| Notes Payable & Chapter 11 Reorganization | Note 7
– NOTES PAYABLE & Chapter 11 reorganization A summary of the notes payable
activity during the years ended December 31, 2020 and 2019 is presented below:
Related Party Notes Convertible Notes Other Notes Debt Discount Total
Outstanding, December 31, 2018 $ 720,000 $ 4,309,415 $ 132,501 $ (1,012,363 ) $ 4,149,553
Issuances 635,000 9,913,339 340,000 - 10,888,339
Exchanges for equity - (2,637,323 ) - 634,525 (2,002,798 )
Repayments (70,000 ) (4,817,105 ) (7,500 ) 428,939 (4,465,666 )
Extinguishment of notes payable - - (148,014 ) 6,196 (141,818 )
Recognition of debt discount - - - (5,523,830 ) (5,523,830 )
Accretion of interest expense - - - 548,026 548,026
Accrued interest reclassified to notes payable principal - - 23,013 - 23,013
Amortization of debt discount - - - 3,671,087 3,671,087
Outstanding, December 31, 2019 1,285,000 6,768,326 340,000 (1,247,420 ) 7,145,906
Issuances 353,762 3,936,548 - - 4,290,310
Third-party purchases (287,041 ) 287,041 - - -
Exchanges for equity - (813,393 ) - 253,654 (559,739 )
Exchanged for equity pursuant to Chapter 11 Plan (998,139 ) (3,592,395 ) (340,000 ) - (4,930,534 )
Secured and Unsecured convertible notes payable exchanged pursuant to Chapter 11 Plan, net (353,582 ) 3,050,975 - - 2,697,393
Recognition of debt discount - - - (8,534,245 ) (8,534,245 )
Accretion of interest expense - - - 2,886,036 2,886,036
Amortization of debt discount - - 1,275,106 1,275,106
Outstanding, December 31, 2020 $ - $ 9,637,102 $ - $ (5,366,869 ) $ 4,270,233 Chapter 11 Reorganization On March 20, 2020, the Company
filed a voluntary petition commencing a case under chapter 11 of title 11 of the U.S. Code in the United States Bankruptcy Court for the
Eastern District of New York. On August 7, 2020, the Company and Auctus, the Company’s largest unsecured creditor and a stockholder
as of the Petition Date, filed an Amended Joint Plan of Reorganization (the “Plan”). Pursuant to the Bankruptcy, for any outstanding
principal and interest at the date of the Company’s Chapter 11 petition (except for creditors who provided additional debt financing
in connection with the Bankruptcy), 100 shares of the Company’s common stock were issued for each dollar of allowed claim, with
such shares subject to leak-out restrictions prohibiting the holder from selling, without the consent of the Company, more than 33% of
the issued shares during each of the three initial 30 day periods following the Effective Date. As a result of the Chapter 11 petition,
the conversion rights for the notes described in this Note 7 – Notes Payable – Convertible Notes – Embedded Conversion
Options and Note Provisions were rescinded and were subject to the conversion rights outlined above. As a result of the Chapter 11 reorganization,
pursuant to ASC 852, Reorganizations On October 30, 2020, the Bankruptcy
Court entered an order (the “Confirmation Order”) confirming the Plan, as amended. Amendments to the Plan are reflected in
the Confirmation Order. On November 16, 2020 (the “Effective Date”), the Plan became effective. The material features of the Plan,
as amended and confirmed by the Confirmation Order, are as follows:
i. Treatment of the financing to the Company by Auctus of up to $7,000,000 which Auctus has provided or committed to provide consisting of the debtor-in-possession loans made to the Company by Auctus during the Chapter 11 Case (the “DIP Funding”) and additional funding as described below.
