Note 6 – Related Party Transactions

The Company’s CEO earned $10,000 per month. The following compensation was recorded within general and administrative expenses – related parties on the statements of operations: $120,000 and $35,000 for the years ended December 31, 2016 and 2015, respectively. As of December 31, 2016, $246,659 of compensation was unpaid and was included in accounts payable – related parties on the balance sheet.

For the years ended December 31, 2016 and 2015, the Company expensed $35,000 and $60,000, respectively, for rent and office services which are included in general and administrative expenses related party to Balance Holdings LLC, an entity controlled by the Company’s CEO. As of December 31, 2016, $5,000 was owed.

During the year ended December 31, 2016, the Company’s CEO provided the Company unsecured short-term advances aggregating $31,842. The advances earn interest at a rate of 6% per annum and are payable on demand. During the twelve months ended December 31, 2016, the Company repaid an aggregate of $54,071 of short-term advances to the Company’s CEO and entities controlled by the Company’s CEO. For the year ended December 31, 2016, the company recorded $1,232 of interest expense. The outstanding balance as of December 31, 2016 was $659.

On December 31, 2016, the CEO loaned $120,000 as a convertible note payable to the Company at an interest rate of 10%, due on October 1, 2017. In addition, the Company issued 600,000 warrants at an execution price of $1.00 which expire on October 1, 2019. (See Note 8).

On December 5, 2016, the CEO loaned $5,000 to the company and an additional $40,000 on December 9, 2016. Both notes were at an interest rate of 8% and are due on October 1, 2017. For the year ended December 31, 2016, the company accrued interest of $230.

On May 4, 2016, the company began compensating its board member Aviv Hillo, $2,500 per month for his consulting and advisory services. The expense for the year ended December 31, 2016 was $15,000 compared to $0 for 2015. In addition, Mr. Hillo was paid $4,000 for legal services related to the purchase of Pimi Agro.

The company on July 27, 2016 signed a sublease with entity partially owned by a related party to sub-lease approximately 2200 square feet 1691 Michigan Ave, Miami Beach, Fl. 33139, beginning August 1, 2016 and ending December 31, 2018 at a monthly base rental of $7,741 per month until July 31, 2017, $7,973 per month from August 1, 2017 to July 31, 2018, and $8,212 from August 1, 2018 to the sublease termination date. In addition to base rent, the company will have to pay 50% of the CAM charges as additional rent. On or about January 15, 2017, The Company was made aware that the master lease for the office space was in default. Consequently, the Company ceased payments. On or about March, 31, 2017, The Company was served with an eviction notice as the Master Lease was still in default. The Company owes two months’ rent to the master lease holder. The Company through its attorney is trying to work out an arrangement to remain in the same space or move to a new space in the building.

As additional compensation for its services, on August 22, 2014, BANG Holdings Corp., issued to the Company 500,000 common shares in exchange for $500 cash. The Company’s principal shareholder holds common shares in BANG Holdings Corp., in excess of 5% of the total outstanding shares through Company’s he controls.