NOTE 7 – DUE TO RELATED PARTY

Successor

During the six months ended June 30, 2017, the Company received no advances from its CEO/director, incurred business expenses that were paid by the CEO/director of $587,154 (comprised of operating expenses of $582,563, inventory purchases totaling $1,250, website development costs of $2,401, and purchased equipment of $940) and had repayments of $490,196. The Company has a balance owed to the related party of $537,705 at June 30, 2017 (Successor). During the three and six months ended June 30, 2017 (Successor), the Company incurred $45,000 and $90,000, respectively, of deferred compensation related to the CEO/director’s employment agreement and $20,000 and $40,000, respectively, of deferred compensation related to the Secretary’s employment agreement. As of June 30, 2017 (Successor), accrued compensation-related party was $906,000.

Predecessor

CCI had no employment agreement with its CEO and director but CCI still incurred compensation on behalf of the CEO and director. CCI incurred compensation expense of $7,793 and $36,774 in the three and six months ended June 30, 2016 (Predecessor), respectively. There were no amounts due to the CEO and director for unpaid amounts related to business expenses paid by the CEO on behalf of CCI. During the three and six months ended June 30, 2016 (Predecessor), the CEO and director received employee benefits totaling $12,024 and $18,839, respectively. In addition, the CEO/director incurred business expenses of $5,000 and $5,320 and had repayments for business expenses of $0 and $180 for the three and six months ended June 30, 2016 (Predecessor), respectively.