3. Related Parties

3 Months Ended

Mar. 31, 2015

Loans payable – related parties at March 31, 2015 and December 31, 2014 consist of the following:

	March 31,		December 31,
	2015		2014
Unsecured non-interest bearing notes payable, due on demand, to Frank Russo, a shareholder and former Director of the Company. During the year ended December 31, 2014, Mr. Russo loaned the Company an additional $28,800, $20,808 of the note was converted to common stock, and $144,000 was purchased by four unrelated parties.	$	165,421	$	165,421

Unsecured notes payable to Edward Eppel, a shareholder and Director of the Company, which bears interest at 10% per annum and is due on demand. During the three months ended March 31, 2014, Mr Eppel loaned the Company an additional $811. Accrued interest is equal to $77,422 and $73,803, respectively.		260,833		256,403

Unsecured $20,000 note payable to Robert Saidel, a shareholder of the Company, which bears interest at 7% per annum and due December 1, 2013. Accrued interest is equal to $2,598 and $2,253 at March 31, 2015 and December 31, 2014, respectively. This note is in default at March 31, 2015.		22,598		22,253

	March 31,		December 31,
	2015		2014
Unsecured $7,500 note payable to Robert Saidel, which bears interest at 7% per annum and due January 8, 2014. Accrued interest is equal to $908 and $779 at March 31, 2015 and December 31, 2014, respectively. This note is in default at March 31, 2015.		8,408		8,279

Unsecured $10,000 note payable to Robert Saidel, which bears interest at 7% per annum and due February 16, 2014. Accrued interest is equal to $1,137 and $964 at March 31, 2015 and December 31, 2014, respectively. This note is in default at March 31, 2015.		11,137		10,964

Unsecured $4,000 note payable to Robert Saidel, which bears interest at 7% per annum and due March 9, 2014. Accrued interest is equal to $438 and $369 at March 31, 2015 and December 31, 2014, respectively. This note is in default at March 31, 2015.		4,438		4,369

Unsecured $137,833 note payable to Robert Saidel, which bears interest at 7% per annum and due April 25, 2014. Accrued interest is equal to $13,595 and $11,216 at March 31, 2015 and December 31, 2014, respectively. This note is in default at March 31, 2015.		151,428		149,049

Unsecured $10,000 note payable to Robert Saidel, which bears interest at 7% per annum and due February 28, 2015. Accrued interest is equal to $754 and $581 at March 31, 2015 and December 31, 2014, respectively. This note is in default at March 31, 2015.		10,754		10,581

Unsecured $20,000 note payable to Frank Russo, which bears interest at 7% per annum and due April 3, 2015. Accrued interest is equal to $1,736 and $1,304 at March 31, 2015 and December 31, 2014, respectively.		26,736		26,304

Unsecured $63,250 notes payable to Frank Russo, which bear interest at 7% per annum and due May 1, 2015 through June 25, 2015. Accrued interest is equal to $3,920 and $2,828 at March 31, 2015 and December 31, 2014, respectively.		67,170		66,078

Unsecured $1,350 note payable to Frank Russo, which bears interest at 7% per annum and due May 30, 2015. Accrued interest is equal to $47 and $24 at March 31, 2015 and December 31, 2014, respectively.		1,397		1,374

Total loans payable - related parties	$	730,320	$	721,075

The Company accrued interest expense of $8,434 and $6,301 for the three months ended March 31, 2015 and 2014, respectively, on the above loans. Accrued interest is included in the loan balances.

The Company borrowed $811 and $63,313 from related parties during the three months ended March 31, 2015 and 2014, respectively. During the three months ended March 31, 2014, the Company converted $10,904 of loans payable to related parties into 375,304,000 shares of the Company’s common stock.

On October 5, 2011, the Company entered into a license with BBGN&K LLC (“BBGN&K”) for the rights to use certain patented technologies of which BBGN&K owns the patents. Mr. Aladesuyi is the managing member of BBGN&K. The license agreement calls for royalty payments beginning in 2012 of 8% of EarthSearch’s revenues to be paid quarterly. Royalty fees were $6,877 and $-0- for the three months ended March 31, 2015 and 2014, respectively. Additionally, the Company has prepaid $90,956 of royalty fees it expects to incur for 2015 as of December 31, 2014. During the three months ended March 31, 2014, the Company prepaid an additional $63,556 for an aggregate of $153,612 as of March 31, 2014. These amounts are included in prepaid expenses in the consolidated balance sheets as of March 31, 2015 and December 31, 2014.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References+ Details

EAST COAST DIVERSIFIED CORP 10-Q