Quarterly report pursuant to Section 13 or 15(d)

Related Party Transactions

v3.19.3
Related Party Transactions
9 Months Ended
Sep. 30, 2019
Related Party Transactions [Abstract]  
Related Party Transactions

NOTE 12 – RELATED PARTY TRANSACTIONS

 

The Company has engaged an advertising firm whose president is a member of the Board of Directors of the Company. Amounts paid to this company are included in marketing and selling expense in the accompanying consolidated statements of operations and for the three month periods ended September 30, 2019 and 2018, totaled $6,000 and $9,000, respectively and for the nine month periods ended September 30, 2019 and 2018, totaled $28,006 and $25,000, respectively.

The Company has appointed certain stockholders to the Board of Directors.  Director fees paid by the Company, including stock-based compensation, for the three month periods ended September 30, 2019 and 2018 totaled $29,533 and $26,392, respectively, and for the nine month periods ended September 30, 2019 and 2018 totaled $130,982 and $126,859, respectively which is included in general and administrative expenses in the accompanying consolidated statements of operations.

The Company has engaged a related-party law firm (a principal of that firm owns shares in the Company) to provide legal services. Legal fees paid to this firm are included in general and administrative expenses in the accompanying consolidated statements of operations for the three month periods ended September 30, 2019 and 2018 totaled $12,000 and $154,088, respectively and $30,000 and $196,178 for the nine month periods ended September 30, 2019 and 2018, respectively.

The Company has engaged an IT network support firm whose owner is an employee of the Company.  Fees paid to this firm are included in general and administrative expense in the accompanying consolidated statements of operations for the three month periods ended September 30, 2019 and 2018 totaled $516 and $2,866, respectively and $1,692 and $9,357 for the nine month periods ended September 30, 2019 and 2018, respectively.

Interest expense on all related-party notes payable for the three month periods ended September 30, 2019 and 2018 totaled $23,545 and $0, respectively and $46,768 and $16,599, for the nine month periods ended September 30, 2019 and 2018, respectively.

Effective August 1, 2016, the Company entered into a management services agreement with a company owned by the former Chief Executive Officer of Magma.  The agreement calls for payments of $180,000 per year for the first two years paid in monthly installments.  In year three, the amount is reduced to $37,500 for the year paid in monthly installments.  Additionally, the Company granted 30,000 options in conjunction with execution of this agreement.  Payments for the three month periods ended September 30, 2019 and 2018 were $3,125 and $21,250, respectively and $21,875 and $111,250 for the nine month periods ended September 30, 2019 and 2018, respectively.