ii. Auctus has provided $3,500,000 in funding to the Company (the “Initial Auctus Funding”) and is to provide, subject to certain conditions, additional funding to the Company, as needed, in an amount equal to $3,500,000, less the sum of the debtor-in-possession loans made to the Company by Auctus during the Chapter 11 Case (inclusive of accrued interest) (approximately $1,227,000 as of the Effective Date) and the costs incurred by Auctus as the debtor-in-possession lender (the “DIP Costs”). As of December 31, 2020, the DIP Costs and additional Plan costs were not finalized and recorded. The DIP Costs and the additional Plan costs in the aggregate are estimated to total $657,598, of which $500,000 and $157,598 were recorded in debt discount and accrued expenses, respectively, on the consolidated balance sheets. In addition, four other persons and entitles (collectively, the “Other Lenders”) who held allowed general unsecured claims provided funding to the Company in the aggregate amount of approximately $348,000 (the “Other Funding” and together with the Initial Auctus Funding, the “Funding”). In consideration of the Funding, the Company has issued the following:
a. Secured convertible notes of the Company (each, a “Secured Convertible Note”) in the principal amount equal to the Funding; the payment of the Secured Convertible Notes is secured by the grant of a security interest in substantially all of the Company’s assets; the Secured Convertible Notes have the following features:
● Maturity date of three years following the Effective Date;
● Interest at the rate of 7% per annum;
● The right of the holder to convert the indebtedness into shares of common stock of the Company at a price equal to the volume weighted average price for the common stock over the five trading days immediately preceding the conversion; and
● Mandatory conversion of all indebtedness at such time as the common stock is listed on the Nasdaq Capital Market or another senior exchange on the same terms as provided to investors in connection with a public offering undertaken in connection with such listing;
b. Warrants (each, a “Class A Warrant”) to purchase a number of shares of common stock equal to the amount of the Funding provided divided by $0.0005 (a total of 7,000,000,000 Class A Warrants in consideration of the Initial Auctus Funding and a total of approximately 697,000,000 Class A Warrants in the aggregate in consideration of the Other Funding), such Class A Warrants having an exercise price of $0.0005 per share; and
c. Warrants (each, a “Class B Warrant” and together with the Class A Warrants, the “Plan Warrants”) to purchase a number of shares of common stock equal to the Funding provided divided by $0.001 (a total of 3,500,000,000 Class B Warrants in consideration of the Initial Auctus Funding and a total of approximately 348,500,000 Class B Warrants in the aggregate in consideration of the Other Funding), such Class B Warrants having an exercise price of $0.001 per share.
iii. The obligation to Auctus with respect to the DIP Funding has been exchanged for the following:
a. A Secured Convertible Note in the principal amount of approximately $1,349,591 (110% DIP Funding) with a maturity date of November 16, 2023;
b. A Class A Warrant to purchase 2,453,802,480 shares of common stock; and
c. A Class B Warrant to purchase 1,226,901,240 shares of common stock (as to which 544,697,452 shares of common stock have been exercised on a net exercise basis, pursuant to the terms of the Class B Warrant, with respect to the issuance of 512,124,200 shares of common stock, of which 217,796,200 and 294,328,000 were issued during 2020 and 2021, respectively). In addition, Auctus shall be entitled
to receive a Secured Convertible Note in exchange for its allowed DIP Costs and allowed Plan costs in a manner in which the DIP Funding
was treated and may be entitled to a Class A Warrant and a Class B Warrant in consideration of such costs. The claim arising from the secured promissory
notes of the Company, dated February 20, 2020 and February 26, 2020, in the original principal amounts of $320,200 and $33,562, respectively,
issued to John Desmarais (“Desmarais”) (collectively, the “Desmarais Notes”), was treated as an allowed secured
claim in the aggregate amount of $490,699 and was exchanged for a Secured Convertible Note in such amount.
iv. The claim arising from the promissory note issued in June 2016 by the Company to Desmarais in the original principal amount of $175,000 was treated as an allowed general unsecured claim in the amount of $245,192 and was satisfied and exchanged for 24,519,200 shares of common stock.
v. The claim arising from the promissory note issued in June 2016 by the Company to Tuxis Trust, an entity related to Desmarais, in the original principal amount of $500,000 was treated as follows:
a. $444,534,43 was treated as an allowed general unsecured claim in such amount and exchanged for 44,453,400 shares of common stock; and
b. $309,301 was treated as an allowed secured claim in such amount and exchanged for a Secured Convertible Note in such amount with a maturity date of November 16, 2023.
