Notes Payable |
3 Months Ended |
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Mar. 31, 2025 | |
| Debt Disclosure [Abstract] | |
| Notes Payable | Note 5 – Notes Payable
As of March 31, 2025 and through the date of this filing, notes and convertible notes payable with principal amounts totaling approximately $6,328,000 and $11,116,000, respectively, were past due. Such notes continue to accrue interest, and all relevant penalties have been accrued as of March 31, 2025. The Company is in negotiations with certain holders of notes payable to extend the maturity dates of such notes or to convert the principal and accrued interest into equity. As of March 31, 2025, the Company had an accrued interest balance of $1,432,967 related to notes and convertible notes payable that were past due.
During the three months ended March 31, 2025 and 2024, the Company recorded interest expense of $427,237 and $222,814, respectively, and amortization of debt discount of $86,637 and $5,956, respectively. As of March 31, 2025 and December 31, 2024, the Company had $3,362,097 and $2,967,854, respectively, of accrued interest and penalties related to notes payable, which is included within accrued interest and accrued interest – related parties on the condensed consolidated balance sheets.
Notes Payable
During the three months ended March 31, 2025, the Company entered into a note amendment agreement with a note holder to (i) extend the maturity date of a note in the principal amount of $150,000 to the earlier of June 30, 2025 or the fifth day after the Company completes an Uplist Offering (as defined in the agreement) and (ii) waive any existing event of default under the note. Contemporaneous with the execution of this amendment, the Company issued to the lender an additional five-year warrant to purchase 200,000 shares of the Company’s common stock at an exercise price of $0.75 per share. This transaction was accounted for as a debt modification. The warrants had an issuance date fair value of $11,860 and were accounted for as derivative liabilities under the Company’s sequencing policy on the condensed consolidated balance sheet as of March 31, 2025. As of March 31, 2025, $150,000 of principal remained outstanding under this note.
Notes Payable - Related Parties
During the three months ended March 31, 2025, the Company received proceeds of $327,000 from an investor and issued a note payable in the principal amount of $385,860 with a maturity date of April 27, 2025. The note bears interest at 12% per annum and has an original issue discount of $58,860 which was recorded as a debt discount and will be amortized over the term of the note. In connection with the issuance, the Company issued ten-year immediately vested warrants to purchase 490,500 shares of common stock at an exercise price of $0.75 per share. The warrants had an issuance date fair value of $55,356 which was included within derivative liabilities - related parties, recorded as a debt discount and will be amortized over the term of the note.
Convertible Notes Payable
During the three months ended March 31, 2025, the Company received proceeds of $50,000 from investors and issued notes payable in the aggregate principal amount of $66,080 with a maturity date of October 30, 2025. The note bears interest at 12% per annum and has an original issue discount of $10,080 and incurred debt issuance costs of $6,000, both of which were recorded as a debt discount and will be amortized over the term of the note. The note is convertible into shares of the Company’s common stock in the event of a default at a conversion price equal to 65% of the trading price of the Company’s common stock during the 20-trading day period prior to conversion.
During the three months ended March 31, 2025, the Company entered into a note amendment agreement with a note holder to extend the maturity date of a convertible note in the principal amount of $50,000 from December 23, 2024 to April 30, 2025. The note currently accrues interest at 10% per annum. If the note is not repaid in full by April 30, 2025, any further extension will require the issuance of an additional five-year warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.75 per share. Contemporaneous with the execution of this amendment, the Company issued to the lender an additional five-year warrant to purchase 150,000 shares of the Company’s common stock at an exercise price of $ per share. This transaction was accounted for as a debt modification. The warrants had an issuance date fair value of $8,915 and were accounted for as derivative liabilities under the Company’s sequencing policy on the condensed consolidated balance sheet as of March 31, 2025.
During the three months ended March 31, 2025, the Company entered into a note amendment agreement with a note holder to extend the maturity date of a convertible note in the principal amount of $25,000 from December 26, 2024 to April 30, 2025. The note currently accrues interest at 10% per annum. If the note is not repaid in full by April 30, 2025, any further extension will require the issuance of an additional five-year warrant to purchase 25,000 shares of the Company’s common stock at an exercise price of $0.75 per share. Contemporaneous with the execution of this amendment, the Company issued to the lender an additional five-year warrant to purchase 75,000 shares of the Company’s common stock at an exercise price of $ per share. This transaction was accounted for as a debt modification. The warrants had an issuance date fair value of $4,457 and were accounted for as derivative liabilities under the Company’s sequencing policy on the condensed consolidated balance sheet as of March 31, 2025.
During the three months ended March 31, 2025, the Company repaid an investor $75,000 of principal on a past due convertible note. As of March 31, 2025, the outstanding principal balance of the note was $50,000.
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