SHORT-TERM LIABILITIES	3 Months Ended
Mar. 31, 2024
Short-term Liabilities
SHORT-TERM LIABILITIES	NOTE 6 – SHORT-TERM LIABILITIES *Convertible Note Payable* As discussed in Note 2, on June 27, 2023, the Board of Directors approved a resolution authorizing the Company to obtain a secured six-month term loan for the principal amount of $330,000. In connection therewith, on June 27, 2023, the Company entered into a Securities Purchase Agreement with selected accredited investors whereby the Company had the right to secure the convertible note. The holder has conversion rights upon event of default and the conversion price is equal to the average of the three lowest prices of the Company’s common stock of the trailing ten days prior to the date conversion of the convertible note. At issuance and at March 31, 2024, the Company estimated the fair value of the conversion option embedded in the Note and determined its value to be de minimis due to the fact that settlement into shares of common stock only occurs upon an event of default. If the event of default were triggered this would provide the Note holder with little upside potential and therefore no value was allocated to the embedded derivative. *Original Issuance Discount* The principal face value of the loan is $330,000 and was issued with an original issuance discount of $26,400 which resulted in aggregate proceeds of $303,600. The loan carries an interest rate of 10% per year, has a default interest rate of 18% per year, and a maturity date of December 27, 2023. Interest is payable on a monthly basis beginning one month following the issue date. Following an event of default, the noteholder has the right to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under the note into fully paid and non-assessable shares of Common Stock. Additionally, the noteholders have the option to convert the $26,400 original issuance discount, which will accrete over the life of the loan based on the effective interest method. The convertible note is also presented net of the issuance costs of $13,250 which will accrete over the life of the note, based on the effective interest method. The Company did not incur any accretion expense related to the original issuance discount for the three months ended March 31, 2024, and 2023. *Debt Discount* To secure the convertible note, the Company paid a commitment fee of $83,526 by issuing 328,571 shares of the Company’s common stock. See Note 8. The convertible note is also presented net of the debt discount of $83,526 which represents the relative fair value of the common stock issued, which was fully recognized as of December 31, 2023. The company did not incur any accretion expense related to the debt discount for the three months ended March 31, 2024, and 2023. *Debt Amendments* On December 26, 2023, the Company and the note holder entered into a letter agreement under which an agreement was made to extend the maturity date of the Note to January 27, 2024, increase the principal of the note to $363,000, and amend the convertible note to extend the date on which the Company shall prepare and file with the SEC a registration statement covering the resale of all of the conversion shares and commitment fee to January 27, 2024. The Company subsequently failed to repay the convertible note on or before January 27, 2024, and failed to file the resale registration statement on or before January 27, 2024. The amendment was deemed a debt modification and a total of $33,000 was recognized as inducement expense. On February 6, 2024, the Company and convertible note holder entered into a letter agreement under which an agreement was made to extend the maturity date of the note to February 27, 2024, increase the principal of the convertible note to $399,300, extend the date on which the Company shall prepare and file the resale registration statement with the SEC to February 27, 2024, and extend the registration effective date for the resale registration statement until April 27, 2024. The amendment was deemed debt extinguishment and a total of $36,300 was recognized as a loss on debt extinguishment. On March 26, 2024, the Company and the note holders entered into a letter agreement under which an agreement was made to extend the maturity date of the note to April 27, 2024, and increase the principal of the note to $449,300. As a result of the debt extinguishment, the Company recognized $50,000 of loss on debt extinguishment for the three months ended March 31, 2024. In April 2024, the note holders agreed to extend the maturity date of the convertible note to October 31, 2024, and any accrued but unpaid interest through the date thereof shall be due and payable on or before October 31, 2024. The extension did not have any modification or extinguishment consideration. As of the date of this filing, the Company subsequently failed to repay the convertible note on or before October 31, 2024, and failed to file the resale registration statement on or before October 31, 2024. In December 2024, the note holder agreed to and issued a one-time waiver applicable to the default and failure to comply with the purchase agreement debt modifications through December 31, 2024. As of the date of this filing the Company is in default with the terms of the convertible notes. The Company intends to honor the notes and all liabilities as it perseveres in its mission to raise funds for the Company’s growth. Despite the default, the Company anticipates continuing its collaboration with the noteholder. The balance of the convertible note as of March 31, 2024, was $449,300. *Short-Term Note Payable* The Company entered into a commercial insurance premium finance and security agreement in May 2023. The agreement finances the Company’s annual D&O insurance premium. Payments are due in monthly installments of approximately $6,400 and carry an annual percentage interest rate of 13.9%. The Company had an outstanding premium balance of approximately $12,546 and $18,712 at March 31, 2024 and December 31, 2023, respectively, related to the agreement, which is included in short-term note payable in the consolidated balance sheets. Interest expense incurred for the three months ended March 31, 2024, related to the finance agreement was approximately $635.

