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Related Party Transactions
6 Months Ended
Jun. 30, 2017
Related Party Transactions [Abstract]  
Related Party Transactions

Included in advances – related parties are amounts owed to the Company’s former CFO and Chairman of the Board of $50,000 at June 30, 2017 and December 31, 2016. Also included in advances – related parties are amounts owed to Ms. Ott of 20,000 Euros, ($22,852 as June 30, 2017) and 75,000 Euros ($85,695 as of June 30, 2017) related to two short term bridge loans. The Company has made arrangements to settle these obligations to Ms. Ott evenly over a 24 month period, starting on October 31, 2017. In addition, the Company settled obligations related to accrued salaries, vacation and related expenses totaling $152,000 owed to Mr. and Ms. Ott. The Company will make an upfront payment to each Mr. and Ms. Ott of $6,750 and will pay the remaining amount owed over a period of 18 months starting in October 2017.  The loans noted above are interest-free loans. The Company plans to continues to pay Mr. and Mrs. Ott the agreed upon severance payments however the upfront payment was not paid as of June 30, 2017. Total severance payments totaled $118,810, of which $71,418 were accrued at June 30, 2017. Mr. Ott and Ms. Ott remain as Directors of the Company and continue to work with the Company.

 

On June 30, 2017, one secured noteholder, an affiliate of a member of our Board of Directors, converted a $50,000 secured promissory note plus accrued interest into 116,833 shares of common stock. The Company issued 50,000 warrants to purchase shares of common stock at a price of $0.50, with a term of five years. See further discussion related to secured promissory notes in Note 4 above.

 

On February 12, 2016, one of the Purchasers of a $100,000 secured promissory note and holder of 50,000 (increased to 100,000 warrants as of December 31, 2016) warrants to purchase shares of common stock at the time of his election, was elected to the Board of Directors to serve as Director and Chairman of the Company’s audit committee. Total warrants due to this director related to the above secured promissory notes for original issuance, modifications, default period and the modification period at June 30, 2017 was 240,000 warrants to purchase common stock.

 

At June 30, 2017 and December 31, 2016, the Company has accrued $65,000 and $55,000, respectively to the above Director and Chairman of the audit committee for services for 2016 as a member of the Board of $35,000 and an additional $20,000 and $30,000 for audit committee services for the year ended December 31, 2016 and for the six months ended June 30, 2017, respectively.

 

Included in accounts payable and accrued expense includes $35,408 due to its CFO’s company for past services performed as a consultant to the Company.

 

The Company has accrued wages and vacation of approximately $1.1 million payable to the former CFO at June 30, 2017 and December 31, 2016. The Company believes that more than half of the balance currently outstanding was to be converted into common stock as a condition of the merger agreement at $2.00 a share. See Note 8 for further discussion regarding the legal proceedings with the Company’s former CFO.