NOTE 9 – RELATED PARTY TRANSACTIONS

As disclosed in Note 3 above, the current CEO and CFO of the Company are part in 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 September 2017, the former CEO of the Company, who is a currently a board member, exercised options to purchase 4.5 million shares of common stock at an exercise price of $0.01 per share. The aggregate exercise price of $45,000 was paid in a cashless transaction with 90,000 shares of common stock which were classified as treasury 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, options to purchase 200,000 shares of commons stock at an exercise price of $0.025 were forfeited by the CEO and by an independent board member (100,000 shares forfeited by each individual).

During the six months ended June 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. No options were exercised during the same period in 2017.

During the six months ended June 30, 2018 and 2017, the Company issued 170,000 and 169,487 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 $18,000 in 2017.

At June 30, 2018 and December 31, 2017, the Company owed approximately $19,000 and $14,000 to the CEO and CFO, respectively.

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.