v3.25.2
Convertible notes payable
 6 Months Ended
Jun. 30, 2025
Convertible notes payable  
Convertible notes payable

5. Convertible notes payable

 

The following table details the Company’s convertible notes payable as of June 30, 2025 and December 31, 2024, respectively:

 

 

 

 

 

 

 

 

 

 

 

Principal Balance as of

 

Ref No.

 

 

 

Date of Note

 

Original Principal

 

 

 

Interest

 

 

June 30,

 

 

December 31,

 

 

 

 

 

Issuance

 

Balance

 

 

Maturity Date

 

Rate %

 

 

2025

 

 

2024

 

 

1

 

 

*/***

 

6/16/2021

 

$20,000

 

 

12/16/2022

 

 

10

 

 

$20,000

 

 

$20,000

 

 

2

 

 

*/***

 

6/17/2021

 

 

50,000

 

 

12/17/2021

 

 

10

 

 

 

50,000

 

 

 

50,000

 

 

3

 

 

*/***

 

6/18/2021

 

 

50,000

 

 

12/18/2021

 

 

10

 

 

 

50,000

 

 

 

50,000

 

 

4

 

 

*/***

 

7/2/2021

 

 

16,000

 

 

1/2/2022

 

 

10

 

 

 

16,000

 

 

 

16,000

 

 

5

 

 

*/***

 

8/4/2021

 

 

7,000

 

 

2/4/2022

 

 

10

 

 

 

7,000

 

 

 

7,000

 

 

6

 

 

*/***

 

8/16/2021

 

 

54,360

 

 

2/16/2022

 

 

10

 

 

 

54,360

 

 

 

54,360

 

 

7

 

 

*/***

 

9/10/2021

 

 

54,360

 

 

3/10/2022

 

 

10

 

 

 

54,360

 

 

 

54,360

 

 

8

 

 

*/***

 

10/18/2021

 

 

54,360

 

 

4/18/2022

 

 

10

 

 

 

54,360

 

 

 

54,360

 

 

9

 

 

*/***

 

6/30/2023

 

 

25,000

 

 

12/30/2023

 

 

10

 

 

 

25,000

 

 

 

25,000

 

 

10

 

 

**/***

 

9/28/2023

 

 

80,000

 

 

3/28/2024

 

 

6

 

 

 

80,000

 

 

 

80,000

 

 

11

 

 

**/***

 

9/29/2023

 

 

80,000

 

 

6/29/2024

 

 

6

 

 

 

80,000

 

 

 

80,000

 

 

12

 

 

**/***

 

10/1/2023

 

 

10,000

 

 

3/31/2024

 

 

6

 

 

 

10,000

 

 

 

10,000

 

 

13

 

 

*/***

 

10/13/2023

 

 

19,750

 

 

4/13/2024

 

 

10

 

 

 

19,750

 

 

 

19,750

 

 

14

 

 

 **/***

 

8/7/2024

 

 

30,000

 

 

2/7/2025

 

 

6

 

 

 

30,000

 

 

 

30,000

 

 

15

 

 

**/***

 

8/26/2024

 

 

30,000

 

 

2/26/2025

 

 

6

 

 

 

30,000

 

 

 

30,000

 

 

16

 

 

 **/***

 

10/29/2024

 

 

7,000

 

 

4/29/2025

 

 

6

 

 

 

7,000

 

 

 

7,000

 

 

17

 

 

**/***

 

11/27/2024

 

 

25,000

 

 

5/27/2025

 

 

6

 

 

 

25,000

 

 

 

25,000

 

 

18

 

 

 **/***

 

12/2/2024

 

 

25,000

 

 

6/2/2025

 

 

6

 

 

 

25,000

 

 

 

25,000

 

 

19

 

 

**/***

 

12/9/2024

 

 

25,000

 

 

6/9/2025

 

 

6

 

 

 

25,000

 

 

 

25,000

 

 

20

 

 

 **/***

 

12/18/2024

 

 

18,505

 

 

6/18/2025

 

 

6

 

 

 

18,505

 

 

 

18,505

 

 

21

 

 

 **

 

2/18/2025

 

 

30,000

 

 

8/18/2025

 

 

6

 

 

 

30,000

 

 

 

-

 

 

22

 

 

 **

 

3/28/2025

 

 

100,000

 

 

8/18/2025

 

 

6

 

 

 

100,000

 

 

 

-

 

 

23

 

 

 **

 

4/1/2025

 

 

100,000

 

 

8/18/2025

 

 

6

 

 

 

100,000

 

 

 

-

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

$911,335

 

 

$681,335

 

 

*The conversion price is the average closing bid price for the 10 trading days prior to the conversion date multiplied by 80%, not to exceed $0.01.

**The conversion price is fixed at $0.01 per share.

*** In default as of June 30, 2025.

Accounting considerations for notes with variable conversion prices

 

The Company evaluated the notes under ASC 815 Derivatives and Hedging (“ASC 815”). ASC 815 generally requires the analysis of embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract. The material embedded derivative features consisted of the embedded conversion option. The conversion option bears risk of equity which were not clearly and closely related to the host debt agreement and required bifurcation. Current accounting principles that are also provided in ASC 815 do not permit an issuer to account separately for individual derivative terms and features that require bifurcation and liability classification.

 

Rather, such terms and features must be and were bundled together and fair valued as a single, compound embedded derivative.

 

Accounting considerations for notes with fixed conversion prices

 

The Company evaluated the notes under ASC 815. ASC 815 generally requires the analysis of embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract. There were no embedded instruments which required bifurcation.

 

During the six months ended June 30, 2025 and 2024, the Company recorded $30,907 and $22,579 in interest expense, respectively, related to the convertible notes. During the three months ended June 30, 2025 and 2024, the Company recorded $17,115 and $11,289 in interest expense, respectively, related to the convertible notes.