NOTE 7 – RELATED PARTY TRANSACTIONS

During the year ended December 31, 2017, Sanford Lang, the Company’s Chairman and former CEO, advanced the Company $289,821 to pay for general operating expenses, his and Martin Goldrod’s personal compensation. The advances are uncollateralized, require a monthly interest payment of $2,545 and due on demand.

As of March 31, 2020, the Company owed The Starco Group, Inc, (“TSG”) $72,843 for expenses paid by The Starco Group on behalf of the Company for expenses to launch licensed brands. Once royalties exceed $250,000 in the aggregate, TSG will deduct the incurred expenses from the subsequent royalty payments until TSG is paid in full. In addition, the Company owes TSG an additional $47,129 for expenses paid on behalf of the Company or funds advanced to the Company to pay for other operating expenses.

As of March 31, 2020, the Company owes two members of the board $1,570 and $637, respectively, for cash advances to the Company.

On January 24, 2020, the Company executed a promissory note for $100,000 with Ross Sklar, CEO. The note bears interest at 4% per annum, compounded monthly, is unsecured and matures in two years.

During the three months ended March 31, 2020 and 2019, the Company recognized royalty income of $55,674 on approximately $547,000 of related party gross sales and $61,263 on approximately $609,000 of related party gross sales, respectively.  There is a $17,974 receivable from The Starco Group as of March 31, 2020.  Mr. Sklar, CEO, is the founder and current CEO of TSG.