NOTES PAYABLE AND NOTE EXCHANGE AGREEMENT

3 Months Ended

Mar. 31, 2022

NOTES PAYABLE AND NOTE EXCHANGE AGREEMENT

NOTE G - NOTES PAYABLE AND NOTE EXCHANGE AGREEMENT

NOTE G--NOTES PAYABLE AND NOTE EXCHANGE AGREEMENT

On November 30, 2018, the Company entered into an Exchange Agreement with its Creditors under which each Creditor agreed to cancel the Original Notes issued and accept a new promissory note in the amount of $160,314 from the Company evidencing the amount of principal and accrued interest thereon through such date owed to the Creditor that mature on December 31, 2021 in exchange for the Original Notes.

In consideration for the exchange of the Original Notes for the New Notes, the Company agreed to reduce the price at which each share of Series A Preferred Stock, of which Ventureo is the sole holder, converts into Common Stock from $0.005 per share to $0.0002 per share. The Company filed an amendment to its Articles of Incorporation reflecting the change of the conversion price. The Company’s Board approved the Agreement by unanimous written consent to action on November 30, 2018 and the stockholders approved the amendment by written consent.

Although new borrowings are not yet formalized into a note agreement, the Company and the lender agree that the new loans have the same terms and conditions for the formalized notes.

The total amount of the Notes Payable is $310,091 and bears interest at 2% per year. Interest expense for the three-month periods ended March 31, 2022 and 2021 is $1,532 and $2,298, respectively. Total accrued interest as of March 31, 2022 was $15,285.

Detail of the Notes Payable is as follows:

· 2018 Principal and Interest consolidated into new promissory note in the amount of $160,314.

· During the 1st Quarter 2019, the Company incurred an additional $14,640 in Notes Payable.

· During the 2nd Quarter 2019, the Company incurred an additional $14,769 in Notes Payable.

· During the 3rd Quarter 2019, the Company incurred an additional $1,526 in Notes Payable.

· During the 4th Quarter 2019, the Company incurred an additional $11,171 in Notes Payable.

As of June 30, 2020, the Company executed a Drawdown Promissory Note in favor of Bryan Glass Securities, Inc. (“BSG”) under which the Company is entitled to borrow up to an aggregate of $150,000 during the 2020 and 2021 calendar years (the “Drawdown Note”). The original drawdown amount was $50,000 but has been increased to $150,000 in 2021 – see Note I below. Under the Drawdown Note, the Company must request a drawdown against the instrument not less than three days prior to the date on which it requires the proceeds, stating the amount of the drawdown and the purposes to which the proceeds will be applied. BSG is entitled to approve or decline an advance of all or a portion of the drawdown request. The unpaid principal amount of the Drawdown Note bears interest at the rate of 2% per year.

During the year 2020, $38,799 of the drawdown was borrowed.

During the year 2021, $62,721 of the drawdown was borrowed.

During the 1st quarter 2022, $6,150 of the drawdown was borrowed.

As of March 31, 2022, the Company has borrowed an aggregate of $107,671 from BSG under the Drawdown Note and the sum of $42,329 remains available for advances thereunder.