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RELATED PARTIES
12 Months Ended
Dec. 31, 2017
Related Party Transactions [Abstract]  
RELATED PARTIES

NOTE 15 – RELATED PARTIES

 

On August 15, 2011, the Company entered into an employment agreement with its then Chief Executive Officer. The agreement was for a period of one year and will remain in effect until either party notifies the other not to further extend the employment period, provides for an annual base salary totaling $250,000 and annual bonuses based on pre-tax operating income, as defined, for an annual minimum of $50,000 in total. On July 18, 2014, the Company’s Chief Executive Officer forgave $326,727 of accrued payroll and amended his employment agreement to reduce his base salary by 30% and eliminated his guaranteed bonus of $50,000 per year. On April 13, 2018, Edward A. Cespedes resigned as the chairman and chief executive officer of our Company and all our subsidiaries. For the years ended December 31, 2017 and 2016 the recorded Chief Executive Officer salary expense was $175,000 and $175,000, respectively. Accrued compensation at December 31, 2017 and 2016 was $468,922 and $463,760, respectively (See Note 12) and is included in accrued expenses on the consolidated balance sheets. In April 2018, prior to the resignation of the Chief Executive Officer, there was forgiveness of $200,000 of the accrued payroll.


As of December 31, 2017 and 2016, the Company’s former Chief Executive Officer and current consultant was owed $51,048 and $56,635 for amounts paid on behalf of the Company.


On November 14, 2017, the Company sold a total of 1,520,000 shares to related parties to current management and directors for proceeds of $380,000 ($0.25 per share). In addition, the investor received five-year warrants to acquire 760,000 shares for a strike price of $0.40 and five-year warrants to acquire 760,000 shares for a strike price of $0.60 per share.


See Note 6 for Convertible Notes Payable Related Party, Note 11 for Purchase Order Financing Related Party, Note 12 for Commitments involving Related Parties and Note 14 for issuance of stock options to related parties.