SHORT-TERM LIABILITIES	9 Months Ended
Sep. 30, 2024
Short-term Liabilities
SHORT-TERM LIABILITIES	NOTE 6 – SHORT-TERM LIABILITIES *Convertible Note Payable 1* 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 September 30, 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 and nine months ended September 30, 2024, and 2023. *Debt Amendments* 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. 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 September 30, 2024. The company did not incur any accretion expense related to the debt discount for the three and nine months ended September 30, 2024. The Company incurred $19,825 and $10,486 of accretion expense related to the debt discount for the three and nine months ended September 30, 2023, respectively. *Debt Modification* 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 to be debt modification and as a result the Company recognized $33,000 of debt discount as of September 30, 2024. 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 nine months ended September 30, 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. *Convertible Note Payable 2* As discussed in Note 2, on July 17, 2024, the Board of Directors approved a resolution authorizing the Company to obtain a secured six-month term loan for the principal amount of $95,000. In connection therewith, on July 17, 2024, 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 September 30, 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. *Issuance Discount 2* The principal face value of the loan is $95,000 and was issued with an original issuance discount of $14,250 which resulted in aggregate proceeds of $80,750. The loan carries an interest rate of 10% per year, has a default interest rate of 18% per year, and a maturity date of January 17, 2025. 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 $14,250 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 $5,750 which will accrete over the life of the note, based on the effective interest method. The Company incurred $5,823 of accretion expense related to the issuance discount for the three and nine months ended September 30, 2024. *Debt Discount 2* To secure the convertible note, the Company paid a commitment fee of $75,000 by issuing 300,000 shares of the Company’s common stock. The convertible note is also presented net of the debt discount of $35,625 which represents the relative fair value of the common stock issued which will accrete over the life of the loan based on the effective interest method. The Company incurred $16,906 of accretion expense related to the debt discount for the three and nine months ended September 30, 2024. *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 $36,789 at September 30, 2024 and 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 and nine months ended September 30, 2024, related to the finance agreement was approximately $0 and $635, respectively. Interest expense incurred related to the short-term note payable for the year ended December 31, 2023 was approximately $3,459. As of the date of this filing the Company is in default of the commercial premium finance agreement and the D&O insurance policy is no longer in effect. *Short-Term Promissory Note* In August 2024, the Company entered into a promissory note agreement for the principal sum of $55,000. The maturity date on the promissory note is May 10, 2025, and carries an annual interest rate of 10%, and has a default interest rate of 18% per year. The principal and interest are payable in a lump sum at the end of the term. The Company incurred $917 of interest expense related to the debt discount for the three and nine months ended September 30, 2024.

SHORT-TERM LIABILITIES

9 Months Ended

Sep. 30, 2024

NOTE 6 – SHORT-TERM LIABILITIES

Convertible Note Payable 1

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 September 30, 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 and nine months ended September 30, 2024, and 2023.

Debt Amendments

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. 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 September 30, 2024. The company did not incur any accretion expense related to the debt discount for the three and nine months ended September 30, 2024. The Company incurred $19,825 and $10,486 of accretion expense related to the debt discount for the three and nine months ended September 30, 2023, respectively.

Debt Modification

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 to be debt modification and as a result the Company recognized $33,000 of debt discount as of September 30, 2024.

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 nine months ended September 30, 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.

Convertible Note Payable 2

As discussed in Note 2, on July 17, 2024, the Board of Directors approved a resolution authorizing the Company to obtain a secured six-month term loan for the principal amount of $95,000. In connection therewith, on July 17, 2024, 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 September 30, 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.

Issuance Discount 2

The principal face value of the loan is $95,000 and was issued with an original issuance discount of $14,250 which resulted in aggregate proceeds of $80,750. The loan carries an interest rate of 10% per year, has a default interest rate of 18% per year, and a maturity date of January 17, 2025. 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 $14,250 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 $5,750 which will accrete over the life of the note, based on the effective interest method. The Company incurred $5,823 of accretion expense related to the issuance discount for the three and nine months ended September 30, 2024.

Debt Discount 2

To secure the convertible note, the Company paid a commitment fee of $75,000 by issuing 300,000 shares of the Company’s common stock. The convertible note is also presented net of the debt discount of $35,625 which represents the relative fair value of the common stock issued which will accrete over the life of the loan based on the effective interest method. The Company incurred $16,906 of accretion expense related to the debt discount for the three and nine months ended September 30, 2024.

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 $36,789 at September 30, 2024 and 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 and nine months ended September 30, 2024, related to the finance agreement was approximately $0 and $635, respectively. Interest expense incurred related to the short-term note payable for the year ended December 31, 2023 was approximately $3,459.

As of the date of this filing the Company is in default of the commercial premium finance agreement and the D&O insurance policy is no longer in effect.

Short-Term Promissory Note

In August 2024, the Company entered into a promissory note agreement for the principal sum of $55,000. The maturity date on the promissory note is May 10, 2025, and carries an annual interest rate of 10%, and has a default interest rate of 18% per year. The principal and interest are payable in a lump sum at the end of the term. The Company incurred $917 of interest expense related to the debt discount for the three and nine months ended September 30, 2024.