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NOTES PAYABLE
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
NOTES PAYABLE

NOTE 5 - NOTES PAYABLE

 

(a) NOTES PAYABLE IN DEFAULT:

 

Notes payable in default consist of various notes bearing interest at rates from 5% to 9%, which are unsecured with original due dates between August 2000 and December 2016. All the notes are unpaid to date and are in default and are thus classified as current liabilities. On December 31, 2021, and 2020, notes payable in default amounted to $871,082 and $871,082, respectively. Accrued interest on the notes in default on December 31, 2021 and 2020 are $381,019 and $345,663, respectively. Below is a discussion of the details to the notes payable in default and a table summarizing the notes in default with additional information.

 

During 2002, the Company settled a trade payable in litigation by executing a note payable to a Company in the amount of $18,000, interest accrues at 6% per annum, unsecured, due September 1, 2002, and in default. Accrued interest on December 31, 2021, and 2020 is $21,960 and $20,880, respectively.

 

Also, during 2002, in settlement of another trade payable, the Company executed a note payable to a Company in the amount of $30,000, interest accrues at 6% per annum, unsecured, due September 12, 2002, in default. Accrued interest on December 31, 2021, and 2020 is $34,099 and $32,299, respectively.

 

During 2000, the Company executed a note payable to an individual in the amount of $25,000, interest accrues at 5% per annum, unsecured, due August 31, 2000, in default. Accrued interest on December 31, 2021, and 2020 is $28,343 and $27,091, respectively.

 

In 2002, the Company settled an obligation with a consultant by executing a note payable for $40,000, interest accrues at 7% per annum, unsecured, due July 10, 2002, in default. Accrued interest on December 31, 2021, and 2020 is $55,087 and $52,287, respectively.

 

On December 27, 2009, the Company executed a note payable to an individual for various advances to the Company in the amount of $292,860. On June 26, 2013, this note was renegotiated to include the accrued interest. The new note balance is $388,376 and interest accrues at 5% per annum, unsecured, and is extended to October 5, 2019, with monthly installments beginning in 2014 of $5,553, which did not occur. This note is in default. Accrued interest on December 31, 2021, and 2020 is $165,329 and $145,909, respectively.

 

On January 27, 2010, the Company executed a note payable to a corporation in the amount of $192,000, bears no interest and is due on demand after 6 months of execution and is unsecured. No demand has been made at the date of these financial statements, but the note is in default. Interest expense in the amount of $13,440 has been imputed for this note in 2021 and 2020, with an offsetting entry to Paid in Capital.

 

On August 28, 2012, and September 17, 2012, the Company executed a note payable to a corporation in the amount of $12,000 and $20,000, respectively. On June 26, 2013, this note was renegotiated to include the accrued interest. The new note balance is $32,960 and interest accrues at 5% per annum, unsecured, and is extended to October 5, 2018, with monthly installments beginning in 2014 of $473, which did not occur, and is unsecured and in default. Accrued interest on December 31, 2021, and 2020 is $14,031 and $12,383, respectively.

 

On April 12, 2012, the Company executed a note payable to a corporation in the amount of $100,000, however on June 26, 2013, this note was renegotiated to bear interest at 5% per annum, unsecured, extended to October 5, 2018, with monthly installments beginning in 2014 of $1,430, which did not occur, and this note is in default. Accrued interest on December 31, 2021, and 2020 is $42,568 and $37,568, respectively.

 

On December 31, 2012, the Company executed a note payable to a corporation in the amount of $32,000, however on June 26, 2013, this note was renegotiated to include accrued interest. The new note balance is $32,746, bears interest at 5% per annum, unsecured, extended to October 5, 2018, with monthly installments beginning in 2014 of $468, which did not occur, and this note is in default. Accrued interest on December 31, 2021, and 2020 is $13,936 and $12,300, respectively.

 

On March 11, 2014, the Company executed a note agreement with an LLC in the amount of $5,000, interest accrues at 6% per annum, unsecured, due after 8 months of execution, extended to October 5, 2018, and is in default. Accrued interest on December 31, 2021, and 2020 is $2,342 and $2,042, respectively.

 

On January 31, 2014, the Company executed a note agreement with a corporation in the amount of $7,000, interest accrues at 6% per annum, unsecured, due after 8 months of execution, but extended to October 5, 2018, and is in default. Accrued interest on December 31, 2021, and 2020 is $3,324 and $2,904, respectively.

 

 

None of the above notes are convertible or have any covenants.

