RE:RE:RE:RE:Dilution 11. COMMITMENTS AND CONTINGENCIES
From 2003 to 2017, the Company used a residential property in Larchmont New York owned by the Estate of Sidney B. Lifschultz (an entity controlled by CEO David Lifschultz) for office and marketing purposes. The agreed rental amount for such use was $250,000 per year, or a total of $3,750,000 for the 15 years. The $3,750,000 was unpaid and included in “Due to Related Parties” at December 31, 2019 (see Note 7). On July 3, 2020, the Estate of Sidney B. Lifschultz distributed its $3,750,000 receivable from the Company to David Lifschultz ($1,875,000) and Bruce Abbot ($1,875,000).
On July 7, 2020, the Company agreed to satisfy a total of $3,875,000 then owed to David Lifschultz and Bruce Abbott through (1) Company reduction of a total of $1,676,984 of the Company’s receivable balances from David Lifschultz and Bruce Abbott (see Note 4) and (2) Company issuance of new convertible debentures totaling $2,198,016 to David Lifschultz ($1,099,008) and Bruce Abbott ($1,099,008) (see Note 6).
From January 1, 2018 to September 30, 2020, the Company used a residential property in Mamaroneck New York paid by COO Bruce Abbott and CEO David Lifschultz for office and marketing purposes. The agreed rental amount for such use was $15,625 per quarter. As of December 31, 2020, $46,875 is unpaid and included in “Due to Related Parties” (see Note 7).
Beginning on October 1, 2020, the company agreed to reimburse David Lifschultz and Bruce Abbot for out-of-pocket expenses that they incurred on behalf of the company for occupancy and related cost. The amount is €10,780, or approximately $12,800 per month and is split evenly between David Lifschultz and Bruce Abbott. For the year ended December 31, 2020, the total amount was $38,459.