Related Party Transactions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 | ||
| Related Party Transactions [Abstract] | ||
| Related Party Transactions Disclosure [Text Block] |
Note 5. Related Party Transactions Due from Shareholder The Company’s founder and majority stockholder had provided cash advances on an unsecured and non-interest-bearing basis, during the first few years of operation. Beginning in 2016, the founder began receiving distributions from the Company. The amounts owed to and due from the shareholder have been netted in the accompanying consolidated balance sheets. In January 2019, this shareholder surrendered
1,401 common shares to the Company as settlement of the balance due. As of March 31, 2019, and December 31, 2018, the net balance due from the founder was $0 and $1.4 million, respectively. The balance did not carry a maturity date and there were no repayment terms.
Due to Shareholder In October 2016, the Company entered into an unsecured loan agreement with a minority shareholder for up to $1 million of borrowings for operating expenses. In November 2016 and January 2018, the Company entered into additional loan agreements to provide up to an additional $2 million of borrowings for which the Company has guaranteed payment from its subsidiary. The interest rate for the notes is 10% per annum and notes mature in January 2021. One of the notes bore interest at 10% for the first 90 days and was then adjusted to 18% per annum.
As previously mentioned, on August 20, 2018, the Company entered into a Stock Exchange Agreement with Alliance MMA, as amended December 18, 2018 in connection therewith this minority shareholder agreed to accept Series A Preferred Stock Units having a face value equal to the total amount owed to him
($2.1 million) in full satisfaction of such indebtedness (including principal and accrued interest).As of March 31, 2019, and December 31, 2018, the due to shareholder totaled $192,446 and $1,591,491 respectively. The Company incurred interest expense of $23,720 and $41,623 for the quarter ended March 31, 2019 and 2018, respectively. As of March 31, 2019 and 2018, the amount accrued was $0 and $41,623, respectively.
In addition, this shareholder also provided office space to the Company at no cost. |