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LOANS PAYABLE
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
LOANS PAYABLE

NOTE 6 — LOANS PAYABLE

 

Loans Payable

 

On October 25, 2018, the Company entered in a promissory note payable with an accredited investor for $50,000 due on October 25, 2019. Pursuant to the note, the maturity date was extended to October 25, 2020. The promissory note bears interest at 100% per annum and the noteholder was issued shares of the Company’s common stock in lieu of interest. On October 7, 2020, the Company entered into a Letter of Agreement Addendum with the note holder, whereas the Company agreed to make ten monthly principal payments beginning November 1, 2020 with the full principal amount to be paid in full by August 31, 2021. In addition, if the full principal amount was not paid in full by August 31, 2021 the Company was to and did issue an additional 2,500 shares of common stock to the noteholder. On November 11, 2021, the Company entered into a Second Letter of Agreement Addendum with the note holder, whereas the Company agreed to continue making monthly payments beginning on December 1, 2021. Total interest expense related to this note was $15,643 for the year ended December 31, 2022. During the year ended December 31, 2022 the Company paid $27,200 in cash towards the outstanding principal. On September 28, 2022, the note holder waived the accrued interest of $168,245 and the amount was included in other income (expense), net on the consolidated statement of operations and comprehensive loss. The note was paid in full as of December 31, 2022.

 

On February 4, 2021, under the U.S. Small Business Administration’s Paycheck Protection Program, the Company entered into a second note payable with a financial institution for $22,916 at an interest rate of 1% per annum and a maturity date of February 4, 2026. Pursuant to the note, principal and interest payments are deferred for ten months, which, at any time during the ten months the Company may apply for loan forgiveness. The Company applied for loan forgiveness on a timely basis, and as of December 31, 2022, the total amount of $22,916 was forgiven.

 

Legacy Ventures International, Inc.

 

On December 11, 2017, the Company issued a promissory note (the “Promissory Note”) in favor of Legacy Ventures International, Inc. (“Legacy”) as part of a commercial transaction with Legacy that was never consummated. The Promissory Note was issued in the original principal amount of $500,000, with interest at 4% per annum and a maturity date of December 31, 2017. As of December 31, 2022, this promissory note was in default. The Company recorded $20,000 of interest expense in each of the years ended December 31, 2023 and 2022. The amount outstanding at December 31, 2023 and 2022 was $0 and $500,000, respectively. The Company evaluated ASC 405-20, Extinguishments of Liabilities (“ASC 405-20”). Pursuant to ASC 405-20, a liability has been extinguished if either of the following conditions is met (a) the debtor pays the creditor and is relieved of its obligation for the liability and (b) the debtor is legally released from being the primary obligor under the liability, either judicially or by the creditor. In consultation with its legal counsel, the Company has determined that the second condition has been met by virtue of the expiration of the applicable statute of limitations. As such, Promissory Note was accounted for as a debt extinguishment. As part of the debt extinguishment the Company wrote off the $500,000 principal amount and accrued interest of $115,000 at December 31, 2023.