Annual report pursuant to Section 13 and 15(d)

Notes Receivable

v3.19.1
Notes Receivable
 12 Months Ended
Dec. 31, 2018
Receivables [Abstract]  
Notes Receivable

NOTE 8 – NOTES RECEIVABLE

 

At December 31, 2018 and 2017, notes receivable were comprised of the following:

 

    2018     2017  
First State Compassion Center -12.5% per annum, maturing in 2026   $ 578,723     $ 624,275  
The Healer - 8% per annum, maturing in 2021     307,429       -  
Chooze Corp. - 8% per annum, maturing in 2021     257,687       -  
Total notes receivable     1,143,839       624,167  
Current portion of First State Compassion Center note receivable     51,462       45,444  
Notes receivable, long-term portion   $ 1,092,377     $ 578,831  

 

The Company loaned approximately $700,000 to First State Compassion Center, its Delaware cannabis-licensee client, during the period of October 2015 to April 2016. In May 2016, this client issued a 10-year promissory note, as amended, to the Company bearing interest at a compounded rate of 12.5% per annum. The monthly payments of approximately $10,100 will continue through April 2026, at which time the note will be fully paid down. At December 31, 2018 and 2017, the current portion of this note comprised the Note Receivable, Current Portion amounts on the balance sheets, and the long-term portion of approximately $527,000 and $579,000, respectively, was included in the caption Notes Receivable, Less Current Portion.

 

During 2018, the Company loaned an aggregate of $550,000 to Chooze Corp. and The Healer, two unrelated third-party companies in the cannabis industry. The loans bear interest at 8% per annum and mature in 2021. At December 31, 2018, the aggregate loan balances plus accrued interest approximated $565,000. In January 2019, the note receivable from Chooze Corp. was converted into a 2.7% ownership interest in that entity.