DEBT | NOTE 6 – DEBT At June 30, 2022, the convertible notes payable consisted of the following: SCHEDULE OF CONVERTIBLE NOTES PAYABLE June 30, 2022 September 30, 2021 Principal amount $ 2,425,000 $ — Less: debt discount (2,142,533 ) — Convertible notes payable, net $ 282,467 $ — Principal amount – related party $ 2,900,000 $ 1,000,000 Less: debt discount – related party (1,925,238 ) (935,019 ) Convertible note payable - related party, net $ 974,762 $ 64,981 Total convertible notes payable, net $ 1,257,229 $ 64,981 Convertible Debt – Related Party On May 12, 2021, the Company entered into a Securities Purchase Agreement (“May 2021 SPA”) with a related party, who is an affiliate stockholder (“May 2021 Investor”) to purchase a convertible note (“May 2021 Note”) and accompanying warrants (“May 2021 Warrants”) for an aggregate investment amount of $ 1,000,000 1,000,000 8 10 May 12, 2026 333,334 333,333 333,333 0.00313 110 19,142 1,000,000 6,575 64,981 1,000,000 4,932 216,470 783,530 THERALINK TECHNOLOGIES, INC. CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS JUNE 30, 2022 (UNAUDITED) The May 2021 Warrants has an exercise price of $ 0.00313 984,200 15,800 1,000,000 151,489 On November 1, 2021, the Company entered into a Securities Purchase Agreement (“First November 2021 SPA”) with a related party, who is an affiliate stockholder (“First November 2021 Investor”), to purchase three convertible notes (collectively as “First November 2021 Notes”) and three accompanying warrants (collectively as “First November 2021 Warrants”), for an aggregate investment amount of $ 1,000,000 334,000 18,251,367 333,000 18,196,722 333,000 18,196,722 1,000,000 8 10 November 1, 2026 990,048 0.00366 110 On January 26, 2022, a notice and request for consent regarding a change in offering terms was sent by the Company to the First November 2021 Investor. Upon the approval of the First November 2021 Investor, the Company modified the terms of the First November 2021 SPA which increased the warrants issuable from 20% to 100% of the common stock issuable upon conversion of the notes purchased. As a result, the First November 2021 Investor received additional cashlessly-exercisable warrants equal to 80% of the common stock issuable upon conversion of the First November 2021 Notes. 218,579,234 34,630 Debt Modifications and Exchanges; 1,000,000 6,575 88,997 911,003 THERALINK TECHNOLOGIES, INC. CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS JUNE 30, 2022 (UNAUDITED) On April 5, 2022, the Company entered into a Securities Purchase Agreement (“First April 2022 SPA”) with a related party, Matthew Schwartz, who is a member of the board of directors (“Investor”), to purchase a convertible note with principal of $ 100,000 4,201,681 100,000 89,815 8 10 April 1, 2027 0.00476 110 100,000 1,885 14,424 85,576 On May 9, 2022, the Company entered into a Securities Purchase Agreement (“May 2022 SPA”) with a related party, who is an affiliate stockholder (“May 2022 Investor”), to purchase four convertible notes for an aggregate investment amount of $ 1,000,000 20 250,000 10,504,202 250,000 10,504,202 250,000 10,504,202 750,000 8 10 142,489 0.00476 110 750,000 5,973 610,743 139,257 On June 15, 2022, the Company closed a Securities Purchase Agreement (“June 2022 SPA”) with a related party, Danica Holly, who is a member of the board of directors (“Investor”), to purchase a convertible note with principal of $ 50,000 2,100,840 50,000 5,924 8 10 April 1, 2027 0.00476 . 110 50,000 164 44,127 5,873 THERALINK TECHNOLOGIES, INC. CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS JUNE 30, 2022 (UNAUDITED) Convertible Debt On November 1, 2021, the Company entered into a Securities Purchase Agreement (“Second November 2021 SPA”) with an investor (“Second November 2021 Investor”) to purchase two convertible notes (collectively as “Second November 2021 Notes”) and two accompanying warrants (collectively as “Second November 2021 Warrants”), for an aggregate investment amount of $ 500,000 250,000 13,661,203 250,000 13,661,203 500,000 8 10 November 1, 2026 27,322,406 495,560 0.00366 110 The Company shall not effect the conversion of any of the Second November 2021 Notes held by the Second November 2021 Investor, and the Second November 2021 Investor shall not have the right to convert any of the Second November 2021 Notes and any such conversion shall be null and void and treated as if never made, to the extent that after giving effect to such conversion, such restricted holder would beneficially own in excess of 4.99% of