NOTE 4 – RELATED PARTY TRANSACTIONS

Notes Payable

At March 31, 2017, as result of the change in control, notes payable to related parties were cancelled in exchange for selling one of the Company’s subsidiaries to its former majority shareholder. Notes payable to related parties at June 30, 2016 were as follows:

	March 31, 2017		June 30, 2016

Note payable, interest at 12% per annum, secured by essentially all assets of the Company, due July 31, 2017. The lender is Temple CB LLC (“Temple”), a limited liability company controlled by Jay Hooper, the Company’s President and majority shareholder	$	-	$	531,975
Note payable to Jay Hooper, due on demand, interest at 4% per annum		-		10,000
		-		541,975
Less: current portion		-		(10,000	)
Notes payable, non-current portion	$	-	$	531,975

Advances

As of March 31, 2017, as result of the change in control, advance from former related parties were cancelled in exchange for selling one of the Company’s subsidiaries to its former majority shareholder, and as of March 31, 2017, the Company owed $17,034 to its current officer and majority shareholder for paying various expenses for the Company after the change in control. As of June 30, 2016, $34,977 was due to the Company’s former President and majority shareholder, Mr. Jay Hooper, for advances made to the Company to pay for operating expenses. The advances are non-interest bearing and are due on demand.

Lease Obligation

Through June 30, 2016, the Company, through its subsidiary, Crown Laboratory Inc., leased a warehouse in El Monte, California. The warehouse is owned by Temple CB LLC, (“Temple CB”), a single member limited liability company owned by the Company’s former President and majority shareholder. In October 2016, the Company and Temple CB agreed to terminate the lease effective July 1, 2016. The Company already ceased using the premises before July 1, 2016.

The lease was an operating lease and contained escalating rent payments and a period of free rent. The Company recognized rent expense on a straight-line basis over the entire lease period. During the three and nine months ended March 31, 2016, the Company recorded $147,692 and $443,077 of rent expense, respectively. During the three and nine months ended March 31, 2017, no rent expense was recorded relating to the lease agreement, the Company rented office and warehouse space from a third party company on a month-to-month basis for a few months and recorded a rent expense of $27,786.

As of March 31, 2017, as result of the change in control, lease obligation was cancelled in exchange for selling one of the Company’s subsidiaries to its former majority shareholder. As of June 30, 2016, the Company owed $120,000 under this lease obligation.

As of June 30, 2016, the Company recorded a deferred lease obligation of $636,154. During the six months ended December 31, 2016, relating to the termination of the lease agreement, the Company recorded a gain on the termination of the deferred lease obligation of $636,154. As the deferred lease obligation was to a related party, the Company recorded the gain as a contribution to Additional Paid-in Capital.

Due to Related Party

During the three months ended March 31, 2017, the Company’s current majority shareholder advanced $17,034 to the Company as working capital. During the nine months ended March 31, 2017, the Company used contract labor services provided by Temple CB, a related party to the Company’s former majority shareholder, totaling $14,400 in discontinued operations. There were no amounts owed to Temple CB as of March 31, 2017. As of June 30, 2016, a total of $5,600 was owed to Temple CB. Total payments made to Temple CB for the services during the three and nine months ended March 31, 2016 were $0 and $20,000, respectively.