v3.25.1
CONVERTIBLE NOTES PAYABLE
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
CONVERTIBLE NOTES PAYABLE

NOTE 5 – CONVERTIBLE NOTES PAYABLE

 

The following table summarizes the outstanding balance of convertible notes payable, interest and conversion rates as of December 31, 2024 and 2023, respectively.

        
     

December 31,

2024

  

December 31,

2023

 
            
A.  Convertible note payable to an investor with interest at 12% per annum, convertible at any time into shares of common stock at the lowest VWAP or $0.001 per share. The balance of principal and accrued and unpaid interest is payable on maturity on March 1, 2026. The note is secured by substantially all the assets of the Company.  $205,000   $205,000 
              
B.  Convertible note payable to an investor with interest at 5% per annum, convertible at any time into shares of common stock at $0.00084 per share. Interest is payable annually with the balance of principal and interest due on maturity on March 1, 2024. The note is secured by substantially all the assets of the Company.   –    55,000 
              
D.  Convertible note payable to an investor with interest at 12% per annum, convertible at any time into shares of common stock at the lowest VWAP or $0.001 per share. The balance of principal and accrued and unpaid interest is payable on maturity on March 1, 2026. The note is secured by substantially all the assets of the Company.   50,000    50,000 
              
E.  Convertible note payable to a related party with interest at 12% per annum, convertible at any time into shares of common stock at $0.00084 per share. Interest is payable quarterly with the balance of principal and interest due on maturity on August 2, 2025. The note is secured by substantially all the assets of the Company.   125,000    125,000 
              
G.  Convertible note payable to an investor with interest at 10% per annum, convertible at any time into shares of common stock at $0.0006 per share. Note was issued as payment for future fees to be incurred under the related Equity Financing Agreement. Principal and interest due on maturity on April 29, 2025. The note is secured by substantially all the assets of the Company.   13,942    58,988 
       393,942    493,988 
   Less current portion   (138,942)   (435,000)
   Long term portion  $255,000   $58,988 

 

A. January 18, 2018 Convertible Note (“Note A”)

 

On March 14, 2022, the noteholder of Note A agreed to extend the maturity date of March 1, 2022 of the Senior Secured Convertible Promissory Note to March 1, 2023, in exchange for the reduction of the conversion price to $0.008 per share, and all prior Events of Default (as defined in the Note A) including penalties were waived, and all future Events of Default (as defined in the Note A) pertaining to the future payment of interest were waived through maturity. On July 21, 2023, the noteholder of Note A agreed to extend the maturity date to March 1, 2024 and then Note A was automatically extended for a one-year term to March 1, 2026 unless written notice of objection was provided by the noteholder. The Note A is convertible into shares of common stock at the lowest closing VWAP of the share price or $0.001 per share during the look back period of 10 days prior to the conversion date, provided:

 

  · Upon request of the noteholder of Note A, the Company shall issue twenty thousand dollars ($20,000) worth of common shares (the “1st Incentive Shares) and the price per 1st Incentive Share shall be the Volume-Weighted Average Price (VWAP) per common share of the Company (subject to adjustments) for the previous ten trading days.
  · The Company shall use its best efforts to file a registration statement registering the resales of the 1st Incentive Shares within 45 calendar days from the date hereof. The Company shall use is best efforts to have the registration statement declared “effective” within sixty (60) calendar days from its filing. The Company shall use its best efforts to have a registration statement registering the resales of the 1st Incentive Shares remain effective until such time that the noteholder of Note A no longer holds any such 1st Incentive Shares.
  · Upon full conversion of the Note A and Note D, the Company shall issue to the holder of Note A fifty thousand dollars ($50,000) worth of common shares (the “2nd Incentive Shares”) and the price per 2nd Incentive Share shall be the VWAP per common share of the Company (subject to adjustments) for the previous ten (10) Trading Days.
  · The Company shall use its best efforts to file a registration statement registering the resales of the 2nd Incentive Shares within forty-five (45) calendar days from the date of issuance. The Company shall use is best efforts to have the registration statement declared “effective” within sixty (60) calendar days from its filing. The Company shall use its best efforts to have a registration statement registering the resales of the 2nd Incentive Shares remain effective until such time that the noteholder of Note A no longer holds any such 2nd Incentive Shares.

 

The Company recorded interest expense of $24,667 and $24,600 for the years ended December 31, 2024 and 2023, respectively. Accrued interest payable on Note A was $209,135 and $184,468 as of December 31, 2024 and December 31, 2023, respectively. The principal balance payable on Note A amounted to $205,000 at December 31, 2024 and 2023, respectively.

