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LOANS FROM STOCKHOLDER AND AFFILIATE
6 Months Ended
Jun. 30, 2018
Receivables [Abstract]  
LOANS FROM STOCKHOLDER AND AFFILIATE

 

4.  LOANS FROM STOCKHOLDER AND AFFILIATE

 

On June 6, 2014, a shareholder, Lone Star Value Investors, LP was issued a promissory note by the Company in the amount of $50,000 (2014 Note). The proceeds of the note are being used for ongoing operating expenses. The loan bears interest at 10% per annum. Interest on the loan and the full amount of the principal is to be repaid on June 30, 2019.

 

On August 2, 2016, the Company issued a promissory note to an affiliate of a shareholder in the amount of $40,000 (2016 Note). The proceeds of the Note will be used for ongoing operating expenses. The 2016 Note bears interest at 10% per annum. Interest and principal on the 2016 Note are to be repaid on August 31, 2021, and all payments are subordinate to the payment of all outstanding amounts due under the 2014 Note.

 

During the three months ended June 30, 2018 and June 30, 2017, the Company recognized interest expense in the amount of $2,244 and $2,238, respectively.   During the six months ended June 30, 2018 and June 30, 2017, the Company recognized interest expense in the amount of $4,463 and $4,451, respectively. Total accrued interest on the combined 2014 Note and 2016 Note is $27,987 and $23,524 as of the June 30, 2018 and December 31, 2017, respectively.