Quarterly report pursuant to Section 13 or 15(d)

CONVERTIBLE PROMISSORY DEBENTURES

v3.24.3
CONVERTIBLE PROMISSORY DEBENTURES
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
CONVERTIBLE PROMISSORY DEBENTURES

NOTE 5 – CONVERTIBLE PROMISSORY DEBENTURES

 

Convertible notes payable consisted of the following:

 

Note Holder/Original Issuance Date   Maturity Date   Cash Received     Outstanding Balance as of September 30, 2024     Outstanding Balance as of December 31, 2023  
Osher Capital Partners LLC                            
January 28, 2020 (“Note 1”)   August 31, 2025   $ 350,005     $ 620,553     $ 564,138  
June 22, 2022 (“Note 2”)   August 31, 2025     75,000       103,745       94,314  
August 31, 2022 (“Note 2”)   August 31, 2025     100,000       135,520       123,200  
September 20, 2022 (“Note 2”)   August 31, 2025     100,000       135,520       123,200  
October 20, 2022 (“Note 2”)   March 31, 2025     100,000       127,000       110,000  
November 14, 2022 (“Note 2”)   March 31, 2025     50,000       64,350       55,000  
December 22, 2022 (“Note 2”)   March 31, 2025     100,000       125,000       110,000  
July 18, 2023 (“Note 3”)   August 31, 2025     60,000       72,600       66,000  
December 7, 2023 (“Note 3”)   August 31, 2025     40,000       48,400       44,000  
May 13, 2024 (“Note 4”)   May 13, 2025     35,000       40,000       -  
August 19, 2024 (“Note 4”)   August 19, 2025     7,500       8,250       -  
                             
Brio Capital Master Fund, Ltd.                            
March 23, 2022 (“Note 2”)   August 31, 2025     100,000       142,960       129,964  
November 9, 2022 (“Note 2”)   August 31, 2025     75,000       101,640       92,400  
January 20, 2023 (“Note 3”)   March 31, 2025     50,000       62,500       55,000  
February 9, 2023 (“Note 3”)   March 31, 2025     50,000       62,500       55,000  
July 20, 2023 (“Note 3”)   August 31, 2025     40,000       48,400       44,000  
January 8, 2024 (“Note 4”)   January 8, 2025     40,000       44,000       -  
May 13, 2024 (“Note 4”)   May 13, 2025     35,000       40,000       -  
August 20, 2024 (“Note 4”)   August 20, 2025     11,500       12,650       -  
                             
Various third-party noteholders                            
Various dates in fiscal
2024 (“Note 4”)		   None outstanding     642,890       -       -  
                             
Previous fiscal 2021, 2022, and 2023 Osher and Brio Notes converted in fiscal 2024                 -       841,420  
Total convertible notes payable       $ 2,061,895     $ 1,995,588     $ 2,507,636  
Original issue discount                 (166,247 )     (225,835 )
Beneficial conversion feature                 -       (22,013 )
Debt discount                 (38,476 )     (49,489 )
                             
Total convertible notes payable               $ 1,790,865     $ 2,210,299  

 

Principal payments on convertible promissory debentures are due as follows:

 

Year ending December 31,      
2025   $ 1,995,588  
Long-Term Debt   $ 1,995,588  

 

Changes in convertible notes were as follows:

 

    Note 1     Note 2     Note 3     Note 4     Totals  
Convertible notes payable as of December 31, 2022   $ 700,816     $ 1,578,500     $ -     $ -     $ 2,279,316  
                                         
Convertible notes payable issued in 2023     163,320       142,000       1,443,200       -       1,748,520  
Conversion of debt for common stock     -       (341,000 )     (1,179,200 )     -       (1,520,200 )
Convertible notes payable as of December 31, 2023   $ 864,136     $ 1,379,500     $ 264,000     $ -     $ 2,507,636  
                                         
Convertible notes payable issued in 2024     56,416       97,655       30,400       852,630       1,037,101  
Conversion of debt for common stock     (299,999 )     (541,420 )     -       (707,730 )     (1,549,149 )
Convertible notes payable as of September 30, 2024   $ 620,553     $ 935,735     $ 294,400     $ 144,900     $ 1,995,588  

 

 

Changes in note discounts were as follows:

 

    Note 1     Note 2     Note 3     Note 4     Totals  
Note discounts as of December 31, 2022   $ -     $ 642,660     $ -     $ -     $ 642,660  
                                         
Note discounts issued in conjunction with debt in 2023     163,320       142,000       1,390,535       -       1,695,855  
2023 accretion of note discounts     (48,325 )     (683,850 )     (1,309,003 )     -       (2,041,178 )
Note discounts as of December 31, 2023   $ 114,995     $ 100,810     $ 81,532     $ -     $ 297,337  
                                         