vi. Holders of allowed general unsecured claims (other than Auctus and the Other Lenders) received an aggregate of 1,049,726,797 shares of common stock where were valued at the fair market value of the stock at issuance date of $14,381,259 with an associated loss of $3,883,991 recognized in Reorganization Items, net on the accompanying consolidated statement of operations in exchange for approximately $10,497,268 outstanding accounts payable and convertible debt (including accrued interest), with such shares being subject to a leak-out restriction prohibiting each holder from selling, without consent of the Company, more than 33% of its shares during each of the three initial 30 day periods following the Effective Date.
vii. Auctus and the Other Lenders have been issued, in respect of their allowed general unsecured claims ($3,261,819 in the case of Auctus and an aggregate of approximately $382,400 in the case of the Other Lenders), a convertible promissory note of the Company (each, an “Unsecured Convertible Note”) in the allowed amount of the claim, which Unsecured Convertible Notes have the following material features:
a. Maturity date of three years from the Effective Date;
b. Interest at the rate of 5% per annum;
c. The right of the holder to convert the indebtedness into shares of common stock at a price equal to the volume weighted average for the common stock over the five trading days immediately preceding the conversion;
d. Mandatory conversion of all outstanding indebtedness at such time as the common stock listed on the Nasdaq Capital Market or another senior exchange on the same terms as provided to investors in connection with a public offering undertaken in connection with such listing; and
e. A leak-out restriction prohibiting each holder from selling, without the consent of the Company, more than 16.6% of the underlying shares received upon conversion during each of the six initial 30 day periods following the Effective Date.
viii. The issuance of (a) the shares of common stock and the Unsecured Convertible Notes to the holders of allowed general unsecured claims and (b) the Secured Convertible Notes and Plan Warrants to Auctus in exchange for the DIP Funding and any common stock into which those Secured Convertible Notes and those Plan Warrants may be converted is exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to the Bankruptcy Code Section 1145. Such securities shall be freely transferrable subject to Section 1145(b)(i) of the Bankruptcy Code. Pursuant to the Plan, on the Effective
Date, the Company filed a Certificate of Amendment to its Certificate of Incorporation pursuant to which, among other things, the number
of shares of common stock authorized to be issued by the Company has been increased to 300,000,000,000 and the par value of the shares
of common stock has been reduced to $0.0001 per share. Related Party Notes As of December 31, 2019, related
party notes consisted of notes payable issued to certain directors of the Company, family members of an officer of the Company, and the
Tuxis Trust (the “Trust”). A former director and principal stockholder of the Company (the “Director/Principal Stockholder”)
serves as a trustee of the Trust, which was established for the benefit of his immediate family. As of December 31, 2020, there were no
related party notes outstanding. During the year ended December
31, 2019, the Company issued to family members of officers of the Company and a Scientific Advisory Board member (the “SAB Member”)
notes payable in the aggregate principal amount of $635,000, which bore interest at the rate of 12% - 15% per annum and provided for original
maturity dates between July 2019 and May 2020. During the year ended December
31, 2019, the holders of certain related party notes in the aggregate principal amount of $505,000 entered into agreements with the Company
pursuant to which the parties agreed that the maturity of the promissory notes held by such holders would be extended or further extended
from dates from December 2018 and August 2019 to dates between July 2019 and December 2019. In consideration of the extensions, such notes
in the aggregate principal amount of $475,000 provided for an exchange of such notes for shares of common stock and warrants, as described
below, in connection with a public offering of the Company’s securities (a “Public Offering”). The exchange price for
the indebtedness was to be equal to the lesser of (i) 75% of the public offering price of the common stock, or units of common stock and
warrants, as the case may be, offered pursuant to the Public Offering or (ii) $0.60 per share (subject to adjustment for reverse stock
splits and the like) (the “Exchange Price”). The number of shares of common stock issuable pursuant to the warrants to be
