Notes Payable

3 Months Ended

Mar. 31, 2023

Notes Payable [Abstract]

NOTES PAYABLE

8 NOTES PAYABLE

On February 16, 2021, the Company entered into separate Securities Purchase Agreements (the “SPAs”), with each of Cavalry Fund I LP (“Cavalry”) and Mercer Street Global Opportunity Fund, LLC (“Mercer”), pursuant to which the Company received $500,500 and $500,500 from Cavalry and Mercer, respectively, in exchange for the issuance of: (i) Original Issue Discount 12.5% Convertible Notes (the “Notes” and each a “Note”) in the principal amount of $572,000 to each of Cavalry and Mercer; and (ii) five-year warrants (the “Original Warrants”) issued to each of Cavalry and Mercer to purchase 2,486,957 shares of the Company’s common stock at an exercise price of $0.24 per share.

In terms of the December 30, 2022 Note Amendment Transaction, described in more detail in Note 9 below, the Original Warrants issued on February 16, 2021 were irrevocably exchanged for 12-month non-convertible promissory notes in the amount of $482,000 (the “Exchange Notes”) to each of Cavalry and Mercer. This exchange caused the cancellation of the Original Warrants for all purposes. The Company accounted for the aggregate value of the notes issued of $964,000, less the fair value of the warrants exchanged for these notes of $43,608, totaling $920,392 as a component of the loss on convertible debt.

The Exchange Notes have a maturity date of December 30, 2023 and carry an interest rate of ten percent (10%). The Company shall have the right, but not the obligation, in lieu of a cash payment upon maturity of the Exchange Notes, to issue 51,901,711 shares of common stock, as adjusted for any stock splits, dividends or other similar corporate events, in full satisfaction of its obligations under each of the Exchange Notes (or any pro rata portion of such number of shares in partial satisfaction of such obligations). The Company is under no legal obligation to reserve such number of shares for future issuance.

Notes payable consists of the following:

Description	Interest Rate			Maturity date	Principal		Accrued Interest		March 31, 2023 Amount, net		December 31, 2022 Amount, net
Cavalry Fund I LP		10	%	December 30, 2023		482,000		12,184		494,184		482,134
Mercer Street Global Opportunity Fund, LLC		10	%	December 30, 2023		482,000		12,184		494,184		482,134
Total convertible notes payable					$	964,000	$	24,368	$	988,368	$	964,268

Interest expense totaled $24,100 and $0 for the three months ended March 31, 2023 and 2022, respectively.