| SHORT TERM NOTES AND CONVERTIBLE DEBT | NOTE 9. SHORT TERM NOTES AND CONVERTIBLE
DEBT Convertible Notes: As of December 31, 2023, there were no no Senior Notes Payable In May 2023, the Company issued $ 1,437,500 1,250,000 In September 2023, as agreed to during the issuance
of the Senior Notes Payable, the Company exercised their right to an additional financing, issuing $ 862,500 September 1, 2024 750,000 15.0 8.0 In November 2023, the Company issued $ 294,118 April 19, 2024 250,000 15.0 8.0 The Company incurred issuance costs, recorded
as deferred financing costs, of $ 296,313 The Company evaluated the embedded redemption
and contingent interest features in the notes to determine if such features were required to be bifurcated as an embedded derivative liability.
In accordance with ASC 815-40, Derivatives and Hedging Activities, the embedded redemption features and contingent interest feature were
accounted for as derivative liabilities at the date of issuance and shall be adjusted to fair value at each reporting date. The Company
fair valued such derivative liabilities and recorded a debt discount at issuance of the notes of $ 320,561 The Company issued warrants to purchase 1,232,156
and 744,890 shares of common stock (77,010 and 46,556 shares, respectively, after giving effect to the 2024 Stock Split) to the holders
of the Senior Notes Payable and Series C Notes Payable (collectively the “Senior Notes Warrants”) with an exercise price of
$0.6262 and $0.2856 per share ($10.02 and $4.58 post-2024 split), respectively. The Company accounted for the warrants in accordance with
the guidance contained in ASC 815 “Derivatives and Hedging” whereby under that provision these warrants did not meet the criteria
for equity treatment and were recorded as a liability. As such, these warrants are recorded at fair value as of each reporting date with
the change in fair value reported within other income in the accompanying consolidated statements of operations as “Change in fair
value of warrant liability” until the warrants are exercised, expired or other facts and circumstances lead the warrant liability
to be reclassified to stockholders’ equity. The fair value of the Senior Notes Warrants at issuance was $736,249 and was recorded
as a debt discount. The Company incurred issuance costs of $72,862 relating to the Senior Notes Warrants which was recorded as a day 1
expense due to the liability classification of such warrants. In connection with the issuance of the Senior
Notes Payable and Series C Notes Payable, the Company paid a commitment fee in the form of 339,360 and 148,978 shares (21,210 and 9,311
shares after giving effect to the 2024 Stock Split) of unregistered common stock to the holders, respectively. The aggregate commitment
fees had a fair value at issuance of $208,916 and are recorded as a deferred financing cost. The resulting debt discounts from the
derivative liabilities, warrant liabilities and deferred financing costs were presented as a direct deduction from the carrying
amount of that debt liability and amortized to interest expense using the effective interest rate method. For the three months ended
March, 2024, the Company recognized $ 335,352 Between January 22 and January 29, 2024, the
Company entered into a series of exchange agreements (the “Exchange Agreements”) with the accredited investors to
exchange principal and accrued interest on these notes for shares of common stock. Pursuant to the Exchange Agreements, the Company
issued an aggregate of 644,142 1,519,779 1,145,037 1,066,732 On March 6, 2024, the Company paid $ 300,974 898,380 111,928 The following table reconciles the aggregate amount
for the Senior Notes Payable, Series B Notes Payable, and Series C Notes Payable as well as the unamortized deferred financing costs and
debt discounts relating to the derivative liabilities and warrant liabilities.
Schedule of derivative liabilities and warrant liabilities
March 31, 2024 December 31, 2023
Note Payable $ 862,500 $ 2,594,118
Less: Unamortized Discounts and Deferred Financing Costs
Warrants – (557,582 )
Derivative (77,583 ) (235,628 )
Deferred financing costs (114,767 ) (675,184 )
(192,350 ) (1,468,394 )
$ 670,150 $ 1,125,724 |
