CONVERTIBLE NOTES PAYABLE – RELATED PARTIES

3 Months Ended

Mar. 31, 2025

Convertible Notes Payable Related Parties

CONVERTIBLE NOTES PAYABLE – RELATED PARTIES

18. 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 March 31, 2025 and December 31, 2024:

	March 31, 2025		December 31, 2024
Notes payable, 12%	$	21,611,218	$	21,771,155
Less: current portion		11,500,000		11,500,000
Notes payable, long-term potion	$	10,111,218	$	10,271,155
Less: debt discount		500,000		750,000
Notes payable, long-term portion, net	$	9,611,218	$	9,521,155

Interest expense under convertible notes payable – related parties was $903,962 and $1,071,511, of which $250,000 and $250,000 was related to amortization of the debt discount, for the three months ended March 31, 2025 and 2024, respectively. The Company recognized a capital contribution in additional paid in capital of $3,006,896 related to the forgiveness of accrued interest for the three months ended March 31, 2024.