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NOTE 7 - CONVERTIBLE NOTES | 9 Months Ended
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Sep. 30, 2024
Note 7 - Convertible Notes |
NOTE 7 - CONVERTIBLE NOTES | NOTE 7 - CONVERTIBLE NOTES Convertible notes at September 30, 2024 and December 31, 2023 consisted of the following:
|  | September 30, |  | December 31,
|  | 2024 |  | 2023
Issued in fiscal year 2023 |  | $ | 28,193 |  |  | $ | 369,044 |
Issued in fiscal year 2024 |  |  | 4,011,775 |  |  |  | — |
Total convertible notes payable |  |  | 4,039,968 |  |  |  | 369,044 |
Less: Unamortized debt discount |  |  | (490,022 | ) |  |  | (39,012 | )
Total convertible notes |  |  | 3,549,946 |  |  |  | 330,032 |
Less: current portion of convertible notes |  |  | 3,549,946 |  |  |  | 330,032 |
Long-term convertible notes |  | $ | — |  |  | $ | — |
During the nine months ended September 30, 2024 and 2023, the Company recorded interest expense of $555,092 and $13,668, respectively, and recognized amortization of discount, included in interest expense, of $693,516 and $13,904, respectively. Issued in fiscal year 2023 During the year ended December 31, 2023, the Company borrowed $284,760 and $256,760 from a third party totaling $541,520, which includes original issue discount and financing costs of $66,520. The notes are due on June 1, 2024 and October 15, 2024, and a one-time interest charge of 12% shall be applied. Accrued, unpaid interest and outstanding principal shall be paid in 10 payments each in the amount of $31,893 and $28,757 beginning on July 16, 2023 and January 15, 2024, respectively. The notes are convertible at the option of the holders at any time following an event of default, and the conversion price is 75% multiplied by the lowest trading price of Company’s common stock during the 10 trading days prior to the conversion date. Issued in fiscal year 2024 On January 24, 2024, we entered into a securities purchase agreement (the “SPA”) with M2B Funding Corp., a Florida corporation, for it to purchase up to the principal amount of $3,888,889 in secured convertible promissory notes (the “Notes”) for an aggregate purchase price of $3,500,000 (the “Purchase Price”), which Notes are convertible into shares (“Conversion Shares”) of our common stock with an initial conversion price of $0.11 per share. Each noteholder shall receive shares of common stock (“Kicker Shares”) in an amount equal to ten percent of the principal amount of any Note issued divided by $0.11. The Notes are secured by all of our assets under a Security Agreement signed with the SPA. The initial tranche was executed in January 2024 for $2,222,222 in face value of Notes and 2,020,200 Kicker Shares, with an original issue discount of $222,222; second and third tranches were executed in March 2024 for $1,111,111 and $555,556, respectively, in face value of Notes and 1,010,101 and 505,051 Kicker Shares, with an original issue discount of $111,111 and $55,556, respectively. Each one year note bears interest at 18% per annum. Additionally, during the nine months ended September 30, 2024, the Company borrowed amounts from a third party totaling $665,360, which includes original issue discount and financing costs of $105,360.
Principal |  | Issuance |  | Maturity |  | Interest |  | Payment
amount |  | date |  | date |  | rate |  | schedule
$ | 146,900 |  |  |  | March 7, 2024 |  |  |  | January 15, 2025 |  |  |  | 12 | % |  | 10 payments each in the amount of $16,453 beginning on April 15, 2024
$ | 177,100 |  |  |  | March 7, 2024 |  |  |  | January 15, 2025 |  |  |  | 14 | % |  | 5 payments, one payment of $100,947 and four payments of $25,237, beginning in September 2024
$ | 179,400 |  |  |  | July 10, 2024 |  |  |  | April 30, 2025 |  |  |  | 14 | % |  | 9 payments each in the amount of $22,724 beginning on August 30, 2024
$ | 151,960 |  |  |  | September 16, 2024 |  |  |  | July 15, 2025 |  |  |  | 14 | % |  | 5 payments, one payment of $86,617 and four payments of $21,654, beginning in March 2025
The notes are convertible at the option of the holders at any time following an event of default, and the conversion price is 75% multiplied by the lowest trading price of Company’s common stock during the 10 trading days prior to the conversion date. Conversion During the nine months ended September 30, 2024, the Company converted notes with principal amounts of $333,333 and conversion fee of $3,750 into 3,064,394 shares of common stock.

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