Note 14. Related Parties and Related Party Transactions

On June 14, 2018, the Company entered a Line of Credit with APO Holdings, LLC for up to $100,000 at any one time. The Line of Credit may be cancelled at any time by either party providing 30 days written notice of cancellation. It was given at a 0.6% monthly interest rate (7.2% annualized interest rate) and may be paid at any time with no definitive payoff date. As of January 31, 2022, and January 31, 2021, the outstanding balance owed on the line of credit was $0. On December 9, 2020 APO Holdings, LLC converted the outstanding balance owed into 38,962 shares of the Company’s common stock.

On April 17, 2020, the Company terminated the employment of Alex Mardikian as the CEO of the Company. On April 17, 2020 Paul Rosenberg resigned as the CFO of the Company. On April 17, 2020, the Company entered into an agreement with Michael Hawkins as the CEO and CFO of the business and elected him to the Board of Directors. On June 16, 2021, the agreement was terminated.

On April 17, 2020, the Company issued 50,000 shares of Series A Preferred Stock to Epic Industry Corp (“Epic”) and 100,000 shares of Series A Preferred Stock to Overwatch Partners, Inc. (“Overwatch”) for par value ($0.0001) for a total receipt of $15 paid by Epic. The Agreement was originally between the Company and Epic. The 100,000 shares of Series A Preferred was issued to Overwatch at the discretion of Michael Hawkins, the sole owner of Epic. The Company’s CEO is 50% owner of Overwatch. At the time, the issuance represented 33% of the Company’s stock on a fully diluted basis and 68% of voting control of the Company. The Company valued the stock under ASC 820 utilizing the Option Pricing Method to value conversion rights, and the Market Approach to value the voting control. The issuance of stock’s recorded value was $40,137,788.

On April 17, 2020, the Company issued 150,000 shares of Series B Preferred Stock to Paul Rosenberg in exchange for 60 cryptocurrency ATM machines, which the Company believes has no retail or book value. At the time, the issuance represented 7% of the Company’s stock on a fully diluted basis. The Company valued the stock under ASC 820 utilizing the Option Pricing Method to value conversion rights, and the Market Approach to value the voting control. The issuance of stock’s recorded value was $6,548,188.

On April 22, 2020, the Company converted $104,988 in outstanding accounts payable to Paul Rosenberg into 130,128 shares of common stock of the Company at $0.75 per share.

On April 29, 2020, the Company converted 5,000,000 shares of common stock owned by BOTS into 500,000 shares of Series B Preferred stock. BOTS is restricted from converting the Series B Preferred stock into common stock for a period of 24 months from the conversion. There was no gain or loss on conversion due to conversion terms.

On May 13, 2020, the Company sold its 420 Cloud Software to First Bitcoin Capital, Corp, for the purchase price of $1,900,000. The $1,900,000 was paid through the transfer of $500,000 in BIT cryptocurrency and a $1,400,000 convertible promissory note. The Company received 122,968,776.18 BIT tokens at the price of $0.004066098 per token. The convertible promissory note had a simple interest fee of 9% per year and may have been converted into First Bitcoin Capital Corp stock at a 10% discount to market or in additional BIT cryptocurrency tokens. The Note had no expiration date. The convertible note receivable was convertible into stock that was thinly traded on the OTC Markets, and since the software assets had a $0 basis, and were sold to a related party, any subsequent conversions would be included in equity. The interest receivable on this note at January 31, 2021 was $90,000. On July 6, 2021, the $1.4 million convertible promissory note was exchanged as part of the settlement agreement with BOTS.

During the year ended January 31, 2021, the Company reclassified $154,307 of accounts payable – related party as a reserve for settlement – related party. The Company reclassified this debt as management believed the fees represented by this amount that were due to the former CEO and several employees who worked directly for the former CEO in other projects were not due. Furthermore, if the fees were due, we believe we have offsetting transactions owed the Company by the former CEO. The Company has not proceeded with any legal actions at this time against the former CEO.

On March 17, 2021, the Company borrowed $500,000 from Epic. The Company paid off the loan during the quarter ended July 31, 2021.

During the quarter ended April 30, 2021, the Company issued seven warrants to its officers and directors for the purchase of up to a total of 1,100,000 common shares of stock at $2.21 per share.

On July 1, 2021, the Company entered into an Agreement to Cancel Consulting Agreement dated April 17, 2020. Under terms of the agreement, the Company will continue to pay Epic until it has generated $2,500,000 in commissions (representing $5,000,000 additional revenue to the Company). Furthermore, the Company issued 50,000 Series A Preferred shares to Epic to represent 40% of sales for the next $5,000,000 in sales generated through Epic. The $2,000,000 in commission due has been booked as a prepayment to Epic. Epic will continue to generate 10% in commissions of business it brings to the Company. This agreement is in perpetuity.

During the quarter ended July 31, 2021, the Company issued 50,000 shares of Series A Preferred Stock to Epic. The issuance was done as a prepayment for services to generate sales for the Company. The shares are earned as sales generated by Epic achieve certain sales targets.

On July 6, 2021, the Company entered into a settlement agreement with BOTS. Under the settlement agreement, BOTS agreed to return 250,000 shares of Series B Preferred stock to the treasury of the Company, in exchange for the assignment of the $1.4 million promissory note owed by First Bitcoin Capital Corp to the Company, along with all interest owed to date on the promissory note. In addition, the Company transferred 20,726,120 BIT tokens to BOTS. This was a related party transaction.

On August 9, 2021, Eric Jaffe exercised his warrants of 50,000 shares at the exercise price of $2.12 per share on a cashless basis, resulting in the issuance of 42,246 shares of common stock.

On December 31, 2021, the Company sold to Epic 5 million HEX tokens at $0.20 per token for a total amount of $1.0 million.

On January 3, 2022, the Company purchased software called ATrade Desktop Workstation Trading System from ATrade Investment Technologies, LLC (“ATrade”) for $1.0 million. The managing member of ATrade is Cedric Harris, who was the managing member of 832 and became Chief Research Officer of the Company.

On January 7, 2022, Render sold to Overwatch Personal Security two 2019 Ford Raptors. The total sales price for the two vehicles was the net book value on date of sale of $84,956.

During the years ended January 31, 2022 and 2021, Overwatch paid multiple different expenses on behalf of the Company, which the Company treats as an account payable to related party. The total amount owed by the Company to Overwatch as of January 31, 2022 and 2021 was $24,000 and $13,000, respectively.