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Convertible Promissory Notes and Loans Payable
 9 Months Ended
Sep. 30, 2024
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, 2024:

 

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   $-   $346,500         -    (1)
9/03/21  9/03/24   8%   3,500    (125)   3,500    -    3,500    -    (2)
9/30/22  Demand   8%   66,793    (19,245)   63,746    (6,450)   57,296    -    (3)
                     $413,746   $(6,450)  $407,296   $-      

 

(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 the three months ended September 30, 2024.

(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 during the term of the note. The Company recorded $125 for the beneficial conversion feature. This note is classified as a current liability for the three months ended September 30, 2024.

(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 price of $0.021 per share at any time. The Company recorded $19,250 for the beneficial conversion feature. This note is classified as a current liability for the three months ended September 30, 2024.

 

A breakdown of current and long-term amounts due are as follows for the convertible promissory notes as of September 30, 2024:

 

   Summit
Holdings V,
LLC Note		   Tierra Vista
Partners,
LLC Note		   Robert
Carmichael
Note		   Total 
                 
2024   346,500    3,500    63,746    413,746 
Discount   -    -    (6,450)   (6,450)
Total Loan Payments  $346,500   $3,500   $57,296   $407,296 
Current Portion of Loan Payable  $(346,500)  $(3,500)  $(57,296)  $(407,296)
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 the three months ended September 30, 2024.

 

   Payment Amortization 
     
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 during the term of the note. The Company recorded $125 for the beneficial conversion feature. This note is classified as a current liability for the three months ended September 30, 2024.

  

   Payment Amortization 
     
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 price of $0.021 per share at any time. The Company recorded $19,250 for the beneficial conversion feature. This note is classified as a current liability for the three months ended September 30, 2024.

 

 

Loans Payable

 

   Mercedes BMG (1)   Navitas BLU3 (2)   NFS SSI (3)   Navitas 2022
BLU3 (4)		   Navitas 2024
BLU3 (5)		    Navitas 2024 BLU3 (6)    Total 
2024 (6 months)  $2,792   $7,782   $6,991   $14,342   $1,713    $ 898    $34,518 
2025   8,376    19,556    12,329    25,143    5,604      3,890     74,897 
2026   -    6,339    -    -    6,304      4,411     17,054 
2027   -         -    -    7,092      5,002     12,093 
Thereafter   -    -    -    -    8,685      10,419     19,105 
Total Loan Payments  $11,168   $33,667   $19,320   $39,485   $29,398      24,620    $157,668 
Current Portion of Loan Payable  $(11,168)  $(17,665)  $(19,320)  $(22,991)  $(5,442)     (3,809 )  $(80,395)
Non-Current Portion of Loan Payable  $-   $16,012   $-   $16,494   $23,957      20,811    $77,273 

 

(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, 2024 was $11,168 and $19,855 as of December 31, 2023.
   
(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 equipment finance agreement contains customary events of default. The loan balance as of September 30, 2024 was $33,667 and $42,525 as of December 31, 2023.
   
(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, 2024 and December 31, 2023 was $19,320 and $38,607, respectively.
   
(4) On December 12, 2022, BLU3 executed an equipment finance agreement to finance the purchase of certain plastic molding equipment through Navitas. The amount financed is $63,689 payable over 36 equal monthly installments of $2,083. The equipment finance agreement contains customary events of default. The loan balance as of September 30, 2024 was $439,485 and $44,839 as of December 31, 2023.
   
(5) On February 12, 2024, BLU3 executed an inventory finance agreement to finance the purchase of certain equipment stock through Navitas. The amount financed is $32,274 payable over 60 equal monthly installments of $715. The inventory finance agreement contains customary events of default. The loan balance as of September 30, 2024 was $29,398.
   
(6) On September 4, 2024, BLU3 executed an inventory finance agreement to finance the purchase of certain equipment stock through Navitas. The amount financed is $24,620 payable over 60 equal monthly installments of $602. The inventory finance agreement contains customary events of default. The loan balance as of September 30, 2024 was $24,620.