DERIVATIVE LIABILITIES

12 Months Ended

Dec. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE LIABILITIES

NOTE 15: DERIVATIVE LIABILITIES

On January 19, 2021, the Company entered into a 12% Convertible Promissory Note with GS Capital Partners, LLC (the “GS Note”) in the amount of $125,000. The GS Note has a maturity of one-year and is to be repaid commencing on the fifth month anniversary and every month thereafter in the amount of $20,000. The conversion price of the GS Note is 66% of the lowest closing stock price over the previous 20 trading days. There are certain price protections for GS Capital Partners, LLC under the terms of the GS Note, which make the conversion option a derivative liability. The Company recorded an original issue discount in the amount of $10,000 and $5,000 was paid out of the proceeds for legal fees. In accordance with the terms of the GS Note, the Company issued 3,250 shares of common stock as a commitment fee and issued 21,250 shares of common stock that are returnable upon achievement of the terms of the GS Note (which were returned upon repayment of this note in October 2021). The note was repaid in October 2021.

On February 12, 2021, the Company entered into a 10% Convertible Promissory Note with Platinum Point Capital, LLC (the “Platinum Note”). The Platinum Note has a maturity of one-year. The conversion price of the Platinum Note is the greater of (a) $0.08 or (b) 70% of the lowest closing stock price over the previous 15 trading days. There are certain price protections for Platinum Point Capital, LLC under the terms of the Platinum Note, which make the conversion option a derivative liability. The Company granted 25,000 warrants that have a term of three-years and an exercise price of $16.00 per share with the Platinum Note. The warrants granted with the Platinum Note also contain certain price protections, that make the value of the warrants a derivative liability. The Company and Platinum Point Capital, LLC entered into an amendment to exclude the Mimo warrants granted on February 17, 2021 from the price protections. In accordance with the terms of the Platinum Note, the Company issued 7,500 shares as a commitment fee. The note was repaid/converted in 2021.

On September 17, 2021, the Company entered into a 20% OID Senior Secured Promissory Note with Evergreen Capital Management LLC (the “Evergreen 1”) in the amount of $720,000 (includes $120,000 of Original Issue Discount). The Evergreen 1 had a maturity of nine months to June 17, 2022. The Evergreen 1 accrued interest at a rate of 10% per year. The conversion price of Evergreen 1 was the lower of (a) $11.60 (“Fixed Conversion Price”) or (b) upon the occurrence and during the continuation of any Event of Default, if lower, 90% of the average of the two lowest VWAPs for the five (5) consecutive Trading Day that is immediately prior to the applicable Conversion Date (the “Default Conversion Price”). There were certain price protections for Evergreen Capital Management LLC under the terms of Evergreen 1, which made the conversion option a derivative liability. The Company granted 62,069 warrants that had a term of five-years and an exercise price of $11.60 per share with Evergreen 1. The warrants granted with Evergreen 1 also contained certain price protections, that made the value of the warrants a derivative liability. This note was converted, and the warrants were cancelled, in 2022.

On October 8, 2021, the Company entered into a 20% OID Senior Secured Promissory Note in the amount of $480,000 (includes $80,000 of Original Issue Discount) with Evergreen Capital Management LLC (the “Evergreen 2”). The Evergreen 2 had a maturity of nine months to July 8, 2022. The Evergreen 2 accrued interest at a rate of 10% per year. The conversion price of Evergreen 2 was the lower of (a) $11.60 (“Fixed Conversion Price”) or (b) upon the occurrence and during the continuation of any Event of Default, if lower, 90% of the average of the two lowest VWAPs for the five (5) consecutive Trading Day that is immediately prior to the applicable Conversion Date (the “Default Conversion Price”). There were certain price protections for Evergreen Capital Management LLC under the terms of Evergreen 2, which made the conversion option a derivative liability. The Company granted 41,379 warrants that had a term of five-years and an exercise price of $11.60 per share with Evergreen 2. The warrants granted with Evergreen 2 also contained certain price protections, that made the value of the warrants a derivative liability. This note was converted, and the warrants were cancelled, in 2022.

