Quarterly report pursuant to Section 13 or 15(d)

Related Parties and Related Party Transactions

v3.23.3
Related Parties and Related Party Transactions
 9 Months Ended
Oct. 31, 2023
Related Parties and Related Party Transactions  
Related Parties and Related Party Transactions

Note 11. Related Parties and Related Party Transactions

 

Related party balance sheet items (in thousands)

 

 

 

As of October 31,

2023

 

 

As of January 31, 2023

 

 

 

 

 

 

 

 

Prepaid expenses

 

 $ -

 

 

 $ 2,000

 

Accounts payable and accrued expenses

 

 

 130

 

 

 

 28

 

Loans payable

 

 

 957

 

 

 

 13

 

 

Related party income statement items (in thousands)

 

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

 

October 31,

 

 

October 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting expenses

 

 $ 66

 

 

 $ 30

 

 

 $ 198

 

 

 $ 90

 

Stock based compensation

 

 

 631

 

 

 

 575

 

 

 

 1,931

 

 

 

 1,725

 

Payroll expenses

 

 

 120

 

 

 

 132

 

 

 

 358

 

 

 

 484

 

 

During the quarter ended July 31, 2021, the Company issued 50,000 shares of Series A Preferred Stock to Epic. The issuance was done as a prepayment for services to generate sales for the Company. The shares are earned as sales generated by Epic achieve certain sales targets.

 

In May 2023, Overwatch distributed to us Pulse and PulseX tokens of 12.3 billion each. As a result of this transaction, the Company distributed to Epic 2.5 billion Pulse tokens. The receipt of Pulse and PulseX also earned Epic 50,000 shares of Series A Preferred Stock, which were issued to Epic during the quarter ended July 31, 2021 and recorded as a prepaid expense of $2.0 million. Our board decided that the value received from Pulse and PulseX, in lieu of sales, satisfied the requirements for the Series A Preferred Stock to be earned by Epic.

 

On July 14, 2023, a board director of the Company loaned it $55,000, representing half of the Company’s employee retention credit refund, which the Company expects to receive this year. The note calls for the payment of the principal sum of $55,000 plus interest of $12,500 for a total of $67,500. The maturity date of the note is December 31, 2023.

 

On August 15, 2023, Epic, with the approval of the board, purchased Mercury’s building for $480,000. Mercury used $461,000 of the proceeds from the sale to payoff both Mercury’s line of credit and term loan. After paying off the notes and closing costs, Mercury was left with $11,000 for general corporate purposes.

 

On September 7, 2023, Epic formalized the loans to the Company in a note. As of July 31, 2023, the outstanding balance was $0.7 million. Subsequent to July 31, 2023, Epic has provided funding and plans to provide additional funding to equal a total note principal of $1.0 million. As of October 31, 2023, the remaining amount to be funded by Epic under the note is $111,000. Monthly interest only payments at an annual rate of 4% will be made through the maturity date of February 1, 2025.

 

On September 28, 2023, Robert Adams, a board director, purchased 300,000 shares of Series C preferred stock for 11.0 billion PulseX tokens, which equaled $104,000 at date of transfer of the tokens.