RELATED PARTY NOTES PAYABLE AND RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2024

Related Party Transactions [Abstract]

RELATED PARTY NOTES PAYABLE AND RELATED PARTY TRANSACTIONS

NOTE 5 – RELATED PARTY NOTES PAYABLE AND RELATED PARTY TRANSACTIONS

Charles A. Ross, Jr. serves as the Company’s Chief Executive Officer. Compensation for Mr. Ross was $86,154 and $60,000 plus stock awards (granted and issued) of $0 and $0, respectively for the three months ended June 30, 2024 and 2023 and $162,500 and $120,000 plus stock awards (granted and issued) of $0 and $0, respectively for the six months ended June 30, 2024 and 2023. Doug E. Grau serves as the Company’s President and Interim Principal Accounting Officer. Compensation for Mr. Grau was $70,000 and $30,000 plus stock awards (granted and issued) of $0 and $0, respectively for the three months ended June 30, 2024 and 2023 and $132,500 and $70,000 plus stock awards (granted and issued) of $0 and $0, respectively for the six months ended June 30, 2024 and 2023.

Both Messrs. Ross and Grau serve as the Company’s Chief Executive Officer and President, respectively. Compensation for both, Messrs. Ross and Grau, includes a base salary and a bonus based upon certain performance measures approved by the board of directors. Three of our officers lent the Company approximately $260,793, net of repayments during the six months ended June 30, 2024, the loans are unsecured non-interest-bearing demand notes. These officers provided these loans as short-term funding and usually receives repayment a few months later, pending working capital needs.

Corey Lambrecht serves as the Company’s Chief Operating Officer. Mr. Lambrecht and the Company entered into an employment agreement on November 20, 2023. Mr. Lambrecht’s employment agreement provides for an initial annual base salary of $260,000, which may be adjusted by the board of directors of the Company. Mr. Lambrecht at this time continues as a director but ceased being an independent director of the Company. Mr. Lambrecht received approximately $130,000 and $0 for his services as an officer of the Company for six months ended June 30, 2024, and $45,000 as an independent consultant for the Company for the six months ended June 30, 2023, respectively.

The Company in connection with its employment agreements, as amended, reserved for issuance of 62,500,000 shares of its common stock that are convertible under the Series A preferred stock conversion terms.

Per Mr. Lambrecht’s employment agreement entered into on November 20, 2023, the share-award grant is to vest 1/4^th upon the signing of Mr. Lambrecht’s employment, another 1/4^th on January 1, 2024, another 1/4^th on January 1, 2025 and the remaining 1/4^th on January 1, 2026. Mr. Lambrecht’s employment agreement has a term running from November 20, 2023 through December 31, 2026, a term of 37 and ½ months. The Company on November 20, 2023 for Mr. Lambrecht recognized $4,612,500 as a total value for the share-award grant and $246,000 in compensation expense for the 4^th quarter of 2023 for the share award grant and respective earn-outs of the common stock equivalents underlying that share award. For the six months ended June 30, 2024 the Company recognized an additional $1,007,334 in compensation expense attributable to the share award grant and respective earn-out. On January 1, 2024 another 6,250 shares of Series A preferred stock vested for Mr. Lambrecht, providing for a total of 6,250,000 of shares of common stock that Mr. Lambrecht may convert his Series A preferred shares into.

Per Mr. Ross’s amended employment agreement with an effective date of November 20, 2023, the already issued or existing share-award grant is to vest 1/5^th on January 1, 2024, another 1/5^th on January 1, 2025, 1/5^th on January 1, 2026, 1/5^th on January 1, 2027 and the remaining 1/5^th on January 1, 2028. Mr. Ross’s amended employment agreement has an effective term running from November 20, 2023 through December 31, 2026, a term of 37 and ½ months. The Company on October 31, 2023 for Mr. Ross recognized $8,752,500 as a total value for the share-award grant and recognized $466,800 in compensation expense for the 4^th quarter of 2023 for the share award grant and respective earn-outs of the common stock equivalents underlying that share award. For the six months ended June 30, 2024 the Company recognized an additional $2,079,834 in compensation expense attributable to the share award grant and respective earn-out. On January 1, 2024 10,000 shares of Series A preferred stock vested for Mr. Ross, providing for a total of 5,000,000 of shares of common stock that Mr. Ross may convert his Series A preferred shares into at any time.

Per Mr. Grau’s amended employment agreement with an effective date of November 20, 2023, the already issued or existing share-award grant is to vest 1/5^th on January 1, 2024, another 1/5^th on January 1, 2025, 1/5^th on January 1, 2026, 1/5^th on January 1, 2027 and the remaining 1/5^th on January 1, 2028. Mr. Grau’s amended employment agreement has an effective term running from November 20, 2023 through December 31, 2026, a term of 37 and ½ months. The Company on October 31, 2023 for Mr. Grau recognized $8,752,500 as a total value for the share-award grant and recognized $466,800 in compensation expense for the 4^th quarter of 2023 for the share award grant and respective earn-outs of the common stock equivalents underlying that share award. For the six months ended June 30, 2024 the Company recognized an additional $2,079,834 in compensation expense attributable to the share award grant and respective earn-out.

The Company in connection with various employment and independent directors’ agreements is required to issue shares of its common stock as payment for services performed or to be performed. The value of the shares issued is determined by the fair value of the Company’s common stock that trades on the Nasdaq Capital Market. This value on the date of grant is afforded to the Company for the recording of stock compensation to employees and other related parties or control persons and the recognition of this expense over the period in which the services were incurred or performed. Most of the Company’s agreement for stock compensation provide for services performed to have been satisfied by the initial grant, thereby incurring the cost immediately from the grant.

Stock-based compensation is presented in accordance with the guidance of ASC Topic 718, “Compensation – Stock Compensation” (“ASC 718”). Under the provisions of ASC 718, the Company is required to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our statements of operations. Where the stock-based compensation is not an award, option, warrant or other common stock equivalent, the Company values the shares based on fair value with respect to its grant date and the price that investors may have been paying for the Company’s common stock on that date in its various exempt private placement offerings.

Taxable value of the stock-based compensation is recorded in accordance with the Internal Revenue Service’s regulations as it pertains to employees, control persons and others whereby they receive share-based payments. This may not always align with what the Company records these issuances in accordance with GAAP. There are no provisional tax agreements or gross-up provisions with respect to any of our share-based payments to these entities. The payment or withholding of taxes is strictly left to the recipient of the share-based payments, or the modification of share-based payments.

	June 30, 2024		December 31, 2023
	(unaudited)		(audited)
Working capital loan with a director of the Company on June 28, 2024. The prepayment or purchase price prior to July 31, 2024 is 120.0% or $480,000, the prepayment or purchase price after July 31, 2024 and prior to August 31, 2024 is 125.0% or $500,000, thereafter the purchase price is $520,000 or 130.0% on or before September 30, 2024.		480,000		-
Total recorded as a current liability	$	480,000	$	-

On June 28, 2024, the Company entered into a short-term loan with a director, Lawrence Sinks (“Mr. Sinks”), evidenced by a promissory note in the principal amount of $400,000 (the “Director’s Note”). Proceeds from the Director’s Note are to be utilized solely by the Company’s wholly-owned subsidiary, American Rebel Beverages, LLC. The Director’s Note is due on September 30, 2024, with a repayment amount of $520,000. The Company may reduce the repayment amount to $500,000 if the Note is repaid on or before August 31, 2024.