Notes Payable, Non-related Parties and Related Party

3 Months Ended

Mar. 31, 2024

Notes Payable Non-related Parties And Related Party

Notes Payable, Non-related Parties and Related Party

Note 10 – Notes Payable, Non-related Parties and Related Party

Notes payable, non-related parties at March 31, 2024 and December 31, 2023 consist of the following:

	March 31,			December 31,
	2024			2023
1800 note	$	16,500		$	27,546
SBA loan		350,000			350,000
Total notes payable		366,500			377,546
Unamortized debt discount		(473	)		(2,265	)
Notes payable		366,027			375,281
Less current portion		(54,281	)		(46,533	)
Notes payable, long-term portion	$	311,746		$	328,748

SBA Loan

On June 22, 2020, the Company received a loan from the Small Business Administration under the Economic Injury Disaster Loan program related to the COVID-19 relief efforts. The loan bears interest at 3.75%, requires monthly principal and interest payments of $731 after 12 months from funding and is due 30 years from the date of issuance. The monthly payments have been extended by the SBA to all EIDL borrowers with additional 12 months. Monthly payments will be commenced on or around June 16, 2022. On October 1, 2021, the Company entered an Amended Loan Authorization and Agreement with the SBA providing for the modification of the Original Note providing for monthly principal and interest payments of $1,771 after 24 months from the Original Note commencing on or around June 22, 2022. On March 17, 2022 the SBA notified it deferred the payments to all COVID-19 EIDL loans will have the first payment due extended from 24-months to 30-months from the date of the note. The Modified Note will continue to bear interest at 3.75% and is due 30 years from the date of issuance of the Original Note. The Modified Note is guaranteed by Douglas Davis, the former CEO of the Company and current consultant, as well as by GBT Tokenize Corp. The additional funding of $200,000 was received by the Company on October 5, 2021. The current portion of principal balance of the note at March 31, 2024 and December 31, 2023 was $38,254 and $21,252 plus accrued interest of $40,104 and $36,832, respectively. The noncurrent portion of principal balance of the note at March 31, 2024 and December 31, 2023 was $311,746 and $328,748, respectively. The Company did not make any payment on the loan and seeking hardship from the SBA for reduce payment which was not yet addressed by the SBA.

Sixth Street Lending LLC – named changed - 1800 Diagonal Lending LLC

Straight Note – with Convertible Feature - On March 1, 2023, the Company entered into a Securities Purchase Agreement, with 1800 Diagonal Lending LLC, an accredited investor (“DL”) pursuant to which the Company issued to DL a Promissory Note (the “DL Note”) of $59,408 with an original issue discount of $6,258 resulting in net proceeds of the Company of $53,150. The DL Note had a maturity date of June 1, 2024 and the Company had agreed to pay interest on the unpaid principal balance of the DL Note at the rate of 12.0% from the date on which the DL Note is issued. A one-time interest charge of 12% or $7,128 was applied on the issuance date of the DL Note to the principal amount owed under the DL Note. Accrued, unpaid interest and outstanding principal, subject to adjustment, shall be paid in ten payments of $6,654 resulting in a total payback to DL of $66,536. The first payment is due April 15, 2023 with nine subsequent payments each month thereafter. The Company shall have a five-day grace period with respect to each payment. The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty. This DL Note shall not be secured by any collateral or any assets of the Company.

The outstanding principal amount of the DL Note may not be converted into the Company common shares except in the event of default. In the event of default on the DL Note, DL may convert the DL Note into shares of the Company’s common stock at a conversion price equal to 75% of the lowest trading price during the 10 day period immediately preceding the date of conversion. In addition, upon the occurrence and during the continuation of an event of default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Note. In no event shall DL be allowed to affect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99% of the outstanding shares of the common stock of the Company.

During the three months ended March 31, 2024, the note has been fully repaid.

As of March 31, 2024 and December 31, 2023, the note had an outstanding balance of $0 and $1,486 and a one-time interest of $0 and $7,129, respectively.

Straight Note $47,208 - On April 24, 2023, the Company entered into a Securities Purchase Agreement, with 1800 Diagonal Lending LLC, an accredited investor (“DL”) pursuant to which the Company issued to DL a Promissory Note (the “DL Note”) in the aggregate principal amount of $47,208 with an original issue discount of $5,058 resulting in net proceeds of the Company of $42,150. The DL Note has a maturity date of April 24, 2024 and the Company has agreed to pay interest on the unpaid principal balance of the DL Note at the rate of 12.0% per annum from the date on which the DL Note is issued (the “Issue Date”). A one-time interest charge of 12% or $5,664 was applied on the Issue Date to the principal amount owed under the DL Note. Accrued, unpaid interest and outstanding principal, subject to adjustment, shall be paid in ten payments each in the amount of $5,287 resulting in a total payback to DL of $52,872. The first payment is due June 15, 2023 with nine subsequent payments each month thereafter. The Company shall have a five-day grace period with respect to each payment. The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty. This DL Note shall not be secured by any collateral or any assets of the Company.

The outstanding principal amount of the DL Note may not be converted into the Company common shares except in the event of default. In the event of default on the DL Note, DL may convert the DL Note into shares of the Company’s common stock at a conversion price equal to 75% of the lowest trading price with a 10-day look back immediately preceding the date of conversion. In addition, upon the occurrence and during the continuation of an event of default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Note. In no event shall DL be allowed to affect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99% of the outstanding shares of the common stock of the Company.

As of March 31, 2024 and December 31, 2023, the note had an outstanding balance of $16,500 and $26,059 and a one-time interest of $0 and $5,665, respectively.

Discounts on Promissory Note

The Company recognized debt discount of $1,792 and $3,891 during the three months ended March 31, 2024 and 2023, respectively, related to the amortization of the debt discount on promissory notes. The unamortized debt discount at March 31, 2024 and 2023 was $473 and $55,516, respectively.

Notes payable, related party at March 31, 2024 and December 31, 2023 consist of the following:

	March 31,			December 31,
	2024			2023
Alpha Eda note payable	$	140,000		$	140,000
Total notes payable, related party		140,000			140,000
Unamortized debt discount		—			—
Notes payable, net, related party		140,000			140,000
Less current portion		(140,000	)		(140,000	)
Notes payable, net, related party, long-term portion	$	—		$	—

Alpha Eda

On November 15, 2020, the Company issued a promissory note to Alpha Eda, LLC (“Alpha”), a related party for $140,000. The note accrues interest at 10%, is unsecured and was due on September 30, 2021. On March 31, 2023 Alpha and the Company extended the note maturity to December 31, 2023. The balance of the note at March 31, 2024 and December 31, 2023 was $140,000 and $140,000 plus accrued interest of $50,124 and $46,633, respectively.