Loans from Parent and Other Related Party Transactions |
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| Loans from Parent and Other Related Party Transactions |
Note 8 – Loans from Parent and Other Related Party Transactions
To fund the Company’s operations for the nine months ended September 30, 2022 and 2021, the former Parent advanced funds and paid expenses of InnovaQor and the Group in the amount of $496,517 and $151,452, respectively. The amount as of September 30, 2022 is included in Due to Former Parent and Notes Payable in the accompanying Condensed Consolidated Balance Sheet. During the three months ended September 30, 2022, the former Parent converted $803,416 of these advanced into a promissory note in the amount of $883,757, representing a 10% original issue discount. The loan is due on December 31, 2022. Also, it provides for default interest at 18% per annum.
During the nine months ended September 30, 2022, Ms. Hollis, the Chief Executive Officer of the Company, loaned the Company $96,100. The Company entered into promissory notes in the amount of $105,710, representing a 10% original issue discount. The loans were due on September 6, 2022 and are currently in default. They provide for default interest at 18% per annum. In addition, the Company issued Ms. Hollis shares of Series C-1 Preferred Stock on March 31, 2022 in connection with one of the loans. These shares of Series C-1 Preferred Stock were valued at $15,250 using the Option Price Method and the same assumptions as used to value the prior issuance of Series C-1 Preferred Stock.
During the three months ended September 30, 2022, Alcimede Limited loaned the Company $32,500. Seamus Lagan, the Chief Executive Officer of Rennova, is the sole director of Alcimede Limited. This amount is due on demand. The Company entered into a promissory note in the amount of $35,750, representing a 10% original issue discount. The loan is due on December 5, 2022. Also, it provides for default interest at 18% per annum.
The above amounts are not indicative of what third parties would have agreed to.
Related Parties Revenue
Included in net revenues for the three months ended September 30, 2022 and 2021 is $33,498 and $58,344, respectively, of intercompany revenue with Rennova (the former parent). Net revenues for the nine months ended September 30, 2022 and 2021 include $135,291 and $182,976, respectively, of intercompany revenue with Rennova (the former parent).
The Group has incurred certain costs that have been allocated from Rennova. Included in the Condensed Consolidated Statements of Operations are the following allocated costs:
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