. The note matures on January 31, 2019, as amended, and is secured by the a subordinated interest in the Companys equity interests in Crush Mobile LLC. On April 17, 2018, the Company received $40,000 from John Lemak, an affiliate of Sandor Capital, a related party and significant shareholder, for which a note was issued bearing 8% interest annually. The note matures on January 31, 2019, as amended, and is secured by the Companys equity interests in Crush Mobile LLC (pari passu with Park). On May 8, 2018, the Company received $50,000 from John Lemak, an affiliate of Sandor Capital, a related party and significant shareholder, for which a note was issued bearing 8% interest annually. The note matures on January 31, 2019, as amended, and is secured by the Companys equity interests in Crush Mobile LLC (pari passu with Park). On June 1, 2018, the Company received $16,000 from John Lemak, an affiliate of Sandor Capital, a related party and significant shareholder, for which a note was issued bearing 8% interest annually. The note matures on January 31, 2019, as amended, and is secured by certain of the companys domain name and websites. On June 3, 2018, the Company received $4,000 from John Lemak, an affiliate of Sandor Capital, a related party and significant shareholder, for which a note was issued bearing 8% interest annually. The note matures on January 31, 2019, as amended, and is secured by certain of the companys domain name and websites. |