Quarterly report pursuant to Section 13 or 15(d)

Related Party Transactions

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Related Party Transactions
9 Months Ended
Sep. 30, 2018
Related Party Transactions [Abstract]  
Related Party Transactions

9 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 has no fixed maturity. As of September 30, 2018, the outstanding balance due was $389,502.

 

For the nine months ended September 30, 2018 and 2017, outsourced management services fees of $765,000 was paid to Axia Management, LLC (Axia) as compensation for services provided and were commensurate with the level of effort required to provide these services. These costs are included in Selling, general and administrative expenses in the Statement of Operations. Axia is owned by the majority owner of the Company.

 

At September 30, 2018 and December 31, 2017, the Company had trade payables to Axia of $54,643 and $55,400, respectively.

 

For the nine months ended September 30, 2018 and 2017, the Company purchased telecom services and access to wireless networks from 321 Communications in the amount of $826,401 and $1,253,002, respectively. These costs are included in Cost of revenue in the Statement of Operations. The majority owner of the Company is a minority owner of 321 Communications.

 

At September 30, 2018 and December 31, 2017, the Company had trade payables to 321 Communications of $75,606 and $132,404, 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 nine months ended September 30, 2018 and 2017 were $1,612,126 and $976,678, respectively, and are included in Cost of revenue in the Statement of Operations. A director, officer, and minority owner of the Company has a controlling interest in CenterCom Global.

 

At September 30, 2018 and December 31, 2017, the Company had trade payables to CenterCom Global of $182,364 and $150,000, respectively.

 

See Note 5 for long-term debt due to related parties.