11. Related Parties

12 Months Ended

Dec. 31, 2015

Notes

11. Related Parties

11.  RELATED PARTIES

Christopher Brogdon was a member of the Company’s board of directors and also the Chief Executive Officer and President of the Company through his resignation on November 20, 2015.

Prior to June 30, 2013, the Company acquired an unsecured, interest free receivable due from Christopher Brogdon totaling $500,000.  On September 16, 2014, the receivable due from Mr. Brogdon was exchanged for a 62.5% membership interest in Edwards Redeemer Property Holding, LLC.  As of December 31, 2015 and 2014, the Company had advances to Christopher Brogdon in the amount of $0 and $53,211.  During 2015, the Company determined that advances in the amount of $53,211 were no longer collectible and were recognized as a bad debt expense on the Consolidated Statements of Operations for the year ended December 31, 2015.

For the years ended December 31, 2015 and 2014, the Company made advances to certain companies affiliated with Christopher Brogdon in the amount of $80,000 and $812,074, respectively.  During 2015 and 2014, the Company determined that certain advances to companies affiliated with Christopher Brogdon were no longer collectible based on their ability to repay.  Accordingly, the Company recorded $380,000 and $440,219 as a bad debt expense on the Consolidated Statements of Operations for the years ended December 31, 2015 and 2014, respectively.  As of December 31 2015 and 2014, the Company had advances to related parties of $0 and $300,000, respectively.

Christopher Brogdon was the managing member of GWH Investors, LLC, Redeemer Investors, LLC, Providence HR Investors, LLC, 1321 Investors, LLC, GLN Investors, LLC and Dodge Investors, LLC.  As described in Note 7, the Company has or had notes payable to these entities.  Effective November 20, 2015, Mr. Brogdon resigned all positions which he held with entities affiliated with the Company, and Clifford Neuman, a Director and Secretary, was substituted as managing member of those affiliates.

Clifford Neuman is a manager and member of Gemini Gaming, LLC.  As described in Note 7, the Company had a note receivable from Gemini Gaming, LLC at December 31, 2015.

In connection with its private placement of common stock described elsewhere in this report, the Company engaged the services of GVC Capital, LLC, (GVC”) a registered broker-dealer and FINRA member to serve as Placement Agent.  GVC was paid a Placement Agent fee in the closing of the offering during 2014 in the amount of $415,627, a non-accountable expense allowance in the aggregate amount of $134,392 and expense reimbursement in the aggregate amount of $17,088. Steven Bathgate, a director, is a managing member of GVC and as a result had a financial interest in the payments made to GVC.  In addition, GVC was issued warrants to purchase shares of common stock equal to 10% of the shares sold in the offering.