Quarterly report pursuant to Section 13 or 15(d)

RELATED PARTY TRANSACTIONS

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RELATED PARTY TRANSACTIONS
3 Months Ended
Mar. 31, 2019
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS
14 RELATED PARTY TRANSACTIONS

 

The following transactions were entered into with related parties:

 

LOANS PAYABLE

 

Description   Interest Rate    

Maturity

Date 

  March 31,
2019
    December 31,
2018
 
                       
Vladimir Skigin                            
               Equipment funding     36 %   On Demand    $ 86,225      $ 81,316  
               Promissory note     15 %  

January 11, 

2020

    57,348       55,474  
                             
Notes payable – Related parties               $ 143,573     $ 136,790  

 

Interest expense totaled $6,784 and $69,748 for the three months ended March 31, 2019 and 2018, respectively. 

 

Vladimir Skigin

 

Vladimir Skigin has personally advanced the Company equipment funding. Mr. Skigin is considered to be a related party as his shareholding and that of the Company’s under his control exceeds 5%.  

 

Equipment funding

 

The Company entered into an agreement with Gibbs, whereby the importation of kiosks and accessories was arranged and funded by Gibbs, Skigin funded a portion of the kiosks and accessories purchased under the same terms and conditions of the agreement entered into with Gibbs. In terms of the agreement, a 5% margin has been added to the cost of the kiosks and accessories purchased and to the liability outstanding. The amount was due on November 1, 2017. The amount has not been paid to date. The agreement does not provide for any default provisions and management is currently negotiating the terms of repayment with Skigin. A penalty interest rate has been provided for on the loan. The balance of the note plus accrued interest at March 31, 2019 is $86,225.

 

Promissory note

 

On April 17, 2018, the Company issued a Promissory Note in the aggregate principal amount of $49,491 to Vladimir Skigin. The note has a maturity date of September 13, 2018 and a coupon of eighteen percent per annum. The Company has the right to prepay the note without penalty prior to maturity date. On September 13, 2018, the maturity date of the note was extended to January 11, 2019. On February 21, 2019 the maturity date was extended to September 13, 2019, with the interest rate changed to 15%.  The balance of the note plus accrued interest at March 31, 2019 is $57,348.

 

CONVERTIBLE NOTES PAYABLE

  

                               

March 31

2019

   

December 31

2018

 
Description  

Interest

rate

    Maturity Date   Principal    

Accrued

interest

   

Unamortized

debt discount

   

Balance,

net

   

Balance,

net

 
                                         
Cobbolo Limited     15 %   December 26, 2019     53,438       13,265             66,703       64,726  
      15 %   December 26, 2019     52,959       13,146             66,105       64,146  
                                                     
Total convertible notes payable               $ 106,397     $ 26,411     $     $ 132,808     $ 128,872  

  

Interest expense totaled to $3,935 and $506,865 for the three months ended March 31, 2019 and 2018, respectively.

 

The convertible notes above have a fixed conversion price of $0.20 per common share.

 

Vladimir Skigin

 

Vladimir Skigin is the principal and has control over Cobbolo Limited and has also personally advanced the Company funds.

 

  Cobbolo Limited

 

On June 29, 2017, the Company exchanged a note issued to Cobbolo Limited with a principal amount of $50,000, together with accrued interest thereon of $3,438, totaling $53,438, for a convertible note, principal amount of $53,438, bearing interest at 12% per annum and matured on December 26, 2017. In terms of an agreement entered into with the note holder, the maturity date was extended to December 26, 2018 and the interest rate was increased to 15% per annum. On February 21, 2019 the maturity date was extended to December 26, 2019, with the interest rate remaining unchanged. The note is convertible into common shares of the Company at a conversion price of $0.20 per share. The balance of the note plus accrued interest at March 31, 2019 was $66,703.

 

On June 29, 2017, the Company exchanged a note issued to Cobbolo Limited with a principal amount of $50,000, together with accrued interest thereon of $2,959, totaling $52,959, for a convertible note, principal amount of $52,959, bearing interest at 12% per annum and matured on December 26, 2017. In terms of an agreement entered into with the note holder, the maturity date was extended to December 26, 2018 and the interest rate was increased to 15% per annum. On February 21, 2019 the maturity date was extended to December 26, 2019, with the interest rate remaining unchanged. The note is convertible into common shares of the Company at a conversion price of $0.20 per share. The balance of the note plus accrued interest at March 31,2019 was $66,105.

 

In connection with the Convertible notes above, the Company issued a warrant to purchase 531,987 common shares of the Company at a variable exercise price of $0.20 per share, if the convertible note above is converted into common shares prior to its maturity date or $0.30 per share if the convertible note is not converted prior to its maturity date.