Convertible Notes Payable | Note 7. Convertible Notes Payable Convertible notes payable at December 31, 2023 and 2022 consist of the following: Schedule of Convertible Notes Payable December 31, December 31, Note 1 – Shareholder $ 100,000 $ 100,000 Note 2 – Mercer Note 695,500 706,000 Note 3 – Mercer Note #2 440,000 440,000 Total 1,235,500 1,246,000 Debt discount and issuance costs - (84,082 ) Total convertible notes payable 1,235,500 1,161,918 Less: current portion 1,235,500 1,161,918 Non-current portion $ - $ - Note 1 – Effective May 7, 2021, the Company issued a Convertible Promissory Note in the principal amount of $ 100,000 10 September 30, 2022 The Company may satisfy the Note upon maturity or Default, as defined, by the issuance of common shares at a conversion price equal to the greater of a 25% discount to the 15-day average market price of the Company’s common stock or $0.50. The principal and interest accrued are convertible at any time through the maturity date of December 31, 2023 at the option of the holder using the same conversion calculation 26,521 16,521 Note 2 – Effective August 10, 2021, the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which it issued to the investor an Original Issue Discount Secured Convertible Promissory Note (the “$806,000 Note”) in the principal amount of $ 806,000 930,000 750,000 The principal amount of the $ 806,000 806,000 5 0.65 806,000 806,000 On November 11, 2021, Mercer Street Global Opportunity Fund, LLC (“Mercer Fund”), converted $ 50,000 806,000 76,923 0.65 The 930,000 three years 1.25 806,000 As a result of the issuance of a $ 440,000 0.20 806,000 0.20 50,000 806,000 250,000 0.20 On October 5, 2023, at the request of Mercer Fund, the Company agreed to reduce the conversion price with respect to $ 10,500 806,000 0.025 806,000 0.20 On February 19, 2024, the Company received the most recent notice from the manager of Mercer Fund of its agreement to forebear from the exercise of any rights it might have as a result of any defaults under the $ 806,000 806,000 5 As of December 31, 2023, all original issue discount and debt issuance costs, including the allocated relative fair value of the Warrants, have been recognized. The remaining principal balance of $ 695,500 , along with associated interest, is recorded with current liabilities on the Company’s consolidated balance sheets. As of December 31, 2023, the $ 806,000 Note had $ 87,344 of accrued interest, total unamortized debt issuance costs of $ 0 , including the Warrant and the remaining discount. As of December 31, 2022, the $ 806,000 Note had $ 52,171 of accrued interest. Note 3 – Effective July 19, 2022, the Company entered into a Securities Purchase Agreement with Mercer Fund pursuant to which it issued an Original Issue Discount Secured Convertible Promissory Note (the “$440,000 Note”) in the principal amount of $ 440,000 550,000 400,000 The principal amount of the $ 440,000 440,000 5 0.20 440,000 440,000 The $ 440,000 440,000 440,000 440,000 440,000 On February 19, 2024 the Company received the most recent notice from the manager of the Mercer Fund, LLC that it agreed to forebear from exercising any rights it might have as a result of any defaults under the $ 440,000 The 550,000 0.50 440,000 The Registration Rights Agreement requires the Company to file with the Securities and Exchange Commission within 60 days following the closing of the issuance of the $ 440,000 440,000 440,000 The Company accounts for the allocation of its issuance costs related to its Warrants in accordance with ASC 470-20, Debt with Conversion and Other Options The Company estimated the fair value of the Warrants utilizing the Black-Scholes pricing model, which is dependent upon several assumptions such as the expected term of the Warrants, expected volatility of the Company’s stock price over the expected term, expected risk-free interest rate over the expected term and expected dividend yield rate over the expected term. The Company believes this valuation methodology is appropriate for estimating the fair value of warrants. The value allocated to the relative fair value of the Warrants was recorded as debt issuance costs and additional paid in capital. The principal, net of the original issue discount and debt issuance costs, including the allocated relative fair value of the Warrants, which are being recognized over the life of the $ 440,000 440,000 31,764 0 440,000 9,764 61,836 22,247 |