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13. RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2018

13.

RELATED PARTY TRANSACTIONS

During the three months ended March 31, 2018, the Company released a total of 937,500 shares of common stock with a total value of $140,625, to three directors. These payments were expensed at issuance (See Note 10).

In 2009, the Company executed a 10% convertible note payable in the amount of $102,236 due December 31, 2010 to John Evey for amounts loaned to the Company. Mr. Evey joined the Board of Directors on April 27, 2010. Through a series of extensions, the note due date was extended to December 31, 2017. During the three months ended March 31, 2018, in lieu of interest payments, the Company made principal payments on this note amounting to $3,000. As of March 31, 2018, the note is past due and has a balance of $59,616 with accrued and unpaid interest amounting to $64,222 (See Notes 4, and 6). Although as of December 31, 2016 Mr. Evey is no longer a director, because he was our Chairman and a prior related party, we have continued to classify this note as a Convertible note payable - related parties in the accompanying balance sheet.

On October 18, 2016, the Company entered into a five year employment agreement, effective as of January 1, 2016, with Mr. Desmond Wheatley, the Chief Executive Officer, President, and Chairman of the Company (the “Agreement”). Pursuant to the Agreement, Mr. Wheatley will receive an annual deferred salary of $50,000 which Mr. Wheatley will defer until such time as Mr. Wheatley and the Board of Directors agree that payment of the deferred salary and/or cessation of the deferral is appropriate. Additionally, on March 29, 2017 the board of directors granted Mr. Wheatley a $35,000 bonus for which Mr. Wheatley agreed to defer such bonus under the same terms of his salary deferral. All deferred amounts are evidenced by an unsecured convertible promissory note payable by the Company to Mr. Wheatley. The balance of the note as of March 31, 2018, is $147,500 with accrued and unpaid interest amounting to $15,769 which is included in accrued expenses (See Notes 4 and 6).