CONVERTIBLE NOTES

3 Months Ended

Mar. 31, 2023

CONVERTIBLE NOTES

CONVERTIBLE NOTES

NOTE 8 – CONVERTIBLE NOTES

During May and June 2021, the Company entered into financing arrangements to provide working capital. The Company received proceeds of $175,000 from three private investors. The promissory notes carried interest at the rate of between 8% and 12% and matured between May 4, 2022, and October 23, 2022. The notes automatically converted at 75% of the 30-day average bid price of the obligor common stock (or the public company common stock as the case may be), with the exception of the $50,000 Taverna 12% Note, which converted at the lower of $1.00 per share or the current market price of Hempacco stock. The notes could not be converted prior to maturity. The Taverna note matured on May 4, 2022, and were converted, along with accrued interest, into 56,592 shares of Hempacco common stock on June 7, 2022.

The notes payable to Miguel Cambero for $100,000 and Ernie Sparks for $25,000 originally matured on October 23, 2022. Both notes were subsequently extended through April 30, 2023, and contained provisions providing that the notes would convert into shares of the Company’s common stock pursuant to the conversion formula in the notes. As a result, the Ernie Sparks note converted at the adjusted maturity date into 62,223 shares. As of the date of this filing, the note payable to Miguel Cambero is in technical default as conversion documents have not been executed.

On or about March 18, 2022, the Company issued a promissory note to a related party, Jerry Halamuda for $50,000. The note carries an interest rate of 8% and the initial maturity date was  June 18, 2022. The note is secured by 50,000 common shares of the Company. On June 18, 2022, the Company and the investor signed Amendment No. 1 to the promissory note extending the maturity date to September 18, 2022. Subsequently, additional amendments were executed which extended the maturity date to June 18, 2023, and then to September 18, 2023.