Annual report pursuant to Section 13 and 15(d)

Note Receivable - Related Parties

v3.7.0.1
Note Receivable - Related Parties
 12 Months Ended
Dec. 31, 2016
Receivables [Abstract]  
Note Receivable - Related Parties

Note 7 - Note Receivable – Related Parties

 

    On December 31, 2014, a note of $1,475,766 was issued to the Company in exchange for the Company’s open trade receivables from ChubeWorkx Guernsey Limited (“ChubeWorkx”), a major shareholder. It is payable in sixty equal installments of $27,734 commencing January 1, 2015 and has an interest rate of 5% per annum.
     
    As of December 31, 2015, the Company established an allowances for doubtful accounts for notes receivable – related party of $1,299,609 which is reported as bad debt expense – related parties in the Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2015.
     
    On August 17, 2016, the Company entered into a Settlement Agreement with ChubeWorkx which settled all pending claims between the companies. Under the terms of the Settlement Agreement, the Company recovered the full outstanding principal amount in the current fiscal year in the form of $750,000 of BreathScan® Alcohol Detector inventory – which the Company intends to subsequently sell – and the balance of $549,609 as a prepaid royalty (Note 17). As a result of the Settlement Agreement, the Company reversed the allowance for doubtful note in the amount of $1,299,609 which is included in the Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2016.