NOTE 5 - COMMITMENTS AND CONTINGENCIES

On October 16, 2014, the Company and Chad Ulansky entered into an employment agreement (the “CEO Employment Agreement”), pursuant to which Mr. Ulansky is employed by the Company as its Chief Executive Officer for three years. As compensation for his services, Mr. Ulansky shall receive an annual base salary of $400,000 for the first year of the CEO Employment Agreement, $450,000 for the second year and $500,000 for the third year. The Company shall have the right to pay the salary or any other amounts payable to Mr. Ulansky in shares of deferred stock units of the Company based on the 90-day volume weighted average price (“VWAP”) of the shares of the common stock of the Company at the end of each quarter. As at January 31, 2017, $451,971 (July 31, 2016 – $609,392) has been accrued in due to related parties, which equates to 2,553,508 (July 31, 2016 – 1,324,767) shares if Mr. Ulansky were to leave the Company.

On July 12, 2015, the Company and Jennifer Irons entered into an employment agreement (the “CFO Employment Agreement”, and together with the CEO Employment Agreement, the “Employment Agreements”), pursuant to which Ms. Irons is employed by the Company as its Chief Financial Officer for three years. As compensation for her services, Ms. Irons shall receive an annual base salary of $125,000 for the first year of the CFO Employment Agreement, $137,500 for the second year and $150,000 for the third year. The Company shall have the right to pay the salary or any other amounts payable to Ms. Irons in deferred share units of the Company based on the 90-day WAP of the common shares of the Company at the end of each quarter. As at January 31, 2017, $118,535 (July 31, 2016 – $147,605) has been accrued in due to related parties, which equates to 669,689 shares (July 31, 2016 – 320,880) if Ms. Irons were to leave the Company.

Each Employment Agreement shall automatically renew on each anniversary of such Employment Agreement for one additional year term unless one party provides the other with notice prior to such anniversary date that such party does not desire to renew the Employment Agreement. The Company may immediately terminate Mr. Ulansky's and Ms. Irons’ employment for cause. If (i) Mr. Ulansky's or Ms. Irons’ employment is terminated by the Company without cause, (ii) Mr. Ulansky or Ms. Irons terminates his or her employment as a result of the Company assigning him or her duties inconsistent with his or her position or the Company fails to pay his or her compensation, or (iii) there is a change in control in the Company, then in either case the Company shall pay Mr. Ulansky or Ms. Irons an amount equal to (a) the product of the number of years and fractional years for the remainder of the term multiplied by (b) 50% of the then current base salary in effect as of the date of termination.

During the six month period ended January 31, 2017 the Company recorded a net recovery of $186,492 in management fee and due to related party; this was the result of a decrease in the value of the share price from the July 31, 2016 year end to the January 31, 2017 quarter end. During the six month period ended January 31, 2017, the Company issued 1,577,544 shares under the Employment Agreements.

The Company’s only other commitments as at January 31, 2017 is for its share of office space, which it shares with four other companies. The Company is committed to minimum future lease payments for office premises through to July, 2018 as follows:

Fiscal year ending July 31, 2017       $ 2,240