Related Party Transactions | NOTE 3 – RELATED PARTY TRANSACTIONS Due to Stockholder Mr. James Owens, the founder and controlling stockholder of the Company, who was appointed as Chairman of the Company’s Board of Directors and the Company’s Chief Technology Officer on July 3, 2019, advances the Company money as needed for working capital needs. During the years ended December 31, 2020 and 2019, Mr. Owens loaned the Company $178,453 and $712,330, respectively. The Company repaid Mr. Owens $360 and $374,309 during the years ended December 31, 2020 and 2019, respectively. Additionally, Mr. Owens assumed the Weinstein $60,000 note payable (see note 4), along with accrued interest of $5,833, from the Company on November 25, 2019. At this time the principal and interest due on the Weinstein note payable of $65,833 was reclassed to the due to stockholder. On December 14, 2019, the Company’s Board of Directors approved the creation of a series of preferred stock of the Company to be named the “Series A Preferred Stock” and that the designation and number of shares thereof and the voting and powers, preferences, and other rights of the shares will be as set forth in a Certificate of Designations to be filed with the State of Wyoming. Further, the Board directed the Officers of the Company to enter into a subscription agreement to issue and sell to James Owens, the Chairman of the Board, Chief Technology Officer, founder, and controlling stockholder of the Company one thousand (1,000) shares of the Series A Preferred Shares at a total purchase price of $250,000. On April 2, 2020, the Company issued James Owens 1,000 shares of its Series A Preferred Stock at the agreed upon price of $250 per share. The estimated fair value of the Series A Preferred Stock was determined to be less than the $250,000 based on the estimated calculated value of the control premium using the implied value of the Company based on a recent offering of the Company’s common stock. Therefore, the total agreed upon price of $250,000 was recorded as a reduction to the due to stockholder account and an increase to additional paid-in capital due to the related party nature of the transaction (see Note 6 below). The financial statements reflect a “Due to stockholder” liability which was $511,177 and $583,084 at December 31, 2020 and 2019, respectively, representing advances that remain due to Mr. Owens. The loans from Mr. Owens are pursuant to an oral agreement, are non-interest bearing and payable upon demand by Mr. Owens. Assumption of Liabilities by Related Party and Debt Forgiveness On February 21, 2020, James Owens, with the consent of the counter parties and Board of Directors, assumed $1,907,130 of Company liabilities effective December 31, 2019, which consisted of accrued salaries and related expenses of $1,750,680 and $156,450 of accrued consulting expenses at December 31, 2019. Mr. In connection with the execution of an intellectual property purchase agreement on June 30, 2017 with Webstar Networks Corporation (“Webstar Networks”), a related party for which the Company’s founder, James Owens, controls the voting rights, (the “IP Purchase Agreement”) the Company purchased all intellectual property associated with the eCampus software and website www.webstarecampus.com On August 16, 2017, the Company entered into an amended and restated consulting agreement (the “Consulting Agreement”) with James Owens. Under the terms of the Consulting Agreement, Mr. Owens’ duties included: strategic alliances, mergers and acquisitions; corporate planning, strategy and negotiations with potential strategic business partners and/or other general business consulting needs as expressed by the Company; business development and business advertising and due diligence processes. The term of the Consulting Agreement commenced on August 16, 2017 and continued for a period of five years. Mr. Owens was to receive a monthly retainer of $20,000 per month for his services. This amount had been accrued and would be paid upon the occurrence of a Financing Event. The Consulting Agreement was canceled on February 21, 2020, effective December 31, 2019 and all accrued liabilities of $569,300 associated therewith were forgiven by James Owens. Consulting services expense of $0 and $240,000 were recorded in the years ended December 31, 2020 and 2019, respectively, which is included in consulting fees on the accompanying statements of operations. Employment Agreements On February 21, 2020, effective January 1, 2020, the Company entered into executive employment agreements with Don D. Roberts as its President and Chief Executive Officer, Harold