NOTE 6 – LOANS PAYABLE

The Company’s subsidiary had various loans outstanding on March 31, 2025 and December 31, 2024. All of these loans were short-term in nature, with varying rates of interest and fees, and no set minimum monthly payments. All of these notes were in default as of March 31, 2025.

 SCHEDULE OF DEBT

The Note has a principal balance of $117,320, and a stated maturity date of April 15, 2024. A one-time interest charge of 13%, or $15,251, was applied on the date of issuance and was immediately expensed. Interest and outstanding principal shall be paid in nine payments, each in the amount of $14,730.11 (a total payback to 1800 Diagonal of $132,571). The first payment was due July 15, 2023, with eight subsequent payments due each month thereafter. The Note may not otherwise be prepaid in whole or in part. In the event the Company fails to pay any amount when due under the Note, the interest rate will increase to 22%. Upon the occurrence and during the continuation of any event of default under the Note (“Event of Default”), the Note will become immediately due and payable and the Company is required to pay to 1800 Diagonal an amount equal to 150% times the sum of (a) the then outstanding principal amount of the Note, plus (b) any accrued and unpaid interest on the unpaid principal amount of this Note, plus (c) default interest, if any, plus (d) any other amounts owed to the 1800 Diagonal pursuant to the Note. Following any Event of Default, 1800 Diagonal may convert any amount due under the Note into shares of the Company’s common stock (the “Conversion Shares”) at a conversion price equal to 75% multiplied by the lowest trading price for the Company’s common stock during the ten trading days prior to the conversion date (representing a discount rate of 25% to market); provided, however, that 1800 Diagonal may not convert any portion of the Note that would cause it, together with its affiliates, to beneficially own in excess of 4.99% of the Company’s common stock. The Company has agreed to reserve from its authorized and unissued common stock four times the number of shares that are actually issuable upon full conversion of the Note to provide for the issuance of the Conversion Shares. The conversion price and number of shares of the Company’s common stock issuable upon conversion of the Note will be subject to adjustment from time to time in the event of any combinations, recapitalization, reclassifications, extraordinary distribution, or similar event.

To date the Company has repaid a total of $54,591 with 6 payments as follows: $14,730.11 on 7/19/2023, $7,000 on 8/1/2023, $10,000 on 9/20/23, $10,000 on 3/22/24, $5,000 on 4/26/24 and $7,500 on 6/4/24 leaving unpaid balance of $77,980.89. 1800 Diagonal has started converting the balance into shares and selling into the market starting on January 27^th,2025 and has converted into 24,486,568 shares which resulted in $83,380 debt extinguishment.

Government loans payable

As of March 31, 2025 and December 31, 2024, the Company had $500,000 and $500,000 respectively, in government EIDL loans outstanding related to Covid-19. These loans are repayable over a 30-year period with an interest rate of 3.75%.

Convertible notes

As of March 31, 2025 and December 31, 2024 the balance of convertible notes was $237,420 and $266,118 respectively.

On June 6, 2023, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with 1800 Diagonal Lending LLC, a Virginia limited liability company (“1800 Diagonal”), pursuant to which the Company issued to 1800 Diagonal an unsecured promissory note in the principal amount of $117,320 (the “Note”). The net proceeds received by the Company were $100,000, after deducting an original issue discount in the amount of $12,570 and $4,750 for 1800 Diagonal’s legal fees, which were immediately expensed. As of March 31, 2025, the balance outstanding on this convertible note amounted to $49,643.

On March 22, 2024, the Company entered into the Cove Purchase Agreement with Cove Funding, pursuant to which Cove Funding agreed to extend the Cove Loan to the Company in the amount of up to $300,000, in two tranches. On March 22, 2024, the Company issued the Cove Note to Cove Funding in the principal amount of $187,777, evidencing the First Tranche of the Cove Loan. The Company received net proceeds of $150,000 (after deducting a 5% commitment fee, a 5% diligence fee, and Cove Funding’s fees and expenses related to the transaction, including attorney’s fees). The difference between the amount of the First Tranche and $300,000 (less a 5% commitment fee, a 5% diligence fee, and Cove Funding’s fees and expenses related to the transaction, including attorney’s fees) may be funded in a second tranche (the “Second Tranche” and, together with the First Tranche, the “Principal Amount”), upon the Company’s written request, and subject to certain conditions.

The Cove Note has a stated maturity date of July 22, 2024 (as such date may be extended by the parties, the “Maturity Date”), and an interest rate of 12% per annum, which begins to accrue on the First Tranche on the Closing Date and will begin to accrue on the Second Tranche if and when such amount is funded by Cove Funding. Any Principal Amount that is not paid when due will bear interest at a rate of the lesser of (a) 24% per annum, or (b) the maximum amount permitted by law. The Cove Convertible Note may not be prepaid in whole or in part, except as otherwise set forth in the Cove Note. Pursuant to the terms of Cove Note, if the Cove Loan is not repaid on or before the Maturity Date, the Company is required to issue Cove Funding shares of its Common Stock, on a monthly basis (subject to a 4.99% beneficial ownership limitation), with a value of 16.67% of the principal amount of the Cove Loan outstanding as of each issuance date, plus a commitment fee equal to 5% of such outstanding principal amount, until the Cove Loan is repaid in full (collectively, the “Penalty Shares”). In addition, commencing on the Maturity Date, Cove Funding may (subject to a 4.99% beneficial ownership limitation) convert amounts due under the Cove Note into shares of the Company’s Common Stock (collectively, the “Conversion Shares”) at a conversion price equal to the lesser of (a) $0.07, or (b) the five-trading day closing price average immediately prior to the conversion date. The number of Conversion Shares issuable upon conversion of the Cove Note will be subject to adjustment from time-to-time in the event of any combination, extraordinary distribution, dilutive issuance, or similar event. Upon the occurrence of an event of default under the Cove Note, 125% of the amounts due under the Cove Note will become immediately due and payable. In addition, as long as the Company has any obligations outstanding under the Cove Note, the Company may not (among other things), without Cove Funding’s written consent, incur any senior or pari passu indebtedness, sell a significant amount of the Company’s assets, or issue equity securities in an amount greater than 10% of the Company’s outstanding Common Stock, subject to certain exceptions.

As of March 31, 2025 and December 31, 2024 the balance of this convertible note, which was in default, amounted to $187,777.