NOTE 14. RELATED PARTY

Rental Home Portfolio Asset Acquisition:

On December 30, 2019, as consideration for the Rental Home Portfolio Asset Acquisition, the Company agreed to issue 4,222,474 of the Company’s common stock valued at $15,385 and Series I, nonconvertible preferred stock valued at $117,926 to the Szkaradeks’. (See Note 4).

The Company also issued two promissory notes, in the aggregate principal amount of $9,750 to the Szkaradeks’ which accrue interest at the rate of 8% per annum and mature on January 31, 2020 with a forbearance through January 1, 2021. (See Note 22).

As part of the Rental Home Portfolio Asset Acquisition, the Company assumed notes with a fair value totaling $86,737, of which, $1,230 were related party notes payable from the Szkaradeks’. (See Note 4).

The following is a summary of the balances of related party notes assumed in the acquisition of Rental Home Portfolio Asset Acquisition as of December 31, 2019

The following is a summary of the fair value of the related party notes assumed is the acquisition of Rental Home Portfolio Asset Acquisition as of December 31, 2019.

The required principal payments for all borrowings for each of the five years following the balance sheet date are as follows:

Benchmark Sellers

As of the October 10, 2019, the date of the senior lender foreclosure, the Benchmark Sellers were no longer considered to be related parties. (See Note 12).

On April 20, 2017, the Company issued Series A convertible promissory notes, in the aggregate principal amount of $12,500 to the former owners of Benchmark and to significant shareholders of the Company, which matured on April 20, 2019. Interest is computed at the rate of 5% percent per annum on the outstanding principal. Interest expense was $695 for the year ended December 31, 2018. These notes shall be convertible into conversion shares, at the holder’s option, upon an event of default at a conversion price per share of $11.88.

On April 20, 2017, the Company issued Series B Notes in the aggregate principal amount of $30,000 to the former owners of Benchmark and to significant shareholders of the Company, which mature on April 20, 2020. Interest is computed at the rate of 3% per annum on the outstanding principal. Interest expense was $929 for the year ended December 31, 2018.

On April 20, 2017, the Company issued Series C Notes in the aggregate principal amount of $7,500 to the former owners of Benchmark and to significant shareholders of the Company, which matured on October 20, 2018. Interest is computed at the rate of 3% per annum on the outstanding principal. Interest expense was $138 for the year ended December 31, 2018.

The following is a summary of the balance of related party notes as of December 31, 2018:

During October 2018, the Company paid the remaining principal and accumulated in-kind interest balance totaling $4,891 on its Series C Notes in the aggregate principal amount of $7,500 to the former owners of Benchmark.