SHORT-TERM LIABILITIES

3 Months Ended

Mar. 31, 2024

NOTE 6 – SHORT-TERM LIABILITIES

Convertible Note Payable

As discussed in Note 2, on June 27, 2023, the Board of Directors approved a resolution authorizing the Company to obtain a secured six-month term loan for the principal amount of $330,000. In connection therewith, on June 27, 2023, the Company entered into a Securities Purchase Agreement with selected accredited investors whereby the Company had the right to secure the convertible note. The holder has conversion rights upon event of default and the conversion price is equal to the average of the three lowest prices of the Company’s common stock of the trailing ten days prior to the date conversion of the convertible note. At issuance and at March 31, 2024, the Company estimated the fair value of the conversion option embedded in the Note and determined its value to be de minimis due to the fact that settlement into shares of common stock only occurs upon an event of default. If the event of default were triggered this would provide the Note holder with little upside potential and therefore no value was allocated to the embedded derivative.

Original Issuance Discount

The principal face value of the loan is $330,000 and was issued with an original issuance discount of $26,400 which resulted in aggregate proceeds of $303,600. The loan carries an interest rate of 10% per year, has a default interest rate of 18% per year, and a maturity date of December 27, 2023. Interest is payable on a monthly basis beginning one month following the issue date. Following an event of default, the noteholder has the right to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under the note into fully paid and non-assessable shares of Common Stock. Additionally, the noteholders have the option to convert the $26,400 original issuance discount, which will accrete over the life of the loan based on the effective interest method. The convertible note is also presented net of the issuance costs of $13,250 which will accrete over the life of the note, based on the effective interest method. The Company did not incur any accretion expense related to the original issuance discount for the three months ended March 31, 2024, and 2023.

Debt Discount

To secure the convertible note, the Company paid a commitment fee of $83,526 by issuing 328,571 shares of the Company’s common stock. See Note 8. The convertible note is also presented net of the debt discount of $83,526 which represents the relative fair value of the common stock issued, which was fully recognized as of December 31, 2023. The company did not incur any accretion expense related to the debt discount for the three months ended March 31, 2024, and 2023.

Debt Amendments

On December 26, 2023, the Company and the note holder entered into a letter agreement under which an agreement was made to extend the maturity date of the Note to January 27, 2024, increase the principal of the note to $363,000, and amend the convertible note to extend the date on which the Company shall prepare and file with the SEC a registration statement covering the resale of all of the conversion shares and commitment fee to January 27, 2024. The Company subsequently failed to repay the convertible note on or before January 27, 2024, and failed to file the resale registration statement on or before January 27, 2024. The amendment was deemed a debt modification and a total of $33,000 was recognized as inducement expense.

On February 6, 2024, the Company and convertible note holder entered into a letter agreement under which an agreement was made to extend the maturity date of the note to February 27, 2024, increase the principal of the convertible note to $399,300, extend the date on which the Company shall prepare and file the resale registration statement with the SEC to February 27, 2024, and extend the registration effective date for the resale registration statement until April 27, 2024. The amendment was deemed debt extinguishment and a total of $36,300 was recognized as a loss on debt extinguishment.

On March 26, 2024, the Company and the note holders entered into a letter agreement under which an agreement was made to extend the maturity date of the note to April 27, 2024, and increase the principal of the note to $449,300. As a result of the debt extinguishment, the Company recognized $50,000 of loss on debt extinguishment for the three months ended March 31, 2024.

In April 2024, the note holders agreed to extend the maturity date of the convertible note to October 31, 2024, and any accrued but unpaid interest through the date thereof shall be due and payable on or before October 31, 2024. The extension did not have any modification or extinguishment consideration.

As of the date of this filing, the Company subsequently failed to repay the convertible note on or before October 31, 2024, and failed to file the resale registration statement on or before October 31, 2024. In December 2024, the note holder agreed to and issued a one-time waiver applicable to the default and failure to comply with the purchase agreement debt modifications through December 31, 2024.

As of the date of this filing the Company is in default with the terms of the convertible notes. The Company intends to honor the notes and all liabilities as it perseveres in its mission to raise funds for the Company’s growth. Despite the default, the Company anticipates continuing its collaboration with the noteholder.

The balance of the convertible note as of March 31, 2024, was $449,300.

Short-Term Note Payable

The Company entered into a commercial insurance premium finance and security agreement in May 2023. The agreement finances the Company’s annual D&O insurance premium. Payments are due in monthly installments of approximately $6,400 and carry an annual percentage interest rate of 13.9%.

The Company had an outstanding premium balance of approximately $12,546 and $18,712 at March 31, 2024 and December 31, 2023, respectively, related to the agreement, which is included in short-term note payable in the consolidated balance sheets. Interest expense incurred for the three months ended March 31, 2024, related to the finance agreement was approximately $635.