Note 6 – Related Party Transactions

On June 5, 2014, the Company issued 12,000,000 and 8,000,000 shares of common stock as “founder shares” to two entities controlled by the Company’s Board Chairman for services rendered in forming the Company. The shares had a fair value of $2,000.

On August 22, 2014, the Company entered into a one-year agreement to provide business development and corporate planning services to Bang Holdings Corporation (“Bang Holdings”), in which the Company’s Chairman of the Board and, Chief Executive Officer (“CEO”) has an indirect interest in. Bang Holdings shall pay the Company $150,000 over the term of the agreement. During the year ended December 31, 2015, the Company recognized $39,000, of revenues related to the agreement. During the period from June 4, 2014 (inception) to December 31, 2014, the Company recognized $111,000 of revenues related to the agreement. Pursuant to the agreement, the Company received 500,000 shares of common stock of Bang Holdings as consideration for a $500 investment in cash recorded at cost.

In connection with services performed related to the above business development agreement, 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: $150,000 and $105,000 during the year ended December 31, 2015 and the period June 5, 2014 to December 31, 2014, respectively. As of December 31, 2014, the $70,000 of compensation was unpaid and was included in accrued expenses – related party on the balance sheet. As of December 31, 2015, $174,000 of compensation was unpaid and was included in accounts payable – related parties on the balance sheet.

For the year ended December 31, 2015, the Company expensed $60,000 and during the period from June 5, 2014 (inception) to December 31, 2014, the Company expensed $35,000 to Balance Holdings LLC, an entity controlled by the Company’s CEO, for rent and office services, which was included in general and administrative expenses – related party in the statement of operations. As of December 31, 2015, $25,000 was unpaid and was included in accounts payable – related parties on the condensed balance sheet.

On June 5, 2014, July 9, 2014 and August 22, 2014 the Company received $505, $100 and $500 of short-term advances, respectively, from entities controlled by the Company’s Board Chairman to fund the Company’s early formation expenses. The short-term advances remained outstanding as of December 31, 2014 and were included within short-term advances – related parties on the balance sheet.

On January 15, 2015, the Company’s Board of Directors approved the issuance of 250,000 and 150,000 shares of the Company’s common stock to the Company’s then-Chief Executive Officer, and the Secretary, respectively. The common stock had a fair value of $40.

During the year ended December 31, 2015, the Company’s CEO provided the Company unsecured short-term advances aggregating $58,840. The advances earn interest at a rate of 8% per annum and are payable on demand. During the year ended December 31, 2015, the Company repaid an aggregate of $38,325 of short-term advances to the Company’s CEO and entities controlled by the Company’s CEO to fund the Company’s early formation expenses.