Related Party Transactions
|12 Months Ended|
Dec. 31, 2015
|Related Party Transactions|
|Related Party Transactions||
NOTE 4 - RELATED PARTY TRANSACTIONS
In prior years, Joseph Fiore, majority shareholder of the Company, and Berkshire Capital, which is controlled by Mr. Fiore, paid expenses, made advances and loaned money to the Company. All expenses paid on behalf of the Company have been recorded in the consolidated statements of operations for the period incurred. The advances and loans were unsecured, bore interest at 6% per annum and due upon demand. On December 31, 2014, the Company entered in an agreement to settle all of its outstanding notes payable and accrued interest due to related parties, which as of that date totaled $11,032,297. Pursuant to the settlement agreement, the Company issued 107,636 shares of its newly created Class A Preferred Stock in settlement of $10,763,611 in debt and accrued interest and $268,686 was forgiven. The Company accounted for the forgiveness of the accrued interest as an addition to paid in capital. See Note 8.
During 2014 the Company incurred approximately $2,261,000 in marketing and promotional fees to a company owned by a shareholder, Mark McGarrity, of which, $270,000 was still outstanding as of December 31, 2014 and has been reported as related party accounts payable on the accompanying balance sheet. The $270,000 was paid in full in 2015. Mark McGarrity became a minority shareholder though the purchase of 2,000,000 shares of common stock at $0.40 per share on December 29, 2014. See Note 7.
On February 23, 2015, the Company acquired Franklin Networks, Inc. (Franklin) from Mark McGarrity and another minority shareholder. Subsequently, on March 2, 2015, Mr. McGarrity was hired as Chief Information Officer of the Company. See Note 10.
During the months of April, May and June, 2015 all activities of Franklin were conducted from shared business offices of an officer of the Company. The Company paid $2,500 per month for the use of these facilities for a total of $7,500 and was reflected as part of Loss from discontinued operations on the accompanying consolidated statements of operations. As of December 31, 2015, the Company owed this officer a total of $7,506 in unpaid rent and other fees which was reported as related party accounts payable on the accompanying balance sheet.
During the months of April, May, June and July 2015, the Company used consulting services of a company owned by an officer of the Company in the amount of $38,215, of which $30,360 was reflected as part of Other General and Administrative Expenses on the accompanying consolidated statements of operations and $7,855 was reflected as part of Loss from discontinued operations on the accompanying consolidated statements of operations.
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://www.xbrl.org/2003/role/presentationRef