v3.25.2
Debt
3 Months Ended
Mar. 31, 2025
Debt  
Debt

Note 7. Debt

 

 

 

March 31,

2025

 

 

December 31,

2024

 

Promissory note due to a related party which matured on December 20, 2024, requiring interest only payments monthly, bearing interest at 18% per annum and secured by all HLDCO’s assets. Effective March 7, 2025, the lender and the Company entered into an Omnibus Note Extension Agreement which provided that this note was extended to June 5, 2025. As consideration for the extension, the principal balance was increased by 5%.

 

$172,673

 

 

$164,450

 

Promissory note due to a related party maturing on August 16, 2025, requiring interest only payments monthly, bearing interest at 18% per annum and secured by all HLDCO’s assets.

 

 

105,000

 

 

 

105,000

 

Promissory note due to a related party which matured on September 27, 2024, requiring interest only payments monthly, bearing interest at 12% per annum and secured by all HLDCO’s assets. Effective March 7, 2025, the lender and the Company entered into an Omnibus Note Extension Agreement which provided that this note was extended to June 5, 2025. As consideration for the extension, the principal balance was increased by 5%.

 

 

64,050

 

 

 

61,000

 

Promissory note due to a related party which matured on November 10, 2024, requiring interest only payments monthly, bearing interest at 18% per annum and secured by all HLDCO’s assets. Effective March 7, 2025, the lender and the Company entered into an Omnibus Note Extension Agreement which provided that this note was extended to June 5, 2025. As consideration for the extension, the principal balance was increased by 5%.

 

 

220,500

 

 

 

210,000

 

Promissory notes issued between March 2024 and July 2024 due one year from issuance, requiring interest only payments monthly, bearing interest at 18% per annum and are unsecured. These notes mature March 2025 through July 2025.

 

 

1,985,000

 

 

 

2,110,000

 

Promissory note due to a related party maturing on December 20, 2025, requiring interest only payments monthly, bearing interest at 18% per annum and secured by all HLDCO’s assets.

 

 

118,000

 

 

 

20,000

 

On January 13, 2025, the Company entered into a securities purchase agreement providing for the issuance of a promissory note with an original issue discount of $15,000.  Additionally, a one-time interest charge of 12%, or $16,800, was applied on the issuance. Accrued, unpaid interest and outstanding principal, subject to adjustment, shall be paid in twelve payments with eleven payments requiring a minimum payment of $5,000 and the final payment for the outstanding balance with payments beginning February 15, 2025. Upon the occurrence and during the continuation of any Event of Default, the note shall become immediately due and payable and the Company shall pay to the holder, in full satisfaction of its obligations hereunder, an amount equal to 150% of any amounts due under the note. Additionally, the note shall be convertible into shares of the Company common stock at a conversion rate equal to 65% multiplied by the lowest VWAP price for the common stock during the ten (10) trading days prior to the conversion date (representing a discount rate of 35%) (subject to equitable adjustments by the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events).

 

 

132,800

 

 

 

-

 

On January 22, 2025, the Company entered into a convertible promissory note due July 2025, with an original issue discount of $5,263. This note includes a guaranteed interest payment at a rate of 18%. All principal and accrued interest are due at maturity. Additionally, the holder has the right to convert the note at a rate of $0.04 per share, subject to adjustment for certain events such as a change in control. Additionally, six months after the issuance of the note, the conversion price will be reset if the Company’s stock has (a) fallen below $0.05 or (b) has an average daily trading volume of less than $10,000. In the event of a reset, the conversion price will be reduced to 75% of the VWAP for the 10 days prior to the reset date.

 

 

105,263

 

 

 

-

 

On February 10, 2025, the Company entered into a securities purchase agreement providing for the issuance of a promissory note with an original issue discount of $15,000.  Additionally, a one-time interest charge of 12%, or $13,800, was applied on the issuance. Accrued, unpaid interest and outstanding principal, subject to adjustment, shall be paid in five payments with the first payment of $64,400 due on August 15, 2025 and four subsequent payments of $16,100 due monthly thereafter. Upon the occurrence and during the continuation of any Event of Default, the note shall become immediately due and payable and the Company shall pay to the holder, in full satisfaction of its obligations hereunder, an amount equal to 150% of any amounts due under the note. Additionally, the note shall be convertible into shares of the Company common stock at a conversion rate equal to 65% multiplied by the lowest VWAP price for the common stock during the ten (10) trading days prior to the conversion date (representing a discount rate of 35%) (subject to equitable adjustments by the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events).

 

 

115,000

 

 

 

-

 

On March 10, 2025, the Company entered into a convertible promissory note due December 2025, with a face value of $189,474 and an original issue discount of $9,474. This note includes a guaranteed interest payment at a rate of 18%. The lender agreed to fund the note in three installments of $60,000 with the first due at issuance of the note, the second 30 days after closing and the final payment 90 days after closing. All principal and accrued interest are due at maturity. Additionally, the holder has the right to convert the note at a rate of $0.01 per share, subject to adjustment for certain events such as a change in control. Additionally, six months after the issuance of the note, the conversion price will be reset if the Company’s stock has (a) fallen below $0.01 or (b) has an average daily trading volume of less than $10,000. In the event of a reset, the conversion price will be reduced to 60% of the VWAP for the 10 days prior to the reset date.

 

 

69,474

 

 

 

-

 

Term note with a bank secured by car, payable in monthly installments of $939, including interest at 6.79% through October 4, 2030

 

 

9,281

 

 

 

11,719

 

Less: debt discounts

 

 

39,088

 

 

 

-

 

Total notes payable

 

$3,057,953

 

 

$2,682,169

 

Lines of Credit

 

On July 28, 2022, The Company entered into a $225,000 line of credit agreement with a financial institution. The line of credit matured on July 28, 2024, had an interest rate of 10% per annum and required monthly interest only payments with all principal and accrued interest due at maturity. On July 28, 2024, the line of credit was converted to a term loan agreement with a fixed interest rate of 9.99%, minimum monthly payments of $3,735 and a maturity date of July 28, 2029. As of March 31, 2025, the outstanding principal totaled approximately $216,000.

 

On March 11, 2025, The Company entered into a $51,000 line of credit agreement with a financial institution. The line of credit matures on March 11, 2026, has an interest rate of 0% per annum and requires monthly interest only payments with all principal and accrued interest due at maturity. As of March 31, 2025, the outstanding principal totaled approximately $48,000.