v3.25.2
Note Payable and Convertible Notes Payable
 3 Months Ended
Mar. 31, 2025
Note Payable and Convertible Notes Payable [Abstract]  
NOTE PAYABLE AND CONVERTIBLE NOTES PAYABLE

NOTE 6 – NOTE PAYABLE AND CONVERTIBLE NOTES PAYABLE 

 

Note payable

 

During the year ended December 31, 2023, the Company issued note payable of $25,000 to pay professional fees and recorded it as a deferred offering cost. The Note is unsecured, due on the earlier of the completion of an IPO or February 12, 2024, and bears interest at $5,000 if paid before December 31, 2023 or $25,000 if paid after December 31, 2023. During the three months ended March 31, 2025 and 2024, the Company recorded interest expense of $0 and $5,000, respectively. As of March 31, 2025, and December 31, 2024, and, accrued interest was $0 and $0, respectively.

 

In February 2024, the Company borrowed $30,000 and repaid the note payable and accrued interest totaling $43,000.

 

On December 16, 2024, the Company issued a note payable of $40,000 to pay professional fees. The note is unsecured, due 180 days from the date of agreement with 20% interest rate per annum. During the three months ended March 31, 2025, the Company recognized and accrued interest of $1,973 As of March 31, 2025, and December 31, 2024, the Company had loan payable of $40,000 and $40,000, accrued interest of $2,301 and $329, respectively

 

Convertible notes payable

 

The components of Convertible Notes payable as of March 31, 2025, and December 31, 2024, were as follows:

 

   Principal   Maturity   Interest   March 31,   December 31, 
Issuance Date  Amount   Date   Rate   2025   2024 
September 2024 issuances   105,300    June 30, 2025    22%  $56,637   $105,300 
November 2024 issuance   57,500    May 12, 2025    15%   57,500    57,500 
December 2024 issuance   60,000    June 20, 2025    20%   
-
    60,000 
January 2025 issuance   96,000    June 20, 2025    20%   96,000    
-
 
March 2025 issuance   56,000    December 15, 2025    12%   56,000    
-
 
March 2025 issuance   30,000    December 7, 2025    15%   30,000    
-
 
March 2025 issuance   30,000    December 18, 2025    15%   30,000    
-
 
March 2025 issuance   285,714    December 10, 2025    10%   200,000    
-
 
Total face value                 $526,137   $222,800 
Unamortized debt discount and issuance costs                  (161,682)   (64,929)
Total convertible notes                  364,455    157,871 
Current portion of convertible notes                  (364,455)   (157,871)
Long-term convertible notes                 $
-
   $
-
 

On September 18, 2024, the Company entered into a Convertible Note with a principal amount of $105,300 including $15,300 debt discount at a 22% interest rate per annum. The note is convertible at any time following an event of default with a conversion price of 65% multiplied by the lowest trading price for the Company’s common stock during the ten trading days prior to the conversion date. Additionally, the Company incurred legal fee reimbursement and due diligence fee amounting to $2,500 and $3,500 recognized as financing cost, respectively. During the three months ended March 31, 2025, the Company repaid principal of $48,663 and accrued interest of $11,337.

 

On November 13, 2024, the Company entered into a Convertible Note with a principal amount of $57,500 including $7,500 debt discount at a 15% interest rate per annum and issuance 28,750 warrants. The note is convertible at the option of the holders at any time, and the conversion price is 70% multiplied by the lowest trading price of Company’s common stock during the 10 trading days prior to the conversion date.

 

On December 20, 2024, the Company entered into a Convertible Note with a principal amount of $60,000 including $10,000 debt discount at 20% interest rate compounded monthly. The lender has the right to convert, at any time following date of the Reg-A Statement and until the outstanding balance has been paid in full at conversion formula of the outstanding balance amount divided by 30% and the market price. On January 17, 2025, the Company modified the original convertible Note of $60,000 with new Convertible Note with a principal amount of $96,000 including $16,000 discount at 20% interest rate compounded monthly. The Company determined the modifications of exchange debts are extinguishment of debts with recognition gains or losses. As a result of the debt extinguishment, the Company recognized a gain on modification of debt of $11,156.

 

On March 3, 2025, the Company entered into a Convertible Note with a principal of $56,000 including $6,000 discount at 12% interest per annum.  The note is convertible at the option of the holders at any time after 180 days of this issuance date of Note, and the conversion price is 61% multiplied by the lowest trading price of Company’s common stock during the 10 trading days prior to the conversion date.

 

On March 7, 2025, and March 18, 2025, the Company entered into two Convertible Notes with an investor with a principal of $30,000 and $30,000 including $5,000 and $5,000 discount at 15% and %15 interest per annum, respectively. The note is convertible at the option of the holders at any and the conversion price is 60% multiplied by the lowest trading price of Company’s common stock during the 10 trading days prior to the conversion date.

 

On March 10,2025, the Company entered into a Convertible Note with a principal of $285,714 including $85,714 discount at 10% interest per annum. During the three months ended March 31, 2025, the Company obtained $200,000 including $70,000 discount. The note is convertible into common shares at any time, and the conversion price is equal to the lowest daily Volume -Weighted Average Price on the trading day immediately prior to the date that any Tranche is advanced.

 

During the three months ended March 31, 2025, and 2024, the Company recorded interest expense of $68,900 and $89,133, amortization of debt discount of $45,952 and $165,082, default penalty of $0 and $146,054, respectively. As of March 31, 2025, and December 31, 2024, accrued interest was $58,395 and $11,283, respectively.

 

The Company valued the conversion feature using the Black-Scholes pricing model. The fair value of the derivative liability for all the notes that became convertible, including the notes issued in prior years, during the three months ended March 31, 2025, amounted to $141,456, and $50,000 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $91,456 was recognized as a “day 1“ derivative loss.