NOTE 6 - CONVERTIBLE PROMISSORY NOTES

12 Months Ended

Dec. 31, 2022

Notes

NOTE 6 - CONVERTIBLE PROMISSORY NOTES

NOTE 6 – CONVERTIBLE PROMISSORY NOTES

The Company has a collateralized convertible debt obligation with an unaffiliated entity outstanding at December 31, 2022 and 2021 as follows:

Note (A)	Principal	Less Debt Discount	Plus Premium	Net Note Balance	Accrued Interest
December 31, 2022	$       290,000 (1)	$                    -	$                  -	$       290,000	$      267,410
December 31, 2021	$      290,000 (1)	$                   -	$                 -	$      290,000	$       190,781

(1) Collateralized by the Company’s assets, including accounts receivable, cash and equivalents, inventory, property, equipment, intangibles.  At December 31, 2022 and 2021, the Company’s assets consisted of cash and equivalents of $707 and $186 (respectively), inventory of $80,404, and intangible assets of $275,000, for total carrying value of $356,111 and $355,590 (respectively).

(A) On September 24, 2018 (the “Date of Issuance”) the Company issued a convertible promissory note (the “Note”) with a face value of $300,000, maturing on September 24, 2019, and a stated interest of 10% to a third-party investor. The default interest rate of 24% has been in effect since the September 24, 2019 maturity date lapsed. The note is convertible into a variable number of the Company's common stock, based on a conversion rate of 50% of the lowest trading price for the 25 days prior to conversion.

Along with the Note, on the Date of Issuance the Company issued Common Stock Purchase Warrants (the “Warrants”), exercisable immediately with an expiration date of September 24, 2023. As of December 31, 2022, 264,084 Warrants were available related to the Note at an exercise price of $0.568 per share.  The note proceeds of $300,000 were allocated between the fair value of the promissory note ($300,000) and the Warrants ($86,750), resulting in a debt discount of $67,292.  As the warrants were exercisable immediately, this debt discount was amortized in its entirety to interest expense on the Date of Issuance.