 

B. January 2019 Convertible Note (“Note B”)

 

Effective March 1, 2021, the noteholder of Note B agreed to extend the maturity date of the Senior Secured Convertible Promissory Note to March 1, 2024, and all prior Events of Default (as defined in the Note B) including penalties were waived, and all other terms of Note B remain the same.

 

On February 5, 2024, the Company and the noteholder of Convertible Promissory Note B entered into a Debt Exchange Agreement to convert $55,000 principal balance of Note B and $13,825 of accrued and unpaid interest as of the maturity date of Note B on March 1, 2024. In exchange for the cancellation of all indebtedness of the Company owed to noteholder B as evidenced by the Convertible Note, and for no additional consideration, the Company agreed to issue to noteholder B, 57 shares of the Company’s Series C convertible preferred stock, at the stated value of $1,200 per share (See Note 8). The Series C Convertible Preferred Stock is classified as temporary equity, as it is convertible upon issuance at an amount equal to the lowest traded price for the Company’s common stock for the fifteen trading days immediately preceding the date of conversion.

 

Based on the requirements of ASC 815, Derivatives and Hedging, the conversion feature represents an embedded derivative that is required to be bifurcated and accounted for as a separate derivative liability. The derivative liability is originally recorded at its estimated fair value and is required to be revalued at each conversion event and reporting period. Changes in the derivative liability fair value are reported in operating results each reporting period.

 

The Company recorded interest expense of $693 and $2,750 for the years ended December 31, 2024 and 2023, respectively. This note and accrued interest was due to a related party. Accrued interest payable on Note B totaled $0 and $13,592 as of December 31, 2024 and 2023, respectively. The principal balance payable on Note B amounted to $0 and $55,000 at December 31, 2024 and 2023, respectively.

 

D. March 2019 Convertible Note (“Note D”)

 

On March 14, 2022, the noteholder of Note D agreed to extend the maturity date of March 1, 2022 of the Senior Secured Convertible Promissory Note to March 1, 2023, in exchange for the reduction of the conversion price to $0.008 per share, and all prior Events of Default (as defined in the Note D) including penalties were waived, and all future Events of Default (as defined in the Note D) pertaining to the future payment of interest were waived through maturity. On July 21, 2023, the noteholder of Note D agreed to extend the maturity date to March 1, 2024 and then Note D was automatically extended for a one-year term to March 1, 2026 unless written notice of objection was provided by the noteholder. The Note D is convertible into shares of common stock at the lowest VWAP of $0.001 per share during the look back period (see “Note A” above).

 

The Company recorded interest expense of $6,016 and $6,000 for the year ended December 31, 2024 and 2023, respectively. Accrued interest payable on Note D totaled $32,714 and $26,697 at December 31, 2024 and 2023, respectively. The principal balance payable on Note D amounted to $50,000 at December 31, 2024 and 2023, respectively.

 

E. August 2019 Convertible Note (“Note E”)

 

On August 5, 2024, the noteholder of Note E agreed to extend the maturity date of the Senior Secured Convertible Promissory Note to August 2, 2025 for no additional consideration. All other terms and conditions of the Note E remained the same.

 

The Company recorded interest expense of $15,941 and $15,000 on Note E for the year ended December 31, 2024 and 2023, respectively. Accrued interest payable on Note E was $78,731 and $63,690 at December 31, 2024 and 2023, respectively. This note is payable to a related party. The principal balance payable on Note E amounted to $125,000 as of December 31, 2024 and 2023, respectively.

 

G . July 2020 Equity Financing Arrangement (“Note G”)

 

On April 29, 2022, the noteholder of Note G agreed to extend the maturity date of the Secured Convertible Promissory Note to April 29, 2023. On May 1, 2023, the noteholder of Note G agreed to extend the maturity date of the Secured Convertible Promissory Note to April 29, 2025. All other terms and conditions of the Note G remained the same.

 

During the year ended December 31, 2024, the noteholder of Note G converted principal amount of $45,045 and accrued interest of $1,955 in exchange for 85,000,000 shares of common stock of the Company.

 

The Company recorded interest expense on Note G $1,123 and $9,748 for the years ended December 31, 2024 and 2023, respectively. Accrued interest payable on Note G was $1,123 and $0 as of December 31, 2024 and 2023, respectively. The principal balance payable of Note G amounted to $13,942 and $58,988 at December 31, 2024 and 2023, respectively.