Related Party Transactions
|12 Months Ended|
Dec. 31, 2017
|Related Party Transactions [Abstract]|
|Related Party Transactions||
NOTE 8 – RELATED PARTY TRANSACTIONS
As disclosed in Note 1, the Company acquired Sigal Consulting LLC in May 2014. At the time of the transaction, Sigal Consulting LLC was partially owned by a director of the Company and by individuals who became the Company’s CEO and CFO in 2018.
On June 2017, the Company acquired the remaining 49% interest in MariMed Advisors Inc. from its ownership group, which included a director of the Company and individuals who became the CEO and CFO of the Company in 2018, for an aggregate 75 million shares of 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, as disclosed in Note 6 above.
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 from a company that is minority-owned by the Company’s chief operating officer. The purchase price was $140,000 plus subscriptions on 1,000,000 shares of the Company’s common stock. In addition, the selling company shall be paid a royalty based on a percentage of the Company’s revenue associated with the Betty’s Eddies™ product line, commencing at 25% and decreasing to 2.5% as certain sales thresholds are met. For the year ended December 31, 2017, the Company earned approximately $40,000 of revenue and paid royalties of approximately $10,000.
After applying the total purchase price, which consisted of the cash paid plus the fair value of the subscribed common stock on the date of the transaction, to the assessed fair values of the assets purchased, the transaction gave rise to goodwill of approximately $333,000. At December 31, 2017, the Company reviewed the goodwill for impairment and determined that, based on the present value of future cash flows of the acquired assets, there was no impairment. The goodwill is included in other assets in the financial statements.
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).
At December 31, 2017, the Company owed approximately $19,000 and $14,000 to the CEO and CFO, respectively.
The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
Reference 1: http://www.xbrl.org/2003/role/presentationRef