NOTE 11 - NOTES PAYABLE-RELATED PARTIES

As of March 31, 2026 and December 31, 2025, the Company had advances from Kent Emry (Chairman of the Company). The balance outstanding as of March 31, 2026 and December 31, 2025 was $1,500.

On January 22, 2013, the Company issued an unsecured promissory note payable to Kent Emry (Chairman of the Board) for $200,000 due January 1, 2018, with a stated interest rate of 12% per annum beginning three months from issuance, payable monthly. Principal payments were due starting February 1, 2015 at $6,650 per month. The lender has an option to convert the note to licensing rights for the State of Oregon. The Company currently is in default of the principal and interest. The balance outstanding as of March 31, 2026 and December 31, 2025 was $163,610.

Since 2026, the Company had received an aggregate of $85,904 advances from Mr. Lucido. On February 15, 2026, the Company issued 294,118 shares of its common stock at $0.34 per share in connection with conversion of the related party promissory note then outstanding of $100,000. As the fair value of the shares issued equaled the carrying amount of the note, no gain or loss was recognized. As of March 31, 2026 and December 31, 2025, the outstanding balance of advances from Mr. Lucido was $185,904 and $200,000, respectively. During the three months ended March 31, 2026 and 2025, the Company also recognized imputed interest of $5,267 and $5,254 for advances from Mr. Lucido based on an imputed interest of 10% per annum.

As of March 31, 2026 and December 31, 2025, the Company owed $307,249 and $312,249 advances to Lourdes Felix, respectively. During the three months ended March 31, 2026 and 2025, the Company also recognized imputed interest of $9,969 and $3,840, respectively, for advances from Lourdes Felix based on an imputed interest of 10% per annum.

The interest expense – related parties during the three months ended March 31, 2026 and 2025 were $135,448 and $160,128, respectively, which includes the amortization of royalty obligations as interest expense of $115,334 (see Note 13). As of March 31, 2026 and December 31, 2025, the accumulated interest on related parties notes payable was $230,301 and $225,423, respectively, and was included in accounts payable and accrued expenses on the balance sheet.

The outstanding notes payables to related parties as of March 31, 2026 and December 31, 2025 were summarized as below: