NOTE 6 - PROMISSORY AND CONVERTIBLE NOTES |
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| NOTE 6 - PROMISSORY AND CONVERTIBLE NOTES | NOTE 6 – PROMISSORY AND CONVERTIBLE NOTES
On August 27, 2021, the Company issued a convertible note payable to a lender (“Lender A”) with a principal amount of $500,000 and an original issue discount of $50,000. The note matures 24 months from the issuance date and bears an effective interest rate of 8% per annum. As of June 30, 2025, and December 31, 2024, this convertible note payable was in default and therefore classified as a current liability. Default interest accrues at a rate of 20% upon default, and the default conversion price is $0.75 per share. During the year ended December 31, 2024, the Company converted $110,000 of accrued interest into 2,200,000 shares of common stock pursuant to the terms of the convertible note agreement. Although the conversion was effective as of December 31, 2024, the related shares were issued in January 2025. The fair value of the shares issued was $44,000 and was recorded within the unaudited condensed statement of stockholders’ equity for the six months ended June 30, 2025.
On April 22, 2025, Lender A (“the Seller”) entered into a note assignment and purchase agreement with a buyer (“Lender G”) whereas the Seller agreed to sell, assign, transfer, and convey the Note, including the unpaid principal and accrued and unpaid interest thereon to the Buyer.
During the six months ended June 30, 2025, the Company converted $32,500 of accrued interest into shares of the Company’s common stock. Lender A received 3,000,000 common shares, with a fair value of $66,000, which is recorded within the unaudited condensed statement of stockholder equity.
On September 17, 2021, the Company issued a lender (“Lender B”) a convertible note payable with principal of $55,000 and an original issue discount of $5,000. The note matures after 24 months and has an effective interest rate of 8%. As of June 30, 2025, and December 31, 2024, this convertible note payable was in default and therefore classified as a current liability. Default interest accrues at a rate of 20% upon default, and the default conversion price is $0.75 per share.
On October 27, 2021, the Company issued a lender (“Lender C”) a convertible note payable with principal of $220,000 and an original issue discount of $20,000. The note matures after 24 months and has an effective interest rate of 8%. As of June 30, 2025, and December 31, 2024, this convertible note payable was in default and therefore classified as a current liability. Default interest accrues at a rate of 20% upon default, and the default conversion price is $0.75 per share.
On April 23, 2025, Lender C (“the Seller”) entered into a note assignment and purchase agreement with a buyer (“Lender G”) whereas the Seller agreed to sell, assign, transfer, and convey the Note, including the unpaid principal and accrued and unpaid interest thereon to the Buyer.
As of June 30, 2025, the Company converted $110,000 of accrued interest into common shares pursuant to the terms of an existing convertible note agreement. Although the conversion was effective as of June 30, 2025, the related 2,000,000 shares of common stock were issued subsequent to the period end, in July 2025.
On January 21, 2022, the Company issued a lender (“Lender E”) a convertible note payable with principal of $325,000 and an original issue discount of $75,000. The note matures after 24 months and has an effective interest rate of 8%. As of June 30, 2025, and December 31, 2024, this convertible note payable was in default and therefore classified as a current liability. Default interest accrues at a rate of 20% upon default, and the default conversion price is $0.975 per share.
On January 30, 2024, the Company signed an agreement with a major shareholder (“Lender F”) for a $165,000 note payable. The note accrues interest at a rate of 1.75% compounded annually and has a maturity date of January 30, 2025 (Note 5 – Related Party Transactions).
During the year ended December 31, 2021, the Company issued three convertible notes payable. In accordance with the terms of the note agreements, during the year ended December 31, 2022, the Company received notice to convert the three notes into shares of the Company’s common stock. As a result, an aggregate of $232,500 in principal and $13,145 in interest was converted into 245,645 shares of common stock (Note 7 – Stockholders’ Equity). Following the conversion, $2,407 of accrued interest remained outstanding and owed to one of the note holders (“Lender D”). As of the six months ended June 30, 2025, the Company notes all convertible notes payables are currently in default.
On May 6, 2025, the Company issued a lender (“Lender G”) a convertible note payable with principal of $275,000 and an original issue discount of $25,000. The note matures after 24 months and has an effective interest rate of 10%.
The following tables reflects a summary of the outstanding principal and interest by each lender and their respective maturity date as of June 30, 2025 and December 31, 2024:
During the six months ended June 30, 2025 and 2024, the Company recorded debt discount amortization expense in the amount of $1,884 and $9,349, respectively. As of June 30, 2025, the Company had an unamortized debt discount balance of $23,116. |
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