Notes Payable

9 Months Ended

Sep. 30, 2024

Notes Payable [Abstract]

NOTES PAYABLE

11 NOTES PAYABLE

Notes payable consists of the following:

Description	Interest Rate	Maturity date	Principal		Accrued Interest		Unamortized debt discount			September 30, 2024 Amount, net		December 31, 2023 Amount, net
Cavalry Fund I LP	10.00%	October 31, 2024	$	482,000	$	85,689	$	-		$	567,689	$	531,004
Mercer Street Global Opportunity Fund, LLC	10.00%	October 31, 2024		482,000		85,689		-			567,689		531,003
2024 notes	8.5%	February 28, 2025 to May 5, 2025		311,111		4,609		(60,869	)		254,851		-
Total notes payable			$	1,275,111	$	175,987	$	(60,869	)	$	1,390,229	$	1,062,007

Interest expense totaled $28,489 and $24,635 for the three months ended September 30, 2024 and 2023, respectively, and $77,980 and $73,371 for the nine months ended September 30, 2024 and 2023, respectively.

Amortization of debt discount totaled $14,248 and $0 for the three months ended September 30, 2024 and 2023, respectively, and $16,908 and $0 for the nine months ended September 30, 2024 and 2023, respectively.

Cavalry Fund I LP and Mercer Street Global Opportunity Fund, LLC

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 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 12 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.

On February 27, 2024, the maturity date of the notes was extended to April 30, 2024 with an automatic one-month extension each month until such time as the note is declared to be in default, all other terms remain the same as the previous notes. The Company performed an analysis in terms of ASC 470 and it was determined that the extension was a debt modification, in addition, no additional consideration was paid for the maturity date extension.

2024 Notes

Between May 29, 2024 and September 9, 2024, the Company entered into five Securities Purchase Agreements with three accredited investors, pursuant to which the Company issued five non-convertible promissory notes (the “2024 Notes”) with an aggregate principal amount of $311,111 for gross proceeds of $233,333, after taking into account an aggregate original issuance discount of $77,778.

The 2024 Notes mature between February 28, 2025 and June 6, 2025 and bear interest at 8.5% per annum.

The 2024 Notes have restrictions relating to fundamental transactions which require the approval of the note holder, in addition the note holder has an optional redemption right on subsequent transactions that may require the Company to redeem all or part of the Note, at a premium of 120% of the cash amount of the Note, at the note holder’s discretion.