|3 Months Ended|
Mar. 31, 2018
|Debt Disclosure [Abstract]|
5. NOTES PAYABLE
Pursuant to a Lockup, Conversion, and Additional Investment Agreement dated October 23, 2017, as amended on November 29, 2017, January 4, 2018, and February 1, 2018 (the “JMJ Agreement”) with JMJ Financial (“JMJ”) whereby the Company and JMJ agreed to settle the current defaults under the promissory note with JMJ upon the closing of the Public Offering, on February 16, 2018, the Company issued 12,005 shares of Series D Convertible Preferred Stock with an issuance date fair value of $12,005,000, which represents the fair value of securities required to be issued pursuant to the JMJ Agreement, in satisfaction of aggregate liabilities previously owed to JMJ of $17,805,175, such that the Company recorded a gain on settlement of $5,800,175 on the condensed consolidated statement of operations during the three months ended March 31, 2018. The Series D Convertible Preferred Stock was determined to be permanent equity on the Company’s condensed consolidated balance sheet.
Separate from and unrelated to the JMJ Agreement, on January 22, 2018, JMJ advanced $250,000 to the Company (the “JMJ Advance”).
On February 1, 2018, the Company and JMJ entered into a letter agreement whereby the parties agreed that, concurrent with the closing of the public offering, the Company will convert the JMJ Advance into units, with each unit consisting of one share of restricted common stock and a warrant to purchase one share of restricted common stock at an exercise price equal to the exercise price of the warrants sold as part of the public offering, at a price equal to 80% of the per unit price in the public offering. On March 16, 2018, the Company issued 73,529 shares of common stock with an issuance date fair value of $205,881 to JMJ, pursuant to this agreement. As of March 31, 2018, a warrant to purchase 147,058 shares of common stock with a fair value of $184,355 had not been issued and, as a result, was included within accrued issuable equity. The warrant was issued subsequent to March 31, 2018.
See Note 8 – Related Parties – BLNK Holdings Transfers to JMJ for additional information.
CONVERTIBLE AND OTHER NOTES – RELATED PARTY
Farkas Group Inc. (“FGI”) Notes
On February 16, 2018 and pursuant to the closing of the Public Offering, the Company paid $688,238 (including principal repayments of $545,000) in satisfaction of the debt.
BLNK Holdings, LLC (“BLNK Holdings”) Notes
On March 16, 2018, the Company issued 74,753 shares of common stock with an issuance date fair value of $209,308 to BLNK Holdings in exchange of the principal and accrued and unpaid interest on the notes.
On February 14, 2018, the Company issued a note payable in the principal amount of $55,000. Interest on the notes accrues at a rate of 8% annually and is payable monthly. The note was repaid during the three months ended March 31, 2018.
During the three months ended March 31, 2018, in addition to the repayment of the $55,000 note discussed above, the Company made principal repayments of $160,000.
Interest expense on notes payable for the three months ended March 31, 2018 and 2017 was $104,983 and $140,661, respectively.
The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.
Reference 1: http://www.xbrl.org/2003/role/presentationRef