CONVERTIBLE NOTES PAYABLE |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONVERTIBLE NOTES PAYABLE | NOTE 8 – CONVERTIBLE NOTES PAYABLE
Private Placement, 2021 Notes currently outstanding
Around May 3, 2021, we entered into four (4) Securities Purchase Agreements (the “2021 SPAs”), under which we agreed to sell convertible promissory notes (the “2021 Notes”), in an aggregate principal amount of $2,165,000 with 6% interest.
At any time after the issue date of the Notes, the Holders of the Notes, (the “2021 Holders”), have the option to convert all or any part of the outstanding and unpaid principal amount and accrued and unpaid interest of the 2021 Notes into shares of our Common Stock at the Conversion Price. The “Conversion Price” will be the lesser of (i) $.13 per share or (ii) if the market price at the date of conversion is below $0.13, the conversion price will be reduced with 120% of the price difference.
If the 2021 Notes are converted prior to us paying off such note, it would lead to substantial dilution to our shareholders as a result of the conversion discounted applicable to the 2021 Notes. There can be no assurance that there will be any funds available to pay of the 2021 Notes. If we fail to obtain such additional financing on a timely basis, the 2021 Holders may convert the 2021 Notes and sell the underlying shares, which may result in significant dilution to shareholders due to the conversion discount, as well as a significant decrease in our stock price.
On May 5, 2023, three (3) of the 2021 Notes were re-negotiated; the interest was set to 10%, and the default rate to 18%, a prepayment at 120% was included and the renegotiated notes extended until April 30, 2023. Two of the notes were fully converted. On July 15, 2024, a debt discount of $105,000 was added to the remaining notes principal. As per the amendment dated December 27, 2024, the Company has the option to repurchase the note at face value and a conversion of $70,000 in shares of Common Stock, due at payoff date.
At June 30, 2025, and December 31, 2024, the outstanding convertible notes were as follows:
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