issued to such holders was to be equal to the number of shares of common stock issuable to them upon conversion of the principal amount
of their respective notes. The exchange price of the warrants to be issued to such holders was to be the lesser of (i) 125% of the Exchange
Price or (ii) $0.80 per share (subject to adjustment for reverse stock splits and the like). Since the fair value of the new ECO exceeded
10% of the carrying amount of the debt, the note extensions were accounted for as extinguishments, and accordingly the Company recognized
an aggregate net loss on extinguishment of $145,066 in connection with the derecognition of the net carrying amount of the extinguished
debt of $510,887 (inclusive of $475,000 of principal and $35,887 of accrued interest) and the issuance of the new convertible notes in
the same amount, plus the fair value of the new notes’ ECOs of an aggregate of $145,066. As a result of the Company’s Chapter
11 reorganization, the exchange did not occur. During the year ended December
31, 2019, the Company and a certain related party lender agreed to further extend the maturity date of a certain related party note with
a principal balance of $25,000 from a maturity date in September 2019 to a new maturity date in October 2019, effective September 30,
2019. During the year ended December
31, 2019, the Company, a then director of the Company, and the Trust agreed that promissory notes held by the director and the Trust in
the outstanding principal amounts of $175,000 and $500,000, respectively, would be exchanged for shares of common stock and warrants,
as described below, in connection with a Public Offering. The exchange price for the indebtedness was to be equal to 75% of the public
offering price of the common stock, or units of common stock and warrants, as the case may be, offered pursuant to the Public Offering
(the “Director/Trust Exchange Price”). The number of shares of common stock issuable pursuant to the warrants to be issued
to the director and the Trust was to be in the same ratio to the number of shares of common stock issued upon exchange of their indebtedness
as the number of shares of common stock subject to any warrants included as part of units offered pursuant to the Public Offering (the
“Public Warrants”) bore to the number of shares of common stock issued as part of the Public Offering units. The exercise
price of the warrants to be issued to the director and the Trust was to be 125% of the Director/Trust Exchange Price and the term of the
warrants was to be the same term as the Public Warrants. Concurrently with the exchange, the exercise prices of outstanding warrants held
by the director and the Trust for the purchase of an aggregate of 1,377,842 shares of common stock of the Company was to be reduced from
between $1.50 and $4.00 per share to $0.75 per share and the expiration dates of such warrants was to be extended from between December
2019 and March 2022 to December 2023. The exchange agreements were submitted for approval by the stockholders of the Company, which was
obtained in August 2019. As a result of the Company’s Chapter 11 reorganization the exchange did not occur. As of December 31, 2019, certain
related party notes in the aggregate principal amount of $485,000 were convertible into shares of common stock of the Company at a conversion
price of $0.60 per share, subject to adjustment, and a five-year warrant for the purchase of a number of shares equal to the number of
shares issued upon the conversion of the principal amounts of the notes. During the years ended December
31, 2020 and 2019, the Company partially repaid certain related party notes in the aggregate principal amount of $- and $70,000, respectively. During the year ended December
31, 2020, the Company issued to a former board member notes payable in the aggregate principal amount of $353,762, which bore interest
at the rate of 12% per annum and provided for an original maturity date of March 10, 2020. On November 16, 2020, pursuant to the Bankruptcy
(See Note 7 – Notes Payable – Chapter 11 Reorganization), these notes were exchanged for a Secured Convertible Note in the
principal amount of $490,698 which bears interest at the rate of 7% per annum and has a maturity date of November 16, 2023. During the year ended December
31, 2020, pursuant to the Bankruptcy (See Note 7 – Notes Payable – Chapter 11 Reorganization), the Company’s original
promissory note issued to the Director/Principal Stockholder in the principal amount of $175,000 was treated as an allowed general unsecured
claim in the amount of $245,192 and was satisfied and exchanged for 24,519,178 shares of common stock. During the year ended December
31, 2020, the Director/Principal Stockholder resigned as a director of the Company. As a result, the Director/Principal Stockholder is
