Quarterly report pursuant to Section 13 or 15(d)

Related party transactions and balances

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Related party transactions and balances
9 Months Ended
Sep. 30, 2018
Related Party Transactions [Abstract]  
Related party transactions and balances

9. Related party transactions and balances

 

Related Party Loans

 

In February 2018 the Company provided a loan of EUR 39,048 (approximately USD $45,000) to Engage IT Services Srl to finance hardware purchased by third-party betting shops. In June 2018, the Company increased the loan by EUR 45,675 (approximately USD $53,000). The loans bears interest at 4.47% and is due in February 2019. An officer of the Company holds a 34% stake in Engage IT Services Srl.

 

Advances from stockholders represent non-interest-bearing loans that are due on demand. Interest was imputed at 5% per annum. Balances of Advances from stockholders are as follows:

 

  September 30, 2018 December 31, 2017
Gold Street Capital Corp. $ 141,667   $ 41,143  
Doriana Gianfelici       58,792  
Luca Pasquini       (119,939)  
Other stockholders       567,813  
Total advances from stockholders $ 141,667   $ 547,809  
               

  

Amounts due to Gold Street Capital Corp., the major stockholder of Newgioco Group, are for reimbursement of expenses. During the three and nine months ended September 30, 2018, the Company paid management fees of $nil and $72,000, respectively, to Gold Street Capital Corp.

 

In January 2018, the Company advanced EUR 100,000 (approximately USD $116,000) to an officer to cover fees related to an application for a gaming license in Malta, under the name Ulisse Services, Ltd. As of the date of this report the application is pending and there is no assurance that the gaming license in Malta would be obtained. Changes in the balance of the advance were due to the fluctuations in foreign exchange rates.

 

During the nine months ended September 30, 2018, the Company paid management fees of approximately 360,000 Euro to Ulisse Services, Ltd. to cover office and set-up expenses, of which 40,000 Euro is included in accounts payable.

 

The amounts due to the stockholders at September 30, 2018 are non-interest bearing and due on demand.

 

Related-Party Debt

 

Promissory notes payable to related parties with a principal of approximately $318,000 represents amounts due to Braydon Capital Corp., a company owned by Claudio Ciavarella, the brother of our CEO. These notes bear interest at a rate of 1% per month and have no fixed maturity date. Accounts payable and accrued liabilities include approximately $104,000 in accrued interest on these notes.