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CONVERTIBLE NOTES PAYABLE
12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
CONVERTIBLE NOTES PAYABLE

NOTE 10 – CONVERTIBLE NOTES PAYABLE

 

Convertible Notes Payable and Convertible Notes Payable – Related Parties

 

The Company’s convertible notes as of December 31, 2024 and 2023 were as follows:

   

      Current   Non-current   Current   Non-current 
      December 31,   December 31, 
      2024   2023 
      Current   Non-current   Current   Non-current 
                    
Convertible Notes Payable:                      
2023 Bridge Notes  (a)  $3,146,000   $-   $3,146,000   $           - 
2024 Bridge Notes  (b)   187,500    -    -    - 
2024 Non-Interest Bearing Bridge Notes  (c)   525,000    -    -    - 
2024 Convertible Notes  (d)   1,548,960    481,600    -    - 
                        
Related Parties:                       
Miller – Bridge Notes  (e)   480,000    -    480,000    - 
Titan 5 – Bridge Note  (f)   120,000    -    120,000    - 
Celli – Bridge Note  (g)   212,500    -    150,000    - 
FC Advisory – Bridge Note  (h)   60,000    -    60,000    - 
Standard Waste Promissory Note #2  (i)   -    2,359,898    -    - 
Total outstanding principal      6,279,960    2,841,498    3,956,000    - 
Less: discounts      (1,807,791)   (573,396)   (359,850)   - 
Total convertible notes payable      4,472,169    2,268,102    3,596,150    - 
                        
Convertible notes payable – related parties      480,790    1,812,799    724,250    - 
Convertible notes payable     $3,991,379   $455,303   $2,871,900   $- 

 

 

Convertible Notes Payable:

 

(a)

Between May 19, 2023 and August 7, 2023, the Company issued a series of convertible notes payables (the “2023 Bridge Notes”) to investors with a total principal value of $3,146,000 and an annual interest rate of 10%. The 2023 Bridge Notes were issued with maturity dates ranging from May 19, 2024 through August 7, 2024 and with a 20% original issue discount. The 2023 Bridge Notes also contain identical “rollover rights” conversion features that enable the holders to convert all or part of the note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public or private offering. In the event of default, the 2023 Bridge Notes accrue interest at a rate of 24% and all outstanding principal must be repaid at an amount equal to 120% of the outstanding principal balance.

 

Effective July 29, 2024 and through December 31, 2024, the Company and the investors agreed to waive all events of default and all claims to related default interest, with the exception of any default interest that accrued prior to July 29, 2024. Additionally, effective July 29, 2024, $264,000 of the 2023 Bridge Notes were amended to have a maturity date of December 31, 2024. On December 31, 2024 the investors and the Company agreed to amend all of the 2023 Bridge Notes except for $600,000 of the 2023 Bridge Notes. The amended notes had their maturity date extended to March 31, 2025. As of December 31, 2024, $600,000 of the 2023 Bridge Notes were in default.

   
(b) On February 28, 2024 and March 7, 2024 the Company issued two 25% original issue discount convertible notes payable (the “2024 Bridge Notes”) with a total principal amount of $187,500. The 2024 Bridge Notes have an annual interest rate of 11% and mature on August 31, 2025. The 2024 Bridge Notes contain a “rollover rights” conversion feature that enables the holders to convert all or part of the note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public or private offering.
   
(c) On August 12, 2024 the Company issued an investor a $525,000 non-interest bearing convertible note payable (the “2024 Non-Interest Bearing Bridge Note) along with 10,000,000 common stock warrants in exchange for proceeds of $500,000. The Company recognized a debt discount of $413,190 as a result of the warrants (Note 14 – Mezzanine Equity and Stockholders’ Equity). The 2024 Non-Interest Bridge Note has a $25,000 original issue discount and a maturity date of October 12, 2024, which was subsequently extended to December 31, 2024. The 2024 Non-Interest Bearing Bridge Note also contains a “rollover rights” conversion features that enables the holder to convert all or part of the note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public or private offering.
   
  Subsequent to December 31, 2024 the maturity date of the 2024 Non-Interest Bearing Bridge Note was extended to May 31, 2025 (Note 20 – Subsequent Events).
   
(d) Between October 15, 2024 and December 26, 2024 the Company issued six 12% original issue discount convertible promissory notes (“2024 Convertible Notes”) along with 31,239,385 warrants in exchange for proceeds of $1,813,000. The 2024 Convertible Notes have a total principal amount of $2,030,560. The Company recognized a debt discount of $1,377,978 as a result of the warrants (Note 14 – Mezzanine Equity and Stockholders’ Equity). The 2024 Convertible Notes also have an annual interest rate of 15% and maturity dates ranging from November 15, 2025 through December 26, 2026. Each of the 2024 Convertible Notes contains a conversion feature enabling the principal balance to be converted into common stock at a conversion price of $0.065 per share.

