v3.26.1
Intangible Assets and Secured Note – Related Party
6 Months Ended
Jun. 30, 2026
Intangible Asset, Goodwill and Other [Abstract]  
Intangible Assets and Secured Note – Related Party

Note 10 – Intangible Assets and Secured Note – Related Party

 

On September 3, 2024, the Company entered into an Asset Purchase Agreement with Suretone Entertainment, Inc. (“Seller”) pursuant to which the Company agreed to acquire the 2019 movie titled “The Kid” (directed by Vincent D’Onofrio and starring Ethan Hawke and Chris Pratt) and certain other assets (the “Assets”) related to “The Kid” from the Seller, for an aggregate purchase price of $2,893,000 (the “Purchase Price”).

 

In consideration for the purchased Assets, the Company paid the Purchase Price which consisted of: (i) payment of $250,000 in cash on September 3, 2024; (ii) issuance of 1,500,000 restricted shares of the Company’s common stock, par value $0.0001 per share (valued at $0.762 per share which, was the market per share value of the Company’s common stock); and (iii) issuance of a secured promissory note in the original amount of $1,500,000 (the “Secured Note”) to a related party. The Secured Note’s term is one year with an interest rate of 8%. On October 21, 2024, the Company paid $500,000 and on December 13, 2024, the Company paid an additional $500,000 of the principal balance of the Secured Note leaving a principal balance of $500,000 at December 31, 2024. On January 2, 2025, the Company paid $250,000 and on June 14, 2025 paid another $250,000 which paid off the Note. In addition, the $41,877 accrued interest on the note was waived in connection with the early pay-off of the Note and recorded as an adjustment to additional paid-in capital.

 

The Assets were being amortized over a ten-year period10. Amortization expense totaled $289,300 for the year ended December 31, 2025.

 

As a result of the Company’s expansion into a Digital Assets Strategy in 2025 the Company determined that the movie did not fit into its ongoing operations and decided it was in the best interest of the Company’s shareholder to sell the asset. Consequently, since the asset has little value to the ongoing operations, the asset is considered impaired for accounting purposes and an impairment reserve of $2,507,267 has been recorded for the year ended December 31, 2025.