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CONVERTIBLE NOTES PAYABLE

6 Months Ended

Jun. 30, 2023

NOTE 6 - CONVERTIBLE NOTES PAYABLE

The Company has convertible notes payable as follows:

	June 30,		December 31,
	2023		2022

Promissory note, dated June 2, 2017, bearing interest of 4% annually, payable within a year	$	18,260	$	18,260
Promissory note, dated January 5, 2018, bearing interest of 10% annually, payable on July 5, 2018		-		33,249
Promissory note, dated April 20, 2018, bearing interest of 12% annually, payable on April 20, 2019		50,000		50,000
Promissory note, dated April 30, 2018, bearing interest of 12% annually, payable on April 30, 2019		50,000		50,000
Promissory note, dated November 23, 2020, bearing interest of 10% annually, payable on November 23, 2021		-		200,000
Promissory note, dated February 12, 2021, bearing interest of 10% annually, payable on February 12, 2022		-		50,000
Promissory note, dated March 29, 2021, bearing interest of 10% annually, payable on March 29, 2022		-		100,000
Promissory note, dated April 29, 2022, bearing interest of 10% annually, payable on April 29, 2023		-		12,750
Promissory note, dated July 14, 2022, bearing interest of 10% annually, payable on July 14, 2023		-		39,250
Convertible notes before debt discount		118,260		553,509
Less debt discount		-		(15,253	)
Total outstanding convertible notes payable	$	118,260	$	538,256

During the six months ended June 30, 2023 and 2022, the Company recognized interest expense of $15,638 and $32,007 and amortization of debt discount, included in interest expense, of $41,627 and $43,634, respectively. As of June 30, 2023 and December 31, 2022, the Company recorded accrued interest of $66,657 and $146,190, respectively.

Conversion

During the six months ended June 30, 2023, the Company converted convertible note principal of $52,000 and accrued interest of $3,901 for total debt of $55,901 into 229,818,269 shares of common stock. The corresponding derivative liabilities at the dates of conversion of $97,450, was settled through additional paid in capital.

During the six months ended June 30, 2022, the Company converted convertible note principal and accrued interest of $206,901 into 163,364,994 shares of common stock. The derivative liability of $84,011 corresponding to the settlement of a certain convertible note, was included in gain on settlement of debt.

Settlement

During the six months ended June 30, 2023, the Company had returned to it certain outstanding convertible notes payable pursuant to a judgment on May 2, 2023 in the case captioned SEC V. GPL Ventures et al. 21 Civ. 6814 (S.D.N.Y.) requiring GPL Ventures to surrender all unconverted convertible notes in their entirety to certain issuers identified in the judgement (Note 9), upon the surrender of the GPL Notes, such Notes were cancelled on the books and records of the Company. Based on the cancellation of these convertible notes the Company wrote off $383,249 in outstanding principal, $91,270 in accrued interest and $2,275,825 in derivative liabilities for a total of $2,750,344 included in gain on settlement of debt.

The Company has entered into various convertible notes with variable conversion rates that create derivative liabilities. A description of outstanding convertible notes payable is as follows:

Promissory Notes - Issued in fiscal year 2017

During the year ended December 31, 2017, the Company issued a total of $19,100 of notes with the following terms:

	·	Terms of 12 months due on demand.
	·	Annual interest rate of 4%.
	·	Convertible at the option of the holders at issuance.
	·	Conversion prices are typically based on the discounted (60% discount) lowest trading prices of the Company’s shares during various periods prior to conversion, the closing sale price.
	·	Notes are currently in default.

Promissory Notes - Issued in fiscal year 2018

During the year ended December 31, 2018, the Company issued a total of $100,000 of notes with the following terms:

	·	Terms are 12 months.
	·	Annual interest rates of 12%.
	·	Convertible at the option of the holders at issuance.
	·	Conversion prices are typically based on the discounted (50% discount) average closing prices or lowest trading prices of the Company’s shares during various periods prior to conversion.
	·	Notes are currently in default.

Derivative liabilities

The Company determined that the exercise feature of the warrants met the definition of a liability in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Stock. The Company will bifurcate the embedded conversion option in the note once the note becomes convertible and account for it as a derivative liability. The fair value of the warrants was recorded as a debt discount being amortized to interest expense over the term of the note.

The Company assessed its convertible notes in accordance with ASC 815 and determined the were derivative liabilities associated with the convertible notes.

The Company valued the conversion features using the Black Scholes valuation model. The fair value of the derivative liability for the note that became convertible for the six months ended June 30, 2023 amounted to $26,374 and was recognized as a debt discount to the notes. The fair value of the derivative liability for all the notes and warrants that became convertible for the year ended December 31, 2022 amounted to $305,707. $238,339 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $67,368 was recognized as a “day 1” derivative loss.