 

 

Related Parties:

 

(e)

Between June 13, 2023 and July 24, 2023, the Company sold and issued two 20% original issue discount Promissory Notes (the “Miller Bridge Notes”) to Miller. The Miller Bridge Notes both have principal amounts of $240,000. The Miller Bridge Notes have an annual interest rate of 10% per annum and were issued with maturity dates ranging from June 13, 2024 to July 24, 2024. The Miller Bridge Note contains a “rollover rights” conversion feature that enables the holders to convert all or part of the Miller Bridge Note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public offering. In the event of default, the Miller Bridge Notes accrue interest at a rate of 24% and all outstanding principal must be repaid at an amount equal to 120% of the outstanding principal balance.

 

Effective July 29, 2024 and through December 31, 2024, the Company and Miller agreed to waive all events of default and all claims to related default interest, with the exception of any default interest that accrued prior to July 29, 2024. On December 31, 2024 the Miller Bridge Notes were amended and the maturity date was extended to March 31, 2025.

 

(f)

On June 13, 2023, the Company sold and issued a 20% original issue discount Promissory Note (the “Titan 5 Bridge Note”) to Titan 5, a stockholder of the Company. The Titan 5 Bridge Note has a principal amount of $120,000, an annual interest rate of 10%, and was issued with a maturity date of June 13, 2024. The Titan 5 Bridge Note contains a “rollover rights” conversion feature that enables the holders to convert all or part of the Titan 5 Bridge Note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public or private offering. In the event of default, the Titan 5 Bridge Note accrues interest at a rate of 24% and all outstanding principal must be repaid at an amount equal to 120% of the outstanding principal balance.

 

Effective July 29, 2024 and through December 31, 2024, the Company and Titan 5 agreed to waive all events of default and all claims to related default interest, with the exception of any default interest that accrued prior to July 29, 2024. On December 31, 2024 the Titan 5 Bridge Note was amended and the maturity date was extended to March 31, 2025.

   
(g)

On December 28, 2023, the Company sold and issued a 20% original issue discount Promissory Note to Celli. The Promissory Note has a principal amount of $150,000, an annual interest rate of 10%, and was issued with a maturity date of December 28, 2024. In the event of a Qualified Financing, the Company will be required to repay all outstanding principal and accrued interest. A Qualified Financing is defined as the issuance and sale of equity securities by the Company to investors prior to the maturity date, with total gross proceeds of not less than $5,000,000. The Promissory Note was amended to extend its maturity date to March 31, 2025. On February 28, 2024, the Company sold and issued a 25% original discount Senior Secured Promissory Note to Celli. The note has a principal amount of $62,500, an annual interest rate of 11%, and was issued with a maturity date of August 31, 2025. These two notes are collectively referred to as the “Celli Bridge Notes”.

 

The Celli Bridge Notes contain a “rollover rights” conversion feature that enables the holder to convert all or part of the Celli Bridge Note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public or private offering. In the event of default, the Celli Bridge Notes accrue interest at a rate of 24% and all outstanding principal must be repaid at an amount equal to 120% of the outstanding principal balance.

   
(h) On December 22, 2023, the Company sold and issued a 20% original issue discount Promissory Note (the “FC Advisory Bridge Note”) to FC Advisory, a company owned by a Director of the Company. The FC Advisory Note has a principal amount of $60,000, an annual interest rate of 10%, and was issued with a maturity date of December 22, 2024. The FC Advisory Bridge Note contains a “rollover rights” conversion feature that enables the holders to convert all or part of the FC Advisory Bridge Note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public or private offering. Subsequent to its issuance, the FC Advisory Bridge Note was amended to extend its maturity date to March 31, 2025.

 

 

(i)

On May 31, 2024 the Company entered into a promissory note agreement (Standard Waste Promissory Note #2) with Dominic and Sharon Campo for $2,359,898. The note matures on May 15, 2027. The promissory note has an annual interest rate of 13.75% for the first year, 14.75% for the second year and 15.75% for the third year. Upon default, a 10 day “cure period” shall begin. The promissory note requires thirty-five (35) monthly installment payments of interest beginning on June 15, 2024, and a balloon payment of all outstanding principal and accrued interest upon maturity. As of December 31, 2024 the outstanding loan balance is $2,359,898. The Company incurred debt issuance costs of $1,158,562 in connection with the execution of this agreement of which $225,276 was amortized during the year ending December 31, 2024 (please see Guarantee of Debt above). The debt issuance cost balance as of December 31, 2024 is $933,286.

 

On December 31, 2024 the Company and Dominic and Sharon Campo agreed to amend the Standard Waste Promissory Note #2. As a result $149,352 of accrued interest was converted into 2,987,050 shares of common stock. Additionally, following the amendment interest due from the Standard Waste Promissory Note #2 was changed to $6,460 per week. Lastly, the holders were granted the ability to purchase shares of common stock form the Company upon the Company’s listing on a national stock exchange, using the principal and accrued interest of the Standard Waste Promissory Note #2 in lieu of a cash payment.

 

Interest expense due to convertible note payables for the years ended December 31, 2024 and 2023 was $648,993 and $223,846, respectively.

 

Convertible note payables principal maturities for the next three years as of December 31, 2024 were as follows:

  

      
2025  $6,279,960 
2026   481,600 
2027   2,359,898 
Less: debt discounts   (2,381,187)
Total convertible notes payable  $6,740,271