NOTE 9 - NOTES PAYABLE

As of September 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 September 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 September 30, 2024 and December 31, 2023 is $200,000. The interest expense during the three months ended September 30, 2024 and 2023 were $12,602. The interest expense during the nine months ended September 30, 2024 and 2023 were $37,534 and $37,397, 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 September 30, 2024 and December 31, 2023 was $100,000. The interest expense during the three months ended September 30, 2024 and 2023 was $6,301 and $3,150, respectively. The interest expense during the nine months ended September 30, 2024 and 2023 was $18,767 and $9,349, respectively. The Company made an interest payment of $6,250 and $9,375, respectively, during the nine months ended September 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 September 30, 2024 and 2023, the Company amortized $0 and $7,902 of debt discount as interest expense. During the nine months ended September 30, 2024 and 2023, the Company amortized $0 and $23,448 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 September 30, 2024 and December 31, 2023 was $50,000. The interest expense during the three months ended September 30, 2024 and 2023 was $2,521 and $1,576, respectively. The interest expense during the nine months ended September 30, 2024 and 2023 was $7,250 and $4,264, respectively. The Company made an interest payment of $1,563 and $3,125, respectively, during the nine months ended September 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 September 30, 2024 and 2023, the Company amortized $0 and $1,513 of debt discount as interest expense, respectively. During the nine months ended September 30, 2024 and 2023, the Company amortized $395 and $4,093 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 interest rate was increased to 15% on September 6, 2024 due to default. 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 September 30, 2024 and December 31, 2023 was $150,000. The interest expense during the three months ended September 30, 2024 and 2023 was $3,715 and $822, respectively. The interest expense during the nine months ended September 30, 2024 was $9,699 and $822, respectively. 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 September 30, 2024 and 2023, the Company amortized $21,529 and $8,155 of debt discount as interest expense, respectively. During the nine months ended September 30, 2024, the Company amortized $80,896 and $8,155 of debt discount as interest expense, respectively.

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. 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. On July 11, 2024, the Company entered into a second amendment agreement to such promissory note. In accordance with the second amendment, the parties agreed to modify the maturity date of the note from August 10, 2024 to September 30, 2024. The amortization payments of the note were replaced with a single lump sum payment in the amount of $275,000. The principal and interest of such promissory note shall be convertible into common stock of the Company at $1.50 per share unless the Company does not make a payment on September 30, 2024, in which case the conversion price shall be $0.75. The exercise price of the warrants issued in connection with the original promissory note was amended from $2.00 per share to $1.50 per share unless the Company does not make a note payment on September 30, 2024, in which case the exercise price shall be $1.00 per share. In exchange for the modification, the Company issued 50,000 shares of restricted stock to the debt holder at $0.52 per share for a total value of $26,000. The amendment was treated as an extinguishment of the original debt and an issuance of the new debt, in which a debt extinguishment loss of $52,664 was recognized during the three and nine months ended September 30, 2024. The balance outstanding as of September 30, 2024 and December 31, 2023 was $220,000. The interest expense during the three months ended September 30, 2024 was $4,388. The interest expense during the nine months ended September 30, 2024 was $15,141. During the three months ended September 30, 2024, the Company amortized $12,975 of debt discount as interest expense. During the nine months ended September 30, 2024, the Company amortized $134,991 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. 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. On August 23, 2024, the Company entered into a second amendment agreement to such promissory note. In accordance with the second amendment, the parties agreed to modify the maturity date of the note from September 8, 2024 to October 31, 2024. The amortization payments of the note were replaced with a single lump sum payment in the amount of $275,000. The principal and interest of such promissory note shall be convertible into common stock of the Company at $1.50 per share unless the Company does not make a payment on October 31, 2024, in which case the conversion price shall be $0.75. The exercise price of the warrants issued in connection with the original promissory note was amended from $2.00 per share to $1.50 per share unless the Company does not make a note payment on October 31, 2024, in which case the exercise price shall be $1.00 per share. In exchange for the modification, the Company issued 50,000 shares of restricted stock to the debt holder at $0.30 per share for a total value of $15,000. The amendment was treated as an extinguishment of the original debt and an issuance of the new debt, in which a debt extinguishment loss of $13,665 was recognized during the three and nine months ended September 30, 2024. The balance outstanding as of September 30, 2024 and December 31, 2023 was $220,000. The interest expense during the three months ended September 30, 2024 was $7,715. The interest expense during the nine months ended September 30, 2024 was $16,491. During the three months ended September 30, 2024, the Company amortized $45,894 of debt discount as interest expense. During the nine months ended September 30, 2024, the Company amortized $152,920 of debt discount as interest expense.

The interest expense during the three months ended September 30, 2024 and 2023 were $148,999 and $36,883, respectively. The interest expense during the nine months ended September 30, 2024 and 2023 were $648,726 and $90,412, respectively. As of September 30, 2024 and December 31, 2023, the accumulated interest on notes payable was $1,330,133 and $1,268,264, respectively, and was included in accounts payable and accrued expenses on the balance sheet.

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