NOTE 3 - RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2024

Notes

NOTE 3 - RELATED PARTY TRANSACTIONS

NOTE 3– RELATED PARTY TRANSACTIONS

Jenifer Osterwalder, the Company’s Chief Executive Officer, charges the Company $12,000 per month beginning January 1, 2021 for services rendered. Total amounts expended in the Company's condensed consolidated financial statements in connection with the CEO's services was $108,000 and $108,000 for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024 and December 31, 2023, amounts due to the CEO related to accrued salaries were $396,000 and $288,000 respectively.

From time to time due to the limited cash flow available, the Company's CEO pays certain operating expenditures on behalf of the Company. These advances bear no interest and are due on demand. As of September 30, 2024 and December 31, 2023, the Company's CEO was due $0 and $6,150 in connection with these advances, respectively. During the nine months ended September 30, 2024, the Company issued 68,311 shares of common stock in satisfaction of $6,150 in advances. On the date of the agreement, the fair market value of the common stock per the Company’s closing stock price was $6,651 resulting an extinguishment of debt of $501.

Sean Michael Brehm, the Company’s Chairman and a member of the board of directors, is also the sole shareholder of NNN, which the Company has acquired in exchange for 1,000,000 shares of newly designated Series Quantum Preferred Stock effective August 29, 2024; see Note 4.  In connection with the acquisition, Sean Michael Brehm also purchased 5,050,000 of the Company’s common shares at $0.20 per share for a total purchase price of $1,010,000. Due to the related party and common control nature of this transaction, the acquisition was accounted for at the carrying value of the acquired net assets of NNN. Assets acquired consisted of approximately $6,000 in cash. The pre-acquisition financial results of NNN were not significant.

It was originally determined that the share exchange agreement closed effective August 29, 2024.  However, the Company has determined that the  transaction was never formally closed or title to the IP formally delivered to Spectral

because of problems NNN had with its record keeping and ability to deliver certificates and other requirements under the agreement and that Spectral never formally received the shares in NNN as required by the agreement.  Therefore, it was an error to state that the transaction had formally closed.  Rather than revisit the transaction in an effort to cure defects, the Company and NNN decided to rescind the transaction.  On November 14, 2024, the transaction was rescinded.  The 1,000,000 Series Quantum Preferred Shares that were issued have been assigned to a new Delaware corporation which was assigned the intellectual property previously owned by NNN.  There is no longer a connection between NNN and Spectral. See Note 3.

Prior to the close of the acquisition, the Company paid approximately $145,000 to NNN for development services. Subsequently, on November 13, 2024, the transaction was rescinded.  The 1,000,000 Series Quantum Preferred Shares that were issued have been assigned to a new Delaware corporation which was assigned the intellectual property previously owned by NNN.  There is no longer a connection between NNN and Spectral.  As a result of the rescission, it is not an accurate representation of the Company’s financial statements to provide financial statements consolidated with NNN as there is no relationship between the parties and the transaction was rescinded.

On September 10, 2024, the Company entered into an Acquisition Agreement to exchange shares with Crowdpoint Technologies, Inc., a Texas corporation (“Crowdpoint”), a company controlled by Sean Michael Brehm, and its wholly owned subsidiary, Crwdunit Inc., a Delaware corporation (“Target”), whereby the Company agreed to acquire from Crowdpoint 100% of the Target’s outstanding shares in exchange for 3,750,000 shares of the Company’s common stock. The closing of the transaction is expected to occur by December 10, 2024, subject to the satisfaction of certain closing conditions as defined within the agreement.  As this transaction has not yet closed, the financial results of Crwdunit are not consolidated with the Company’s.