Related Party Transactions

3 Months Ended

Mar. 31, 2025

Related Party Transactions

Related Party Transactions

Note 3. Related Party Transactions

Convertible notes payable - related parties

As of March 31, 2025 and December 31, 2024, convertible notes payable – related parties (net of debt discount) totaled $500,000 and $500,000, respectively.

During the year ended December 31, 2022, Brian Thom, the Company’s Chief Executive Officer, converted $372,000 of a loan payable balance to a convertible note payable. The unpaid accrued interest on the loan payable was transferred to the convertible note payable. The note had an interest rate of 10%, an original issue discount (“OID”) of 7% and had a maturity date of December 31, 2023. The note is convertible into common stock of the Company at $0.35 per share. In the event the Company issues any shares of common stock before the maturity date at a price that is lower than $0.35 per share, the conversion price shall be reduced to equal such lower issue price per share. The Company recorded $28,000 of a debt discount related to the OID. As of March 31, 2025 and December 31, 2024, the remaining unamortized debt discount was $0 and $0, respectively. Accrued interest associated with the note was $156,862 and $139,334 as of March 31, 2025 and December 31, 2024, respectively.

During the year ended December 31, 2022, Robert Denser, a Director of the Company, loaned the Company $93,000 through a convertible note. The note had an interest rate of 10%, an OID of 7% and had a maturity date of December 31, 2023. The note is convertible into common stock of the Company at $0.35 per share. In the event the Company issues any shares of common stock before the maturity date at a price that is lower than $0.35 per share, the conversion price shall be reduced to equal such lower issue price per share. The Company recorded $7,000 of a debt discount related to the OID. As of March 31, 2025 and December 31, 2024, the remaining unamortized debt discount was $0 and $0, respectively. Accrued interest associated with the note was $33,518 and $29,315 as of March 31, 2025 and December 31, 2024, respectively.

On December 15, 2023, the Company entered into amendments on the above convertible notes, which extended the maturity date to December 31, 2024 and increased the interest rate from 10% to 13%, effective January 1, 2024. On December 20, 2024, the Company entered into amendments on the above convertible notes, which extended the maturity date to December 31, 2026.

Interest expense – related party on the above convertible notes payable was $21,731 and $19,231 during the three months ended March 31, 2025 and 2024, respectively. Accrued interest – related party due to these convertible notes was $190,380 and $168,649, as of March 31, 2025 and December 31, 2024, respectively and has been recorded in accrued liabilities – related parties on the balance sheet.

The following represents the future aggregate maturities as of March 31, 2025 of the Company’s Convertible Notes Payable – Related Parties:

	Amount
2025 (remaining)	$	-
2026		500,000
Total	$	500,000

Accrued liabilities – related parties

During the three months ended March 31, 2025, the Company’s Chief Executive Officer advanced the Company $20,000 to pay for operating expenses resulting in an advance balance of $20,000 as of March 31, 2025 and has been recorded in accrued liabilities – related parties on the balance sheet.   The advance is unsecured, non-interest bearing and is due on-demand.