Note 5 – 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: $30,000 and $30,000 for the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017, $276,659 of compensation was unpaid and was included in accounts payable – related parties on the balance sheet.

For the three months ended March 31, 2017 and 2016, the Company expensed $0 and $15,000, 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 March 31, 2017, $5,000 was owed.

During the three-months ended March 31, 2017, the Company’s CEO provided the Company unsecured short-term advances aggregating $2,000. The advances earn interest at a rate of 8% per annum of which $659 are payable on demand, and $2,000 are due on December 31, 2017. For the three months ended March 31, 2017, the company recorded $1,232 of interest expense. The outstanding balance as of March 31, 2017 was $2,659.

On September 30, 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 7).

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 three months ended March 31, 2017, the company accrued interest of $900.

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 three months ended March 31, 2017 was $2,500 compared to $0 for 2016. In addition, Mr. Hillo was paid $4,000 for legal services related to the purchase of Pimi Agro in 2016.

During the three months ended, January 1, 2017 to March 31, 2017, the company’s CEO made loans to the company in the amount of $33,330. The loans have rate of interest of 8% and mature on December 31, 2017. $358 has been accrued as of March 31, 2017.

On January 9, 2017 and February 9, 2017 a company controlled by the company’s CEO made loans to the Company totaling $4,700. The loans have a rate of interest of 8% and mature on December 31, 2017. $83 in interest has been accrued as of March 31, 2017.

During the three months ended, January 1, 2017 to March 31, 2017 a company controlled by the company’s CEO made loans to the company in the amount of $19,500. The loans have a rate of interest of 8% and mature on December 31, 2017. $227 has been accrued in interest as of March 31, 2017.

The company on July 27, 2016 signed a sublease with an entity partially owned by a related party to sub-lease approximately 2,200 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 which has been accrued. The Company has used its security deposit to partially pay its delinquent rent. On Friday, May 12, 2017 the Company moved its headquarters to 350 Lincoln Road, 2nd Floor, Miami Beach, FL 33139. The Company pays $1,532 per month rent on a month to month basis.