|9 Months Ended|
Sep. 30, 2018
|Related Parties [Abstract]|
13. RELATED PARTIES
At September 30, 2018 and December 31, 2017, the Company had outstanding the following loans due to related parties:
The interest expense, including amortization of debt discounts, associated with the related-party notes payable in the three months ended September 30, 2018 and 2017 was $0 and $157, respectively. The interest expense, including amortization of debt discounts, associated with the related-party notes payable in the nine months ended September 30, 2018 and 2017 was $0 and $369, respectively.
All notes payable to related parties are subordinate to the JGB (Cayman) Waltham Ltd. and JGB (Cayman) Concord Ltd. term loan notes.
Related Party Promissory Notes to Mark Munro, CamaPlan FBO Mark Munro IRA, 1112 Third Avenue Corp, and Pascack Road, LLC
On July 25, 2017, Mark Munro, CEO, and Mark Durfee, Board Member, exchanged their outstanding related party debt for the Company’s Series J preferred stock with special voting rights. Mark Munro converted principal and interest of $1,709 and $195, respectively. Mark Durfee converted principal and interest of $2,550 and $464, respectively. As a result of the exchange, Mark Munro and Mark Durfee received 387 and 613 shares, respectively, of the Company’s Series J preferred stock (Refer to Note 14, Preferred Stock, for further detail).
Convertible Promissory Note to Scott Davis, Former Owner of Nottingham
On July 1, 2014, the Company issued an unsecured $250 convertible promissory note to Scott Davis, who was a related party. The note bore interest at the rate of 8% per annum, originally matured on January 1, 2015 and was convertible into shares of the Company’s common stock at an initial conversion price of $2,636.00. The Company evaluated the convertible feature and determined that the value was de minimis and as such, the Company did not bifurcate the convertible feature.
On March 25, 2015, the Company and Mr. Davis agreed to a modification of the convertible promissory note. The term of the note was extended to May 30, 2016, the initial conversion price was amended to $888.00 per share of the Company’s common stock and, in consideration for this modification, the Company issued to Mr. Davis 56 shares of common stock with a fair value of $864.00 per share.
On May 31, 2015, Mr. Davis converted $25 of principal amount of the note into 29 shares of common stock, with a fair value of $1,412.00 per share and the Company recorded a loss on debt conversion of $13 on the consolidated statement of operations.
On May 30, 2016, the note matured and was due on demand.
On April 3, 2017, Scott Davis assigned the full outstanding principal amount of the note to a third party (refer to Note 8, Term Loans, for additional detail).
Related Party Promissory Note to Pascack Road, LLC
On December 28, 2017, Pascack Road, LLC advanced $75 to the Company in return for a promissory note. The note did not accrue interest and was due on demand.
On January 3, 2018, the Company entered into a receivables purchase agreement whereby the Company sold $275 of receivables to Pascack Road, LLC in exchange for $200 in cash and the conversion of the $75 promissory note outstanding. The sale was unconditional, irrevocable, and without recourse to the Company.
During the nine months ended September 30, 2018, the Company received and remitted $79 of the receivables sold.
1112 Third Avenue Corp Receivables Purchase Agreement – January 3, 2018
On January 3, 2018, the Company entered into a receivables purchase agreement whereby the Company sold $275 of receivables to 1112 Third Avenue Corp in exchange for $275 in cash. The sale was unconditional, irrevocable, and without recourse to the Company.
During the nine months ended September 30, 2018, the Company received and remitted $103 of the receivables sold.
Loans to Employees
During the year ended December 31, 2016, the Company issued loans to employees totaling $928. As of December 31, 2017, the Company had outstanding loans to four employees with total principal of $928. These loans are collateralized by shares of the Company’s common stock held by the employees. As of December 31, 2017, the value of the collateral was below the principal value. As a result, the Company recorded a reserve for the balance of $924 on the consolidated balance sheet as of December 31, 2017. As of September 30, 2018, the balance in loans to employees was $0.
The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef