NOTE 5 – RELATED PARTY TRANSACTIONS

The Company currently maintains an executive office in Florida, which is leased by GreenBlock Capital LLC, an investment firm in which the Company’s President serves as a Managing Director but holds no equity or voting rights. The Company has no formal agreement for this space and pays no rent.

In May 2018, we received $12,500 from our Chief Executive Officer and a Director in the Follow-On Bridge Offering (see Note 6).

During the six months ended June 30, 2019, the Company received an additional $549,000 from our equity method investment (see Note 4) for prepaid management fees. As of June 30, 2019, $328,571 of these accumulated fees remain as contract liabilities and we recognized $338,096 as revenues during the six months ended June 30, 2019 based on the service period. As of December 31, 2018, $117,667 of these fees remained as contract liabilities.

During the six months ended June 30, 2019, the Company received $187,500 from EPH as a demand note payable with interest payable at 6% annually. This has been presented as note payable – related party on the condensed consolidated balance sheets.

During the six months ended June 30, 2019, the Company incurred $11,168 in legal fees with a related party and, during the six months ended June 30, 2018, the Company incurred approximately $39,393 from a law firm in which our audit committee chair is an employee. As of June 30, 2019 and December 31, 2018, our accounts payable and accrued expenses include approximately $5,000 and $30,000, respectively, for legal fees incurred in the prior year with this law firm.

During the six months ended June 30, 2019, the Company earned $88,596 in service fees under its agreement with CECO and recorded $161,404 as deferred contract liabilities to be earned through December 31, 2019. Two of the Company’s officers and directors each own minority equity stakes in CECO.