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 an officer but never held any equity or voting rights. The Company has no formal agreement for this space and pays no rent.

During the six months ended June 30, 2020 and 2019, the Company recognized $350,000 and $426,692 as revenues based on management services provided to the Company’s equity method investee (see Note 4) and, for the 2019 period, also for service fees under its agreement with Community Eco Power (CECO), which have been presented as revenues – related parties on the condensed consolidated statement of operations.

On April 7, 2020, the Company received $15,000 under multiple demand notes with interest payable at 10% annually from three Directors of the Company. These notes matured on June 30, 2020 and are in default; however, the Directors have indicated they will extend the terms.

During the year ended December 31, 2019, the Company received $788,500 from EPH under multiple demand notes payable with interest payable at 6% annually. This has been presented as note payable – related parties on the condensed consolidated balance sheets. During the six months ended June 30, 2020, the Company received an additional $147,673 from EPH as a note payable with interest payable at 6% annually. As of June 30, 2020 and December 31, 2019, accrued interest on these notes payable was $42,896 and $15,426 as presented on the condensed consolidated balance sheets. As of June 30, 2020 and December 31, 2019, the balance due on these demand notes payable was $936,173 and $788,500, respectively.

During the six months ended June 30, 2020 and 2019, the Company incurred approximately $32,676 and $6,168, in legal fees with a law firm in which the Company’s audit committee chair is an employee. As of June 30, 2020 and December 31, 2019, accounts payable and accrued expenses include $43,251 and $10,575, respectively, for legal fees due to the law firm for services.

In May 2019, the Company signed a worldwide, exclusive license agreement with Agrarian Technologies LLC and its affiliates (“Agrarian”) to sell Agrarian’s proprietary bio-stimulant. The license also provides the Company with the exclusive rights to market soil and mulch products under the Wild Earth® and Mulch Masters® federally registered trademarks. As part of the transaction, the Company hired the principal owner of Agrarian and inventor of its technology to serve as the Company’s vice president of product development (“VP”). The license agreement provides the Company exclusivity for the Agrarian technology for the longer of two years or the term of the VP with the Company plus an additional two years; provided however, if VP is terminated without cause, such exclusivity would concurrently terminate. The license agreement requires quarterly licensing fees based on a percentage of sales and a minimum fee of $30,000 per year paid quarterly. As of June 30, 2020 and December 31, 2019, $30,000 and $15,000 of license fees have been accrued and included in accounts payable and accrued expenses on the condensed consolidated balance sheets.