Quarterly report pursuant to Section 13 or 15(d)

Related Party Transactions

Related Party Transactions
9 Months Ended
Sep. 30, 2018
Related Party Transactions [Abstract]  
Related Party Transactions



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


In October 2017, the Company acquired the intellectual property, formulations, recipes, proprietary equipment, and know-how of the Betty’s Eddies™ brand of cannabis-infused products, as disclosed in Note 3, from a company that is minority-owned by the Company’s chief operating officer.


In December 2017 and January 2018, options to purchase 400,000 shares of commons stock at an exercise price of $0.025 were forfeited by the CEO and by an independent board member (200,000 shares forfeited by each individual).


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, as disclose in Note 9. Also during this month, the CEO and a board member each forfeited options to purchase 100,000 shares of common stock.


During the nine months ended September 30, 2018, a current board member exercised options to purchase 400,000 shares of common stock, and the former CFO of the Company exercised options to purchase 300,000 shares of common stock. These options were exercised at exercise prices ranging from $0.08 to $0.63 per share. During the same period ended September 30, 2017, as disclosed in Notes 8 and 9, options to purchase 4.5 million shares of common stock were exercised by the former CEO of the Company, who is a currently a board member, at an exercise price of $0.01 per share.


During the nine months ended September 30, 2018 and 2017, the Company issued 170,000 and 202,541 shares, respectively, of common stock for services rendered by the former CFO of the Company. Based on the market value of the common stock on the dates of the two issuances, the Company recorded non-cash losses of approximately $112,000 in 2018 and $31,000 in 2017.


At September 30, 2018 and December 31, 2017, the Company owed an aggregate of approximately $33,000 to the CEO and CFO.


The caption Due from Related Parties in the Company’s financial statements is primarily comprised of short-term loans to non-consolidated entities under common ownership.


The caption Due to Related Parties reflects short term loans from related parties and includes advances received from officers of the Company.