Related Party Transactions
|6 Months Ended|
Jun. 30, 2020
|Related Party Transactions [Abstract]|
|Related Party Transactions||
The Company’s former Chief Executive Officer has advanced the Company various amounts on a non-interest-bearing basis, which is being used for working capital. The advance had no fixed maturity. As noted, Mr. Matzinger elected to exchange outstanding non-interest-bearing debt totaling $389,502 owed by the Company into 6,232 shares of Preferred C stock. As of June 30, 2020 and December 31, 2019, the outstanding balance due was $0.
For the six months ended June 30, 2020 and 2019, outsourced management services fees of $595,000 and $510,000, respectively, were paid to Axia Management, LLC (“Axia”) as compensation for services provided. These costs are included in Selling, general and administrative expenses in the condensed consolidated statements of operations. Axia is owned by the Company’s Chief Executive Officer.
At June 30, 2020 and December 31, 2019, the Company had trade payables to Axia of $933,397 and $666,112, respectively.
For the six months ended June 30, 2020 and 2019, the Company purchased telecom services and access to wireless networks from 321 Communications in the amount of $130,861 and $308,237, respectively. These costs are included in Cost of revenue in the condensed consolidated statements of operations. The Company’s Chief Executive Officer is a minority owner of 321 Communications.
At June 30, 2020 and December 31, 2019, the Company had trade payables to 321 Communications of $81,883 and $140,923, respectively.
The Company contracted with CenterCom Global, S.A. de C.V. (“CenterCom Global”) to provide customer service call center services, manage the sales process to include handling incoming orders, the collection and verification of all documents to comply with FCC regulations, monthly audit of all subscribers to file the USAC 497 form, yearly audit of all subscribers that have been active over one year to file the USAC 555 form (Recertification), information technology professionals to maintain company websites, sales portals and server maintenance. Billings for these services in the six months ended June 30, 2020 and 2019 were $954,217 and $1,163,935, respectively, and are included in Cost of revenue in the condensed consolidated statements of operations. The Company’s President has a controlling interest in CenterCom Global.
At June 30, 2020 and December 31, 2019, the Company had trade payables to CenterCom Global of $618,582 and $282,159, respectively.
See Note 7 long-term debt due to related parties.
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/disclosureRef