NOTE 9 - NOTES PAYABLE

As of June 30, 2024 and December 31, 2023, the Company had an advance from a third party. The advance bears no interest and is due on demand. The balance outstanding as of June 30, 2024 and December 31, 2023 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 June 30, 2024 and December 31, 2023 is $200,000. The interest expense during the three months ended June 30, 2024 and 2023 were $12,466. The interest expense during the six months ended June 30, 2024 and 2023 were $24,932 and $24,795, respectively.

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. The interest rate was increased to 25% on October 7, 2023 due to default. Under the terms of the note the Company shall pay quarterly interest payments of $3,125. The balance outstanding as of June 30, 2024 and December 31, 2023 was $100,000. The interest expense during the three months ended June 30, 2024 and 2023 was $6,233 and $3,117, respectively. The interest expense during the six months ended June 30, 2024 and 2023 was $12,466 and $6,199, respectively. The Company made an interest payment of $6,250 during the six months ended June 30, 2024 and 2023. 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 three months ended June 30, 2024 and 2023, the Company amortized $0 and $7,816 of debt discount as interest expense. During the six months ended June 30, 2024 and 2023, the Company amortized $0 and $15,546 of debt discount as interest expense.

On January 25, 2023, the Company issued an unsecured promissory note payable to a third party for $50,000 with principal and interest due January 25, 2024, with a stated interest rate of 12.5% per annum. The interest rate was increased to 20% on January 26, 2024 due to default. Under the terms of the note the Company shall pay quarterly interest payments of $1,563. The balance outstanding as of June 30, 2024 and December 31, 2023 was $50,000. The interest expense during the three months ended June 30, 2024 and 2023 was $2,493 and $1,558, respectively. The interest expense during the six months ended June 30, 2024 and 2023 was $4,729 and $2,688, respectively. The Company made an interest payment of $1,563 during the six months ended June 30, 2024 and 2023. As additional consideration for the loan the Company issued 4,285 shares of common stock and valued at $6,000, which was recognized as debt discount. During the three months ended June 30, 2024 and 2023, the Company amortized $0 and $1,495 of debt discount as interest expense, respectively. During the six months ended June 30, 2024 and 2023, the Company amortized $395 and $2,580 of debt discount as interest expense, respectively.

On September 6, 2023, the Company issued an unsecured promissory note payable to one third party for $150,000 with principal and interest due September 6, 2024, with a stated interest rate of 8% per annum. The third party has the option to select the repayment in cash or in stock of the Company at $2.00 per share. The balance outstanding as of June 30, 2024 and December 31, 2023 was $150,000. The interest expense during the three months ended June 30, 2024 was $2,992. The interest expense during the six months ended June 30, 2024 was $5,984. If the Company fails to make any payment due under the terms of the promissory note, the interest rate shall increase to 15% per annum. In connection with the issuance of the promissory note, the Company issued the warrant that entitles the third party to purchase 150,000 common shares. The warrant shall have a term of three years with an exercise price of $2.00 and shall be equitably adjusted to offset the effect of any stock splits and similar events. The Company allocated the proceeds based on the relative fair value of the debt and the warrants, resulting in the recognition of $88,820 of debt discount on such promissory note. As additional consideration for the debt, the Company issued 18,000 shares of common stock valued at $30,240, which was also recognized as debt discount. During the three months ended June 30, 2024, the Company amortized $29,683 of debt discount as interest expense. During the six months ended June 30, 2024, the Company amortized $59,367 of debt discount as interest expense.

On November 10, 2023, the Company issued an unsecured promissory note payable to a third party with principal and interest due August 10, 2024, with a stated interest rate of 8% per annum. The cash proceeds of the promissory note was $200,000, and the principal amount of the promissory note was $220,000. Upon the occurrence of any event of default that has not been cured within 30 calendar days from the date of the event of default, the outstanding balance shall immediately increase to 125% of the outstanding balance immediately prior to the occurrence of the event of default. The fair value of the event of default penalty put option, which was $26,730, was recognized as a derivative liability and debt discount on the consolidated balance sheet at issuance date. The balance outstanding as of June 30, 2024 and December 31, 2023 was $220,000. The interest expense during the three months ended June 30, 2024 was $6,365. The interest expense during the six months ended June 30, 2024 was $10,753.  In connection with the issuance of the promissory note, the Company issued the warrant that entitles the third party to purchase 200,000 common shares. The warrant shall have a term of four years with an exercise price of $2.00 and shall be equitably adjusted to offset the effect of any stock splits and similar events. As additional consideration for the debt, the Company issued 24,000 shares of common stock valued at $36,480. The Company allocated the proceeds based on the relative fair value of the debt, the warrants and the stock, resulting in the recognition of $140,355 of debt discount on such promissory note. On March 8, 2024, the Company entered into an amendment agreement to such promissory note. In accordance with the amendment, the parties agreed to modify the amortization payments of the unsecured promissory note. In exchange for the modification, the Company issued 15,000 shares of restricted stock to the debt holder at $1.00 per share for a total value of $15,000, which was recognized as debt discount. During the three months ended June 30, 2024, the Company amortized $64,299 of debt discount as interest expense. During the six months ended June 30, 2024, the Company amortized $122,016 of debt discount as interest expense. 

