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Related Parties
12 Months Ended
Dec. 31, 2016
Related Party Transactions [Abstract]  
Related Parties

10. 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 a former affiliate was exchanged for a 62.5% membership interest in Edwards Redeemer Property Holding, LLC. As of December 31, 2016 and 2015, the Company had no advances outstanding to Christopher Brogdon. 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, the Company made advances to certain companies affiliated with Christopher Brogdon in the amount of $80,000. During 2015, 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 as a bad debt expense on the Consolidated Statements of Operations for the years ended December 31, 2015. As of December 31 2016 and 2015, the Company had no advances to related parties outstanding.

 

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, a former affiliate 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 6, the Company had a note receivable from Gemini Gaming, LLC at December 31, 2015. Mr. Neuman provides office space for the Company’s Controller at no charge. For the years ended December 31, 2016, Mr. Neuman was issued 250,000 shares of common stock with a fair value of $112,500 in satisfaction of $100,000 of accrued and unpaid legal fees.  A loss of $12,500 was recognized from the settlement of accounts payable due to related parties. For the years ended December 31, 2016 and 2015, the Company owed Mr. Neuman for legal services rendered $96,689 and $44,092, respectively

 

The Company transitioned the bookkeeping and property management for the Company to Colliers International until Feb 1, 2017. Colliers International was paid $700 per month per property for this service. Andy Sink, director and the interim Chief Operating Officer of the Company through his resignation on March 14, 2017, is a partner of Colliers International. 

 

Creative Cyberweb developed and maintains the Company’s website, and is affiliated with CFO Zvi Rhine’s family. The initial setup fee was $5,000 and ongoing upkeep is $400 per month.

 

In the fourth quarter of 2016 and the first quarter of 2017 , the Company undertook a private offering (“Offering”) of Units, each Unit consisting of a 10% Senior Secured Note and one warrant for every dollar in principal amount of Note purchased. In the Offering, Ultimate Investments, Ltd and the Baller Family Foundation, Inc., each entity controlled by Mr, Baller, each invested $100,000. Zvi Rhine invested $50,000, while is brother David Rhine invested $50,000 and his father Gary Rhine invested $25,000. In addition, Adam Desmond invested $100,000 in the Offering and his father Robert Desmond invested $150,000.

 

During 2016, Zvi Rhine was issued 95,000 shares of common stock for services provided valued at $38,000.

 

During 2016, the directors of the Company were granted a total of 977,275 shares of restricted common stock.