Note discounts issued in conjunction with debt in 2024     56,414       97,657       30,400       470,826       665,297  
2024 accretion of note discounts     (114,995 )     (116,489 )     (88,501 )     (427,926 )     (747,911 )
Note discounts as of September 30, 2024   $ 56,414     $ 81,978     $ 23,431     $ 42,900     $ 204,723  
                                         
Convertible notes payable, net, as of December 31, 2023   $ 749,141     $ 1,278,690     $ 182,468     $ -     $ 2,210,299  
Convertible notes payable, net, as of September 30, 2024   $ 564,139     $ 853,757     $ 270,969     $ 102,000     $ 1,790,865  
                                         
2023 Effective interest rate     6 %     50 %     496 %     - %     81 %
2024 Effective interest rate     19 %     12 %     30 %     295 %     37 %

 

Current Noteholders

 

2024 Convertible Notes (Note 4)

 

During fiscal 2024, the Company entered into Original Issue Discount Senior Convertible Debentures (the “2024 Notes”) totaling (i) $852,630 aggregate principal amount of Notes (total of $771,890 cash was received) due between January and June 2025 based on $1.00 for each $0.90909 paid by the noteholders and (ii) five-year Common Stock Purchase Warrants (“Warrants”) to purchase up to an aggregate of 213,164 shares of the Company’s Common Stock at an exercise price of $7.50 per share. The aggregate cash subscription amount received by the Company for the issuance of the Note and Warrants was $771,891 which was issued at a $80,739 original issue discount from the face value of the Note.

 

In September 2024, holders converted $474,794 in exchange for the issuance of 118,700 shares of Common Stock to the holders.

 

In May 2024, holders converted $232,937 in exchange for the issuance of 38,826 shares of Common Stock to the holders.

 

2023 Convertible Notes (Note 3)

 

During fiscal 2023, the Company entered into Original Issue Discount Senior Convertible Debentures (the “2023 Notes”) totaling (i) $264,000 aggregate principal amount of Notes (total of $240,000 cash was received) due in various dates from July 2024 through March 2025 based on $1.00 for each $0.90909 paid by the noteholders and (ii) five-year Common Stock Purchase Warrants (“Warrants”) to purchase up to an aggregate of 44,002 shares of the Company’s Common Stock at an exercise price of $7.50 per share. The aggregate cash subscription amount received by the Company for the issuance of the Note and Warrants was $240,000 which was issued at a $24,000 original issue discount from the face value of the Note. The conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes is $4.00 per share, subject to adjustment as provided therein, such as stock splits and stock dividends.

 

On September 30, 2024, a noteholder agreed to extend the note to August 31, 2025 for original issue discount totaling $15,400.

 

On April 9, 2024, a noteholder agreed to extend the note to March 31, 2025 for original issue discount totaling $15,000.

 

 

2022 Convertible Notes (Note 2)

 

During fiscal 2022, the Company entered into Original Issue Discount Senior Convertible Debentures (the “2022 Notes”) totaling (i) $879,428 aggregate principal amount of Notes (total of $700,000 cash was received) due on various dates from January 2024 through December 7, 2024 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants”) to purchase up to an aggregate of 240,534 shares of the Company’s Common Stock at an exercise price of $7.50 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the issuance of the Note and Warrants was $770,000 which was issued at a $70,000 original issue discount from the face value of the Note. The conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes is $4.00 per share, subject to adjustment as provided therein, such as stock splits and stock dividends.

 

On September 30, 2024, a noteholder agreed to extend the note to August 31, 2025 for original issue discount totaling $56,306.

 

On April 10, 2024, a noteholder agreed to extend the notes to between August 2024 and March 2025 for original issue discount totaling $41,350.

 

Osher – $564,139 (Note 1)

 

On January 28, 2020, as subsequently amended, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with respect to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of (i) $564,139 aggregate principal amount of Original Issue Discount Senior Convertible Debenture due August 30, 2024, based on $1.00 for each $0.90909 paid by Osher and (ii) five-year Common Stock Purchase Warrants to purchase up to an aggregate of 102,827 shares of the Company’s Common Stock at an exercise price of $5.60 per share. The aggregate cash subscription amount received by the Company from Osher for the issuance of the note and warrants was $350,005 with a total of $214,133 original issue discount from the face value of the Note. The conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes is $3.76 per share, subject to adjustment as provided therein, such as stock splits and stock dividends.

 

On September 30, 2024, a noteholder agreed to extend the note to August 31, 2025 for original issue discount totaling $56,414.