E. Hutchins as its Chief Financial Officer, and James Owens as its Chief Technology Officer. The details of these agreements are found in Note 8 below (Commitments). The agreements provide for salaries of $350,000 and auto allowances of $12,000 per year for each of the executives. As of December 31, 2020 and 2019, the accrued salaries resulting from these employment agreements were $966,000 and $0, respectively, and the accrued auto allowances were $28,800 and $0, respectively, which have been included in accrued salaries and related expenses on the accompanying balance sheets. As of December 31, 2020 and 2019, payroll taxes in the amount of $40,837 and $0, respectively, have also been accrued related to these employment agreements. The salaries and related expenses related to these agreements for the years ended December 31, 2020 and 2019, were $1,126,837 and $0, respectively, and have been presented as salaries and related expense on the accompanying statements of operations. During the year ended December 31, 2020, Mr. Hutchins was paid $84,000 of his salary and $7,200 in auto allowances. License Agreement On April 21, 2020, the Company entered into a license agreement with Soft Tech Development Corporation (“Soft Tech”) to exclusively license, market and distribute Soft Tech’s Gigabyte Slayer and WARP-G software (the “Licensed Technology”) and further develop and commercialize these softwares throughout the world. James Owens, our controlling stockholder, owns Soft Tech. Pursuant to the terms of the license agreement, we agreed to pay a contingent licensing fee of $650,000 for each of the two components of Soft Tech’s technology, for a total of $1,300,000 for the Licensed Technology. The contingent licensing fee becomes due and payable only upon the earlier of: (i) the closing of an aggregate of $20 million in net capital offering of our stock or (ii) when our cumulative net sales from the Licensed Technology reaches $20 million. Further, we have agreed to pay a royalty rate of 7% based on the net sales of the Licensed Software. The term of the license agreement is five years with one automatic renewal period. However, the royalty will continue as long as we are selling the Licensed Technology. Common Stock Contributions During the year ended December 31, 2020, the following contributions of shares of Webstar Technology Group, Inc.’s common stock occurred: ● On June 16, and August 18, 2020, James Owens contributed 39,281,715 and 28,934,383, respectively, shares of common stock of Webstar Technology Group, Inc., to Webstar Networks Corporation, a corporation controlled by Mr. Owens. ● On July 27, 2020, Mr. Owens contributed 50,000,000 shares of common stock of Webstar Technology Group, Inc. to the Frank T. Parone Revocable Trust, a trust controlled by Mr. Owens. ● On September 10, 2020, the Frank T. Parone Revocable Trust, a trust controlled by James Owens, contributed 590,613 shares of common stock of Webstar Technology Group, Inc. to Webstar Networks Corporation. On September 14, 2020, Webstar Networks Corporation completed the distribution of all of its shares of Webstar Technology Group, Inc.’s common stock, an aggregate of 89,524,996, to the stockholders of Webstar Networks Corporation in a liquidating distribution. This distribution increased the number of stockholders in Webstar Technology Group, Inc. to 320 stockholders. None of the additional stockholders now hold 5% or more of the Company’s common stock. Lease Agreement Joseph P. Stingone, Sr., the Company’s former Chief Executive Officer provided the use of its principal offices located at 4231 Walnut Bend, Jacksonville, FL 32257 free of charge, except for utilities, repairs, and maintenance. The Company signed a lease with Mr. Stingone’s company, Walnut Bend Executive Center, LLC., effective April 1, 2019. On February 21, 2020, the lease was canceled effective December 31, 2019 and all liabilities associated therewith of $61,346 were assumed by entity controlled by James Ownes (see note 5). Service Agreement On June 21, 2019 the Company engaged StoneBridge Securities, LLC, and entity solely owned by Michael Hendrickson, a director of the Company, to preform services relating to the future offering of the Company’s common stock. The agreement calls for commissions to StoneBridge ranging from 1% to 3% for assisting in capital raising transactions. The agreement additionally called for a signing bonus of 500,000 warrants for the purchase of the Company’s common stock. The engagement agreement and signing bonus were canceled by action of the Company’s Board of Directors on November 22, 2019, effective June 30, 2019. |