NOTES PAYABLE |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
| NOTES PAYABLE | ||||||||||||||||||||||||||||||||||||||||||||||
| NOTES PAYABLE |
NOTE 9 – NOTES PAYABLE
As of December 31, 2022 and 2021, the Company had an advance from a third party. The advance bears no interest and is due on demand. The balance outstanding as of December 31, 2022 and 2021 is $21,480.
On September 9, 2021, the Company issued an unsecured promissory note payable to one third party for $200,000 with principal and interest due June 8, 2022, with a stated interest rate of 25% per annum. The balance outstanding as of December 31, 2022 and 2021 is $200,000. The interest expense during the years ended December 31, 2022 and 2021 were $50,000 and $15,616, respectively. If the Company fails to make any payment due under the terms of the promissory note, the Company shall issue a warrant to the third party to which the number of common shares that the third party has the right to purchase equals 48,309 common shares. The warrant shall have a term of 3 years with an exercise price of $4.14 and shall be equitably adjusted to offset the effect of any stock splits and similar events. During the year ended December 31, 2022, the Company issued the warrant that entitles the third party to purchase 48,309 common shares due to the loan default. The fair value of the warrant on June 8, 2022 was $86,821, which the Company recognized as interest expense.
On October 6, 2022, the Company issued an unsecured promissory note payable to a third party for $100,000 with principal and interest due October 6, 2023, with a stated interest rate of 12.5% per annum. Under the terms of the note the Company shall pay quarterly interest payments of $3,125. The balance outstanding as of December 31, 2022 was $100,000. The interest expense during the year ended December 31, 2022 was $2,979. If the Company fails to make any payment due under the terms of the promissory note, the stated interest rate of the note shall be increased to 25%. As additional consideration for the loan the Company issued 16,500 shares of common stock and valued at $31,350, which was recognized as debt discount. During the year ended December 31, 2022, the Company amortized $7,472 of debt discount as interest expense. The outstanding notes payables as of December 31, 2022 and 2021 were summarized as below:
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