v3.26.1
LOANS PAYABLE
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
LOANS PAYABLE

NOTE 6 – LOANS PAYABLE

 

The Company’s subsidiary had various loans outstanding on March 31, 2026 and December 31, 2025. 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, 2026.

 

   March 31, 2026   December 31, 2025 
Loan FB (c)  $50,464   $50,464 
Other Credit Cards   98,894    82,203 
Loan CC (d)   144,684    144,684 
Credit Line –LB LB(b)   54,524    54,524 
Credit Line – WB(a)   99,994    99,994 
Total loans payable  $448,560   $431,869 

 

(a) The maximum borrowing level under this unsecured facility was $100,000 at an interest rate of 2.5% over prime. This facility has no fixed maturity date.
(b) The maximum borrowing level on this facility was $150,000 with a fixed interest rate of 10%. This facility has no fixed maturity date.
(c) The interest rate on this facility was 40% with a one-year maturity date of December 31, 2023.
(d) The principal loan is for $150,000 with weekly loan payments due of $2,558 over a 78-month period. The effective interest rate on this loan amounts to approximately 67% These are two combined loans that were for $199,500 & 33,000 with current balance for both of $144,437 in default.

 

 

Government loans payable

 

As of March 31, 2026 and December 31, 2025, the Company had $493,710 and $493,710 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, 2026 and December 31, 2025 the balance of convertible notes was $547,112 and $535,735 respectively.

 

Cove Note

 

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, 2026 and December 31, 2025 the balance of this convertible note, which was in default, amounted to $234,425 which includes accrued interest.

 

Trillium Note

 

On October 29, 2025, the Company entered into an Equity Line of Credit Agreement (“ELOC”) and a Registration Rights Agreement (“RRA”) with Trillium which, among other things provides for the purchase of up to $10,000,000 of the Company’s common stock by Trillium subject to various conditions.

 

As of March 31, 2026, the total balance due to Trillium amounted to $461,310.