On December 8, 2023, the Company issued an unsecured promissory note payable to a third party with principal and interest due September 8, 2024, with a stated interest rate of 8% per annum. The cash proceeds of the promissory note was $200,000, and the principal amount of the promissory note was $220,000. Upon the occurrence of any event of default that has not been cured within 30 calendar days from the date of the event of default, the outstanding balance shall immediately increase to 125% of the outstanding balance immediately prior to the occurrence of the event of default. The fair value of the event of default penalty put option, which was $26,730, was recognized as a derivative liability and debt discount on the consolidated balance sheet at issuance date. The balance outstanding as of June 30, 2024 and December 31, 2023 was $220,000. The interest expense during the three months ended June 30, 2024 was $4,388. The interest expense during the six months ended June 30, 2024 was $8,776. In connection with the issuance of the promissory note, the Company issued the warrant that entitles the third party to purchase 200,000 common shares. The warrant shall have a term of four years with an exercise price of $2.00 and shall be equitably adjusted to offset the effect of any stock splits and similar events. As additional consideration for the debt, the Company issued 24,000 shares of common stock valued at $27,120. The Company allocated the proceeds based on the relative fair value of the debt, the warrants and the stock, resulting in the recognition of $123,270 of debt discount on such promissory note. On March 25, 2024, the Company entered into an amendment agreement to such promissory note. In accordance with the amendment, the parties agreed to modify the amortization payments of the unsecured promissory note. In exchange for the modification, the Company issued 15,000 shares of restricted stock to the debt holder at $0.89 per share for a total value of $13,350, which was recognized as debt discount. During the three months ended June 30, 2024, the Company amortized $56,910 of debt discount as interest expense. During the six months ended June 30, 2024, the Company amortized $107,026 of debt discount as interest expense.

On March 14, 2024, the Company issued an unsecured promissory note payable to a third party with principal and interest due December 14, 2024, with a stated interest rate of 8% per annum. The cash proceeds of the promissory note was $200,000, and the principal amount of the promissory note was $220,000. Upon the occurrence of any event of default that has not been cured within 30 calendar days from the date of the event of default, the outstanding balance shall immediately increase to 125% of the outstanding balance immediately prior to the occurrence of the event of default. The fair value of the event of default penalty put option, which was $26,730, was recognized as a derivative liability and debt discount on the consolidated balance sheet at issuance date. The balance outstanding as of June 30, 2024 was $220,000. The interest expense during the three months ended June 30, 2024 was $12,440. The interest expense during the six months ended June 30, 2024 was $13,260. In connection with the issuance of the promissory note, the Company issued the warrant that entitles the third party to purchase 200,000 common shares. The warrant shall have a term of four years with an exercise price of $2.00 and shall be equitably adjusted to offset the effect of any stock splits and similar events. As additional consideration for the debt, the Company issued 24,000 shares of common stock valued at $22,080. The Company allocated the proceeds based on the relative fair value of the debt, the warrants and the stock, resulting in the recognition of $115,419 of debt discount on such promissory note. During the three months ended June 30, 2024, the Company amortized $47,039 of debt discount as interest expense. During the six months ended June 30, 2024, the Company amortized $55,826 of debt discount as interest expense.

The interest expense during the three months ended June 30, 2024 and 2023 were $317,907 and $27,489, respectively. The interest expense during the six months ended June 30, 2024 and 2023 were $499,727 and $53,529, respectively. As of June 30, 2024 and December 31, 2023, the accumulated interest on notes payable was $1,341,351 and $1,268,264, respectively, and was included in accounts payable and accrued expenses on the balance sheet.

The outstanding notes payables as of June 30, 2024 and December 31, 2023 were summarized as below: