Notes Payable

6 Months Ended

Jun. 30, 2024

Notes Payable [Abstract]

Notes Payable

Note 6 – Notes Payable

In connection with the acquisition of assets from ECC, the Company issued a note payable to the owner of ECC. The note accrued interest at 5% per annum, requires quarterly principal and interest payments of $4,518 and is due on April 15, 2021. At June 30, 2024 and December 31, 2023, the amount outstanding under this note payable was $5,272 and $5,272, respectively. The Company repaid $0 during the six months ended June 30, 2024.

On December 26, 2020, a line of credit held by the company had matured, and based on the terms of the line of credit agreement was converted to a note payable upon demand. The obligation accrues interest at the rate of $10.89 per day until the bank receives full payment. As of June 30, 2024, the balance owed by the Company was $1,500.

On October 12, 2023, the Company entered into a note payable in the amount of $125,000 and included an origination fee of $2,500, which was deducted from the proceeds. The note bears non-annualized interest of $25,000 and 52 payments of $2,885 are to be paid weekly until paid in full. As of June 30, 2024, the balance on the note was $20,678.

Convertible Notes

On May 5, 2022, the Company received a loan in connection with the issuance of stock warrants in the amount of $750,000. The loan has terms of 12 months and accrues interest at 5% per annum. As part of the issuance of the loan, the company identified debt discounts related to the warrants issued, the incentive shares issued as discussed in Note 10, the beneficial conversion feature of the debt, and the expenses paid as part of the issuance. The total debt discounts recorded as of the date of the note was $550,538. On January 1, 2024, and upon adoption of ASC 2020-06, the total remaining unamortized debt discount on this note was adjusted and recorded as part of a cumulative-effect adjustment to accumulated deficit.

On October 10, 2022, the Company received a loan in connection with the issuance of stock warrants in the amount of $375,000. The loan has terms of 12 months and accrues interest at 5% per annum. As part of the issuance of the loan, the company identified debt discounts related to the warrants issued, the beneficial conversion feature of the debt, and the expenses paid as part of the issuance. The total debt discount recorded as of the date of the note was $200,488. On January 1, 2024, and upon adoption of ASC 2020-06, the total remaining unamortized debt discount on this note was adjusted and recorded as part of a cumulative-effect adjustment to accumulated deficit.

Effective January 1, 2024, the Company adopted guidance which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. This guidance was adopted using a modified retrospective approach. The Company used the modified retrospective approach whereby amounts previously reported have not been revised. Upon adoption we recognized a decrease to additional paid-in capital of $751,809, an increase to long-term debt of $47,078, and a cumulative-effect adjustment to accumulated deficit of $704,731. (See Note 2)

On April 17, 2024, the Holder of the Company’s convertible Notes agreed to extend the maturity dates to December 31, 2024, under Amendment #2 of the Notes. In consideration for extending the maturity dates, the principal balance of Note 1 was increased by $50,000 and the principal balance of Note 2 was increased by $20,000. During the six months ended June 30, 2024, the Company converted $121,370 in principal and interest and $8,750 in fees in exchange for 2,502,000 shares of common stock.

The following table summarizes certain details related to our outstanding convertible notes:

Maturity Date	Principal Amount		Contractual Interest		Stated Interest Rate			Default Interest			Effective Interest Rate
December 31, 2024	$	458,007	$	21,432		5	%		16	%		5.116	%
December 31, 2024	$	206,008	$	9,137		5	%		16	%		5.116	%

Future maturities of all convertible notes payable as of June 30, 2024, are as follows:

Years ended December 31,	June 30, 2024		December 31, 2023
2024	$	664,015	$	570,176
2025		-
2026		-
2027		-
2028		-
Thereafter		-
	$	664,015	$	570,176