CONVERTIBLE NOTES PAYABLE – RELATED PARTIES

6 Months Ended

Jun. 30, 2025

Convertible Notes Payable Related Parties

CONVERTIBLE NOTES PAYABLE – RELATED PARTIES

17. CONVERTIBLE NOTES PAYABLE – RELATED PARTIES

The convertible notes payable, related party were issued as part of consideration for the acquisition of Forever 8. The discount was calculated based on the fair value of the instrument as of October 1, 2022. Principal due under the convertible note payable – related parties was as follows at June 30, 2025 and December 31, 2024:

	June 30, 2025		December 31,2024
Notes payable, 12%	$	21,484,848	$	21,771,155
Less: current portion		11,500,000		11,500,000
Notes payable, long-term potion	$	9,984,848	$	10,271,155
Less: debt discount		250,000		750,000
Notes payable, long-term portion, net	$	9,734,848	$	9,521,155

For the three and six months ended June 30, 2025, interest expense under convertible notes payable – related parties was $895,784 and $1,799,746, of which $250,000 and $500,000 was related to amortization of the debt discount, respectively. For the three and six months ended June 30, 2024, interest expense under convertible notes payable – related parties was $1,037,162 and $2,108,673, of which $250,000 and $500,000 was related to amortization of the debt discount, respectively. For the three and six months ended June 30, 2024, the Company recognized a capital contribution in additional paid in capital of $0 and $3,006,896 related to the forgiveness of accrued interest.