3. Related Party Transactions

In addition to items disclosed in Note 6, the Company had additional related party transactions during the six months ended June 30, 2023 and 2022.

Historically, the Company has received funds from borrowings on notes payable and advances from related parties and officers of the Company to cover operating expenses. Related parties include the officers and directors of the Company and a significant shareholder holding in excess of 10% of the Company’s outstanding shares.

During the six months ended June 30, 2023, David Tobias, the Company’s chief executive officer and director, loaned $22,721 to the Company for notes payable bearing interest at the rate of 5% per annum due on December 31, 2023. 

During the six months ended June 30, 2023, the Company and Cathy Carroll, director, entered into a note payable for $30,000 for compensation due her for services. Ms. Carroll’s note bears interest at 8% per annum and is due December 31, 2024. The note payable totaled $55,000 at December 31, 2022.

During the years ended December 31, 2022 and 2021, the Company recorded interest expense related to notes payable to related parties at the rates between 5% and 8% per annum in the amounts of $16,374 and $66,872, respectively.

The following tables reflect the related party note payable balances. 

During the three and six months ended June 30, 2023 and 2022, the Company incurred approximately $-0- (2022: $12,500) and $-0- (2022: $26,389), respectively, for consulting services from a nephew of the Company’s president. The services were accrued at June 30, 2022 and paid in common stock. These amounts are included in the statements of operations in general and administrative expenses.

At June 30, 2023 and December 31, 2022, the Company has a balance due from MJ Harvest, Inc., with whom the Company plans to merge, of $75,054 and $55,666 (see Note 8). The amount is included in advances to related party on the condensed consolidated balance sheets. The funds were advanced to MJ Harvest, Inc. to cover operating expenses.

At June 30, 2023 and December 31, 2022 the Company had stock payable in the amount $542,421 and $345,893 due to related parties; directors and contract officers.