Quarterly report [Sections 13 or 15(d)]

Convertible Notes and Notes Payable

v3.25.1
Convertible Notes and Notes Payable
 3 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
Convertible Notes and Notes Payable

Note 7 – Convertible Notes and Notes Payable

 

Convertible Notes Payable

 

On December 23, 2015, the Company issued a convertible note payable to Chase Mortgage, Inc., not a related party, for $25,000, at an interest rate of 8%, due on December 23, 2018. The note also included 100,000 warrants at an exercise price of $1 per share, which expired on December 23, 2020. The note is convertible at the holder’s discretion into the Company’s common stock at a price of $0.50 per share. The note has matured and is in default, which triggered an increased interest rate of 18%. The accrued interest balance on this note as of March 31, 2025, is $46,619, and the note is recorded under convertible note payable in the liabilities section of the balance sheet. As of March 31, 2025, the note maintains a balance of $25,000.

 

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. 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 $0 and $0 as of March 31, 2025 and December 31, 2024 of $500,000 and $500,000, respectively was recorded under current liability on the balance sheet and no additional debt discount adjustment is required upon adoption of ASU 2020-06. The note has accrued interest of $450,137.

 

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 three months ended March 31, 2025 and 2024, the Company amortized $0 and $0, respectively of debt discount. As of the date of this report, this note is in default.

 

    March 31, 2025     December 31, 2024  
             
16th Avenues Associates   $ 500,000     $ 500,000  
Chase Mortgage, Inc.     25,000       25,000  
Debt discount     -       -  
Convertible note payable   $ 525,000     $ 525,000  

 

 

BALANCE LABS, INC.

Notes to Consolidated Financial Statements

March 31, 2025

(Unaudited)

 

Here’s the table summarizing the details of the convertible notes payable, including accrued interest as of March 31, 2025.

 

relevant information:

 

Loan Source   Loan Amount     Accrued Interest (as of March 31, 2025)     Balance Sheet Classification  
Chase Mortgage, Inc.   $ 25,000     $ 46,619     Convertible note payable  
16th Avenue Associates   $ 500,000     $ 450,137     Convertible note payable- net of debt discount  
Total   $ 525,000     $ 496,756        

 

This table includes the loan amounts for both Chase Mortgage, Inc. and 16th Avenue Associates, as well as the accrued interest

 

The following non-related party convertible notes accrued interest for the three months ended March 31, 2025 and 2024:

 

Three months ended March 31, 2025:

 

● Chase Mortgage, Inc.: $1,803
● 16th Avenue Associates: $12,592
● Total Recognized Interest Expense: $14,395

 

Three months ended March 31, 2024:

 

● Chase Mortgage, Inc.: $2,124
● 16th Avenue Associates: $14,299
● Total Recognized Interest Expense: $16,423