Related Party Transactions | Note 3. Related Party Transactions Convertible notes payable - related parties As of December 31, 2022 and 2021, convertible notes payable – related parties totaled $478,331 and $0, respectively. As of December 31, 2020, Brian Thom, the Chief Executive Officer had a total outstanding convertible note payable balance of $555,000 and unamortized debt discount of $199,314. During the year ended December 31, 2021, Mr. Thom converted $45,000 of accrued compensation into a convertible note. The note was convertible at $0.50 per share at the discretion of Mr. Thom, had a maturity date of March 31, 2021 and carried an interest rate of 3%. The note resulted in a beneficial conversion feature of $45,000 which was recorded as a debt discount. During the year ended December 31, 2021, Mr. Thom, converted the total outstanding convertible note balance of $600,000, which was related to $450,000 of loans to the Company and $150,000 of accrued compensation along with accrued interest of $10,135 into 1,220,272 shares of common stock leaving $0 owed to Mr. Thom as of December 31, 2021. The debt discount on the convertible notes was amortized during the year and a total of $244,314 for all of Mr. Thom’s notes was amortized to interest expense – related party, which included the unamortized debt discount of $199,314 as of December 31, 2020 and the debt discount of $45,000 recorded during 2021. As of December 31, 2021, the remaining unamortized debt discount was $0. During the year ended December 31, 2022, Mr. Thom, converted $372,000 of a loan payable balance to a convertible note payable. The unpaid accrued interest on the loan payable was transferred to the convertible note payable. The note has an interest rate of 10%, an original issue discount (“OID”) of 7% and has a maturity date of December 31, 2023. The note is convertible into common stock of the Company at $0.35 per share. In the event the Company issues any shares of common stock before the maturity date at a price that is lower than $0.35 per share, the conversion price shall be reduced to equal such lower issue price per share. The Company recorded $28,000 of a debt discount related to the OID. As of December 31, 2022, the remaining unamortized debt discount was $16,998 and accrued interest associated with the note was $33,897. As of December 31, 2020, Louis Schiliro, the former Chief Operating Officer, had a total outstanding convertible note payable balance of $170,000 and an unamortized debt discount of $69,564. During the year ended December 31, 2021, Mr. Schiliro converted $45,000 of accrued compensation into a convertible note. The note was convertible at $0.50 per share at the discretion of Mr. Schiliro, had a maturity date of March 31, 2021 and carried an interest rate of 3%. The note resulted in a beneficial conversion feature of $45,000 which was recorded as a debt discount. During the year ended December 31, 2021, $175,000 of the convertible note payable along with $1,502 of accrued interest was assigned to one of the Company’s legal counsel leaving a total outstanding balance of $40,000. The remaining balance of $40,000 along with accrued interest was converted into 80,173 shares of common stock leaving $0 owed to Mr. Schiliro as of December 31, 2021. The debt discount on the convertible notes payable was amortized during the year and a total of $114,654 for all of Mr. Schiliro’s notes was amortized to interest expense – related party during the year ended December 31, 2021, which included the unamortized debt discount of $69,654 as of December 31, 2020 and the debt discount of $45,000 recorded during 2021. As of December 31, 2021, the remaining unamortized debt discount was $0. As of December 31, 2020, Kristofer Heaton, the Principal Financial Officer, has a convertible notes payable balance of $3,750 and an unamortized debt discount of $3,750. During the year ended December 31, 2021, Mr. Heaton, converted $22,500 of accrued compensation into a convertible note. The note was convertible at $0.50 per share at the discretion of Mr. Heaton, had a maturity date of March 31, 2021 and carried an interest rate of 3%. The note resulted in a beneficial conversion feature totaling $22,500 which was recorded as a debt discount. The total outstanding principal balance of $26,250 along with accrued interest was converted into 52,666 shares of common stock leaving $0 owed to Mr. Heaton as of December 31, 2021. The debt discount on the convertible notes payable was amortized during the year and a total of $26,250 for all of Mr. Heaton’s convertible notes payable was amortized to interest expense – related party during the year ended December 31, 2021, which included the unamortized debt discount of $3,750 as of December 31, 2020 and the debt discount of $22,500 recorded during the 2021. As of December 31, 2021, the remaining unamortized debt discount was $0. During the year ended December 31, 2022, Robert Denser, Director of the Company, loaned the Company $93,000 through