Notes Payable, Related Party

9 Months Ended

Sep. 30, 2021

Notes Payable Related Party

Notes Payable, Related Party

Note 8 – Notes Payable, Related Party

Notes payable, related party, are comprised of the following as of September 30, 2021, and December 31, 2020:

Noteholder	Due	Interest Rate			Secured	September 30, 2021		December 31, 2020
Sky Island, Inc.	Demand		0	%	No	$	8,015	$	8,015
Eric Kennedy	Demand		0	%	No		30,000		30,000
Rob Novinger	Demand		0	%	No		30,851		30,851
Neu-Ventures, Inc.	Demand		0	%	No		790,120		788,309
Total						$	858,986	$	857,175

Sky Island, Inc.

From January 1, 2020, to December 31, 2020, the Company decreased the Sky Island promissory notes from a beginning balance of $1,757,124 to a closing balance of $8,015. In January 2020, the Company entered into an agreement to reduce the outstanding loan by $1,062,000, first applied to accrued interest of $312,891, in exchange for ownership in the Company’s equity method investment. Since June 2020, Sky Island Inc. agreed to reduce the coupon rate on notes payable from 10% to 0%.

On December 17, 2020, the Company entered into an Intellectual Property Purchase Agreement with PVI pursuant to which the Company sold all of the Company’s trade dress and trade names, logos, internet addresses and domain names, trademarks and service marks and related registrations and applications, including any intent to use applications, supplemental registrations and any renewals or extensions in exchange for Mr. Jaime Ortega, waiving and cancelling $1,000,000 of the aggregate existing loans extended by Mr. Ortega to the Company. There was no activity during the three and nine months ended September 30, 2021. The outstanding balance owed to Sky Island Inc, was $8,015 as of September 30, 2021, and December 31, 2020.

The promissory note transactions were deemed a related party transaction because Jaime Ortega, owner, chief operating officer and director of Sky Island, Inc., was a founding shareholder of the Company. Mr. Ortega has an aggregate ownership of 48.1 % and 49.6% of the issued and outstanding common stock of the Company as of September 30, 2021, and December 31, 2020.

Accrued interest payable on the Sky Island promissory notes as of September 30, 2021, and December 31, 2020, was $45,637. Interest expense of $0 was recorded for the three months ended September 30, 2021, and 2020, respectively. Interest expense of $0 and $25,200 was recorded for the nine months ended September 30, 2021, and 2020, respectively.

There was no interest paid on Notes Payable, Related Party, during the nine months ended September 30, 2021, or 2020.

Neu-Ventures, Inc.

Beginning in April 2019, the Company also began receiving advances from Neu-Ventures, Inc., another entity owned by our majority shareholder, Mr. Ortega. These advances are due on demand and do not incur interest.

Advances from Neu-Ventures between January 2021 and September 2021 totaled $56,325, offset by $243,950 cash payments. Neu-Ventures also paid $89,437 of corporate expenses on behalf of the Company during the nine months ended September 30, 2021. Neu-Ventures also paid $100,000 on behalf of the Company pursuant to the stock purchase agreement entered into on August 7, 2021, to acquire up to 50,000 shares of Capital Growth Investments, Inc. The outstanding balance to Neu Ventures, Inc. was $790,120 and $788,309, as of September 30, 2021, and December 31, 2020, respectively.

Eric Kennedy

In May 2019, the Company agreed to a settlement with Eric Kennedy, a Company’s director, related to deferred cash compensation that had been accrued for in the Company’s accounts payable and accrued liabilities to reduce the amount to $35,000, resulting in a gain on settlement of related party payables of $36,000, which was recorded in the consolidated statements of stockholders’ equity. Therefore, the $35,000 was reclassified to related party notes payable.

The note does not incur interest and was originally to be repaid through an initial $10,000 payment with monthly payments of $5,000 thereafter, but the Company was only able to make one $5,000 payment, reducing the balance to $30,000 as of December 31, 2020. There was no activity during the three and nine months ended September 30, 2021. The balance due to Eric Kennedy was $30,000 as of September 30, 2021, and December 31, 2020.

Rob Novinger

As of December 31, 2018, Rob Novinger has been paid $10,000 against his note with an original balance of $30,000, leaving a balance of $20,000. An additional $5,000 was added to the balance from a new advance received in 2019, leaving a balance of $25,000 at December 31, 2019. During the fiscal year ended December 31, 2020, the Company increased the balance by $5,851 to reflect the settlement payable owed to Novinger, leaving a balance of $30,851 as of December 31, 2020. There was no activity during the three and nine months ended September 30, 2021. The balance due to Rob Novinger was $30,851 as of September 30, 2021, and December 31, 2020.