the shares of common stock outstanding immediately after giving effect to such conversion (which provision may be increased to a maximum of 9.9% by written notice from the Second November 2021 Investor to the Company, which notice shall be effective 61 calendar days after the date of such notice). On January 26, 2022, a notice and request for consent regarding a change in offering terms was sent by the Company to the Second November 2021 Investor. Upon the approval of the Second November 2021 Investor, the Company modified the terms of the Second November 2021 SPA which increased the warrants issuable from 20% to100% of the common stock issuable upon conversion of the notes purchased. As a result, the Second November 2021 Investor received additional cashlessly-exercisable warrants equal to 80% of the common stock issuable upon conversion of the Second November 2021 Notes. 109,289,616 22,429 Debt Modifications and Exchanges; 500,000 24,438 44,087 455,913 THERALINK TECHNOLOGIES, INC. CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS JUNE 30, 2022 (UNAUDITED) On November 1, 2021, the Company entered into a Securities Purchase Agreement (“Third November 2021 SPA”) with an investor (“Third November 2021 Investor”) to purchase two convertible notes (collectively as “Third November 2021 Notes”) and two accompanying warrants (collectively as “Third November 2021 Warrants”), for an aggregate investment amount of $ 500,000 250,000 13,661,203 250,000 13,661,203 500,000 8 10 November 1, 2026 27,322,406 495,560 0.00366 110 The Company shall not effect the conversion of any of the Third November 2021 Notes held by the Third November 2021 Investor, and the Third November 2021 Investor shall not have the right to convert any of the Third November 2021 Notes and any such conversion shall be null and void and treated as if never made, to the extent that after giving effect to such conversion, such restricted holder would beneficially own in excess of 4.99% of the shares of common stock outstanding immediately after giving effect to such conversion (which provision may be increased to a maximum of 9.9% by written notice from the Third November 2021 Investor to the Company, which notice shall be effective 61 calendar days after the date of such notice). On January 26, 2022, a notice and request for consent regarding a change in offering terms was sent by the Company to the Third November 2021 Investor. Upon the approval of the Third November 2021 Investor, the Company modified the terms of the Third November 2021 SPA which increased the warrants issuable from 20% to100% of the common stock issuable upon conversion of the notes purchased. As a result, the Third November 2021 Investor received additional cashlessly-exercisable warrants equal to 80% of the common stock issuable upon conversion of the Third November 2021 Notes. 109,289,616 22,429 Debt Modifications and Exchanges; 500,000 24,329 44,087 455,913 On January 27, 2022, the Company entered into a Securities Purchase Agreement (“First January 2022 SPA”) with an investor (“First January 2022 Investor”) to purchase a convertible note with a principal balance of $ 500,000 500,000 136,612,022 8 10 November 1, 2026 136,612,022 472,403 0.00366 110 The Company shall not effect any conversion of the First January 2022 Note and the First January 2022 Investor shall not have the right to convert any amount of the First January 2022 Note and any such conversion shall be null and void and treated as if never made, to the extent that after giving effect to such conversion, such restricted holder would beneficially own in excess of 4.99% of the shares of common stock outstanding immediately after giving effect to such conversion (which provision may be increased to a maximum of 9.9% by such First January 2022 Investor by written notice from the First January 2022 Investor to the Company, which notice shall be effective 61 calendar days after the date of such notice. 