Notes Payable – Related Parties

The following is a summary of notes payable – related parties as of June 30, 2024, and 2023:

The following is a summary of current and noncurrent notes payable – related parties as of June 30, 2024, and 2023:

All notes dated December 31, 2022, and prior are unsecured, bear interest at 3% per annum, and are due 360 days from the date of issuance, ranging from June 25, 2020, to December 30, 2022. All notes dated after December 31, 2022, are unsecured, bear interest at 8% per annum, and are due 1095 days from the date of issuance. Each related party has significant influence or common ownership with the Company’s Chief Executive Officer. Several of these notes are in default. The Company has not received any notices of default or demands for payment. All notes are unsecured and those which are past-due are due on demand. As of June 30, 2024 and 2023, total accrued interest for Notes Payable-Related Parties was $0 and $14,182, respectively. The Company recorded interest expense from Notes Payable-Related Party for fiscal years ending June 30, 2024, and 2023, of $244,750 and $814,240, respectively.

There were various related party debt convertible notes that occurred during 2024 and 2023 (see “Note 8. Convertible Note Payable – Related Parties” for more information).

There is an expected future payment of $53,957 due for the year ended June 30, 2026.

Notes Payable

Notes payable includes the following:

The Company’s Economic Injury Disaster Loan (“EIDL”) dated May 10, 2020, include a 3.75% interest rate for up to 30 years; the payments are deferred for the first two years (during which interest will accrue), and payments of principal and interest are made over the remaining 28 years. The EIDL loan has no penalty for prepayment. The EIDL loan attaches collateral which includes the following property that EIDL borrower owns or shall acquire or create immediately upon the acquisition or creation thereof: all tangible and intangible personal property, including, but not limited to: (a) inventory, (b) equipment, (c) instruments, including promissory notes (d) chattel paper, including tangible chattel paper and electronic chattel paper, (e) documents, (f) letter of credit rights, (g) accounts, including health-care insurance receivables and credit card receivables, (h) deposit accounts, (i) commercial tort claims, (j) general intangibles, including payment intangibles and software and (k) as-extracted collateral as such terms may from time to time be defined in the Uniform Commercial Code. The security interest the EIDL borrower grants includes all accessions, attachments, accessories, parts, supplies and replacements for the collateral, all products, proceeds and collections thereof and all records and data relating thereto. The balance of IHG’s EIDL is $150,000 and $147,807 for the years ended June 30, 2024, and 2023, respectively. The EIDL loan is technically in default as a result of a change in ownership without the Small Business Administration (“SBA”) prior written consent. The Company has contacted the SBA regarding the transfer of ownership and has not yet finalized the transfer of ownership.

The Company’s COVID-19 Government Loan includes a 2.5% interest rate for up to six years; the payments are deferred for the first year (during which interest will accrue). The balance of COVID-19 Government Loan is $24,206 and $36,938 for the years ended June 30, 2024, and 2023, respectively.

The Company has a loan totaling $95,060 and $320,709 as of June 30, 2024, and 2023, respectively, which includes an interest rate of 5% with a maturity date of April 29, 2025. The loan is collateralized by personal property and includes monthly payments in the amount of $2,656, with a balloon payment at the maturity date in the amount of $336,898. The Company renewed a loan on June 26, 2023, for $176,836, which includes an interest rate equal to the Wall Street Journal Prime Rate, or 8.25% as of June 30, 2023, and a maturity date of June 26, 2024. The loan is collateralized by the accounts receivable of the Company and includes four payments of $46,838.

On July 25, 2023, the Company entered into an agreement with OnPoint LTB, LLC, for a credit line and funding of up to $2,000,000. The terms of the credit line include a 24-month term loan, with interest only for 6 months, then amortizing over 18 months down to 50%, with the remaining 50% of the balance due at the end of term. Interest is fixed at 20% per annum, with an origination fee of $20,000 which is added to the loan balance. The Company borrowed the first installment of $1,200,000 at the time of closing and the remaining $800,000 was borrowed on October 4, 2023. As part of the loan origination fee, the Company issued 500,000 shares of its common stock. The transaction includes a debt discount of $189,971 which is amortized using an effective interest method over a 24-month period. The net balance of the loan is $1,561,395 as of June 30, 2024.

On January 4, 2024, the Company executed a revenue purchase agreement with NewCo Capital Group LLC for $350,000, which includes a 17% purchase percentage and a total purchased amount of $507,500 at the end of the term. The agreement includes a $10,500 underwriting fee and a $10,500 origination fee.

On January 22, February 22, a loan and security agreement was executed with Nautilus Parent Holding, LLC whereby the Company can borrow 80% of the estimated accounts receivable at 2% interest per month for up to a maximum draw down of $750,000. On April 18, 2024, the Company board of directors approved to increase the maximum draw down to $8,000,000. As of June 30, 2024, the total drawdown was $2,900,000. The agreement includes a $5,000 expense deposit.

On April 8, 2024, the Company entered into a promissory note with 1800 Diagonal Lending, LLC for $172,500. The promissory note includes a one-time interest charge of 14%, which was applied on the issuance date, and matures on February 15, 2025. There are 10 monthly payments in the amount of $19,665 for a total payback of $196,650. In the event of default, 1800 Diagonal Lending, LLC shall have the right to convert all or part of the outstanding and unpaid amount of the note into common shares equal to 61% multiplied by the lowest trading price of the Company common stock during the 10 trading days prior to the conversion date.

On May 2, 2024, the Company executed a revenue purchase agreement with Credit Line Capital Group for $600,000, which includes a 14% purchase percentage and a total purchased amount of $786,000 at the end of the term. The agreement includes a $6,000 underwriting fee and a $6,000 origination fee.

On May 16, 2024, the Company entered into a promissory note with 1800 Diagonal Lending, LLC for $122,475. The promissory note includes a one-time interest charge of 14%, which was applied on the issuance date, and matures on March 30, 2025. There are 10 monthly payments in the amount of $13,962 for a total payback of $139,621. In the event of default, 1800 Diagonal Lending, LLC shall have the right to convert all or part of the outstanding and unpaid amount of the note into common shares equal to 61% multiplied by the lowest trading price of the Company common stock during the 10 trading days prior to the conversion date.

On May 16, 2024, the Company entered into a term loan with Agile Capital Funding, LLC for $525,000 and includes an administrative fee in the amount of $23,625. There are 32 weekly payments in the amount of $22,641 for a total payback of $724,500.

On June 25, 2024, the Company executed a revenue purchase agreement with Cucumber Capital LLC for $325,000, which includes a 9% purchase percentage and a total purchased amount of $487,175 at the end of the term. The agreement includes a $19,500 origination fee.

The following are the expected future payments as of June 30, 2024: