PREPAID EXPENSE – NONCURRENT PORTION	9 Months Ended
Sep. 30, 2024
Prepaid Expense Noncurrent Portion
PREPAID EXPENSE – NONCURRENT PORTION	NOTE 6 - PREPAID EXPENSE – NONCURRENT PORTION Effective July 13, 2022, the Company entered into a manufacturing contract with Montrade S.p.A., (“Montrade”) a company based in Bologna, Italy, for Montrade to manufacture and install the consumable manufacturing equipment. The Company made an initial payment of $589,265 USD on July 11, 2022 and was required to make additional payments, prior to Amendments, of up to $1,086,465 USD for the module as certain stages are completed. On February 23, 2023, the Company made a payment of $138,386 for completion of the design phase. On March 29, 2023, the Company signed Amendment 1 to the manufacturing contract for additional design work and paid $12,465 of the additional $36,809 cost. As Amendment 1 was for design work, the $12,465 was expensed. On October 18, 2023, the Company signed Amendment 2 to the manufacturing contract to modify certain components and paid $40,091 of the $114,546 cost. In 2022, $130,948 of the initial payment was expensed for design services completed by Montrade. The remaining payment of $458,317 and the additional payment on October 24, 2023, for Amendment 2 of $40,091 for a combined total of $498,408 are related to the manufacturing of the module for the automated manufacture of consumables for the Company’s proprietary, patented and patent pending Heat-not-Burn system. These payments totaling $498,408 were recorded as prepaid expenses – noncurrent portion. On February 26, 2024, the Company signed Amendment 3 to the manufacturing contract with Montrade, for a change to a component with a cost of $27,845. Full payment for this Amendment was made March 6, 2024. At September 30, 2024 the equipment production is nearing completion and with the finalization of the one component in the third quarter we anticipate completion of the build in early 2025. With the three amendments added and with payments made in 2023 and 2024, the Company will be required to pay up to $1,046,878. The Prepaid Expense – Noncurrent Portion balance on September 30, 2024 is $526,253. Montrade is an industry leading designer and manufacturer of machines for a wide range of products, including heated tobacco products.

PREPAID EXPENSE – NONCURRENT PORTION

9 Months Ended

Sep. 30, 2024

NOTE 6 - PREPAID EXPENSE – NONCURRENT PORTION

Effective July 13, 2022, the Company entered into a manufacturing contract with Montrade S.p.A., (“Montrade”) a company based in Bologna, Italy, for Montrade to manufacture and install the consumable manufacturing equipment. The Company made an initial payment of $589,265 USD on July 11, 2022 and was required to make additional payments, prior to Amendments, of up to $1,086,465 USD for the module as certain stages are completed.

On February 23, 2023, the Company made a payment of $138,386 for completion of the design phase. On March 29, 2023, the Company signed Amendment 1 to the manufacturing contract for additional design work and paid $12,465 of the additional $36,809 cost. As Amendment 1 was for design work, the $12,465 was expensed. On October 18, 2023, the Company signed Amendment 2 to the manufacturing contract to modify certain components and paid $40,091 of the $114,546 cost.

In 2022, $130,948 of the initial payment was expensed for design services completed by Montrade. The remaining payment of $458,317 and the additional payment on October 24, 2023, for Amendment 2 of $40,091 for a combined total of $498,408 are related to the manufacturing of the module for the automated manufacture of consumables for the Company’s proprietary, patented and patent pending Heat-not-Burn system. These payments totaling $498,408 were recorded as prepaid expenses – noncurrent portion.

On February 26, 2024, the Company signed Amendment 3 to the manufacturing contract with Montrade, for a change to a component with a cost of $27,845. Full payment for this Amendment was made March 6, 2024. At September 30, 2024 the equipment production is nearing completion and with the finalization of the one component in the third quarter we anticipate completion of the build in early 2025.

With the three amendments added and with payments made in 2023 and 2024, the Company will be required to pay up to $1,046,878. The Prepaid Expense – Noncurrent Portion balance on September 30, 2024 is $526,253. Montrade is an industry leading designer and manufacturer of machines for a wide range of products, including heated tobacco products.