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CONVERTIBLE PROMISSORY NOTES PAYABLE | 12 Months Ended
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Dec. 31, 2021
Debt Disclosure [Abstract] |
CONVERTIBLE PROMISSORY NOTES PAYABLE | NOTE 11 – CONVERTIBLE PROMISSORY NOTES PAYABLE a) Convertible promissory notes In October, November, and December 2021, the Company, issued seven (7) convertible promissory notes of US$2,250,000 aggregate principal amount, due in one year (the ‘Notes’) with issuance price discounted 90.0%. The Notes bear interest at a rate of 8.0% per annum, payable in one year and will mature on October 27, November 5, November 16, November 29 and December 2 of 2022. Net proceeds after debt issuance costs and debt discount were approximately US$1,793,000. Debt issuance costs in the amount of US$162,000 are recorded as deferred charges and included in the other current assets on the consolidated balance sheet. The debt discount and debt issuance costs are amortized into interest expense using the effective interest method over the terms of the Notes. The details of convertible notes are as follows: Unless the Notes are converted, the principal amounts of the Notes, and accrued interest at the rate of 8% per annum, are payable on the one-year anniversary of the issuance of the Notes (the “Maturity Date”). If the Company fails to satisfy its loan obligation by the Maturity Date, the default interest rate will be 16%. The Lenders have the right to convert any or all of the principal and accrued interest on the Notes into shares of common stock of the Company on the earlier of (i) 180 calendar days after the issuance date of the Notes or (ii) the closing of a listing for trading of the common stock of the Company on a national securities exchange offering resulting in gross proceeds to the Company of $15,000,000 or more (an “Uplist Offering”). If the Company closes an Uplist Offering on or before the 180th calendar date after the issuance date of the Notes, the conversion price shall be 70% of the per share offering price in the Uplist Offering; otherwise, the conversion price is $0.75 per share. Subject to customary exceptions, if the Company issues shares or any securities convertible into shares of common stock at an effective price per share lower than the conversion price of the Notes, the conversion rate of the Notes shall be reduced to such lower price. Until the Notes are either paid or converted in their entirety, the Company agreed with the Lenders not to sell any securities convertible into shares of common stock of the Company (i) at a conversion price that is based on the trading price of the stock or (ii) with a conversion price that is subject to being reset at a future date or upon an event directly or indirectly related to the business of the Company or the market for the common stock. The Company also agreed to not issue securities at a future determined price. The Lenders have the right to require the Company to repay the Notes if the Company receives cash proceeds, including proceeds from customers and the issuance of equity (including in the Uplist Offering). If the Company prepays the Notes prior to the Maturity Date, the Company shall pay a 10% prepayment penalty. For the year ended December 31, 2021, the Company recognized interest expenses of the Notes in the amount of US$27,447. The following is the summary of outstanding promissory notes as of December 31, 2021: SUMMARY OF OUTSTANDING PROMISSORY NOTES
|  | Interest rate |  |  | Principal Amount |  |  |  | Net Proceeds |  |  | Warrants Shares |  |  | Maturity Date
Convertible Note- Tarlos Victory (Note 9 (b)) |  |  | 8 | % |  | $ | 250,000 |  |  |  | $ | 197,000 |  |  |  | 200,000 |  |  | October 27, 2022
Convertible Note-Mast Hill (Note 9 (b)) |  |  | 8 | % |  |  | 750,000 |  |  |  |  | 601,000 |  |  |  | 600,000 |  |  | November 5, 2022
Convertible Note-First Fire (Note 9 (b)) |  |  | 8 | % |  |  | 250,000 |  |  |  |  | 197,000 |  |  |  | 200,000 |  |  | November 16, 2022
Convertible Note-LGH Note 9 (b)) |  |  | 8 | % |  |  | 250,000 |  |  |  |  | 207,000 |  |  |  | 200,000 |  |  | November 24, 2022
Convertible Note -Fourth Man (Note 9 (b)) |  |  | 8 | % |  |  | 250,000 |  |  |  |  | 197,000 |  |  |  | 200,000 |  |  | November 29, 2022
Convertible Note-Jeffery Street Note 9 (b)) |  |  | 8 | % |  |  | 250,000 |  |  |  |  | 197,000 |  |  |  | 200,000 |  |  | December 2, 2022
Convertible Note -Blue Lake Note 9 (b)) |  |  | 8 | % |  |  | 250,000 |  |  |  |  | 197,000 |  |  |  | 200,000 |  |  | December 2, 2022
Total |  |  |  |  |  |  | 2,250,000 |  |  |  |  | 1,793,000 |  |  |  | 1,800,000 |  |  |
Debt Discounts |  |  |  |  |  |  | (225,000 | ) |  |  |  |  |  |  |  |  |  |  |
Amortization of discounts for the year ended December 31, 2021 |  |  |  |  |  |  | 5,550 |  |  |  |  |  |  |  |  |  |  |  |
Convertible Promissory Notes payable as of December 31, 2021 |  |  |  |  |  | $ | 2,030,550 |  |  |  |  |  |  |  |  |  |  |  |