On October 15, 2021, the Company entered into a 20% OID Senior Secured Promissory Note in the amount of $240,000 (includes $40,000 of Original Issue Discount) with Evergreen Capital Management LLC (the “Evergreen 3”). The Evergreen 3 had a maturity of nine months to July 15, 2022. The Evergreen 3 accrued interest at a rate of 10% per year. The conversion price of Evergreen 3 was the lower of (a) $11.60 (“Fixed Conversion Price”) or (b) upon the occurrence and during the continuation of any Event of Default, if lower, 90% of the average of the two lowest VWAPs for the five (5) consecutive Trading Day that is immediately prior to the applicable Conversion Date (the “Default Conversion Price”). There were certain price protections for Evergreen Capital Management LLC under the terms of Evergreen 3, which made the conversion option a derivative liability. The Company granted 20,690 warrants that had a term of five-years and an exercise price of $11.60 per share with Evergreen 3. The warrants granted with Evergreen 3 also contained certain price protections, that made the value of the warrants a derivative liability. This note was converted, and the warrants were cancelled, in 2022.

On July 5, 2022, the Company entered into a 11% OID Senior Secured Promissory Note with GS Capital Partners LLC (the “GS Capital”) in the amount of $144,000 (includes $14,000 of Original Issue Discount). The GS Capital has a maturity of twelve months to July 5, 2023. It accrues interest at a rate of 12% per year. The conversion price Subject to the adjustments described herein, the conversion price (the “Conversion Price”) shall be equal to 86% of the lowest trading price of the Company’s Common Stock for the 12 Trading Days immediately preceding the delivery of a notice of conversion. There are certain price protections, which make the conversion option a derivative liability.

On October 21, 2022, the Company entered into a 20% OID Senior Secured Promissory Note with Evergreen Capital Management, LLC (“Evergreen 4”) in the amount of $48,000 (includes $8,000 of Original Issue Discount). Evergreen 4 has a maturity of twelve months to July 21, 2023. It accrues interest at a rate of 10% per year. The conversion price Subject to the adjustments described herein, the conversion price (the “Conversion Price”) shall be equal 75% of the price per share at which the common stock of the Company is sold to the public in a qualified offering. There are certain price protections, which make the conversion option a derivative liability.

Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each warrant is estimated using the Black-Scholes valuation model. The following assumptions were used in December 31, 2022 and 2021:

	Year Ended December 31, 2022			Year Ended December 31, 2021
Expected term		1 year			1 year
Expected volatility		187 - 335	%		164 - 269	%
Expected dividend yield		-			-
Risk-free interest rate		1.65 – 4.73	%		0.15	%

The Company’s derivative liabilities are as follows:

	December 31, 2022		December 31, 2021
Fair value of the Platinum Point warrants (25,000 warrants)	$	-	$	90,000
Fair value of the Evergreen 1 conversion option		-		223,448
Fair value of the Evergreen 1 warrants (62,069 warrants)		-		307,862
Fair value of the Evergreen 2 conversion option		-		148,965
Fair value of the Evergreen 2 warrants (41,379 warrants)		-		205,241
Fair value of the Evergreen 3 conversion option		-		74,483
Fair value of the Evergreen 3 warrants (20,690 warrants)		-		102,621
Fair value of the Evergreen 4 conversion option		58,917		-
Fair value of the GS Capital conversion option		157,676		-
	$	216,593	$	1,152,620

On December 30, 2022, Evergreen notes 1 through 3 were converted into shares of the Company common stock and Series b Preferred Stock, resulting in the extinguishment of the derivative liability due to conversion. See Note 9.

Activity related to the derivative liabilities for the year ended December 31, 2022 is as follows:

Beginning balance as of December 31, 2021	$	1,152,620
Issuances of warrants/conversion option – derivative liabilities		209,866
Extinguishment of derivative liability upon conversion/repayment of convertible notes and cancellation of warrants		(1,748,682	)
Change in fair value of warrants/conversion option - derivative liabilities		602,789
Ending balance as of December 31, 2022	$	216,593