RELATED PARTY TRANSACTIONS | NOTE 7: RELATED PARTY TRANSACTIONS As of January 31, 2017, and January 31, 2016, related parties are due a total of $241,438 and $316,088, respectively. January 31, 2017 January 31, 2016 Related party payable compensation (2) $ 167,348 $ 18,333 Notes payable (4) 30,000 - Convertible notes payable for cash proceeds received (1) - 251,045 Convertible notes payable for unpaid compensation (3) - 59,000 Less: unamortized discount (3) - (12,290 ) Total convertible notes payable, net of unamortized discount - 297,755 Total related party loans - 297,755 Total related party transactions $ 197,348 $ 316,088 Related party convertible notes payable consists of the following unsecured convertible promissory notes: Description Principal Interest Rate Conversion Rate Maturity Date Note Payable (1) $ - 5% FMV On demand with 90 days written notice Note Payable (4) $ - 6% 80% of FMV Notice of conversion on Jan 30, 2017. Less: unamortized discount (4) - Note Payable, net of unamortized discount $ - (1) As of January 31, 2016, a company controlled by the Company’s former Chairman of the Board was due a principal balance of $251,045 in respect to a demand convertible note payable. On December 16, 2016, the Company executed an agreement to fully extinguish all amounts payable consisting of $251,045 principal and $24,912 in accrued interest for a total of $275,957. As a result, the Company has no further indebtedness to this noteholder. (2) Effective December 17, 2015, Mr. Jeffery Taylor was appointed to serve as Chief Executive Officer of the Company and Mr. Don Lee Taylor was appointed to serve as Chief Financial Officer of the Company. On December 21, 2015, the Company entered into employment agreements with Mr. Jeffery Taylor and Mr. Don Lee Taylor for a period of 24 months, where after the contract may be renewed in one year terms at the election of both parties. Jeffery Taylor shall receive an annual gross salary of $115,000 and Don Lee Taylor shall receive an annual gross salary of $105,000 payable in equal installments on the last day of each calendar month and which may be accrued until such time as the Company has sufficient cash flow to settle amounts payable. Further under the terms of the respective agreements all inventions, innovations, improvements, know-how, plans, development, methods, designs, analyses, specifications, software, drawings, reports and all similar or related information (whether or not patentable or reduced to practice) which relate to any of the Company’s actual or proposed business activities and which are created, designed or conceived, developed or made by the Executive during the Executive’s past or future employment by the Company or any Affiliates, or any predecessor thereof (“Work Product”), belong to the Company, or its Affiliates, as applicable. (3) During fiscal 2017 the Company was invoiced a total of $18,000 in consulting services by Ms. Jennifer Taylor, sister of the Company’s officers and directors. The Company paid a total of $8,000 to reduce this amount during fiscal 2017 and a total of $10,000 is included on the Company’s balance sheets as “Accounts payable – related parties”. Due to related parties: Mr. Jeffery Taylor Mr. Don Lee Taylor Ms. Jennifer Taylor Total Balance, January 31, 2016 $ 9,583 $ 8,750 $ - $ 18,333 Add: Management fee 115,000 105,000 220,000 General and admin 18,000 18,000 Reimbursed expenses 35,412 47,064 - 82,476 Accrued loan interest 152 152 - 304 Deduct: cash payment (77,807 ) (85,958 ) (8,000 ) (171,765 ) Balance, January 31, 2017 $ 82,340 $ 75,008 $ 10,000 $ 167,348 (4) On October 1, 2015 the Company issued its former President a convertible promissory note in the principal amount of $59,000 for unpaid compensation. The note bears interest at a rate of 6% per annum, matures on October 1, 2017, and contains a repayment provision which permits the holder to convert the debt into the Company's common stock at a rate of 80% of the fair market value of the common stock on the date of conversion. The conversion discount of 20% of FMV results in a beneficial conversion feature. As a result, the difference between the conversion rate and the market rate of $14,750 on the date of the transaction has been classified as a discount on the note. On January 30, 2017, the Company received a notice of conversion from the note holder, whereunder the note holder converted $63,790 including principal of $59,000 and accrued interest in the amount of $4,790 into 26,386 shares of the Company’s common stock at $2.4176 per share. As of January 31, 2017, 26,386 shares were not yet issued and the Company recorded a liability for unissued shares on the balance sheets. (5) On February 17, 2016, the Company issued promissory notes to Mr. Jeffery Taylor, CEO, in the amount of $17,500 and to Mr. Don Lee Taylor, CFO, in the amount of $17,500, respectively. The notes bear interest at a rate of 1% per annum, maturing on August 17, 2016. During the fiscal year ended January 31, 2017, the company repaid $2,500 to Mr. Jeffery Taylor and $2,500 to Mr. Don Lee Taylor. As of January 31, 2017, the Company has accrued $304 as interest with respect to the above notes. The notes were not repaid on their due dates of August 17, 2016, and are now due on demand. (6) On January 13, 2017, the Company issued a total of 3,000,000 shares of restricted stock to Mr. Jeffery Taylor valued at $8,190,000, or $2.73 per share as stock-based compensation recorded as management fees. On January 13, 2017, the Company issued a total of 3,000,000 shares of restricted stock to Mr. Don Lee Taylor valued at $8,190,000, or $2.73 per share as stock-based compensation recorded as management fees. |