NOTE 11 - RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2017

NOTE 11 - RELATED PARTY TRANSACTIONS

On December 1, 2016, the Company entered into employment agreements with certain key executives with initial terms of five years and call for compensation in cash and equity in the Company as follows:

Employee	Position	Cash Compensation	Equity Compensation
Tanya Bredemeier	Chairman and COO	$ 75,000*	25%
Robert Rico	Chief Executive Office	$ 125,000	10%
Steve Polisar	Chief Legal Officer	$ 36,000*	30%
Jorge Moreno	Chief Marketing Officer	$ 40,000*	10%

*= Second year compensation will increase by 20% after corporate financing milestones are met.

Additionally, an employment agreement was entered into on May 5, 2017, with Luis Ravelo, Vice President of Operations. The agreement has a one-year renewable term with an annual salary of $104,000. As of December 31, 2017 and 2016 related party payroll liabilities totaled $165,945 and $0, respectively.

Certain employees and shareholders were granted shares of Series A preferred stock in 2017. For the years ended December 31, 2017 and 2016 employees and shareholders received a total of 100 shares of Series A preferred stock valued at $2,811,782.

The Company has received loans from related parties for working capital purposes. These unsecured loans bear interest at a rate of 6% per annum and have no repayment terms. For the years ended December 31, 2017 and 2016 the Company was (repaid) loaned a net of $(80,249) and $57,452, respectively. As of December 31, 2017 and 2016 the outstanding balance of these loans is $102,018 and $77,267, respectively.

As part of the Cafesa acquisition on April 25, 2017, the Company is required to make cash and stock payments to a related party. For the year ended December 31, 2017, the Company made two cash payments totaling $105,000. As of December 31, 2017, the outstanding balance due to this related party is $315,000.

GRAND HAVANA INC. 10-K