Convertible Notes Payable, Non-related Partied and Related Party

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Convertible Notes Payable, Non-related Partied and Related Party

Note 9 – Convertible Notes Payable, Non-related Partied and Related Party

Convertible notes payable – nonrelated parties at March 31, 2024 and December 31, 2023 consist of the following:

	March 31,			December 31,
	2024			2023
Convertible note payable to GBT Technologies S.A	$	4,979,996		$	5,175,496
Convertible notes payable to 1800		51,336			70,760
Convertible notes payable to Glen		292,500			462,500
Total convertible notes payable, non-related parties		5,323,076			5,708,756
Unamortized debt discount		(12,728	)		(43,739	)
Convertible notes payable – nonrelated parties		5,311,104			5,665,017
Less current portion		(5,311,104	)		(5,665,017	)
Convertible notes payable – nonrelated parties, long-term portion	$	—		$	—

$10,000,000 for GBT Technologies S. A. acquisition

In accordance with the acquisition of GBT-CR the Company issued a convertible note in the principal amount of $10,000,000. The convertible note bears interest of 6% and is payable at maturity on December 31, 2021. At the election of the holder, the convertible note can be converted into a maximum of 20,000 shares of Series H Preferred Stock. Each share of Series H Preferred Stock is convertible, at the option of the holder but subject to the Company increasing its authorized shares of common stock, into such number of shares of common stock of the Company as determined by dividing the Stated Value ($500 per share) by the conversion price ($500 per share). This convertible note may convert into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price with a 20-day lookback immediately preceding the date of conversion and therefore recorded as derivative liability.

On May 19, 2021, the Company, Gonzalez, GBT-CR and IGOR 1 Corp entered into a Mutual Release and Settlement Agreement and Irrevocable Assignment of outstanding balance plus accrued interest (the “Gonzalez Agreement”). Pursuant to the Gonzalez Agreement, without any party admission of liability and to avoid litigation, the parties had agreed to (i) extend the GBT convertible note maturity date to December 31, 2022, (ii) amend the GBT convertible note terms to include a beneficial ownership blocker of 4.99% and a modified conversion feature to the GBT convertible note with 15% discount to the market price during the 20 trading day period ending on the latest complete trading day prior to the conversion date and (iii) provided for an assignment of the GBT convertible note by Gonzalez to a third party. As a result of the change in terms of this convertible note, the Company took a charge related to the modification of debt of $13,777,480 during the year ended December 31, 2021. This convertible note is recorded as derivative liability because of the discounted price on conversion.

During the period ended March 31, 2024, IGOR 1 converted $195,500 of the convertible note into 2,300,000,000 shares of the Company’s common stock.

As of March 31, 2024, the note had an outstanding balance of $4,979,996 and accrued interest of $2,432,897.

Paid Off Notes/Converted Notes

1800 Diagonal Lending LLC

Convertible Note - On March 1, 2023, the Company entered into a Securities Purchase Agreement with DL pursuant to which the Company issued to DL a Convertible Promissory Note (the “DL Convertible Note”) of $62,680 for a purchase price of $52,150. The DL Convertible Note had a maturity date of June 1, 2024 and the Company had agreed to pay interest on the unpaid principal balance of the DL Convertible Note at the rate of 6.0% from the date on which the DL Convertible Note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the DL Convertible Note, provided it makes a payment including a prepayment to DL as set forth in the DL Convertible Note.

The outstanding principal amount of the DL Convertible Note may not be converted prior to the period beginning on the date that is 180 days following the date the DL Convertible Note is issued. Following the 180th day, DL may convert the DL Convertible Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price during the 20-day period preceding the date of conversion. In addition, upon the occurrence and during the continuation of an event of default (as defined in the DL Convertible Note), the DL Convertible Note shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Convertible Note. In no event shall DL be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99% of the outstanding shares of the common stock of the Company.

As of December 31, 2023, the note had an outstanding balance of $20,180 and accrued interest of $6,041.

During the period ended March 31, 2024, 1800 Diagonal converted the remaining $20,180 of the convertible note with all accrued interest into 295,534,118 shares of the Company’s common stock.

As of March 31, 2024, the note had an outstanding balance of $0 and an interest of $0.

Outstanding Notes

Glen Eagle

The Company entered into a series of loan arrangements with Glen Eagles Acquisition LP pursuant to which it received $512,500 in loans (the “Debt”) from August 2021 up to September 2022. The original funded amount of $457,500 included convertible feature into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price during the 20-day period preceding the date of conversion.

