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RELATED PARTY TRANSACTIONS
12 Months Ended
Sep. 30, 2019
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

Zachary Bradford – Chief Executive Officer, Director and Former Chief Financial Officer

 

The Company had a consulting agreement with ZRB Holdings, Inc, an entity wholly owned by Zachary Bradford, our Chief Executive Officer and director, for management services. In accordance with this agreement, as amended, Mr. Bradford earned $430,437 and $194,527, respectively during the years ended September 30, 2019 and 2018. The Company owed Mr. Bradford $0 and $89,351 in deferred compensation and reimbursable expenses as of September 30, 2019 and 2018, respectively. Deferred compensation is reported under due to related parties in the consolidated balance sheets. The agreement was terminated in October 2019 when Mr. Bradford stepped down as the CFO and took the position of CEO and accepted the associated employment agreement.

 

During the year ended September 30, 2018, the Company executed eleven 15% promissory notes with a total face value of $189,690 and executed two additional 15% promissory notes with a total face value of $25,030 during the year ended September 30, 2019 with Zachary Bradford, its Chief Executive Officer. Under the terms of the promissory notes the Company received a total of $214,720 and agreed to repay the notes on demand. The Company recorded interest expense of $7,648 during the year ended September 30, 2019. On January 3, 2019, the Company settled all remaining obligations under the notes through the payment of all outstanding principal and interest then outstanding. As of September 30, 2019, Company owed $0 in principal and $0 in accrued interest under the terms of the agreement.

 

Bryan Huber – Chief Innovation Officer and Former Chief Operations Officer and Director

 

On August 28, 2018, the Company executed an agreement with Zero Positive, LLC an entity controlled by Mr. Huber. In accordance with the agreement with Zero Positive, LLC, Mr. Huber earned $171,202, during the year ended September 30, 2019.

 

Under the agreement Mr. Huber was also granted a one-time bonus of $50,000 on August 28, 2018, payment of which will be deferred until certain conditions are met. As of September 30, 2019, the bonus had not been paid. The term of the agreement is one year and automatically renews until cancelled by either party.

 

 

On September 28, 2018, in connection with the consulting agreement executed with Zero Positive, LLC Company issued warrants to purchase 90,000 shares of common stock at an exercise price of $8.00 per share to Zero Positive. The warrants were valued at $2,607,096 using the Black Scholes option pricing model based upon the following assumptions: term of 10 years, risk free interest rate of 3.05%, a dividend yield of 0% and volatility rate of 191%. The warrants vest as follows: 30,000 vested immediately, the balance vest evenly on the last day of each month over forty-two months beginning August 31, 2018. As of September 30, 2019, 48,572 warrants had vested, and the Company recorded an expense of $496,590 during the year ended September 30, 2019. During the year ended September 30, 2018, the Company had a consulting agreement with Bryan Huber, for management services. In accordance with this agreement, as amended, Mr. Huber earned $180,612 during year ended September 30, 2018.

 

Larry McNeill – Director and former Chairman of the Board of Directors

 

During the year ended September 30, 2018, the Company executed eight 15% promissory notes with a total face value of $163,100 and executed an additional 15% promissory note with a total face value of $50,000 during the year ended September 30, 2019 with Larry McNeill, a Director of the Company. Under the terms of the promissory notes the Company received a total of $213,100 and agreed to repay the notes on demand. The Company recorded interest expense of $8,016 during the year ended September 30, 2019. On December 31, 2018, the Company settled all remaining obligations under the note through the payment of all outstanding principal and interest then outstanding.

 

Effective January 1, 2019, the Company agreed to pay non-executive board members $2,500 per month. Mr. McNeil earned $22,500 in Board compensation during the year ended September 30, 2019.

 

Matthew Schultz- Former Chief Executive Officer and Director

 

The Company has a consulting agreement with Matthew Schultz, our former Chief Executive Officer, for management services. In accordance with this agreement, as amended, Mr. Schultz earned $445,437 and $194,527, respectively during years ended September 30, 2019 and 2018. The agreement was terminated on October 7, 2019 when Mr. Schultz stepped down as the CEO and took the position of Chairman of the Board.

 

During the year ended September 30, 2018, the Company executed two 15% promissory notes with a total face value of $30,000 with the spouse of the former CEO of our Company. Under the terms of the promissory notes the Company received $30,000 and agreed to repay the note on demand. On January 1, 2019, the Company settled all remaining obligations under the notes through the payment of all outstanding principal and interest then outstanding. As of September 30, 2019, Company owed $0 in principal and $0 in accrued interest under the terms of the agreements. The Company recorded interest expense of $1,147 during the year ended September 30, 2019.