Annual report pursuant to Section 13 and 15(d)

Related Party Transactions

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Related Party Transactions
12 Months Ended
Dec. 31, 2023
Related Party Transactions [Abstract]  
Related Party Transactions

Note 6 – Related Party Transactions

 

The Company’s CEO under a new 2023 agreement earns $10,000 per month starting October 1, 2023 through September 30, 2025. The following compensation was recorded within salaries expenses on the statements of operations: under the new agreement of $30,000 in 2023 and $30,000 under the old agreement in 2022.

 

On April 1, 2016, the Company received $500,000 from Newell Trading Group in exchange for a convertible debenture due April 2, 2017, bearing interest at 10% and convertible into common stock at $.25 per share unless the note is paid by the Company prior to the election of the holder to convert. The Company recognized a beneficial conversion feature expense of $500,000 that has been fully amortized. As of December 31, 2023 and December 31, 2022, accrued interest on the note is $350,000 and $300,000, respectively. On October 3, 2019, Newell Trading Group assigned its rights and interests in its $500,000 convertible debenture to the Sammy Farkas Foundation Inc., (the “Foundation”), a related party. The convertible note payable, net of debt discount of $8,504 and $19,845 as of December 31, 2023 and December 31, 2022 of $491,496 and $480,155, respectively was recorded under current liability and long term liability, respectively on the balance sheet.

 

   

December 31,

2023

   

December 31,

2022

 
16th Avenues Associates   $ 500,000     $ 500,000  
Debt discount     (8,504 )     (19,845 )
Convertible note payable – long term   $ 491,496     $ 480,155  

 

The Foundation then entered into an agreement with the Company to extend the maturity date of the convertible debenture to October 10, 2024 in exchange for 54,000 shares of the Company’s stock. The shares have a fair value of $56,700 which was recorded as a debt discount and was being amortized over the life of the extension. On November 11, 2019, The Sammy Farkas Foundation transferred all the rights and interests of the note to another party, 16th Avenue Associates, a non-related party company. The terms remain the same and the transfer has no effect on the financial statements. During the twelve months ended December 31, 2023, the Company amortized $11,341 of debt discount.

 

During 2016, 2017, and 2019 Balance Group LLC loaned an additional $66,850 to the Company. The notes are in default and have an accrued interest balance of $37,125. The note balance of $66,850 is included in the note payable – related party in current liability as of December 31, 2023 and December 31, 2022.

 

On October 3, 2019, the Company received $40,000 from The Foundation in exchange for a promissory note which bears 12% interest per annum and matured on October 10, 2020 or upon the Company raising $500,000 from outside investors, whichever occurs first. The promissory note is currently in default, and as of December 31, 2023, accrued interest on the note is $23,237. The note balance of $40,000 is included in the note payable – related party in current liability as of December 31, 2023 and December 31, 2022.

 

The promissory note comes with a warrant to purchase 40,000 shares of the Company’s stock with an exercise price of $1.00 per share and expired on October 10, 2022. The warrants had a relative fair value of $8,283, which was recorded as a debt discount and fully amortized.

 

   

December 31,

2023

   

December 31,

2022

 
Balance Group LLC   $ 66,850     $ 66,850  
The Foundation     40,000       40,000  
Note Payable – related party   $ 106,850     $ 106,850  

 

 

BALANCE LABS, INC. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2023 and 2022

 

On September 27, 2021, the Company received $50,000 from the CEO in exchange for a convertible promissory note with a face value of $53,192 which bears 12% interest per annum and matures on September 27, 2022, or upon the Company raising $250,000 from investors, whichever occurs first. The note balance of $53,192 is included in the convertible notes payable - related party, net of debt discount of $0 and $3,428, as of December 31, 2023, and December 31, 2022, respectively. The difference between the amount received and the face value of $3,192 was recorded as a discount and is being amortized over the life of the note. Additionally, the note comes with a beneficial conversion feature of $3,799 which was also recorded as a component of equity in 2021. As of December 31, 2023, the Company has accrued interest of $16,019 and is recorded in the accrued expenses on the balance sheet.

 

On September 30, 2016, Balance Group LLC loaned $120,000 as a convertible note payable to the Company at an interest rate of 10%, due on October 1, 2017. In addition, the Company issued 600,000 warrants at an exercise price of $1 which expired on September 30, 2021. The note is currently in default and is currently recorded under convertible payable – related party in current liabilities in the balance sheet. The accrued interest balance of $87,058 is recorded in the accrued expenses on the balance sheet as of December 31, 2023.

 

   

December 31,

2023

   

December 31,

2022

 
Balance Group LLC   $ 120,000     $ 120,000  
Note Payable from CEO     53,192       53,192  
Convertible note payable- related party   $ 173,192     $ 173,192  

 

As of December 31, 2023 and December 31, 2022, the CEO and companies controlled by the CEO have loaned the Company a total of $1,673,558 in addition to the convertible notes discussed above. The loans carry an interest rate of 8% and mature one year and one day from the date of the loan. These loans of $1,673,558 and the accrued interest on these loans of $612,289 are in default as of December 31, 2023. These loans of $1,673,558 are in default and are reported under short -term advances from related party on the balance sheet as of December 31, 2023 and December 31, 2022.