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NOTES PAYABLE TO RELATED AND UNRELATED PARTIES

3 Months Ended

Mar. 31, 2024

NOTES PAYABLE TO RELATED AND UNRELATED PARTIES

NOTE 3 – NOTES PAYABLE TO RELATED AND UNRELATED PARTIES

Purchase Funding Agreement with Directors and Unrelated Party

On July 2, 2021, the Board of Directors (“Board”) resolved that the Company required a purchase order funding facility to procure additional inventory to support the online Smart Mirror business. The Board resolved that certain Directors could negotiate the terms of a Purchase Order Funding Agreement for up to $1,020,000 with Directors Stewart Wallach and Jeffrey Postal and E. Fleisig, a natural person who is not affiliated with the Company. This agreement was finalized on October 18, 2021, and the Company received the funding of $1,020,000 on October 18, 2021 with an original maturity of April 2023. Under this agreement the interest terms are 5% based on a 365- day year. The note payable is due on September 13, 2024. As of March 31, 2024, the principal outstanding and accrued interest is $1,020,000 and $125,055, respectively.

Working Capital Loan with Directors and Unrelated Party

On May 1, 2022, the Company negotiated three $200,000 working capital funding agreements, to provide $600,000 in funding for daily operations. The Board resolved that certain Directors could negotiate the terms of a Working Capital Funding Agreement for up to a total of $600,000, with Directors Stewart Wallach (through Group Nexus, a company controlled by Mr. Wallach), Jeffrey Postal, and Mouhaned Khoury, a natural person. The term of each agreement is 18 months with principal accruing a simple interest rate of 5 percent per annum, maturing November 1, 2024. These loans may be prepaid in full or partially without any penalty. As of March 31, 2024, the principal outstanding and accrued interest is $600,000 and $57,619, respectively.

On October 13, 2022, the Company negotiated a $50,000 Working Capital Funding agreement with Director Jeffrey Postal, a director, to provide funding for daily operations. The term of this agreement is 18 months and principal accrues simple interest at a rate of 5 percent per annum, maturing November 1, 2024. As of March 31, 2024, the principal outstanding and accrued interest is $50,000 and $3,664, respectively.

On December 1, 2022, the Company negotiated a $50,000 Working Capital Funding agreement with Jeffrey Postal, a director, to provide funding for daily operations. The term of this agreement is 18 months and principal accrues simple interest at a rate of 5 percent per annum, maturing June 1, 2024. The loan may be prepaid in full or partially without any penalty. As of March 31, 2024, the principal outstanding and accrued interest is $50,000 and $3,336, respectively.

On January 3, 2023, the Company negotiated a $40,000 Working Capital Funding agreement with Director Stewart Wallach (through Group Nexus, a company controlled by Mr. Wallach), to provide funding for daily operations. Principal accrues simple interest at a rate of 5 percent per annum, maturing June 15, 2024. The loan may be prepaid in full or partially without any penalty. As of March 31, 2024, the principal outstanding and accrued interest is $40,000 and $2,482, respectively.

On March 27, 2023, the Company negotiated a Working Capital Funding agreement with Director Stewart Wallach to provide funding for daily operations. Total funding under the agreement amounted to $632,500 as of March 31, 2024. Principal accrues simple interest at a rate of 5 percent per annum, maturing June 15, 2024. The loan may be prepaid in full or partially without any penalty. See Note 6. As of March 31, 2024, the principal outstanding and accrued interest is $632,500 and $24,561, respectively.

On January 16, 2024, the Company negotiated a Working Capital Funding agreement with Director Jeffrey Postal to provide $50,000 in funding for daily operations. accrues simple interest at a rate of 5 percent per annum, maturing August 15, 2024. The loan may be prepaid in full or partially without any penalty. As of March 31, 2024, the principal outstanding and accrued interest is $50,000 and $521, respectively.

As of March 31, 2024 and December 31, 2023, the Company had a total of $2,442,500 and $2,352,000, of outstanding principal respectively, on the above referenced funding agreements, which includes accrued interest of $217,237 and $187,974, respectively. The outstanding principal balances and accrued interest has been presented on the condensed and consolidated balance sheet as follows:

Schedule for notes payable to related party


		Notes Payable
		March 31, 2024			December 31, 2023
Current portion of notes payable and accrued interest, related parties	$	2,058,843		$	1,946,315
Current portion of notes payable and accrued interest, unrelated parties		600,892			594,161
Total notes payable principal and accrued interest		2,659,739			2,540,476
Less accrued interest		(217,237	)		(187,974	)
Total notes payable	$	2,442,498		$	2,352,502

Management believes that without additional capital or increased cash generated from operations, there is substantial doubt about the Company’s ability to continue as a going concern and meet its obligations over the next twelve months from the filing date of this report.