In order to include a convertible feature for the $55,000 which was not covered by convertible feature, on January 24, 2023, the Company issued a consolidated convertible promissory note to Glen Eagles Acquisition LP in the principal amount of $512,500, which include all prior convertible notes with addition of the $55,000 straight note. The convertible promissory note bears interest of 10% and is payable at maturity on December 31, 2023. Glen Eagles Acquisition LP may convert the consolidated convertible Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price during the 20-day period preceding the date of conversion. The Company recorded a loss on debt extinguishment of $92,737 at the issuance date.

During the period ended March 31, 2024, Glen Eagle converted $170,000 of the convertible note into 2,000,000,000 shares of the Company’s common stock.

As of March 31, 2024, the consolidated convertible note had an outstanding balance of $292,500 and an accrued interest of $113,364.

1800 Diagonal Lending LLC Convertible Note $50,580 - On April 24, 2023, the Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC, an accredited investor (“DL”) pursuant to which the Company issued to DL a Convertible Promissory Note (the “DL Note”) in the aggregate principal amount of $50,580 for a purchase price of $42,150. The DL Note has a maturity date of July 24, 2024 and the Company has agreed to pay interest on the unpaid principal balance of the DL Note at the rate of six percent (6.0%) per annum from the date on which the DL Note is issued (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the DL Note, provided it makes a payment including a prepayment to DL as set forth in the DL Note.

The outstanding principal amount of the DL Note may not be converted prior to the period beginning on the date that is 180 days following the Issue Date. Following the 180^th day, DL may convert the DL Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price with a 20-day look back immediately preceding the date of conversion. In addition, upon the occurrence and during the continuation of an Event of Default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Note. In no event shall DL be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99% of the outstanding shares of the common stock of the Company.

As of March 31, 2024, the note had an outstanding balance of $50,580 and an accrued interest of $4,723.

Convertible notes payable – related parties at March 31, 2024 and December 31, 2023 consist of the following:

	March 31,			December 31,
	2024			2023
Convertible note payable to Stanley Hills		491,395			661,395
Unamortized debt discount		—			—
Convertible notes payable, net, related party		491,395			661,395
Less current portion		(491,395	)		(661,395	)
Convertible notes payable, net, related party, long-term portion	$	—		$	—

Stanley Hills LLC

The Company entered into a series of loan agreements with Stanley Hills LLC (“Stanley”) pursuant to which it received more than $1,000,000 in loans (the “Debt”) from May 2019 up to December 2019. On February 26, 2020, in order to induce Stanley to continue to provide funding, the Company and Stanley entered into a letter agreement providing that the current note payable balance due to Stanley of $1,214,900 may be converted into shares of common stock of the Company at a conversion price equal to 85% multiplied by the lowest one trading price for the common stock during the 20-trading day period ending on the latest complete trading day prior to the conversion date. Since the conversion price will vary based on the Company’s stock price, the beneficial conversion feature associated with this note is accounted for as a derivative liability. Stanley had agreed to restrict its ability to convert the Debt and receive shares of common stock such that the number of shares of common stock held by it and its affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. During the year ended December 31, 2021, Stanley converted $1,231,466 of its convertible note plus interest into 4,420,758 shares of the Company’s common stock, and during the year ended December 31, 2021, Stanley loaned the Company an additional $325,000. Also, during the year ended December 31, 2021, the Company transferred the SURG shares received as repayment of $800,000 of this convertible note and also converted $126,003 of accrued interest into the principal balance. During the year ended December 31, 2021, Gonzalez assigned all his accrued balances of $424,731 to Stanley in a private transaction that the Company is not part to (See Note 10). On January 2, 2023, the Company issued a convertible promissory note to Stanley for its credit balances in the principal amount of $750,000. The convertible promissory note bears interest of 10% and is payable at maturity on June 30, 2024. Stanley may convert the consolidated convertible Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price during the 20-day period preceding the date of conversion. The Company recorded a gain on debt extinguishment of $408,034 at the issuance date.

During the period ended March 31, 2024, Stanley Hills converted $170,000 of the convertible note into 2,000,000,000 shares of the Company’s common stock.

As of March 31, 2024 and December 31, 2023 the principal balance of Stanley debt was $491,395 and $661,395 respectively. The unpaid interest of the Stanley debt at March 31, 2024 and December 31, 2023 was $61,733 and $49,482,  respectively.

Discounts on convertible notes

The Company recognized debt discount of $32,803 and $143,737 during the three months ended March 31, 2024 and 2023, respectively, related to the amortization of the debt discount on convertible notes. The unamortized debt discount at March 31, 2024 and 2023 was $13,201 and $163,520, respectively.

A roll-forward of the convertible notes payable from December 31, 2023 to March 31, 2024 is below:

Convertible notes payable, December 31, 2023, Net	$	6,326,412
Conversion to common stock		(555,680	)
Amortization of debt discounts		31,011
Convertible notes payable, March 31, 2024, Net	$	5,801,743