500,000 16,877 45,712 454,288 THERALINK TECHNOLOGIES, INC. CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS JUNE 30, 2022 (UNAUDITED) On January 31, 2022, the Company entered into a Securities Purchase Agreement (“Second January 2022 SPA”) with an investor (“Second January 2022 Investor”) to purchase a convertible note with principal balance of $ 500,000 (“Second January 2022 Note”) with the Company receiving $ 500,000 136,612,022 shares of common stock (“Second January 2022 Warrants”). The Second January 2022 Note bears an interest rate of 8 % per annum (which shall increase to 10 % per year upon the occurrence of an “Event of Default” (as defined in the Second January 2022 Note)) and mature on November 1, 2026 . The Second January 2022 Warrants are exercisable at any time and expire on November 1, 2026. The Second January 2022 Warrants to purchase up to 136,612,022 shares of common stock were valued at $ 469,810 using the relative fair value method and recorded as a debt discount which is being amortized over the life of the Second January 2022 Note. The Second January 2022 Note and Second January 2022 Warrants are convertible and exercisable, respectively, into shares of the Company’s common stock at a price equal to $ 0.00366 per share (subject to adjustment). The Second January 2022 Note and Second January 2022 Warrants include a down-round provision under which the conversion price and exercise price are reduced if the Company sells or issues any securities including options, convertible securities, with the exception of exempt issuance (as defined in the agreements), or amended outstanding securities, at a lower conversion or exercise price than that of the Second January 2022 Note and Second January 2022 Warrants. The conversion and exercise price of the Second January 2022 Note and Second January 2022 Warrants are reduced equal to the lower conversion and exercise price of the new issuance or amended securities. The Company may prepay the Second January 2022 Note at any time in an amount equal to 110 % of the outstanding principal balance and accrued interest. At the election of the Second January 2022 Investor, the Second January 2022 Note can be converted in whole or in part at any time and from time to time. Further, upon maturity the Company may pay the outstanding balance of the Second January 2022 Note in cash or convert it into shares of common stock. Upon the listing by the Company or the trading of the common stock on a Qualified National Exchange (as defined in the Second January 2022 Note), the conversion amount shall automatically be converted into fully-paid and non-assessable shares of common stock. The Company shall not effect the conversion of any of the Second January 2022 Note held by the Second January 2022 Investor, and the Second January 2022 Investor shall not have the right to convert any of the Second January 2022 Note and any such conversion shall be null and void and treated as if never made, to the extent that after giving effect to such conversion, such restricted holder would beneficially own in excess of 4.99% of the shares of common stock outstanding immediately after giving effect to such conversion (which provision may be increased to a maximum of 9.9% by such Second January 2022 Investor by written notice from the Second January 2022 Investor to the Company, which notice shall be effective 61 calendar days after the date of such notice. As of June 30, 2022, the Second January 2022 Note had an outstanding principal balance of $ 500,000 and accrued interest of $ 16,438 . The Second January 2022 Note is reflected in the accompanying unaudited balance sheet at $ 44,799 as a long-term convertible note payable, net of discount in the amount of $ 455,201 as of June 30, 2022. During April 2022, the Company entered into a Securities Purchase Agreement (“Second April 2022 SPA”) with various investors (“Investors”), to purchase convertible notes for an aggregate investment amount of $ 425,000 425,000 17,857,144 335,593 8 10 April 1, 2027 0.00476 110 425,000 7,140 103,782 321,218 THERALINK TECHNOLOGIES, INC. CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS JUNE 30, 2022 (UNAUDITED) Notes Payable - Related Party On April 26, 2021, the Company entered into a Promissory Note Agreement with Jeffrey Busch who serves as a member of the Board of Directors and a related party, for a principal amount of $ 100,000 100,000 1 April 1, 2022 1 100,000 428 On October 21, 2021, the Company entered into a Promissory Note Agreement with Jeffrey Busch who serves as a member of the Board of Directors and a related party, for a principal amount of $ 150,000 150,000 1 1 On May 5, 2022, the Company and Jeffrey Busch (collectively as “Parties”) amended the April 26, 2021 note (discussed above) with principal amount of $ 100,000 350,000 250,000 1 2 May 5, 2024 Debt Modifications and Exchanges, 350,000 notes payable – related party 1,650 Note Payable In September 2017, the Company entered into a note agreement with a third-party investor. Pursuant to the note, the Company borrowed a principal amount of $ 1,000 33.3 1,000 1,604 |