Related Party Transactions

9 Months Ended

Sep. 30, 2020

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.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

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