NOTE 5 – RELATED PARTY TRANSACTIONS

The Company currently maintains an executive office in Florida, which is leased by an investment firm in which the Company’s President previously served as a Managing Director but never held any equity or voting rights. The Company has no formal agreement for this space and pays no rent.

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

During the nine months ended September 30, 2019, the Company received an additional $549,000 from its equity method investee (see Note 4) for prepaid management fees. As of September 30, 2019, $164,286 of these accumulated fees remain as contract liabilities and the Company recognized $502,381 as revenues during the nine months ended September 30, 2019 based on the service period. As of December 31, 2018, $117,667 of these fees remained as contract liabilities.

During the nine months ended September 30, 2019, the Company received $425,000 from EPH as multiple demand notes payable with interest payable at 6% annually. This has been presented as note payable – related party on the condensed consolidated balance sheets.

During the nine months ended September 30, 2019, the Company incurred $6,543 in legal fees with a related party and during the nine months ended September 30, 2018, the Company incurred approximately $39,393 from a law firm in which our audit committee chair is an employee. As of September 30, 2019 and December 31, 2018, our accounts payable and accrued expenses include $0 and $30,000, respectively, for legal fees incurred in the prior year with this law firm.

During the nine months ended September 30, 2019, the Company earned $170,175 in service fees under its agreement with CECO and recorded $79,825 as contract liabilities to be earned through December 31, 2019. Two of the Company’s officers and directors each own minority equity stakes in CECO.