Annual report pursuant to Section 13 and 15(d)

Merchant Account Agreements

Merchant Account Agreements
12 Months Ended
Dec. 31, 2019
Merchant Account Agreements  
Merchant Account Agreements





During February 2019, the Company entered into a purchase agreement for future receivables, whereby, for receipt of $2,755 in cash, the Company agreed to repay the holder a total of $4,290 in four monthly payments of $382 and twenty nine weekly payments of $95. During October 2019, after repaying $3,147 in cash payments, the remaining $1,143 balance was written off to gain on foreclosure as part of the foreclosure of certain Company assets and extinguishment of debts (See Note 5).


During the year ended December 31, 2019, the Company paid $8,804 in principal payments, $2,005 in debt settlement payments, reclassified $131 of overpayments to a short term receivable account and recognized a $288 loss on debt settlement on the remaining eighteen merchant account agreements with outstanding principal balances of $11,228. As of December 31, 2019, there were no merchant account agreements outstanding.


During the years ended December 31, 2019 and 2018, the Company recognized $10,197 and $30,008, respectively, in amortization of deferred financing costs and debt discounts from the amortization of original issuance discounts and deferred debt issuance costs on the straight-line method over the term of the related merchant account agreement, which approximates the effective interest method.




During the year ended December 31, 2018, the Company entered into 65 merchant account agreements, whereby the Company agreed to borrow an aggregate of $70,947, net of $25,126 in original issue discounts and $6,914 in deferred financing costs, in exchange for daily repayment funded through the Company’s future receivables. The merchant account agreements were collateralized by the assets of the Company and are due in terms between one and six months. As of December 31, 2018, there were 18 merchant account agreements with an aggregate balance of $11,228, net of original issue discount of $6,746 and deferred financing costs of $2,380.