Annual report pursuant to Section 13 and 15(d)

Related Party Transactions

v3.8.0.1
Related Party Transactions
12 Months Ended
Dec. 31, 2017
Related Party Transactions [Abstract]  
Related Party Transactions

NOTE 6 – RELATED PARTY TRANSACTIONS

 

Through June 2016, the Company sublet approximately 2,500 square feet of assembly, warehouse and office space within the Precision CNC facility located at 1858 Cedar Hill Road in Lancaster, Ohio. The sublease provided for the Company to pay rent monthly in the amount of $2,500, which covered space and some utilities. Occupancy costs for the years ended December 31, 2017 and 2016 were $0 and $15,000, respectively. The sublease was terminated as of June 27, 2016.

 

The Company also purchased much of its machined parts through Precision CNC up until June 2016. Precision CNC owns a non-controlling interest in the Company. For the year ended December 31, 2017 and 2016, the amounts invoiced from Precision CNC totaled $0 and $13,868, respectively, and consisted of rent and research and development expenses for machined parts.

 

On June 27, 2016, the Company and Precision CNC entered into an agreement to eliminate $49,299 in payables owed to Precision CNC in return for the transfer of certain net assets of the Company with a remaining book value of $70,495, which included office furniture, software and computer systems, and 50,000 shares of restricted common stock valued at $10,500. The Company recorded a loss on this transaction in the amount of $31,696. There were no accounts payable and accrued expenses at December 31, 2017 and 2016 to Precision CNC.

 

The Company currently maintains an executive office in Florida, which is leased by GreenBlock Capital LLC, an investment firm that the Company’s President serves as a Managing Director but holds no equity or voting rights. The Company has no formal agreement for this space and pays no rent. The Company also sublets office space in Atlanta, Georgia, where it pays $500 per month on a month-to-month basis. The lessor is a company that our CEO previously served as a senior executive.

 

In March 2017, all outstanding Director accounts payable, accrued expenses and notes payable – related parties with an aggregate amount of $156,368 were converted into the Company’s Bridge Offering (see Note 8).

 

In April 2017, the Company’s President forgave $112,797 of deferred salary. This amount was reclassified from accrued expenses to additional paid in capital during 2017.