RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2022

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 8: RELATED PARTY TRANSACTIONS

Terrence Flowers

As at December 31, 2019, a total of $11,110 was payable to Mr. Terrence Flowers, who ceased to be a shareholder, officer and director on July 9, 2018.  During the year ended December 31, 2020, the Company repaid $11,000 to Mr. Flowers, leaving a balance due of $110 at June 30, 2022 and December 31, 2021. The amount is reflected on the balance sheet in related party payables.

Coleman Smith and ELOC Holdings Corp.

On July 9, 2018, Mr. William Coleman Smith was appointed to the Board of Directors of the Company and as President, Secretary and Treasurer of the Company.  Subsequently, on July 10, 2018, the Company executed a consulting agreement with ELOC Holdings Corp., a company controlled by Mr. Smith, whereby ELOC will provide the services of Mr. Smith for a fee of $10,000 per month. On April 1, 2021, the Company revised Mr. Smith’s compensation so that he also receives $10,000 per month directly as an employee in addition to accrued monthly fees for management services provided through controlled entity ELOC. On February 7, 2022, the board of directors of the Company approved and authorized a further increase of $10,000 per month in salary for Mr. Smith directly, effective January 1, 2022. 

On April 29, 2014, our 60% controlled subsidiary, GZMC, entered into a management and consulting agreement with Mr. Smith, the sole officer and director of GZMC whereunder GZMC is required to pay an annual salary of $120,000 to Mr. Smith.

During the year ended December 31, 2020, Mr. Smith and ELOC Holdings Corp made short term loans with interest at 1.5% per month to the Company to pay various expenses. As of December 31, 2020, Mr. Smith, ELOC Holdings Corp. and the Company agreed to retroactively allocate interest in the amount of 5% per annum to loans, advances, wages and management fees payable by each of GZMC and the Company from January 1, 2020 forward. The parties entered into a single consolidated promissory note for all amounts payable to each of ELOC and Smith, with a principal amount of $1,217,579 payable to ELOC.

During the fiscal year ended December 31, 2021, the Company paid a total of $151,854, of which $11,854 was repaid during the six months ended June 30, 2021, to ELOC to reduce the principal balance on the loan.

During the six months ended June 30, 2022, the Company’s CEO, William Coleman Smith entered into Promissory Notes with the Company for a total of $250,000 due and payable within 5 (days) of the Company receiving proceeds and bearing interest at 1%.

No repayments were made pursuant to above loans during the six months ended June 30, 2022.

The following amounts are included in debt to related party on our Balance Sheets:

Balance at December 31, 2020, Debt, related party	$	1,217,579
Payments on loan		(151,854	)
Balance at December 31, 2021, Debt, related party.		1,065,725
Convertible Promissory Notes for funding provided		250,000
Balance at June 30, 2022, Debt, related party.	$	1,315,725

The interest expenses related to above loans are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Interest expense on notes	$	13,562	$	13,066	$	26,700	$	28,374

During the three and six month periods ended June 30, 2022, the Company accrued $30,000 and $60,000 in management fees to ELOC, respectively and paid management fees to Coleman Smith of $90,000 and $180,000, respectively.  During the three and six months periods ended June 30, 2021, the Company accrued $30,000 and $60,000 in management fees to ELOC respectively, and paid management fees to Coleman Smith of $60,000 and $90,000, respectively.

The following amounts are included in related party payables on our Balance Sheets: 

	June 30, 2022		December 31, 2021
Coleman Smith, President	$	1,657	$	3,946
Interest payable		82,413		55,713
ELOC Holdings Corp.		180,000		120,000
Terrence Flowers		110		110
	$	264,180	$	179,769

On April 8, 2021, the Company and William Coleman Smith, officer and director entered into a securities purchase agreement whereunder Mr. Smith sold an additional 9% interest in GZMC to the Company for consideration of 10 million unregistered, restricted shares of common stock. On the conclusion of the transaction, the Company controlled 60% of GZMC.