*The Company prepaid $10,000 legal deposit for each note till the repayment of the notes. b) Warrants Accounting for Warrants In connection with the issuance of a convertible promissory notes (see Note 11 (a) in October, November and December, 2021, the Company also issued seven (7) three-year warrant (the “Warrant”) to purchase an aggregate of 1,800,000 shares of the Company’s common stock (the “Warrant Shares”). The Warrants issued to the Lenders granted each of the Lenders the right to purchase up to 200,000 shares of common stock of the Company at an exercise price of $1.25 per share. However, if the Company closes an Uplist Offering on or before the 180th calendar date after the issuance date of the Warrants, then the exercise price shall be 125% of the offering price of a share in the Uplist Offering. If the adjusted exercise price as a result of the Uplist Offering is less than $1.25 per share, then the number of shares for which the Warrants are exercisable shall be increased such that the total exercise price, after taking into account the decrease in the per share exercise price, shall be equal to the total exercise price prior to such adjustment. The Lenders have the right to exercise the Warrants on a cashless basis if the highest traded price of a share of common stock of the Company during the 150 trading days prior to exercise of the Warrants exceeds the exercise price, unless there is an effective registration statement of the Company which covers the resale of the Lenders. If the Company issues shares or any securities convertible into shares at an effective price per share lower than the exercise price of the Warrants, the exercise price of the Warrants shall be reduced to such lower price, subject to customary exceptions. The Lenders may not convert the Notes or exercise the Warrants if such conversion or exercise will result in each of the Lenders, together with any affiliates, beneficially owning in excess of 4.9% of the Company’s outstanding common stock immediately after giving effect to such exercise unless the Lenders notify the Company at least 61 days prior to such exercise. The fair values of these warrants as of December 31, 2021 were calculated using the Black-Scholes option-pricing model with the following assumptions: SCHEDULE OF FAIR VALUE OF WARRANTS
|  |  |  |  |  |  |  |  |  |  |  |  |  | December 31, 2021 |
|  | Volatility (%) |  |  | Expected dividends yield (%) |  |  | Weighted average expected life (year) |  |  | Risk-free interest rate (%) (per annum) |  |  | Initial value of common stock purchase warrants liability (US$) |  |  | Changes of fair value of common stock purchase warrants liability (- (gains)/+ losses(US$) |  |  | Common stock purchase sarrants liability as of December 31, 2021(US$) |
Convertible Note- Tarlos Victory (Note 9 (a)) |  |  | 187.3 | % |  | $ | 0.0 | % |  | $ | 2.8 |  |  |  | 0.97 | % |  |  | 311,649 |  |  |  | (186,893 | ) |  |  | 124,756 |
Convertible Note-Mast Hill (Note 9 (a)) |  |  | 187.3 | % |  |  | 0.0 | % |  |  | 2.8 |  |  |  | 0.97 | % |  |  | 576,233 |  |  |  | (201,077 | ) |  |  | 375,156 |
Convertible Note-First Fire (Note 9 (a)) |  |  | 187.3 | % |  |  | 0.0 | % |  |  | 2.9 |  |  |  | 0.97 | % |  |  | 196,037 |  |  |  | (70,629 | ) |  |  | 125,408 |
Convertible Note-LGH Note 9 (a)) |  |  | 187.3 | % |  |  | 0.0 | % |  |  | 2.9 |  |  |  | 0.97 | % |  |  | 214,644 |  |  |  | (88,980 | ) |  |  | 125,664 |
Convertible Note -Fourth Man (Note 9 (ab)) |  |  | 187.3 | % |  |  | 0.0 | % |  |  | 2.9 |  |  |  | 0.97 | % |  |  | 214,867 |  |  |  | (89,046 | ) |  |  | 125,821 |
Convertible Note-Jeffery Street Note 9 (a)) |  |  | 187.3 | % |  |  | 0.0 | % |  |  | 2.9 |  |  |  | 0.97 | % |  |  | 187,338 |  |  |  | (61,423 | ) |  |  | 125,915 |
Convertible Note -Blue Lake Note 9 (a)) |  |  | 187.3 | % |  |  | 0.0 | % |  |  | 2.9 |  |  |  | 0.97 | % |  |  | 187,338 |  |  |  | (61,423 | ) |  |  | 125,915 |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Total |  | 1,888,106 |  |  |  | (759,471 | ) |  |  | 1,128,635 |
(c) Registration Rights Agreements Pursuant to the terms of the Registration Rights Agreement dated as of contract date of each convertible promissory note, 2021, executed between the Company and Lender, the Registration Rights Agreement dated as of each contract date, executed between the Company and Lenders, the Company agreed to file a registration statement with the Securities and Exchange Commission to register the shares of common stock underlying the Notes and the shares issuable upon exercise of the Warrants within sixty days from the date of each Registration Rights Agreement. The Company also granted the Lenders piggyback registration rights on such shares pursuant to the Purchase Agreements.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI https://asc.fasb.org/topic&trid=2208564 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (h) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (g) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1E -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (i) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
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