Certain Relationships and Related Transactions |
12 Months Ended |
|---|---|
Dec. 31, 2024 | |
| Certain Relationships and Related Transactions | |
| Certain Relationships and Related Transactions | Note 12: Certain Relationships and Related Transactions
The following is a summary of transactions to which the Company and certain officers and directors of the Company are a party or have a financial interest. The Board of Directors of the Company has adopted a policy that all transactions between the Company and its officers, directors, principal shareholders and other affiliates must be approved by a majority of the Company’s disinterested directors and be conducted on terms no less favorable to the Company than could be obtained from unaffiliated third parties.
Of the 48 Units sold in the private placement which began in October 2016, three Units were purchased by Paul W. Mobley, Executive Chairman, and four Units were purchased by Marcel Herbst, Director. Each Unit consists of a Note in the principal amount of $50,000 and a Warrant to purchase 50,000 shares of the Company’s Common Stock. These transactions were all completed on the same terms and conditions as all of the unrelated investors who purchased the other 41 Units. The Notes, at the time of issue, were to mature three years after issue date. In late 2018, the Company sent an offer to each remaining Note holder offering to extend the maturity of the Notes to January 31, 2023. Holders of $775,000 in principal amount of the Notes accepted that offer of extension including the Notes held by Paul W. Mobley and Herbst Capital Management, LLC. In conjunction with the refinancing of the Company in February 2020, Notes held by Paul Mobley were included in the $1,275,000 in principal amount of Notes that were repaid out of the proceeds of the new financing. In September 2022, Paul Mobley bought a subordinated note in principal amount of $200,000 from Marcel Herbst which is included in the balance sheet as a portion of the outstanding convertible notes payable along with the attached warrants. In 2024, Paul Mobley received the 10% interest in the amount of $20,000 from the Company at the same time and same rate as all other subordinated debt holders were paid their interest and included in interest expense. After December 31, 2024, Paul Mobley agreed to pay the Company $50,000 for American Express receipts that could not be located for American Express charges paid by the Company based on the use of his personal credit card. That was established as a receivable at December 31, 2024 and that receivable was repaid immediately after established on May 12, 2025. A similar event happened, based on the review at December 31, 2023, and that time Paul Mobley paid the Company $125,000 to cover any amount from receipts that could not be located. Pinnacle Commercial Capital, LLC (“Pinnacle”), a company owned by William Wildman, was paid a $15,000 advance on the commission that Pinnacle is set to earn for helping arrange new financing for the Company. |