NOTES PAYABLE

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

NOTES PAYABLE

NOTE 12: NOTES PAYABLE

The following is a summary of the notes payable as of March 31, 2023 and December 31, 2022. Any long-term debt that was repaid or converted in 2022, is not listed, and the details of those notes can be found in our Form 10-K filed March 31, 2023:

		March 31, 2023			December 31, 2022
Baxter Credit Union	(a)	$	99,976		$	100,305
Diagonal Lending (FKA Sixth Street Lending), net of discounts of $13,930	(b)		72,791			116,086
Loan Builder	(c)		92,059			92,059
Loan Builder #2	(d)		50,599			50,559
Loan Builder #3	(e)		155,074			155,053
Individual	(f)		25,000			25,000
Kabbage Loan	(g)		79,325			101,271
Forward Finance	(h)		31,042			31,042
Celtic	(i)		84,524			80,511
Michaelson Capital	(j)		2,917,090			-
Total		$	3,607,480		$	751,886
Current portion			(3,607,480	)		(751,886	)
Long-term debt, net of current portion		$	-		$	-

(a)	This Company signed an agreement with Baxter Credit Union for a revolving loan in the amount of up to $100,000 at 4% annual interest. The loan was renegotiated for a balance of $99,975 with similar terms at 4% interest per annum and is guaranteed by the CEO of the Company.
(b)	On November 22, 2022, the Company entered into a $115,640 promissory note (the “Diagonal Note”) with 1800 Diagonal Lending LLC (“Diagonal”). The promissory note contains an original issue discount of $12,390. Under the terms of the diagonal Note a one-time interest expense charge of 11% of the amount owed is incurred upon issuance. The Diagonal Note matures on November 22, 2023. In the event of a default the Diagonal Note contains a provision enabling the conversion of the note into the Company’s Common Stock at an exercise price of 75% of the lowest trading price for the Common Stock during the 10 trading days prior to the conversion date.
(c)	On January 14, 2022 the Company signed an agreement (“Loanbuilder – 1”)for a loan through the Loanbuilder service of Paypal, Inc. for a $125,000 loan. Under the terms of Loanbuilder – 1 the Company was to repay the loan in 52 weekly installments of $2,805 inclusive of interest of approximately 10% a year. As of December 31, 2022 this loan was considered to be in default.
(d)	On July 6, 2022 Rohuma signed an agreement (“Loanbuilder – 2”) for a loan through the Loanbuilder service of Paypal, Inc. for a $75,000 loan. Under the terms of Loanbuilder – 2 the loan was to be repaid the in 52 weekly installments of $1,683. Following the transfer of all of the Company’s equity interests in Rohuma to Happy under the Rohuma Agreement, the Company assumed this liability. As of December 31, 2022 this loan was considered to be in default.
(e)	On July 6, 2022 Rohuma signed an agreement (“Loanbuilder – 3”) for a loan through the Loanbuilder service of Paypal, Inc. for a $125,000 loan. Under the terms of Loanbuilder – 3 the loan was to be repaid the in 52 weekly installments of $2,458. Following the transfer of all of the Company’s equity interests in Rohuma to Happy under the Rohuma Agreement, the Company assumed this liability. As of December 31, 2022 this loan was considered to be in default.
(f)	On May 16, 2022, the Company signed a promissory note for $25,000 from an individual with an annual interest rate of 12%. The loan matures on December 31, 2023. In the event of default the loan incurs additional interest of 0.5% on all outstanding principal and interest owed.
(g)	The Company signed two Kabbage Funding Loan Agreements (together known as the “Kabbage Loan”) of $60,400 with American Express National Bank on September 28, 2023 and September 29 2023, respectively. Each loan included a cost of capital interest expense of $4,077 and was to be repaid in nine monthly repayments of $3,658, followed by nine monthly payments of $35,507.

(h)	On August 31, 2022, the Company signed a future receipts sale agreement with Forward Financing, LLC. Under the terms of the agreement the Company received $25,000, net administrative fees, in exchange for $34,250 of future receipts. The agreement was to be repaid in weekly payments of $1,427. The total monthly repayments were not to exceed 10% of that month’s receipts. As of March 31, 2023, this liability is in default.
(i)	On July 29, 2022 the Company entered into a financing and security agreement (the “Celtic line”) with Celtic Bank Corporation (“Celtic”) whereby Celtic provided a revolving line of credit that the Company could use to draw funds. Under the terms of the agreement the servicer for the Company regarding the revolving line of credit is BlueVine Inc (“BlueVine”). The agreement does not set a specific interest rate for draws from the line of credit and instead the interest rate is specific to each draw. During the three months ended March 31, 2023 the Company was charged $4,013 in bank services fees that have been capitalized to the outstanding amount owed due to the Celtic line. The Celtic line is guaranteed by the Company’s CEO. As of December 31, 2022 and March 31, 2023, the Celtic line is in default.
(j)	On January 5, 2023 the Company closed on its acquisition of Recoup, and as part of the consideration for the acquisition the Company assumed the liabilities of a $3,017,090 secured promissory note owed to Michaelson Capital Special Finance Fund II, L.P. (Michaelson). Michaelson and the Company then signed a security agreement to amend and restate the assumed note. On December 30, 2022 the Company and Michaelson signed the amended and restated senior secured term note (the “Michaelson Note”). The Michaelson Note has a principal value of $3,017,090 and an annual interest rate of 12%. Under the terms of the Michaelson Note the Company was to issue a repayment of $250,000 to Michaelson on January 31, 2023, March 31, 2023, June 30, 2023, and September 30, 2023. The remaining balance was to be repaid on December 31, 2023. Please see Note 6 - Acquisition of Recoup Technologies, Inc. After failing to make the first $250,000 payment required by the Michaelson Note, the Company and Michaelson agreed to a forbearance agreement under which, among other terms, the outstanding principal amount was increased by $50,000 in exchange for deferral of the payments owed under the Michaelson Note. Signed on March 3, 2023, the forbearance agreement set the following repayment terms: (1) beginning in April of 2023, the Company is to make monthly interest payments for the interest amounts owed, (2) beginning in April of 2023 the Company is to make monthly principal payments of $35,000, (3) $27,671 of interest expense was added to the accrued interest owed for March of 2023, (4) the Company was required to pay two separate payments of $50,000 during the three months ended March 31, 2023, and (5) the forbearance agreement requires a $250,000 repayment due as of December 31, 2023.

Interest expense on these notes for the three months ended March 31, 2023 and 2022 are $128,642 and $9,761, respectively.