not a related party at December 31, 2020. During the year ended December
31, 2020, pursuant to the Bankruptcy (See Note 7 – Notes Payable – Chapter 11 Reorganization), the Company’s original
promissory note issued to the Trust in the principal amount of $500,000 was treated as follows: (i) $444,534 was treated as an allowed
general unsecured claim in such amount and exchanged for 44,453,443 shares of common stock and (ii) $309,301 was treated as an allowed
secured claim in such an amount and exchanged for a secured convertible note which bears interest at a rate of 7% per annum with a maturity
date of November 16, 2023. During the year ended December 31, 2020, the former board member who serves as the trustee of the Trust resigned
as a director. As a result, the Trust is not a related party at December 31, 2020. Convertible Notes Issuances During the year ended December
31, 2019, the Company issued certain lenders convertible notes payable in the aggregate principal amount of $9,765,325 for aggregate cash
proceeds of $9,086,353. The difference of $678,973 was recorded as a debt discount and will be amortized over the terms of the respective
notes. The convertible notes bore interest at rates ranging between 8% to 15% per annum payable at maturity with original maturity dates
ranging between July 2019 through December 2020. In connection with the issuance of certain convertible notes, the Company issued the
lenders an aggregate of 78,873 shares of the Company’s common stock and the relative fair value of $61,220 was recorded as debt
discount and is being amortized over the terms of the respective notes. In connection with the issuance of certain convertible notes,
the Company issued the lenders five-year warrants to purchase an aggregate of 295,000 shares of the Company’s common stock at exercise
prices ranging from $0.45 per share to $1.00 per share. The aggregate grant date value of the warrants was $104,198, which was recorded
as debt discount and is being amortized over the terms of the respective convertible notes. The warrants were subject to the Company’s
sequencing policy and, as a result, were initially recorded as derivative liabilities. See below within this Note 7 – Notes Payable
– Convertible Notes – Conversions, Exchanges and Other and Note 9 – Derivative Liabilities for additional details regarding
the ECOs of the convertible notes. During the year ended December 31, 2019, $675,523 in outstanding principal and $73,485 in accrued interest
was converted into 46,158,719 shares of the Company’s common stock. During the year ended December 31, 2019, the Company made cash
payments in the aggregate amount of $2,499,476 towards the outstanding principal on the notes. During the year ended December
31, 2019, a certain convertible note in the principal amount of $148,014 was issued concurrently with the extinguishment of a certain
other note payable in the same principal amount. See below within this Note 7 – Notes Payable – Convertible Notes –
Conversions, Exchanges and Other for additional details. During the year ended December 31, 2019, $148,014 of outstanding principal and
$1,901 of accrued interest was converted into 513,788 shares of the Company’s common stock. During the year ended December
31, 2020, the Company issued to a certain lender a convertible note payable in the principal amount of $88,000 for aggregate cash proceeds
of $85,000. The difference was recorded as a debt discount and will be amortized over the term of the note. The convertible note bore
interest at 10% per annum payable at maturity with an original maturity date of January 31, 2021. The outstanding principal and accrued
interest was convertible after 180 days at a conversion price of 61% of the lowest daily volume weighted average price over the twenty
days prior to the conversion date. The convertible note contained a cross-default provision and was in default at issuance. As a result,
the convertible note bore a default interest of 22% per annum. Pursuant to the Bankruptcy (see Note 7 – Notes Payable – Chapter
11 Reorganization), the convertible note, in the aggregate amount of $155,000 (including principal and accrued interest), was exchanged
for 15,500,000 shares of the Company’s common stock. See below within Note 7- Derivative Liabilities for additional details regarding
the ECO of the convertible note. On November 16, 2020, in connection
with the Plan, the Company issued to Auctus and the Other Lenders (See Note 7 – Notes Payable – Chapter 11 Reorganization)
Secured Convertible Notes in the aggregate principal amount of $3,848,548 that bear interest at 7% per annum with a maturity date of November
16, 2023. The outstanding principal and interest is convertible at the holders’ discretion at any time at a conversion price equal
