DEBT

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

DEBT

NOTE 6 – DEBT

Notes Payable – Related Parties

In Q1 2024, the Company issued convertible notes to board member Chris Kneppers totaling $60,000. The Notes bear no interest and are convertible at the option of the lender into common shares of the Company at 8 cents per share, plus a warrant with a strike price of 10 cents per share and a 5-year expiration for a total of 750,000 shares and warrants.

In 2023, the Company entered into long-term convertible notes with board member Chris Kneppers, with principal balances of $110,000 that are to be repaid when the Company receives $5 million in equity investment. The Notes carry a 10% interest per annum. The Notes are convertible, at the option of the lender, into common shares of the Company at 15 cents per share, plus a warrant with a strike price of 25 cents per share and a 5-year expiration, for a total of 733,333 shares and warrants.

On November 11, 2023, and also on July 7, 2023, the Company entered into two long-term convertible notes with board member Edmund Burke, with a total principal balance of $15,000 and $25,000, respectively, that are to be repaid when the Company receives an equity investment of at least $3 million. Otherwise, they accrued warrants, with a strike price of 15 cents and an expiration of 5 years, at the rate of 50,000 and 30,000 respectively every 12 months instead of interest, with a minimum of 80,000 warrants. The Notes may convert into common stock at $0.13/share at the option of the holder for a total of 307,692 shares.

In June 2023, the Company entered into a short-term convertible note with board member Chris Kneppers, with a principal balance of $100,000, that if it’s not paid by December 6, 2023, it automatically extends for another 6 months. It’s convertible at the option of the lender into common stock at $0.13/share for a total of 769,231 shares.

In April 2023, the Company entered into a long-term convertible note with board member Edmund Burke, with a principal balance of $150,000, that is to be repaid when the Company receives an equity investment of at least $1.5 million. Otherwise, it accrued warrants, with a strike price of 15 cents and an expiration of 5 years, at the rate of 100,000 every 6 months instead of interest. It may convert into common stock at $0.13/share at the option of the holder for a total of 1,153,846 shares.

In January 2023, the Company entered into a short-term convertible note with board member Chris Kneppers, with a principal balance of $250,000, that if it’s not paid by July 4, 2023, it converts at the option of the Company into common stock at $0.13/share for a total of 1,923,077 shares.

Legacy Notes Payable – Related Party

On May 31, 2019, the Company entered into an agreement with Chris and Pamela Jemapete such that its debt of $100,630 shall be repaid by the Company out of future gross revenues, subject to the bankruptcy court’s acceptance of the Company’s plan of reorganization, which was confirmed by the Court on September 18, 2019. The debt bears no interest.

On May 20, 2019, the Company entered into an agreement with Steven Sadaka such that the $100,000 owed to him shall be repaid out of future gross revenues, subject to the bankruptcy court’s acceptance of the Company’s plan of reorganization. The Plan was confirmed on September 18, 2019.

Between November 30, 2018 and December 14, 2018, the Company entered into agreements to renegotiate various debts owed to founders and related parties. These agreements were subject to the bankruptcy Court’s plan confirmation. The Plan, which was confirmed by the Court on September 18, 2019, indicated that the debt to Mark Koch shall be $240,990; the debt to Animated Family Films $579,942; and the debt to Steven Dunkle, CTWC, & Wellington Asset Holdings $1.5 million. All these notes are to be paid from future profits and discharged to the extent unpaid five years after Plan effective date, which was September 18, 2019.

Notes Payable – Other

In Q1 2024, the Company issued convertible notes to 4 different individuals totaling $200,000. These notes carry no interest and may be prepaid at anytime, but are convertible, at the option of the lender, into common shares of the Company at 8 cents per shares plus a warrant with a strike price of 10 cents per share and a 5-year expiration for a total of 2,500,000 shares and warrants.

In December 2023, the Company issued a convertible note to one individual for $50,000. This note carries no interest and may be prepaid at anytime, but are convertible, at the option of the lender, into common shares of the Company at 8 cents per shares plus a warrant with a strike price of 10 cents per share and a 5-year expiration for a total of 625,000 shares and warrants.

Legacy Notes Payable – Other

On March 19, 2019, the Company entered into an agreement with Lucas Hoppel, such that its combined debt on two notes shall be reduced to $100,000 without interest. The sum shall be repaid by the Company out of 5% of future gross revenues, within 30 days after the end of the first calendar quarter in which the Company has revenue. This agreement was subject to the bankruptcy court’s acceptance of the Company’s plan of reorganization. The Plan was confirmed by the Court on September 18, 2019.

On March 27, 2019, the Company entered into an agreement with another creditor, such that its debt will be reduced from $32,000 to $20,000 payable out of future gross revenues, upon the bankruptcy court’s acceptance of the Company’s plan of reorganization. The Plan was confirmed by the Court on September 18, 2019.

On November 30, 2018, the Company entered into an agreement with a third party such that its debt will be reduced to $96,570 to be paid with no interest out of 50% of the future net profits of the Company. The Company’s Plan of reorganization confirmed by the bankruptcy Court on September 18, 2019, stipulated that this debt is discharged to the extent unpaid five years from the date of Plan confirmation, or on September 18, 2024.

A summary of all debts indicated in the Notes above is as follows:

Notes Payable	March 31, 2024		December 31, 2023
Short Term Convertible Note – Related Party	$	370,000	$	350,000
Short Term Convertible Notes — Other		200,000		0
Long Term Convertible Notes – Related Party		40,000		0
Long Term Convertible Notes -- Other		50,000		50,000
Long Term Convertible Notes Payable after equity investment – Related Party		300,000		300,000
Long Term Notes Payable from future revenue — Related Party		200,630		200,630
Long Term Notes Payable from future revenue — Other		120,000		120,000
Long-Term Notes Payable expiring on September 18, 2024 — Related Party		2,320,932		2,320,932
Long Term Notes Payable expiring on September 18, 2024 — Other		96,570		96,570
TOTAL NOTES	$	3,698,132	$	3,438,132

Only $100,000 of the $3,698,132 payable as of March 31, 2024, is payable in cash at a specific point in time. $300,000 is due only after a significant capital investment. $320,630 is due out of future revenue with no specific due date. $2,417,502 will be discharged if not paid by September 18, 2024, which is 5 years after the Company exited Chapter 11. The remaining Notes that would not be discharged are $1,230,630, consisting of $860,630 due to related parties, and $370,000 due to others.