CONVERTIBLE NOTES PAYABLE

12 Months Ended

Dec. 31, 2023

Convertible Notes Payable

CONVERTIBLE NOTES PAYABLE

NOTE 8 – CONVERTIBLE NOTES PAYABLE

In January 2021, the Company commenced offering a convertible promissory note. The offering closed on June 30, 2021. Funds raised during the six months ended June 30, 2021, totaled $2,112,150, less an original issuance discount of $104,572, resulting in net proceeds of $2,007,578. The notes mature after eighteen (18) months from issue or on the following events:

● Voluntary Conversion. The investor may, at his/her/its sole option, at any time after nine (9) months, convert all or any portion of the accrued interest and unpaid principal balance of this Note into fully paid and non-assessable shares of common stock of the Company at the conversion price of $1.15 per share.

● Mandatory Conversion. Upon sixty (60) days from the date the Company files a Form 10 registration statement with the Securities and Exchange Commission (the “SEC”), all of the accrued interest and unpaid principal balance of this Note shall automatically convert into fully paid and non-assessable shares of common stock of the Company at the conversion price of $1.15 per share.

● Interest at the rate equal to 2% per annum, computed based on the actual number of days elapsed, and a year of 365 days will be due on all outstanding notes.

● Interest accrual and debt discount amortization commenced on July 1, 2021, upon closing the convertible promissory note offering.

In November 2021 the Company commenced an offering for a convertible promissory note. The offering closed on November 5, 2021. Funds raised as of November 5, 2021, totaled $175,630. The notes mature after eighteen (18) months from issue or on the following events:

● Voluntary Conversion. The investor may, at his/her/its sole option, at any time after nine (9) months, convert all or any portion of the accrued interest and unpaid principal balance of this Note into fully paid and non-assessable shares of common stock of the Company at the conversion price of $1.15 per share.

● Mandatory Conversion. Upon sixty (60) days from the date the Company files a Form 10 registration statement with the Securities and Exchange Commission (the “SEC”), all of the accrued interest and unpaid principal balance of this Note shall automatically convert into fully paid and non-assessable shares of common stock of the Company at the conversion price of $1.15 per share.

● Interest at the rate equal to 2% per annum, computed based on the actual number of days elapsed, and a year of 365 days will be due on all outstanding notes.

● Interest accrual commenced on December 1, 2021, upon closing the convertible promissory note offering.

On September 1, 2022, the noteholders of the convertible promissory note issued June 30, 2021, and November 5, 2021, passed, by a majority, an amendment of Section 6 of the Notes.

Section 6 of each of the Notes is hereby amended and restated in its entirety as follows:

Voluntary Conversion. The investor may, at his/her/its sole option, at any time after nine (9) months, convert all or any portion of the accrued interest and unpaid principal balance of this Note into fully paid and non-assessable shares of common stock, par value $0.01 per share, of the Company at the conversion price of $1.15 per share (the “Conversion Price”). A notice of Conversion is included as Exhibit “A.” If the Company shall at any time or from time to time after issuance of this Note, effect a stock split of the outstanding common stock, the applicable Conversion Price in effect immediately prior to the stock split shall be proportionately decreased. If the Company shall at any time or from time to time after the issuance of this Note, combine the outstanding shares of common stock, the applicable Conversion Price in effect immediately prior to the combination shall be proportionately increased. Any adjustments under this Section 6 shall be effective at the close of business on the date the stock split or combination occurs.

On December 15, 2022, the noteholders of the convertible promissory note issued June 30, 2021, and November 5, 2021, passed, by a majority, an amendment of Section 6 of the Notes.

Section 6 of each of the Notes is hereby amended and restated in its entirety as follows:

Voluntary Conversion. The investor may, at his/her/its sole option, at any time after nine (9) months, convert all or any portion of the accrued interest and unpaid principal balance of this Note into fully paid and non-assessable shares of common stock, par value $0.01 per share, of the Company at the conversion price of $0.50 per share (the “Conversion Price”). A notice of Conversion is included as Exhibit “A.” If the Company shall at any time or from time to time after issuance of this Note, effect a stock split of the outstanding common stock, the applicable Conversion Price in effect immediately prior to the stock split shall be proportionately decreased. If the Company shall at any time or from time to time after the issuance of this Note, combine the outstanding shares of common stock, the applicable Conversion Price in effect immediately prior to the combination shall be proportionately increased. Any adjustments under this Section 6 shall be effective at the close of business on the date the stock split or combination occurs.”

There were no accounting ramifications as a result of the above amendments.

At December 31, 2023, and 2022, convertible notes consisted of the following.

	December 31, 2023		December 31, 2022
Promissory notes – issued in the fiscal year	$	—	$	2,287,780
Total convertible notes payable		—		2,287,780
Less: unamortized debt discount		—		—
Less: notes converted to common stock		—		(2,287,780	)
Less: current portion of convertible notes		—		—
Long-term convertible notes	$	—	$	—

During the years ended December 31, 2023, and 2022, the Company recorded interest expense of $11,725 and $575,777, respectively, and debt discount amortization of $6,954 and $69,714, respectively. On December 15, 2022, all note holders requested voluntary conversion of the notes to common shares at $0.50, resulting in $0 and in accrued interest at December 31, 2023 and 2022, and 4,706,096 common shares issued.