v3.26.1
Convertible notes payable
 6 Months Ended
Jun. 30, 2026
Convertible notes payable  
Convertible notes payable

5. Convertible notes payable

 

The following table details the Company’s convertible notes payable as of June 30, 2026 and December 31, 2025, respectively:

 

 

 

 

 

 

Original

 

 

 

 

 

Principal Balance as of

 

 

 

 

Date of Note

 

Principal

 

 

 

Interest

 

 

June 30,

 

 

December 31,

 

Ref No.

 

 

 

Issuance

 

Balance

 

 

Maturity Date

 

Rate %

 

 

2026

 

 

2025

 

 

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

 

 

3

 

 

*/***

 

6/18/2021

 

 

50,000

 

 

12/18/2021

 

 

10

 

 

 

—

 

 

 

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

 

 

 

30,000

 

 

22

 

 

**/***

 

3/28/2025

 

 

100,000

 

 

8/18/2025

 

 

6

 

 

 

100,000

 

 

 

100,000

 

 

23

 

 

**/***

 

4/1/2025

 

 

100,000

 

 

10/1/2025

 

 

6

 

 

 

100,000

 

 

 

100,000

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

$

811,335

 

 

$

911,335

 

*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, 2026.

 

Holders of these convertible notes payable may not convert a note into common stock if doing so would result in the debt holder (together with its affiliates) beneficially owning more than 4.99% of the Company’s outstanding common stock.

 

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 is 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 three and six months ended June 30, 2026, the holder converted Note 2 ($50,000 in principal and $23,986 in accrued interest) and Note 3 ($50,000 in principal and $23,973 in accrued interest) into 14,678,462 shares of common stock. In addition to the notes and accrued interest converted, the derivative liability of $92,100 associated with these notes was extinguished.

 

During the three months ended June 30, 2026 and 2025, the Company recorded $14,720 and $17,115 in interest expense, respectively, related to the convertible notes. During the six months ended June 30, 2026 and 2025, the Company recorded $31,663 and $30,907 in interest expense, respectively, related to the convertible notes.