XML 23 R13.htm IDEA: XBRL DOCUMENT v3.24.3
Convertible Notes Payable
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Convertible Notes Payable

 

  4. Convertible Notes Payable

 

          
  

September 30,
2024

(unaudited)

 

December 31,

2023

Convertible notes  $1,654,000   $1,332,000 
Accrued interest   954,000    794,000 
Subtotal, including $2,287,000 and $2,022,000 in default at September 30, 2024 and December 31, 2023, respectively   2,608,000    2,265,000 
Convertible note discount   (170,000)   (25,000)
Balance on convertible notes, net of note discounts  $2,438,000   $2,101,000 

 

Convertible notes

 

As of December 31, 2023, total outstanding notes payable totaled $1,332,000. During the nine-month period ended September 30, 2024, the Company issued convertible promissory notes in the aggregate of $853,000 for cash proceeds of $775,000, net of original issue discount (“OID”) of $78,000. The notes are unsecured, with an 10% OID, mature in twelve months from issuance, and are convertible into 25,763,218 shares of the Company’s common stock at $0.03 to $0.05 per share.

 

In addition, the Company granted the note holders warrants to purchase 25,763,218 shares of the Company’s common stock with a relative value of $424,000. The warrants are fully vested, and expire one year from the date of issuance. The Company determined the fair value of the warrants by using a Black-Scholes option pricing model, with the following assumptions: expected term of 1.0 year, stock price of $0.03 to $0.08, exercise price of $0.04 to $0.07, volatility of 156% to 174%, risk-free rate of 3.98% to 5.09%, and no forfeiture rate.

 

Also, during the period ended September 30, 2024, convertible notes of $532,000, net of unamortized discount of $307,000, were converted into 15,578,409 shares of common stock. At September 30, 2024, total outstanding convertible notes payable totaled $1,654,000. As of September 30, 2024, convertible notes payable and accrued interest are convertible into approximately 21,920,856 shares of common stock at conversion rates ranging from $0.02 to $0.48 per share. As of September 30, 2024, a total of 43 convertible notes and accrued interest in the aggregate of $2,287,000 have reached maturity and are past due.

 

Accrued interest

 

At December 31, 2023, accrued interest on convertible notes payable totaled $794,000. During the nine-month period ended September 30, 2024, accrued interest of $160,000 was recorded. At September 30, 2024, accrued interest on convertible notes payable totaled $954,000.

 

Debt discount

 

At December 31, 2023, the unamortized debt discount was $25,000. During the nine-month period ended September 30, 2024, debt discount of $501,000 was recorded for the relative fair value of warrants of $424,000 and OID of $77,000, debt discount amortization of $49,000 was recorded, and $307,000 of debt discount was removed and included in the carrying amount of related convertible notes payable that were converted into shares of common stock. At September 30, 2024, the unamortized debt discount was $170,000.