Quarterly report pursuant to Section 13 or 15(d)

Related Party Transactions

Related Party Transactions
6 Months Ended
Jun. 30, 2022
Related Party Transactions [Abstract]  
Related Party Transactions

Note 11. Related Party Transactions


Revenue and Accounts receivable – Related Party


The Company recognized revenue of $807,218 and $95,813 for the six months ended June 30, 2022 and 2021, respectively, accounts receivable of $366,238 and $443,282, respectively, and contract liabilities of $0 and $63,411 as of June 30, 2022 and December 31, 2021, respectively, from contracts entered into by Craig Technical Consulting, Inc, its majority shareholder, and subcontracted to the Company for four customers.



Accounts payable and accrued interest – related party


At June 30, 2022 and December 31, 2021, Accounts payable and accrued interest owed to CTC, consisted of the following:

    June 30, 2022     December 31, 2021  
Accounts payable   $ 549,171     $ 534,652  
Accrued interest     -       54,145  
Accounts payable and accrued interest   $ 549,171     $ 588,797  


Note payable – related party


On May 1, 2021, the Company converted $4 million advanced to the Company by Craig Technical Consulting, Inc., our principal shareholder, into a related party Note Payable. The remaining $ 3,473,693, that was advanced to the Company was forgiven and recorded as contributed capital. The principal balance of this Note outstanding (together with any accrued, but unpaid interest thereon) shall bear interest at a per annum interest rate equal to the long term Applicable Federal Rate (as such term is defined in Section 1274(d) of the Internal Revenue Code of 1986, as amended), and matures on September 30, 2025, and shall be repaid in the amount of $250,000 every quarter for four (4) years beginning on Oct 1, 2021.


On December 1, 2021, in connection with the assumption of the Decathlon Note, the Company reduced the principal of the Note Payable – related party by recording a reclassification of $1,106,164 from Note Payable – related party to Note payable – non- current (Decathlon note) and recorded forgiveness of note payable of $293,836.


During the six months ended June 30, 2022, the Company recorded interest expense of $18,115.


During the six months ended June 30, 2022, the Company repaid $797,505 and the note payable and accrued interest, was forgiven by Craig Technical Consulting, Inc. The Company recorded debt forgiveness of note payable and accrued interest of $1,624,755 to additional paid in capital.


As of June 30, 2022 and December 31, 2021, the Company had note payable – related party current of $0 and $1,000,000 and non-current of $0 and $1,350,000, respectively.




On August 1, 2021, the Company entered into a Sublease Agreement with its related party and Majority Shareholder, Craig Technical Consulting, Inc. (“Sublandlord”), whereby the Company shall sublease certain offices, rooms and shared use of common spaces located at 150 Sykes Creek Parkway, Merritt Island, FL. The Lease is a month-to-month lease and may be terminated with 30 days’ notice to the Sublandlord. The monthly rent shall be $4,570 from inception through January 31, 2022, $4,707 from February 1, 2022 to January 31, 2023 and $4,847 from February 1, 2023 to January 31, 2024. During the six months ended June 30, 2022, the Company recorded $28,105 to lease expense.