Convertible Promissory Notes and Loans Payable

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Convertible Promissory Notes and Loans Payable

Note 5. Convertible Promissory Notes and Loans Payable

Convertible Promissory Notes

Convertible promissory notes consisted of the following at September 30, 2023:

Origination Date	Maturity Date	Interest Rate			Origination Principal Balance		Original Discount Balance			Period End Principal Balance		Period End Discount Balance			Period End Balance, Net		Accrued Interest Balance		Reg.
9/03/21	9/03/24		8	%		346,500		(12,355	)	$	346,500	$	(4,010	)	$	342,490		-	(1)
9/03/21	9/03/24		8	%		3,500		(125	)		3,500		(42	)		3,458		-	(2)
9/30/22	Demand		8	%		66,793		(19,245	)		63,746		(12,865	)		50,881		-	(3)
9/14/23	Demand		8	%		50,000		-			50,000		-			50,000		-	(4)
										$	463,746	$	(16,917	)	$	446,829	$	-

A breakdown of current and long-term amounts due are as follows for the convertible promissory notes as of September 30, 2023:

	Summit Holdings V,			Tierra Vista Partners,			Robert Carmichael			Robert Carmichael
	LLC Note			LLC Note			Note			Note			Total
2023	$	-		$	-		$	63,746		$	50,000		$	113,746
2024		346,500			3,500			-			-			350,000
Discount		(4,010	)		(42	)		(12,865	)		-			(16,917	)
Total Loan Payments	$	342,490		$	3,458		$	50,881		$	50,000		$	446,829
Current Portion of Loan Payable	$	(342,490	)	$	(3,458	)	$	(50,881	)	$	(50,000	)	$	(446,829	)
Non-Current Portion of Loan Payable	$	-		$	-		$	-		$	-		$	-

(1) On September 3, 2021, the Company issued a three-year 8% convertible promissory note in the principal amount of $346,500 to Summit Holding V, LLC as part of the acquisition of SSI. The Company is required to make quarterly payments under the note in an amount equal to 50% of the adjusted net profit of SSI. Interest is payable quarterly in shares of common stock of the Company at a conversion price of $0.051272 per share. The note holder may convert outstanding principal and interest into shares of common stock at a conversion price of $0.051272 per share at any time during the term of the note. The Company recorded $12,355 for the beneficial conversion feature. This note is classified as a current liability for this period.

	Payment Amortization
2023 (9 months)	$	-
2024		346,500
Total Note Payments	$	346,500
Current portion of note payable		(346,500	)
Non-Current Portion of Notes Payable	$	-

(2) On September 3, 2021, the Company issued a three-year 8% promissory note in the principal amount of $3,500 to Tierra Vista Partners, LLC as part of the acquisition of SSI. The Company is required to make quarterly payments under the note in an amount equal to 50% of the adjusted net profit of SSI. Interest is payable quarterly in common stock of the Company at a conversion price of $0.051272 per share. The note holder may convert outstanding principal and interest into shares of common stock at a conversion price of $0.051272 at any time up to the maturity date of the note. The Company recorded $125 for the beneficial conversion feature. This note is classified as a current liability for this period.

	Payment Amortization
2023 (9 months)	$	-
2024		3,500
Total Note Payments	$	3,500
Current portion of note payable		(3,500	)
Non-Current Portion of Notes Payable	$	-

(3) On September 30, 2022, the Company issued a convertible demand 8% promissory note in the principal amount of $66,793 to Robert Carmichael for funds to meet the working capital needs of LBI. There is no amortization schedule for the note and interest is payable in shares of common stock of the Company at a conversion price equal to the 90 day VWAP of the Company’s stock prior to the quarterly interest payment date. This note is classified as a current liability as the note holder may demand payment or convert the outstanding principal at a conversion rate of $0.021 per share at any time. The Company recorded $19,250 for the beneficial conversion feature.

(4) On September 14, 2023, the Company issued a convertible demand 8% promissory note in the principal amount of $50,000 to Robert Carmichael for funds to meet the working capital needs of LBI. There is no amortization schedule for the note and interest is payable in shares of common stock of the Company at a conversion price equal to the 90 day VWAP of the Company’s stock prior to the quarterly interest payment date. This note is classified as a current liability as the note holder may demand payment or convert the outstanding principal at a conversion rate of $0.01351 per share at any time. The Company recorded $-0- for the beneficial conversion feature.

(5)

Loans Payable

	Mercedes			Navitas			NFS			Navitas 2022
	BMG (1)			BLU3 (2)			SSI (3)			BLU3 (4)			Total
2023 (9 months)	$	2,792		$	3,365		$	8,379		$	4,738		$	19,274
2024		11,168			16,629			26,279			21,228			75,304
2025		8,686			18,024			12,328			23,610			62,648
2026		-			6,007			-			-			6,007
Total Loan Payments	$	22,646		$	44,025		$	46,986		$	49,576		$	163,233
Current Portion of Loan Payable	$	(10,626	)	$	(16,297	)	$	(25,193	)	$	(20,671	)	$	(72,787	)
Non-Current Portion of Loan Payable	$	12,020		$	27,728		$	21,793		$	28,905		$	90,446

(1) On August 21, 2020, the Company executed an installment sales contract with Mercedes Benz Coconut Creek for the purchase of a 2019 Mercedes Benz Sprinter delivery van. The installment agreement is for $55,841 with a zero interest rate payable over 60 months with a monthly payment of $931 and is personally guaranteed by Mr. Carmichael. The loan balance as of September 30, 2023 was $22,646 and $31,023 as of December 31, 2022.

(2) On May 19, 2021, BLU3 executed an equipment finance agreement with Navitas Credit Corp. (“Navitas”) to finance the purchase of certain plastic molding equipment. The amount financed is $75,764 payable over 60 equal monthly installments of $1,611 (the “Navitas 1”). The equipment finance agreement contains customary events of default. The loan balance as of September 30, 2023 was $44,025 and $54,930 as of December 31, 2022.

(3) On June 29, 2022, SSI executed an equipment financing agreement with NFS Leasing (“NFS Leasing”) to secure replacement production molds. The total purchase price of the molds was $84,500 of which $63,375 was financed by NFS Leasing on August 15, 2022. The financing agreement has a 33 month term beginning in August 2022 with a monthly payment of $2,571. The financing agreement contains customary events of default, is guaranteed by the Company and NFS Leasing has a lien on all of the assets of SSI. The loan balance as of September 30, 2023 and December 31, 2022 was $46,986 and $60,804, respectively.

(4) On December 12, 2022, BLU3 executed an equipment finance agreement to finance the purchase of certain plastic molding equipment through Navitas Credit Corp. (“Navitas”). The amount financed is $63,689 payable over 36 equal monthly installments of $2,083 (“Navitas 2”). The equipment finance agreement contains customary events of default. The loan balance as of September 30, 2023 was $49,576 and $63,689 as of December 31, 2022.