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RELATED PARTY TRANSACTIONS
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
NOTE 6 - RELATED PARTY TRANSACTIONS

On March 22, 2016, Company executed a promissory note with Sector Five, Inc., a privately held Delaware corporation, for the purchase of inventory in the amount of $120,006. The note is due in one year and bears interest at 5%. The balance of the note was subsequently reduced by $34,840 for $17,160 of inventory that was returned to the lender and $7,260 that was determined to be obsolete. As of December 31, 2017, there was $85,166 and $9,335 of principal and interest, respectively, due on this note. As of September 30, 2018, there is $85,166 and $12,520 of principal and interest, respectively, due on this note. This note is currently past due.

 

Since the change in control, the Company’s Chairman has loaned funds to the Company in support of its operations by providing payments to the Company’s vendors and advances for operations. These amounts are considered due on demand and are non-interest bearing. As of September 30, 2018 and December 31, 2017, the balance due for these advances is $76,070 and $211,175, respectively.

 

Since the change in control, Kirkland Holdings, Inc., a company with common management, has advanced funds to the Company for operations. The advances are unsecured, non-interest bearing and due on demand. As of September 30, 2018 and December 31, 2017, the balance due for these advances is $14,348 and $59,267, respectively.

 

Per the terms of a consulting agreement, dated January 4, 2018, with Sector Five, Inc., a privately held Delaware corporation, the company will pay $5,000 a month for services to be rendered. As of September 30, 2018, the Company has paid $40,000 to Sector Five, Inc and there is $5,000 outstanding per the agreement.

  

Pursuant to the terms of the employment agreement with Erick Kuvshinikov, CEO, effective February 13, 2018, the Company granted Mr. Kuvshinikov 1,000,000 shares of common stock, all of which were fully vested as of September 30, 2018. The shares were valued at the closing stock price on the day they vested of $.30 for total non-cash expense of $300,000. In addition, Mr. Kuvshinikov will also receive a salary of $2,500 a month for six months. Mr. Kuvshinikov’s agreement was extended for another year.

 

The Company is currently in dispute with a former officer about unpaid compensation. The former officer is claiming that the Company owes him approximately $50,000 for commissions earned but never paid. The Company disputes this claim and believes there is less than a 50% chance of ever having to pay this claim.