 

(b) Additional detail to all Notes Payable in Default is as follows:

 

2021   2020   Interest   Interest Expense     
Principal   Principal   Rate   12/31/2021   12/31/2020   Maturity 
$32,960    32,960    5.00%   1,649    1,648    10/5/18 
 32,746    32,746    5.00%   1,637    1,636    10/5/18 
 5,000    5,000    6.00%   300    300    10/5/18 
 100,000    100,000    5.00%   5,000    5,000    10/5/18 
 7,000    7,000    6.00%   420    420    10/5/18 
 388,376    388,376    5.00%   19,420    19,420    10/5/18 
 192,000    192,000    0%   13,440    13,440    10/5/18 
 18,000    18,000    6.00%   1,080    1,080    9/1/2002 
 30,000    30,000    6.00%   1,800    1,800    9/12/2002 
 25,000    25,000    5.00%   1,250    1,250    8/31/2000 
 40,000    40,000    7.00%   2,800    2,800    7/10/2002 
                            
$871,082   $871,082        $48,796   $48,796      

 

 

(c) NOTES PAYABLE

 

Notes payable consist of four notes bearing interest at rates from 3.75% to 6%, which are unsecured with due dates between July and December 2022. As of December 31, 2021, and 2020, notes payable amounted to $1,072,000 and $0, respectively. Accrued interest on the notes at December 31, 2021, and 2020 are $5,088 and $0, respectively. Below is a discussion of the details to the notes payable and a table summarizing the notes with additional information.

 

On July 20, 2021, the Company received cash from an individual in the amount of $100,000 as a loan bearing interest at 6%, with a term of 12 months of the date received. At December 31, 2021 and 2020, accrued interest on this note totals $2,684 and $0, respectively.

 

On August 6, 2021, the Company received cash from an individual in the amount of $100,000 as a loan bearing interest at 6%, with a term of 12 months of the date received. At December 31, 2021 and 2020, accrued interest on this note totals $2,404 and $0, respectively.

 

On December 31, 2021, the Company executed a note with an individual who had advanced funds throughout the year to assist management in their cashflow needs. The total amount received at December 31, 2021 was $722,000. The note bears interest at 6%, with a term of 12 months from December 31, 2021. Interest will begin to accrue on January 1, 2022, therefore, there was no accrued interest on this note at December 31, 2021.

 

In September 2020, the Bronx received a Small Business Administration (“SBA”) Loan pursuant to the Economic Injury Disaster Loan. The Company received a loan in the amount of $150,000 from the SBA. The SBA Loan is in the form of a Note dated August 29, 2020, which matures on August 29, 2050. The SBA Loan bears interest at a rate of 3.75% per annum and is payable monthly commencing on August 29, 2021. The monthly principal and interest payment for the SBA Loan will be $731. All proceeds from this Loan will be used solely as working capital to alleviate economic injury caused by the Economic Injury Disaster. At December 31, 2021, the outstanding balance was $150,000, with accrued interest of $1,875.

 

 

Future maturities of notes payable are as follows:

 

Year Ending December 31,

 

      
2022  $924,986 
2023   3,376 
2024   3,505 
2025   3,639 
2026   3,778 
Thereafter   132,716 
Total  $1,072,000 

 

At December 31, 2021, and 2020, accrued interest on all outstanding notes payable and notes payable in default were $387,982 and $345,663, respectively. Interest expense on the outstanding notes amounted to $53,962 and $183,669 for the years ended December 31, 2021, and 2020, including the imputed interest discussed above.

 

(d) CONVERTIBLE DEBENTURE:

 

On November 27, 2020, the Company executed a convertible debenture with a corporation in the amount of $74,800, interest accrues at 10% per annum, unsecured, due on November 27, 2021. The debenture includes a conversion right to be exercised at any time 180 days after execution of the note and is convertible into common stock of the Company at 75% of the market price, being calculated as the lowest three trading prices during the fifteen-trading day period prior to conversion. The Debenture also required the Company to reserve 5 times the expected conversion share amount at the transfer agent, to insure there are sufficient shares available upon conversion.

 

The convertible debenture also contains a OID or original issue discount of $6,800, which was deducted from the proceeds, thus advancing $68,000 to the Company. Because the Company prepaid the debenture, the OID was completely expensed in the 2020 year.

 

On February 26, 2021, the Company prepaid the Convertible Debenture and all accrued penalties pursuant to the agreement, along with the accrued interest. Accrued interest and penalties on December 31, 2020, was $12,045, and the Convertible Debenture balance was $74,800.