a convertible note. The note has an interest rate of 10%, an OID of 7% and has a maturity date of December 31, 2023. The note is convertible into common stock of the Company at $0.35 per share. In the event the Company issues any shares of common stock before the maturity date at a price that is lower than $0.35 per share, the conversion price shall be reduced to equal such lower issue price per share. The Company recorded $7,000 of a debt discount related to the OID. As of December 31, 2022, the remaining unamortized debt discount was $4,671 and accrued interest associated with the note was $4,034. Interest expense – related party on the above convertible notes payable was $36,531 (including $13,331 of debt discount amortization related to the OID) and $389,804 (including $385,218 of debt discount amortization) during the year ended December 31, 2022 and 2021, respectively. Accrued interest – related party due to these convertible notes was $37,931 and $0, as of December 31, 2022 and 2021, respectively. Loans payable/Advances - related parties As of December 31, 2022 and 2021, loans payable – related parties totaled $4,000 and $219,000, respectively. During the year ended December 31, 2021, Mr. Thom loaned the Company a total of $175,000 to pay for operating expenses. The loans had an interest rate of 10% and had a maturity date of December 31, 2022. During the year ended December 31, 2022, Mr. Thom loaned the Company $315,000 to pay for operating expenses. The loans had an interest rate of 10% and was due on demand. The Company repaid $118,000 in principal and $6,569 of accrued interest and $372,000 of principal was converted to a convertible note payable and any unpaid accrued interest was transferred to the convertible note payable as mentioned above. The outstanding balance owed to Mr. Thom on the loan payable was $0 and $175,000 as of December 31, 2022 and 2021, respectively. Accrued interest on the loan payable was $0 and $2,125 as of December 31, 2022 and 2021, respectively. During the year ended December 31, 2021, Mr. Schiliro advanced the Company $34,000 to pay for operating expenses and paid $30,000 of expenses on behalf of the Company. During the year ended December 31, 2021, the Company issued 25,000 shares of common stock to settle $20,000 of the outstanding balance leaving a balance of $44,000 as of December 31, 2021. The shares of common stock had a fair market value of $26,750 and the Company recorded a loss on debt settlement of $6,750. During the year ended December 31, 2022, Mr. Schiliro, loaned the Company $64,275 to pay for operating expenses. The loans had an interest rate of 10% and was due on demand. The Company repaid $108,275 in principal and $5,802 of accrued interest leaving a balance of $0 on the loan payable and accrued interest owed to Mr. Schiliro as of December 31, 2022. During the year ended December 31, Mr. Heaton, loaned the Company $4,000 to pay for operating expenses. As of December 31, 2022, $4,000 in principal and $224 in accrued interest is owed to Mr. Heaton. The loan has an interest rate of 10% and is due on demand. Interest expense – related party on the above loans was $25,292 and $2,308 during the years ended December 31, 2022 and 2021, respectively. Accrued interest – related party as of December 31, 2022 and 2021 was $224 and $2,308, respectively. Accrued liabilities – related parties As of December 31, 2020, $74,056 was owed to Nate Knight, who was the Company’s Chief Financial Officer until November 2020, for accrued compensation and reimbursable expenses. During the year ended December 31, 2021, the Company issued 78,500 shares of common stock to settle the total balance owed of $74,056. The shares of common stock had a fair market value of $82,425 and the Company recorded a loss on debt settlement of $8,368. As of December 31, 2021, $899 was owed to Mr. Thom, for reimbursable expenses. During the year ended December 2021, $45,000 of compensation was converted into convertible loans as mentioned above and $135,000 of accrued compensation was settled with the issuance of 270,000 shares of common stock. The stock had a fair market value of $221,400 which resulted in a $86,400 loss on settlement of debt (see Note 6). During the year ended December 31, 2022, the Company had accrued Mr. Thom’s 2022 first quarter compensation of $45,000 and during the second quarter of 2022, the Company issued 150,000 shares of common stock to Mr. Thom to settle the accrued compensation. The common stock had a fair value of $72,000 and the Company recorded $27,000 as a loss on settlement of debt. The Company also paid him $899 for reimbursable expenses leaving a balance of $0 owed for reimbursable expenses. As of December 31, 2020, $59,467 was owed to Mr. Schiliro, for accrued salary and reimbursable expenses, respectively. During the year ended December 31, 2021, $45,000 of accrued compensation was converted into a convertible note as mentioned above, 74,335 shares of common stock were issued to settle the total