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Convertible Promissory Notes and Loans Payable
 3 Months Ended
Mar. 31, 2025
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 March 31, 2025:

 

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   $854)  $347,354    -    (1)
9/03/21  9/03/24   8%   3,500    (125)   3,500    14)   3,514    -    (2)
9/30/22  Demand   8%   66,793    (19,250)   58,338    (19,250)   39,088    -    (3)
09/14/23   Demand   8%             50,000         50,000                 (4)
                     $458,338   $(18,382)  $439,956   $-      

 

(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 quarter ended March 31, 2025. The maturity due date of the note has been extended by the lender from September 3, 2024 to ______________ while the Company works through a determines a restructure of the note.
(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 quarter ended March 31, 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.
(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 working capital needs of BLU3. 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 common stock prior to the quarterly interest payment date. The note holder may demand payment or convert the outstanding principal at a conversion rate of $0.01351 per share at any time. The conversion rate was calculated at a 35% discount to the 90 day VWAP of the Company’s stock as of the date of the note. The Company recorded $-0- for the beneficial conversion feature. As this conversion rate is a fixed rate, the embedded conversion feature is not a derivative liability. The outstanding balance on this note was $50,000 as of December 31, 2024 and December 31, 2023. Mr. Carmichael has waived interest payments on this note effective September 14, 2023.

A breakdown of current and long-term amounts due are as follows for the convertible promissory notes as of March 31, 2025:

 

   Summit Holdings V,   Tierra Vista Partners,   Robert Carmichael   Robert Carmichael     
   LLC Note   LLC Note   LBI Note   BLU3 Note   Total 
2025  $346,500   $3,500   $58,338   $50,000   $458,338 
Discount   854)   14)   (19,250)   ( - )   (18,382)
Total Loan Payments  $347,354   $3,514   $39,088   $50,000   $439,956 
Current Portion of Loan Payable  $(347,354)  $(3,514)  $(39,088)  $(50,000)  $(439,956)
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 quarter ended March 31, 2025. The maturity due date of the note has been extended by the lender from September 3, 2024 to ______________ while the Company works through a determines a restructure of the note.

   Payment Amortization 
     
2025   346,500 
Total Note Payments  $-   
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 quarter ended March 31, 2024.

 

    Payment Amortization  
      
2025   3,500 
Total Note Payments  $-     
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.
   
(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 working capital needs of BLU3. 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 common stock prior to the quarterly interest payment date. The note holder may demand payment or convert the outstanding principal at a conversion rate of $0.01351 per share at any time. The conversion rate was calculated at a 35% discount to the 90 day VWAP of the Company’s stock as of the date of the note. The Company recorded $-0- for the beneficial conversion feature. As this conversion rate is a fixed rate, the embedded conversion feature is not a derivative liability. The outstanding balance on this note was $50,000 as of December 31, 2024 and December 31, 2023. Mr. Carmichael has waived interest payments on this note effective September 14, 2023.
   
  Demand Notes
   
  On November 14, 2023, the Company issued a promissory note in the principal amount of $150,000 to Charles Hyatt, a director, for working capital requirements and payment of certain expenses in connection with the Company’s business combinations. The maturity date of the Note is May 7, 2024 (the “Maturity Date”). The Note bears interest at a rate of 9.9% per annum, and a default interest of 18% per annum. Interest payments shall be due and payable on a monthly basis. The Company may prepay the Note in whole or in part, at any time without premium or penalty. The balance of $280,000 was outstanding as of December 31, 2024, and the due date was extended to a due date of May 5, 2025, pursuant to an amendment dated November 13, 2024.
   
  On February 5, 2024, the Company borrowed funds through the issuance of a promissory note in the principal amount of $280,000 to Charles Hyatt, a Company director, for working capital requirements and payment of certain expenses in connection with the Company’s business combinations. The maturity date of the note was August 6, 2024. The note bears interest at a rate of 9.9% per annum, and has a default interest rate of 18% per annum. Interest payments are and payable on a monthly basis. The Company may prepay the note in whole or in part, at any time without premium or penalty. The balance of $280,000 was outstanding as of December, and the due date was extended to a due date of May 5, 2025, pursuant to an amendment dated November 13, 2024

 

Loans Payable

 

    Mercedes BTL (1)  

Navitas 2021 BLU3

(2)

   NFS SSI (3)  

Navitas 2022 BLU3

 (4)

  

Navitas 2024 BLU3

(5)

   Navitas 2024 BTL (6)   Total 
          -    -    -              - 
2025    5,584    21,432    4,555    17,941    4,223    2,963    56,697 
2026    -    6,338    -    -    6,243    4,411    16,691 
2027    -    -    -    -    7,022    5,002    12,024 
2028    -    -    -    -    7,899    5,672    13,571 
Thereafter    -    -    -    -    1,409    4,747    6,157 
Total Loan Payments    5,584    27,770    4,555    17,941    26,796    22,794    105,440 
Current Portion of Loan Payable    (5,584)   (21,432)   (4,555)   (17,941)   (5,771)   (4,014)   (59,298)
Non-Current Portion of Loan Payable    -    6,338    -    -    21,025    18,780    46,143 

 

(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 March 31, 2024 was $17,063 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 March 31, 2024 was $38,492 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 March 31, 2024 and December 31, 2023 was $32,448 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 March 31, 2024 was $41,273 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 March 31, 2024 was $31,476.

 

 

 

(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 $23,722.