RELATED PARTY TRANSACTIONS |
12 Months Ended |
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Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 10. RELATED PARTY TRANSACTIONS
Convertible Notes Due to Related Parties
During the period ended December 31, 2021, the Company relieved the outstanding payables due to related parties by $200,000 and converted those amounts into additional notes with an aggregate amount of $200,000. As the conversion price embedded in the note agreements was below the trading price of the common stock on the dates of issuance, a beneficial conversion feature (BCF) was recognized at the date of issuance. The Company recognized a debt discount at the date of issuance in the aggregate amount of $38,000 related to the intrinsic value of beneficial conversion feature. Additionally, the Company’s executives transferred $70,000 of their outstanding employee notes for cash to a third party, which lowered the related party notes and increased the convertible note balance by $70,000. The transferred notes had no change in terms, thus resulting in no gain or loss on the extinguishment related to the transfer of debt, making the outstanding balance on the related party notes on December 31, 2021 as $976,546, net of debt discounts. As of December 31, 2020, the outstanding balance on the convertible promissory notes was $884,546.
During 2020, management elected to reduce the 10% annual interest rate to 3% because of the affects COVID-19 had on the U.S. economy. As such, on December 31, 2020 interest of $249,102 is deferred on the above notes and included in accrued expenses to related parties. The other 7% was considered imputed interest and is included as a separate line item on the equity statement accordingly.
On July 1, 2021, the annual interest on the notes was re-established to 10%, and as such, on December 31, 2021 the interest of $306,852 is deferred on the above notes and included in accrued expenses to related parties.
Accrued wages and costs - In order to preserve cash for other working capital needs, various officers, members of management, employees and directors agreed to defer portions of their wages and sometimes various out-of pocket expenses since 2011. As of December 31, 2021, and 2020, the Company owed $391,743 and $500,007, respectively, for such deferred wages and other expenses owed for other services which are included in the accrued expenses – related parties on the accompanying balance sheet.
As part of our mission statement to being a for profit for purpose company, the GTX organization and management team wanted to do its part during the pandemic to provide assistance to front line workers. Masks and other essential PPE donated to various hospitals, assisted living facilities police departments through a host of non-profit 501c3’s the Company partnered with. As we saw a continued need for more assistance throughout communities across the country the Company set up on its ecommerce site the ability for individuals to buy PPE on the behalf of any of our vetted charities and the GTX management team pledged to match 100% of each contribution. During 2020 we were able to donate approximately $46K to a variety of non-profits which in turn distributed products and supplies in their community. The $46K of revenue was recognized as part of overall product sales of which $33K was a direct contribution by the upper management team. During 2021 we were able to donate another $ k to a variety of non-profits. We do not expect there to be any ongoing business from these non-profits as the transactions were specifically related to charitable causes.
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