NOTES PAYABLE | 8. NOTES PAYABLE Covid-19 PPP Loan During the year ended March 31, 2021, the Company entered into loans under the Paycheck Protection Program (“PPP”) sponsored by the U.S. Small Business Administration (SBA) providing for proceeds of $ 588,891 1.0 294,066 146,200 148,625 593,546 Senior Secured Notes In June 2021, the Company entered into a Senior Secured Note with Auctus Fund for $ 650,000 55,000 595,000 June 23, 2022 12 78,000 Any principal amount or interest on this note which is not paid when due shall bear interest at the rate of the lesser of (i) sixteen percent (16%) per annum and (ii) the maximum amount permitted by law from the due date thereof until the same is paid. On July 14, 2021, the principal amount of the note was increased by $ 25,000 675,000 Also pursuant to the agreement, in connection with the issuance of the note, the Company issued two common stock purchase warrants (separately, the “First Warrant” and the “Second Warrant” and together, the “Warrants”) to Auctus, each allowing Auctus to purchase an aggregate of 4,333,333 0.15 The total fair value of the warrants was estimated on the issue date at $ 513,827 SCHEDULE OF FAIR VALUE OF THE WARRANTS June 24, 2022 Market price of common stock on date of issuance $ 0.30 Risk-free interest rate 0.48 % Expected dividend yield 0 Expected term (in years) 3 Expected volatility 199.6 % On or about November 22, 2021, the Company triggered an event of default under the Auctus Note and related documents which entitled Auctus, among other things, to accelerate the due date of the unpaid principal amount of, and all accrued and unpaid interest on, the Auctus Note. On February 17, 2022, Auctus and the Company executed a Waiver Letter which waived such defaults effective as of November 22, 2021. The note is secured by an Affidavit of Confession of Judgment and ranks senior over all existing and future indebtedness of the Borrower. Nonconvertible Notes – Related Party At March 31, 2021, the Company had $ 1,344,625 750,000 3 25,000 725,000 99,970 1,994,655 1,102,735 891,920 SCHEDULE OF NONCONVERTIBLE NOTES RELATED PARTY Interest Rate Issuance Date Maturity March 31, 2022 4 % 12/31/18 12/31/23 $ 55,250 4 % 12/31/18 12/31/21 $ 66,900 4 % 12/31/18 12/31/23 $ 74,220 4 % 9/30/19 9/29/21 $ 314,000 4 % 9/17/19 9/16/20 $ 81,500 4 % 9/30/19 12/31/23 $ 12,450 1 % 12/31/20 12/30/22 $ 254,382 1 % 12/31/20 12/30/22 $ 235,600 1 % 12/31/20 12/30/22 $ 83,785 4 % 12/31/20 12/31/21 $ 53,100 4 % 12/31/20 12/31/21 $ 2,850 12 % 1/10/22 5/10/23 $ 750,000 adjustment $ 10,618 $ 1,994,655 Nonconvertible Notes At March 31, 2021, the Company had $ 1,919,620 370,189 150,000 339,672 1,955,137 1,760,219 189,918 SCHEDULE OF NONCONVERTIBLE NOTES NON RELATED Interest Rate Default Rate Issuance Date Maturity March 31, 2022 14 % N/A 8/1/18 1/31/22 $ 500,000 14.2 % 25 % 9/18/19 9/18/23 $ 23,347 14.2 % 25 % 10/9/19 10/9/23 $ 37,037 14 % Additional 2 % 10/30/19 10/29/21 $ 229,500 14 % Additional 2 % 12/31/19 12/31/20 $ 102,000 14 % N/A 2/5/20 2/5/21 $ 50,000 20 % Additional 2 % 2/25/20 8/24/22 $ 216,000 20 % Additional 2 % 2/28/20 6/30/21 $ 104,000 14.2 % 25 % 3/10/20 3/10/24 $ 90,654 20 % Additional 2 % 4/24/20 4/23/21 $ 20,000 30 % Additional 2 % 10/29/20 2/28/21 $ 25,500 12 % Additional 2 % 10/30/20 11/1/21 $ 25,500 12 % Additional 2 % 10/30/20 11/1/21 $ 25,500 20 % N/A % 2/2/21 5/31/22 $ 45,000 15 % N/A % 4/1/21 3/31/24 $ 38,880 10 % N/A % 4/1/21 3/31/22 $ 100,000 N/A % N/A % 8/11/21 12/31/21 $ 322,219 $ 1,955,137 Convertible Notes – Related Party The Company has issued $ 29,970 4 2 Maturity Date 8 29,970 29,970 Convertible Notes At March 31, 2021, the Company had $ 1,107,143 1,387,800 1,390,000 905,500 5,883,564 1,257,225 360,000 1,229,443 SCHEDULE OF CONVERTIBLE NOTES Interest Rate Conversion Rate Issuance Date Maturity March 31, 2022 12 % $ 1.80 5/5/19 1/26/21 $ 102,000 12 % $ 1.80 7/10/19 7/9/21 $ 153,000 12 % $ 1.80 2/12/20 2/11/21 $ 102,000 8 % $ 0.22 3/9/21 3/8/22 $ 100,000 2 % $ 0.30 6/16/21 3/31/22 $ 250,000 10 % $ 0.30 6/22/21 6/21/22 $ 50,000 10 % $ 7.50 8/30/21 8/29/22 $ 150,000 10 % $ 7.50 8/31/21 8/30/22 $ 75,000 10 % $ - * 8/31/21 8/30/22 $ 50,000 10 % $ - * 9/15/21 9/14/22 $ 20,000 10 % $ - * 9/20/21 9/19/22 $ 10,000 10 % $ - * 9/22/21 9/21/22 $ 10,000 10 % $ - * 10/13/21 10/12/22 $ 50,000 10 % $ 7.50 10/18/21 10/17/22 $ 25,000 10 % $ 7.50 10/20/21 10/19/22 $ 20,000 10 % $ - * 10/28/21 10/27/22 $ 20,000 10 % $ - * 12/27/21 12/26/22 $ 20,000 10 % $ - * 2/11/22 2/10/23 $ 10,000 10 % $ - * 2/22/22 2/21/23 $ 5,000 adjustment $ 7,443 $ 1,229,443 * Upon commencement by the Company of a Qualified Financing, all of the outstanding principal and interest shall convert into that number of shares of New Round Stock, based upon a conversion price equal to the actual price per share of New Round Stock in the Qualified Financing. If not converted prior to the twelve-month anniversary of the issuance of the Notes, the Notes will be payable upon demand. Prepayment is not permitted prior to a payoff event. The Company evaluates these notes at commencement for beneficial conversion features and derivatives. During the year ended March 31, 2022, the Company recorded a beneficial conversion feature on the convertible notes of $ 914,076 0 The following table depicts the total notes payable at March 31, 2022 and March 31, 2021: SCHEDULE OF NOTE PAYABLE OUTSTANDING BALANCE March 31, 2022 March 31, 2021 PPP Loan $ - $ 588,891 Senior secured notes $ 675,000 $ - Nonconvertible notes - related party $ 1,994,655 $ 1,344,625 Nonconvertible notes $ 1,955,137 $ 1,919,620 Convertible notes - related party $ 29,970 $ 29,970 Convertible notes $ 1,229,443 $ 1,107,143 Less: Non-current portion of senior secured notes $ 675,000 $ - Non-current portion of PPP Loan $ - $ (588,891 ) Non-current portion of nonconvertible notes - related party $ (891,920 ) $ (509,972 ) Non-current portion of nonconvertible notes $ (189,918 ) $ (174,620 ) Current notes payable $ 4,127,367 $ 3,716,766 |