CONVERTIBLE NOTES PAYABLE | NOTE 8: CONVERTIBLE NOTES PAYABLE Convertible notes payable consists of the following: SCHEDULE OF CONVERTIBLE NOTES PAYABLE June 30, December 31, 2023 2022 Convertible Notes - Issued in fiscal year 2020 97,946 97,946 Convertible Notes - Issued in fiscal year 2021 414,690 600,400 Convertible Notes - Issued in fiscal year 2022 1,891,083 3,710,440 Convertible Notes - Issued in fiscal year 2023 534,454 - Convertible notes payable, Gross 2,938,173 4,408,786 Less debt discount and debt issuance cost (119,056 ) (176,685 ) Convertible notes payable 2,819,117 4,232,101 Less current portion of convertible notes payable 2,721,171 4,134,155 Long-term convertible notes payable $ 97,946 $ 97,946 During the six months ended June 30, 2023 and the year ended December 31, 2022, we recognized interest expense of $ 3,964,556 374,938 145,837 636,010 346,348 625,783 Conversion During the six months ended June 30, 2023, we converted notes with principal amounts and accrued interest of $ 332,592 10,807,823 Convertible notes payable consists of the following: Promissory Notes - Issued in fiscal year 2020 In 2020, we issued convertible promissory notes with principal amounts totaling $ 100,000 ● Terms 60 ● Annual interest rates of 5 ● Conversion price fixed at $ 0.01 Promissory Notes - Issued in fiscal year 2021 In 2021, we issued convertible promissory notes with principal amounts totaling $ 1,696,999 1,482,000 214,999 ● Terms ranging from 90 12 ● Annual interest rates of 5 12 ● Convertible at the option of the holders after varying dates. ● Conversion price based on a formula corresponding to a discount (39% discount) off the average closing price or lowest trading price of our Common stock for the 20 prior trading days including the day on which a notice of conversion is received ● The Mast Hill Fund, LLC convertible promissory note matured on October 19, 2022. The default annual interest rate of 16 414,690 39,822 The 2021 Convertible Notes also were associated with the following: ● The issuance of 1,414 133,663 ● The issuance of 117,992 7.44 36.00 5 years During the six months ended June 30, 2023, in connection with the 2021 Convertible Notes, we repaid principal in the amount of $ 38,490 39,822 Promissory Notes - Issued in fiscal year 2022 During the year ended December 31, 2022, we issued convertible promissory notes with principal amounts totaling $ 2,120,575 1,857,800 262,775 ● Terms ranging from 3 12 ● Annual interest rates of 9 20 ● Convertible at the option of the holders after varying dates ● Conversion price based on a formula corresponding to a discount (20% or 39% discount) off the lowest trading price of our Common stock for the 20 prior trading days including the day on which a notice of conversion is received, although one of the 2022 Convertible Notes establishes a fixed conversion price of $4.50 per share ● 554,464 473,691 ● On June 30, 2023, the Company entered into a Note Exchange Agreement (the “Note Exchange Agreement”) with Westland Properties LLC (the “Noteholder”), pursuant to which the Company agreed with Westland Properties LLC to exchange one outstanding note with a total outstanding balance of $ 5,398,299 665,000 The New Note matures on June 1, 2024, and calls for payments of (i) $115,000 on or prior to July 25, 2023, (ii) nine monthly payments to the noteholder in the amount of $38,889 each, with the first payment beginning September 1, 2023 and (iii) $200,000 on the earlier of (a) three business days following the Company’s successful listing on any of the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange or (b) the receipt of not less than $4,000,000 in funding from a single transaction. If the conditions for payment of the above $200,000 are not met, but the Company raises capital in excess of $500,000 in a single closing, then 25% of any capital raised in such closing shall be used to satisfy the $200,000 payment 4,904,081 In connection with the adoption of ASU 2020-06 on January 1, 2022, we reclassified $ 517,500 439,857 Promissory Notes - Issued in fiscal year 2023 During the six months ended June 30, 2023, we issued convertible promissory notes with principal amounts totaling $ 637,858 520,000 117,858 ● Terms ranging from 9 12 ● Annual interest rates of 9 20 ● Convertible at the option of the holders after varying dates ● Conversion price based on a formula corresponding to a discount (20% or 30% discount) off the lowest trading price of our Common stock for the 20 prior trading days including the day on which a notice of conversion is received, although one of the 2023 Convertible Notes establishes a fixed conversion price of $.50 per share ● As of the six months ended June 30, 2023, there were no derivative liabilities. | NOTE 9: CONVERTIBLE NOTES PAYABLE Convertible notes payable consists of the following: SCHEDULE OF CONVERTIBLE NOTES PAYABLE December 31, December 31, 2022 2021 Convertible Notes - Issued in fiscal year 2020 97,946 100,000 Convertible Notes - Issued in fiscal year 2021 600,400 1,607,857 Convertible Notes - Issued in fiscal year 2022 3,710,440 - Convertible notes payable, Gross 4,408,786 1,707,857 Less debt discount and debt issuance cost (176,685 ) (691,569 ) Convertible notes payable 4,232,101 1,016,288 Less current portion of convertible notes payable 4,134,155 993,931 Long-term convertible notes payable $ 97,946 $ 22,357 During the years ended December 31, 2022 and 2021, the