NOTE 17 – RELATED PARTY TRANSACTIONS

As disclosed in Note 3 – Acquisitions, the current CEO and CFO of the Company were part of the ownership group from whom Sigal Consulting LLC was acquired in May 2014. The 49% ownership in the Company’s subsidiary, MariMed Advisors Inc., which this ownership group acquired as part of the purchase price, was acquired by the Company from this ownership group in June 2017 in exchange for 75 million shares of the Company’s common stock.

In October 2017, the Company acquired certain assets of the Betty’s Eddies™ brand of cannabis-infused products, as disclosed in Note 3 – Acquisitions, from a company that is minority-owned by the Company’s chief operating officer.

In January 2018, the Company granted options to purchase 1.45 million shares of common stock to the Company’s board members at exercise prices ranging from $0.14 to $0.77 and expiring between December 2020 and December 2022. The fair value of these options on grant date of approximately $458,000 was amortized over the six-month vesting period.

The Company’s current corporate offices are leased from a company owned by a related party under a 10-year lease that commenced August 2018 and contains a five-year extension option. Previous to this lease, the Company’s former corporate offices were also leased from a company owned by a related party. For the three months ended March 31, 2019 and 2018, expenses incurred under these leases approximated $34,000 and $6,000, respectively.

The outstanding Due To Related Parties balances at March 31, 2019 and December 31, 2018 of approximately $220,000 and $276,000, respectively, were comprised of amounts owed of approximately (i) $81,000 in both periods to the Company’s CEO and CFO, (ii) $79,000 and $135,000, respectively, to two companies partially owned by these officers, and (iii) $60,000, in both periods to two shareholders of the Company. Such amounts owed are not subject to repayment schedules and are expected to be repaid during 2019.

The outstanding Due From Related Parties balance at March 31, 2019 and December 31, 2018 of approximately $120,000 and $121,000 was comprised of an advance of to a company partially owned by the Company’s CEO and CFO. This amount is expected to be repaid in 2019.