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NOTE 10 - CONVERTIBLE LOANS

12 Months Ended

Dec. 31, 2024

NOTE 10 - CONVERTIBLE LOANS

Convertible loans at December 31, 2024 and 2023 consisted of the following:

	December 31,			December 31,
	2024			2023
Issued in fiscal year 2023	$	—		$	369,044
Issued in fiscal year 2024		5,225,308			—
Total convertible notes payable		5,225,308			369,044
Less: Unamortized debt discount		(348,950	)		(39,012	)
Total convertible notes		4,876,358			330,032

Less: current portion of convertible notes		1,864,432			330,032
Long-term convertible notes	$	3,011,926		$	—

During the years ended December 31, 2024 and 2023, the Company recorded interest expense of $769,027 and $23,919 and recognized amortization of discount, included in interest expense, of $796,422 and $24,332, 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

In 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.

In October 2024, we entered into a Memorandum of Understanding (the “Agreement”) with M2B Funding Corp. to extend the maturity date on three promissory notes in exchange for stock consideration. Pursuant to the Agreement, the following promissory notes were extended by 12 months from their original date of maturity:

	•	First Note: Originally due January 1, 2025, with an outstanding amount of $1,888,889, extended to January 1, 2026.
	•	Second Note: Originally due March 12, 2025, with an outstanding amount of $1,111,111, extended to March 12, 2026.
	•	Third Note: Originally due March 25, 2025, with an outstanding amount of $555,556, extended to March 25, 2026.

In consideration for this extension, the Company issued 646,467 restricted common shares. As a result of the extension, the Company recognized the loss on debt extinguishment of $297,878 as debt extinguishment and debt discount of $61,818 as debt modification.

Additionally, during the year ended December 31, 2024, the Company borrowed amounts from a third party totaling $2,413,707, which includes original issue discount and financing costs of $248,707.

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
$ 179,400	October 15, 2024	July 15, 2025	14%	9 payments each in the amount of $22,724 beginning on November 30, 2024
$ 1,578,947	December 6, 2024	June 4, 2025	24%	Outstanding balance shall be paid on June 4, 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 year ended December 31, 2024, one note holder converted notes with principal amounts of $666,666 and conversion fee of $5,000 into 6,106,061 shares of common stock.