prior year balance owed of $59,467 and 270,000 shares of common stock were issued to settle $135,000 of accrued compensation. The shares of common stock had a total fair market value of $300,938 and the Company recorded a loss on settlement of debt in the amount of $106,471 (see Note 6). During the year ended December 31, 2022, the Company had accrued Mr. Schiliro’s 2022 first quarter compensation of $45,000 and during the second quarter of 2022, the Company issued 150,000 shares of common stock to Mr. Schiliro for the accrued compensation. The common stock had a fair value of $72,000 and the Company recorded $27,000 as a loss on settlement of debt. As of December 31, 2022, $6,923 was owed to Mr. Schiliro, for reimbursable expenses. As of December 31, 2020, $52,625 was owed to Mr. Heaton, for accrued compensation and services provided. During the year ended December 31, 2021, $22,500 of compensation was converted into a convertible note as described above and 320,250 shares of common shares of stock were issued to settle $105,000 of accrued compensation and $52,625 of prior accruals. The shares of common stock had a total fair market value of $262,605 and the Company recorded a loss on settlement of debt in the amount of $104,980 (see Note 6). During the year ended December 31, 2022, the Company had accrued Mr. Heaton’s 2022 first quarter compensation of $37,500 and during the second quarter of 2022, the Company issued 125,000 shares of common stock to Mr. Heaton for the accrued compensation. The common stock had a fair value of $60,000 and the Company recorded $22,500 as a loss on settlement of debt. As of December 31, 2022, $45,000, $45,000 and $37,500 of accrued compensation was due to Mr. Thom, Mr. Schiliro and Mr. Heaton, respectively. Equity transactions Per the vesting schedules of certain of the Company’s amended RSU Agreements, on January 1, 2021, 6,760,000 shares of common stock were issued to Mr. Douglas Beplate, former Chairman of the Board, 2,000,000 shares of common stock were issued to Mr. Schiliro and 100,000 shares of common stock were issued to Mr. Heaton. On January 6, 2021, the Board of Directors approved the second amendment to the RSU Agreement between the Company and Mr. Beplate in conjunction with Mr. Beplate’s retirement from his day-to-day management role with the Company. The amendment accelerated the vesting and immediately settled his remaining RSU’s by issuing 21,970,000 shares of common stock. Further, as a bonus in recognition of Mr. Beplate’s service to the Company and in recruitment of new executive management, the Company issued to Mr. Beplate an additional 2,000,000 shares of common stock. The Company recorded $26,127,300 of stock-based compensation expense during the year ended December 31, 2021 related to the accelerated vesting of these RSU’s and issuance of common stock. In December 2020, the Company entered into a second restricted stock unit agreement with Mr. Heaton. The second agreement issued an additional 1,000,000 RSU’s, 500,000 of which were granted on the award date and 500,000 of which would be granted on May 15, 2021 provided his professional services agreement was in effect on that date. The 500,000 RSU’s were granted during 2021 per the agreement. The RSU’s, subject to certain conditions, shall vest upon the achievement of certain Company objectives and milestones. During the year ended December 31, 2021, 200,000 of Mr. Heaton’s RSU’s mentioned above vested due to achievement of certain Company objectives. The Company recorded stock-based compensation expense of $220,000 related to the vesting of these RSU’s which was the grant date fair value. During the year ended December 31, 2021, the Company issued 30,000 shares of common stock to Mr. Thom, 30,000 shares of common stock to Mr. Schiliro and 25,000 shares of common stock to Mr. Heaton for services rendered. The 85,000 shares of common stock had a total fair market value of $69,700. During the year ended December 31, 2022, the Board of Directors approved an amendment to Mr. Thom’s RSU Agreement dated November 24, 2020. The amendment increased the number of RSU’s granted from 11,500,000 to 13,225,000. The RSU’s are subject to certain conditions and shall vest upon the achievement of certain Company objectives and milestones. During the year ended December 31, 2022, the Board of Directors approved an RSU Agreement with Robert Denser, Director of the Board. The agreement grants Mr. Denser 1,000,000 RSU’s which are subject to certain conditions and shall vest upon the achievement of certain Company objectives and milestones. During the year ended December 31, 2022, the Company acquired 2,228,115 shares of common stock from its former Chief Executive Officer as described in Note 6. During the year ended December 31, 2022, the Company issued 300,000 shares of common stock each to Mr. Thom and Mr. Schiliro and 250,000 shares of common stock to Mr. Heaton for compensation in lieu of cash. The common stock had a total fair value of $344,250. |