Note 6 – Related Party Transactions

The Company’s CEO earned $10,000 per month through June 30, 2022. This monthly compensation was terminated effective June 30, 2022. The following compensation was recorded within general and administrative expenses – related parties on the statements of operations: $60,000 and $90,000 for the nine months ended September 30, 2022, and 2021, respectively. As of September 30, 2022, and December 31, 2021, $911,659 and $851,659, respectively, of compensation was unpaid and was included in accounts payable – related party on the consolidated balance sheet.

On September 30, 2016, Balance Group LLC 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 exercise price of $1 which expired on September 30, 2021 (See Note 8). The note is currently in default and has an accrued interest balance of $72,033.

During 2016, 2017, and 2019 Balance Group LLC loaned an additional $66,850 to the Company. The notes are in default and have an accrued interest balance of $30,429.

On June 27, 2021, the Company received $50,000 from the CEO in exchange for a convertible promissory note with a face value of $53,192 which bears 12% interest per annum and matures on June 27, 2022, or upon the Company raising $250,000 from investors, whichever occurs first. The difference between the amount received and the face value of $3,192 was recorded as a discount and is being amortized over the life of the note. Additionally, the note comes with a beneficial conversion feature of $3,799 which was also recorded as a discount and is being amortized over the life of the note. For each three and nine months ended September 30, 2022, the Company recorded $1,783 and $1,800, respectively, of amortization of debt discount. As of September 30, 2022, the remaining discount on the note is $0 and the Company has accrued interest of $1,644.

On July 9, 2021, Krypto Ventures, Inc. formerly known as KryptoBank Co. issued an unsecured promissory note in the amount of $25,000 to Lyons Capital LLC, a significant shareholder of Krypto Ventures, Inc. The note carries an interest rate of 12% and is due on the earlier of July 8, 2022, or the date on which Krypto Ventures, Inc. raises at least $200,000. As of July 29, 2021, the Company has accrued interest of $7,129. The note and accrued interest were deconsolidated as part of deconsolidation of Krypto Ventures, Inc. on July 29, 2021 (See Notes 3 and 8).

On June 29, 2021, Balance Labs Inc. made a loan to Krypto Ventures, Inc, formerly known as KryptoBank Co., a related party in the principal amount of $25,000 which loan has an interest rate of 12% per annum and a maturity date of June 28, 2022. For the three and nine months ended September 30, 2022, the Company recorded $757 and $765, respectively of interest income in relation to this note. This note was converted into equity in 2021.

As of September 30, 2021, the CEO and companies controlled by the CEO have loaned the Company a total of $1,673,558 in addition to the convertible notes discussed above. The loans carry an interest rate of 8% and mature one year and one day from the date of the loan. The Company accrued interest of $443,218 on these loans. The total outstanding including accrued interest total $1,721,391 which are in default as of September 30, 2022.

Krypto Ventures Inc, formerly known as KryptoBank Co., as part of its initial funding, borrowed an additional $100,000 from its shareholders during the years ended December 31, 2018, and 2017. The notes have a stated interest rate of 12% compounded annually and are due on demand. The balance outstanding as of July 29, 2021, is $112,167. The Company had accrued interest of $38,886 as of July 29, 2021, The notes and accrued interest were deconsolidated on July 29, 2021 as part of deconsolidation of Krypto Ventures, Inc. (See Notes 3 and 8).

BALANCE LABS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of September 30, 2022

(Unaudited)

On October 3, 2019, the Company received $40,000 from The Foundation in exchange for a promissory note which bears 12% interest per annum and matured on October 10, 2020, or upon the Company raising $500,000 from outside investors, whichever occurs first. The promissory note is currently in default, and as of September 30, 2021, accrued interest on the note is $12,427. The promissory note comes with a warrant to purchase 40,000 shares of the Company’s stock with an exercise price of $1.00 per share and expires on October 10, 2022. The warrants have a relative fair value of $8,283, which was recorded as a debt discount which has been fully amortized.

On December 2, 2020, the Company received 1,000,000 shares from EZFill Holdings Inc., a related party, in exchange for consulting services provided in the past and as part of an agreement between both parties. The shares are valued at $1 each. The shares received are not publicly traded. Each share valued at $1 each based on a recent cash price of the related party. The investment is reflected on the consolidated balance sheet as an investment in a related party. On September 14, 2021, the S-1 Registration Statement for EZFill Holdings, Inc. was declared effective by Securities and Exchange Commission. This investment is recorded at fair value as available-for-sale securities as of September 30, 2022, and using cost method as of December 31, 2021, with the gains and losses being recorded through other income on the consolidated income statement for the periods then ended.

During January 2021, The Farkas Group, a related party, loaned the Company $73,500, unsecured, for one year and one day at an interest rate of 8% and currently in default.

During February 2021, The Farkas Group, a related party, loaned the Company $165,000, unsecured for one year and one day at an interest rate of 8% and currently in default.

During March 2021, The Farkas Group, a related party, loaned the Company $10,000, unsecured for one year and one day at an interest rate of 8% and currently in default.

During April 2021, The Farkas Group, a related party, loaned the Company $82,000, unsecured for one year and one day at an interest rate of 8% and currently in default.

During May 2021, The Farkas Group, a related party, loaned the Company $10,000, unsecured for one year and one day at an interest rate of 8% and currently in default.

During June 2021, The Farkas Group, a related party, loaned the Company $52,000, unsecured for one year and one day at an interest rate of 8% and currently in default.

During August 2021, The Farkas Group, a related party, loaned the Company $15,000, unsecured for one year and one day at an interest rate of 8% and currently in default.

BALANCE LABS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of September 30, 2022

(Unaudited)