Company recognized interest expense on convertible notes payable of $ 3,795,591 and $ 131,623 , and amortization of debt discount, included in interest expense of $ 911,020 478,582 , respectively. Replacement of note During the year ended December 31, 2020, the Company assigned a portion of note with outstanding principal amounts of $ 150,000 135,000 81,000 135,000 54,000 Effective September 30, 2020, the Company exchanged (i) its convertible promissory note originally issued on March 20, 2020 in the amount of $ 125,000 16 325,000 a. Principal balance of $ 325,000 b. No further interest shall accrue so long as there is no event of default; c. Conversions into common stock under the Exchange Note shall be effected at the lowest closing stock price during the five (5) days preceding any conversion, with -0- discount and a conversion price not below $ 112 d. No prepayment premiums or penalties; and e. Maturity date of September 30, 2021 Effective November 17, 2020, the Company entered into a Settlement and Release Agreement (the “Settlement Agreement”) with an existing lender to, among things, settle all dispute regarding a convertible promissory note, and exchanged that note for a newly issued note. The disputed note, referred to herein as the “Smea2z Note”, was originally issued on October 23, 2018 in favor of Smea2z LLC in the original principal amount of Two Hundred Twenty Thousand Dollars ($ 220,000 608,850 400,000 a. No further interest shall accrue so long as there is no event of default; b. Maturity date remains the same: 30 June 2021; c. No right to prepay; d. Conversion price is fixed at $ 56 e. Typical events of default for such a note, as well as a default in the event the closing price for the Company’s common stock is less than $ 56 f. Leak out provision: 1. One conversion per week, for no more than forty million shares; 2. If the trading volume for the Company’s common stock exceeds fifty million shares on any day, a second conversion may be exercised during that week, again for no more than forty million shares (a total of eighty million shares for that week). Notes were fully converted in February 2021 Effective November 18, 2020, the Company entered into an agreement with three existing investors in the Company (the “Warrant Holders”), each of which was the holder of warrants issued the Company. The total number of warrants (collectively, the “Exchanged Warrants”) held by the Warrant Holders totaled 39 100,000 160 Conversion During the year ended December 31, 2022, the Company converted notes with principal amounts and accrued interest of $ 653,796 998,899 During the year ended December 31, 2021, the Company converted notes with principal amounts and accrued interest of $ 1,450,150 24,536 392,703 Convertible notes payable consists of the following: Promissory Notes - Issued in fiscal year 2020 During the twelve months ended December 31, 2020, the Company issued a total of $ 2,466,500 ● Terms ranging from 5 60 ● Annual interest rates of 0 25 ● Convertible at the option of the holders at issuance date, after maturity date or 6 months after issuance date. ● Conversion prices are typically based on the discounted (25% to 50% discount) average closing prices or lowest trading prices of the Company’s shares during various periods prior to conversion. Certain note has a fixed conversion price ranging from $16 to $112. 15,000 18 160 As of December 31, 2021, $ 100,000 Promissory Notes - Issued in fiscal year 2021 During the year ended December 31, 2021, the Company issued convertible notes of $ 1,696,999 1,482,000 214,999 ● Terms ranging from 90 12 ● Annual interest rates of 5 12 ● Convertible at the option of the holders after varying dates. ● Conversion prices are typically based on the discounted (39% discount) average closing prices or lowest trading prices of the Company’s shares during 20 periods prior to conversion. ● 1,414 133,663 ● 117,992 7.44 36.00 5 ● The convertible note on October 19, 2021 by the Company in favor of Mast Hill Fund matured on October 19, 2022 16% 125% 91,311 16% ● The convertible note on December 21, 2021 by the Company in favor of Westland Properties, LLC matured on December 21, 2022 24% 125% The Company broke certain covenants of the convertible note related to the failure of the Company uplist 60 days from the note issuance date that triggered a 10% penalty of the outstanding principal and additional 5% of the outstanding principal every 10 calendar days until the uplist is completed or the note is paid off. 1,974,914 24% As of December 31, 2021, $ 1,607,857 Convertible note with outstanding balance $ 361,869 16 Convertible note with outstanding balance $ 238,532 24 Promissory Notes - Issued in fiscal year 2022 During the year ended December 31 , 2022, we issued convertible promissory notes with principal amounts totaling $ 2,120,575 1,857,800 262,775 ● Terms ranging from 3 12 ● Annual interest rates of 9 20 ● Convertible at the option of the holders after varying dates ● Conversion price based on a formula corresponding to a discount (20% or 39% discount) off the lowest trading price of our Common stock for the 20 prior trading days including the day on which a notice of conversion is received, although one of the 2022 Convertible Notes establishes a fixed conversion price of $4.50 per share. ● 554,464 473,691 In connection with the adoption of ASU 2020-06 on January 1, 2022, we reclassified $ 517,500 439,857 |