NOTE 5 – DUE TO PRIOR RELATED PARTIES
Due to related parties consist of:
| | February 28, | | February 28, |
| | 2022 | | 2021 |
| | | | | | |
USBL loans payable to Spectrum Associates, Inc. (“Spectrum”), a corporation controlled by the two officers of USBL, interest at 6%, due on demand | | $ | — | | $ | 1,324,689 |
USBL loans payable to the two officers of USBL, interest at 6%, due on demand | | | — | | | 569,317 |
USBL loans payable to Daniel T. Meisenheimer, Jr. Trust, a trust controlled by the two officers of USBL, non-interest bearing, due on demand | | | — | | | 48,850 |
MCREH note payable to president of USBL, interest at 7%, due on demand | | | — | | | 48,000 |
MCREH loan payable to Spectrum, non-interest bearing, due on demand | | | — | | | 4,500 |
MCREH loan payable to president of USBL, non-interest bearing, due on demand | | | — | | | 5,000 |
MCREH loan payable to Meisenheimer Capital, Inc., non-interest bearing, due on demand | | | — | | | 159,275 |
Total | | $ | — | | $ | 2,159,631 |
On April 7, 2021, as part of the purchase and sale agreement, the principals of MCI consisting of Daniel Meisenheimer III, Richard Meisenheimer and their affiliated entities have agreed to cancel previously issued and outstanding loans made to the Company.
Spectrum Associates agreed to cancel indebtedness in the amount of $1,318,789 and the principals (D. Meisenheimer III and R. Meisenheimer) and their other affiliates agreed to cancel indebtedness in the amount of $815,590.
As a result of the debt cancellation the Company recognized a gain on the forgiveness of debt of $55,270 and credited $2,346,971 to additional paid in capital.
NOTE 6 – RELATED PARTY TRANSACTIONS
During the year ended February 28, 2022, Saeb Jannoun, CEO advanced the Company $3,000 for general operating expense. The advance was non-interest bearing and due on demand. On July 26, 2021, Mr. Jannoun converted the $3,000 into 30,000 shares of common stock. The shares were valued at $0.50, the closing stock price on the date of conversion, for a loss on conversion of debt of $12,000.
During the year ended February 28, 2022, EROP Enterprises LLC (“EROP”), a significant shareholder, advanced the Company $28,870 for general operating expense. The advance was non-interest bearing and due on demand. On July 26, 2021, EROP converted the $28,870 into 288,700 shares of common stock. The shares were valued at $0.50, the closing stock price on the date of conversion, for a loss on conversion of debt of $115,480.
On April 7, 2021, the Company issued 200,000 restricted shares of common stock each to two of its directors for services. The shares were valued at $0.12, the closing stock price on the date of grant, for total non-cash expense of $48,000.
During the year ended February 28, 2022, EROP purchased 1,475,000 shares of common stock for $147,500. In addition, the Company granted 200,000 shares of common stock to EROP for services per the terms of a consulting agreement. The shares were valued at $0.52, the closing stock price on the date of grant, for total non-cash expense of $104,000. The expense is being amortized over the one-year term of the service agreement with EROP. As of February 28, 2022, the Company recognized $73,667 of the expense.
During the year ended February 28, 2022, the Company was engaged by a relative of a shareholder to provide consulting services. As of February 28, 2022, the Company has recorded $5,000 of consulting revenue for services provided.
During the year ended February 28, 2022, an individual of EROP, advanced the Company $3,581 for general operating expenses. The advance was non-interest bearing and due on demand. The advance was repaid in July 2021.