Quarterly report pursuant to Section 13 or 15(d)

Related Party Transactions

v3.21.1
Related Party Transactions
3 Months Ended
Mar. 31, 2021
Related Party Transactions [Abstract]  
Related Party Transactions
14 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 March 31, 2021 and December 31, 2020, the outstanding balance due was $0.

 

For the three months ended March 31, 2021 and 2020, outsourced management services fees of $18,457 and $255,000, 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 consolidated statements of operations. Axia is owned by the Company’s Chief Executive Officer.

 

At March 31, 2021 and December 31, 2020, the Company had trade payables to Axia of $373,012 and $666,112, respectively.

 

For the three months ended March 31, 2021 and 2020, the Company purchased telecom services and access to wireless networks from 321 Communications in the amount of $218,334 and $88,974, 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 March 31, 2021 and December 31, 2020, the Company had trade payables to 321 Communications of $25,336 and $25,336, 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 year ended December 31, 2020 and 2019 were $2,821,925 and $2,384,780, respectively, and are included in Cost of revenue in the consolidated statements of operations. The Company’s President has a 50% interest in CenterCom Global.

 

At March 31, 2021 and December 31, 2020, the Company had trade payables to CenterCom Global of $1,252,331 and $1,252,331, respectively.

 

See Note 7 long-term debt due to related parties.