Note 8 - Promissory Notes Payable, Related Party and Other Related Party Transactions

3 Months Ended

May 31, 2022

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE 8 – PROMISSORY NOTES PAYABLE, RELATED PARTY AND OTHER RELATED PARTY TRANSACTIONS

The Company’s outstanding notes payable, related party are summarized as follows:

	May 31, 2022		February 28, 2022
6% unsecured note payable – April 2019, due on demand		15,825		15,825
6% unsecured note payable – April 2019, due on demand		15,890		15,890
8% unsecured note payable - October 2019, due on demand		10,000		10,000
TOTAL	$	41,715	$	41,715

Interest expense for the three months ended May 31, 2022 and 2021 was $90 and $1,455, respectively.

Starting January 1, 2019, the Company began accruing a monthly management fee of $15,000 due to an advisory company owned by Andrew J. Kacic, the Company’s former chief executive officer (“CEO”). During the year ended February 28, 2019, the Company recognized management fees of $30,000 under this agreement which amount is included in “Accounts payable and accrued liabilities, related parties” on the consolidated balance sheet at February 28, 2019. Since February 28, 2019, no additional management fees have been accrued since the parties are in dispute. There were no similar management fees due the CEO prior to December 31, 2018. Certain directors and officers of the Company dispute the management fee asserting that no consulting agreement has been executed. It is possible that the amount ultimately paid to the advisory company will be other than the accrued balance of $30,000 due to continuing negotiations between the board of directors and the former CEO. The disputed amount as of the date of these financials is $150,000, which is the remaining 10 (ten) months of the management fee for the calendar year ended 2019. Amounts due to Andrew Kacic at November 30, 2021 and February 28, 2021 were $107,868 and $17,868, respectively. In January 2022, the Company settled their dispute with Andrew Kacic and paid him $88,000. Included in this settlement was $107,868 in accounts payable – related parties, $64,300 in notes payable related parties and $16,573 in accrued interest – related parties. Write off of the notes payable and the accrued interest are included in gain on debt conversion in the amount of $80,873 for the year ended February 28, 2022. Write off of $19,868 of accounts payable related parties is included in professional fees at February 28, 2022.

Certain officers, directors and other related parties of the Company have paid various expenses on behalf of the Company. Balances due to the officers, directors and a related company for reimbursement of these expenses were $198,803 at May 31, 2022 and February 2022, respectively, which amounts are included in “Accounts payable and accrued liabilities - related parties” on the consolidated balance sheets.