CONVERTIBLE NOTES PAYABLE

3 Months Ended

Mar. 31, 2022

Convertible Notes Payable [Abstract]

CONVERTIBLE NOTES PAYABLE

8 CONVERTIBLE NOTES PAYABLE

Convertible notes payable consists of the following:

Description	Effective Interest Rate			Maturity date	Principal		Accrued Interest		Unamortized debt discount		March 31, 2022 Amount, net		December 31, 2021 Amount, net
Cavalry Fund I LP		28.7	%	August 16, 2022		866,242		10,347		-		876,589		548,872
Mercer Street Global Opportunity Fund, LLC		28.7	%	August 16, 2022		866,242		10,347		-		876,589		548,872
Bellridge Capital LP.		10	%	February 16, 2022		-		-		-		-		863,609
Total convertible notes payable					$	1,732,484	$	20,694	$	-	$	1,753,178	$	1,961,353

Interest expense totaled $44,379 and $65,792 and amortization of debt discount totaled $263,200 and $2,113,652 for the three months ended March 31, 2022 and 2021, respectively.

Cavalry Fund I LP

● On February 16, 2021, the Company closed a transaction with Cavalry Fund I LP (“Cavalry”), pursuant to which the Company received net proceeds of $500,500, after an original issue discount of $71,500 in exchange for the issuance of a $572,000 Senior Secured Convertible Note, bearing interest at 10% per annum and maturing on February 16, 2022 (the “Cavalry Note”). The Cavalry Note is convertible into shares of Common Stock at an initial conversion price of $0.23 per share, in addition, the Company issued a warrant exercisable for 2,486,957 shares of Common Stock at an initial exercise price of $0.24 per share.

On February 3, 2022, the Company extended the maturity date of its Cavalry Note from February 16, 2022 to August 16, 2022. The Cavalry Note was due to mature on February 16, 2022 and would have resulted in the accrual of a $157,499 prepayment penalty on the principal of $572,000 and interest of $57,994 outstanding, totaling $787,493. Cavalry agreed to extend the maturity date of the Cavalry Note to August 16, 2022 in consideration of the principal amount outstanding under the Cavalry Note being increased by an additional $78,749, thereby increasing the total principal outstanding to $866,242. This change to the maturity date of the Cavalry Note was assessed in terms of ASC 470-50 as a debt extinguishment, which resulted in the additional $78,749 being expensed.

The balance of the Cavalry Note plus accrued interest at March 31, 2022 was $876,589.

Mercer Street Global Opportunity Fund, LLC

● On February 16, 2021, the Company closed a transaction with Mercer Street Global Opportunity Fund, LLC (“Mercer”), pursuant to which the Company received net proceeds of $500,500, after an original issue discount of $71,500 in exchange for the issuance of a $572,000 Senior Secured Convertible Note, bearing interest at 10% per annum and maturing on February 16, 2022 (the “Mercer Note”). The Mercer Note is convertible into shares of Common Stock at an initial conversion price of $0.23 per share, in addition, the Company issued a warrant exercisable for 2,486,957 shares of Common Stock at an initial exercise price of $0.24 per share.

On February 3, 2022, the Company extended the maturity date of its Mercer Note from February 16, 2022 to August 16, 2022. The Mercer Note was due to mature on February 16, 2022 and would have resulted in the accrual of a $157,499 prepayment penalty on the principal of $572,000 and interest of $57,994 outstanding, totaling $787,493. Mercer agreed to extend the maturity date of the Mercer Note to August 16, 2022 in consideration of the principal amount outstanding under the Cavalry Note being increased by an additional $78,749, thereby increasing the total principal outstanding to $866,242. This change to the maturity date of the Mercer Note was assessed in terms of ASC 470-50 as a debt extinguishment, which resulted in the additional $78,749 being expensed.

The balance of the Mercer Note plus accrued interest at March 31, 2022 was $876,589.

Bellridge Capital LP.

● On February 16, 2021, the Company closed a transaction with Bellridge Capital LP., pursuant to which the Company received net proceeds of $787,500, after an original issue discount of $112,500 in exchange for the issuance of a $900,000 Senior Secured Convertible Note, bearing interest at 10% per annum and maturing on February 16, 2022 (the “Bellridge Note”). The Bellridge Note was convertible into shares of Common Stock at an initial conversion price of $0.23 per share, in addition, the Company issued a warrant exercisable for 3,913,044 shares of Common Stock at an initial exercise price of $0.24 per share.

The Bellridge Note was repaid on February 4, 2022 for gross proceeds of $1,235,313, including interest thereon of $88,250, thereby extinguishing the Bellridge Note.