Related Party Transactions Disclosure |
6 Months Ended | ||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||
| Notes | |||||||||||||||||
| Related Party Transactions Disclosure | 12. RELATED PARTIES Dr. Passley (custodian and sole director and officer until August 11, 2026), Epazz, Inc. and ZenaTech, Inc. (which he controls), GG Mars Capital, Inc. and Star Financial Corporation (whose presidents are family members), other family members and their entities are related parties (ASC 850). Balances:
The advances are cash advanced to the Company (including the funds used to buy the condominium units) and costs paid on its behalf, with no fixed terms; net advances were $659,518 in the six months ended June 30, 2026 ($100 in 2025) plus $21,390 of real estate cost paid directly. The Epazz, Inc. notes and $479,565 of management fees under the voided Management Services Agreement have been derecognized (Note 2); The custodian has not completed his analysis of the balance advanced before 2025, within which any fees or mark-ups under the voided agreement would not be payable. The advances cannot be expected to continue. The January 2025 Stock Compensation Agreement (300,000,000 shares to Dr. Passley, $391,575) and Management Services Agreement (66,000,000 shares to Epazz, Inc., $86,147), the Ecker sale and the Galaxy purchase were related-party transactions declared void (Notes 2 and 6). After the cancellations these parties hold no common stock other than the 100,400 shares noted in Note 11, and Dr. Passley holds the Series A and E preferred stock presented as outstanding; under the Order they may not serve as officers or directors. Jacob Sherman, successor custodian from October 6, 2026, is associated with Cloud Builder, Inc. (holder of the $25,961 note and of 7,700,000 Series C shares treated as cancelled; former holder of 30,000,000 common shares cancelled in April 2025; holder of convertible notes issued by Dr. Passley), is the son of James A. Sherman, CPA, whose firm Advocate CPA, Inc. holds the $21,000 demand note and served the Company and Dr. Passley, and is President of Jennings Family Investments, Inc., lender under the convertible note approved by the Court on October 15, 2026 (Note 16). The Court noted its concern about his relationship with Dr. Passley but was not persuaded that he is not independent. He serves compensation. |