to the average five-day daily volume weighted average price prior to the conversion date. At the date of issuance, this resulted in a
beneficial conversion feature in the aggregate of $124,147 and is being amortized over the term of the respective Secured Convertible
Notes. In connection with these Secured Convertible Notes, the Company issued five-year warrants to purchase an aggregate of 15,226,346,970
shares of the Company’s common stock at exercise prices ranging between $0.0005 and $0.001 per share. The aggregate grant date fair
value of the warrants was $152,263,470. As a result, the Company recorded a debt discount related to the fair market value of beneficial
conversion feature and warrants issued of $5,075,449 was and is being amortized over the term of the respective Secured Convertible Notes. Embedded Conversion Options and Note Provisions As of December 31, 2019, outstanding
convertible notes in the aggregate principal amount of $6,006,576 were convertible into shares of common stock of the Company as follows:
(i) $2,243,750 of aggregate principal amount of convertible notes were convertible at a fixed price ranging from $0.25 to $2.00 per share
for the first six months following the respective issue date, and thereafter at a conversion price generally equal to 58% of the fair
value of the Company’s stock, subject to adjustment, until the respective note had been paid in full, (ii) $2,872,826 of aggregate
principal amount of convertible notes were convertible generally at a range of 58% to 65% of the fair value of the Company’s stock,
subject to adjustment, depending on the note, and (iii) $890,000 of aggregate principal amount of convertible notes were convertible into
shares of common stock of the Company at a conversion price ranging from $0.50 to $0.60 per share, subject to adjustment, and five-year
warrants to purchase common stock of the Company in the same ratio. The warrants provide for an exercise price ranging from $0.75 to $0.80
per share, subject to adjustment. Convertible notes in the aggregate principal amount of $340,000 provided for a mandatory conversion
into common stock of the Company and warrants to purchase common stock of the Company in the same ratio upon the completion of an underwritten
public offering by the Company of its securities whereby the conversion price was to be equal to the lower of the respective original
conversion terms, or 75% of the offering price for the shares of common stock of the Company, or units of shares of common stock of the
Company and warrants, as the case may be, sold pursuant to the public offering. The Company analyzes the ECOs of its convertible notes
at issuance to determine whether the ECO should be bifurcated and accounted for as a derivative liability or if the ECO contains a beneficial
conversion feature. See below within this Note 7 – Notes Payable – Convertible Notes – Embedded Conversion Options and
Note Provisions and Note 9 – Derivative Liabilities for additional details regarding the ECOs of the convertible notes. As of December 31, 2019, a portion
of convertible notes with an aggregate principal balance of $1,271,750, which were not yet convertible, became convertible into shares
of the Company’s common stock subsequent to December 31, 2019 at a conversion price generally equal to 58% of the fair value of
the Company’s stock, subject to adjustment, until the respective notes had been paid in full. As of December 31, 2019, outstanding
convertible notes in the aggregate principal amount of $3,537,438 had prepayment premiums, whereby, in the event that the Company elected
to prepay certain notes during the one hundred eighty-day period following the issue date, the respective holder was entitled to receive
a prepayment premium of up to 135%, depending on the note, on the then outstanding principal balance including accrued interest. As of December 31, 2019, outstanding
convertible notes in the aggregate principal amount of $4,626,874 had most favored nation (“MFN”) provisions, whereby, so
long as such respective note was outstanding, upon any issuance by the Company of any security with certain identified provisions more
favorable to the holder of such security, then at the respective holder’s option, those more favorable terms were to become a part
of the transaction documents with the holder. As of December 31, 2019, notes with applicable MFN provisions were convertible using MFN
conversion prices equal to 58% of the fair market value of the Company’s stock, as defined. During the year ended December
31, 2019, the Company determined that certain ECOs of issued or extended convertible notes were derivative liabilities. The aggregate
issuance date value of the bifurcated ECOs was $5,331,147, of which $4,771,974 was recorded as a debt discount and is being amortized
over the terms of the respective convertible notes and $414,108 was recognized as part of an extinguishment loss as described below. As
of December 31, 2019, outstanding notes totaling $3,289,111 were in default. See Note 9 – Derivative Liabilities for additional
details. On the Petition Date, pursuant to ASC 852, Reorganizations Conversions, Exchanges and Other During the year ended December
31, 2019, the Company and certain lenders exchanged certain convertible notes with bifurcated ECOs with an aggregate net carrying amount
of $5,328,918 (including an aggregate of $2,631,595 of principal less debt discount of $634,525, $181,912 of accrued interest and $3,230,780
related to the separated ECOs accounted for as derivative liabilities) for an aggregate of 54,464,158 shares of the Company’s common
stock at conversion prices ranging from $0.01 to $0.43 per share. The common stock had an aggregate exchange date value of $6,230,102
and, as a result, the Company recorded a loss on extinguishment of notes payable of $508,743. See Note 9 – Derivative Liabilities
for additional details. During the year ended December
31, 2019, the Company repaid an aggregate principal amount of $4,894,604 of convertible notes payable, $267,997 of the respective aggregate
accrued interest and an aggregate of $813,730 of prepayment premiums. As a result of the repayments, the Company recorded a loss on extinguishment
of notes payable of $1,242,669 and an aggregate of $428,939 of the related debt discounts were extinguished. During the year ended December
31, 2019, a certain lender to the Company acquired a promissory note (classified in Other Notes) issued by the Company in the outstanding
amount of $148,014 (inclusive of accrued interest reclassified to principal of $23,013) from a certain lender to the Company. The Company
exchanged the acquired note for a new convertible note in the principal amount of $148,014 which accrued interest at a rate of 12% per
annum, payable on the maturity date in March 2020. The ECO of the note was subject to sequencing and the issuance date fair value of $84,798
was accounted for as a derivative liability (see Note 9 – Derivative Liabilities for additional details). Since the fair value of
the new ECO exceeded 10% of the principal amount of the new note, the note exchange was accounted for as an extinguishment, and accordingly
the Company recognized a net loss on extinguishment of $90,994 in connection with the derecognition of the net carrying amount of $141,818
of the extinguished debt and the issuance of the new convertible notes in the aggregate principal amount $148,014 plus the fair value
of the new note’s ECO of an aggregate of $84,798. During the year ended December
31, 2019, the Company and certain lenders agreed to extend or further extend the maturity dates of certain convertible notes payable with
an aggregate principal balance of $678,102 from maturity dates ranging from June 2019 to July 2019 to new maturity dates ranging from
July 2019 to July 2020. In consideration of the extensions of certain convertible notes with an aggregate principal balance of $650,000,
the Company modified the conversion terms of the lenders’ notes to provide for a mandatory conversion into common stock of the Company
and a five-year warrant to purchase common stock of the Company in the same ratio upon the completion of an underwritten public offering
by the Company of its securities, whereby, the conversion price was to be equal to the lower of the respective original conversion terms,
or 75% of the offering price for the shares of common stock of the Company, or units of shares of common stock of the Company and warrants,
as the case may be, sold pursuant to the public offering. Since the fair value of the new ECO exceeded 10% of the carrying amount of the
debt, the note extensions were accounted for as extinguishments, and accordingly the Company recognized an aggregate net loss on extinguishment
of $329,310 in connection with the derecognition of the net carrying amount of the extinguished debt of $702,387 (inclusive of $650,000
of principal and $52,387 of accrued interest) and the issuance of the new convertible notes in the same amount, plus the fair value of
the new notes’ ECOs of an aggregate of $329,310. During the year ended December
31, 2019, the Company and certain lenders agreed to further extend the maturity dates of certain convertible notes payable with an aggregate
principal balance of $150,000 from maturity dates in September 2019 to new maturity dates in October 2019, effective September 30, 2019. During the year ended December
31, 2020, the Company and certain lenders exchanged convertible notes with bifurcated ECOs with an aggregate net carrying amount of $1,580,587
(including an aggregate of |
