CONVERTIBLE NOTES

6 Months Ended

Jun. 30, 2022

CONVERTIBLE NOTES

7. CONVERTIBLE NOTES

7. CONVERTIBLE NOTES

Convertible notes on June 30, 2022, and December 31, 2021, consists of the following:

	June 30,			December 31,
	2022			2021
Convertible Notes - originated in April 2018	$	95,000		$	95,000
Convertible Notes - originated in June 2018		166,000			166,000
Convertible Notes - originated in October 2018		50,000			50,000
Convertible Notes - issued fiscal year 2021		29,800			105,450
Convertible Notes - issued January 2022		134,000			-
Total convertible notes payable		474,800			416,450
Less: Unamortized debt discount		(34,786	)		(13,333	)
Total convertible notes		440,014			403,117
Less: current portion of convertible notes		440,014			403,117
Long-term convertible notes	$	-		$	-

For the six months ended June 30, 2022, and 2021, the interest expense on convertible notes was $25,556 and $28,146, respectively. As of June 30, 2022, and December 31, 2021, the accrued interest was $84,873 and $63,100, respectively.

The Company recognized amortization expense related to the debt discount of $79,547 and $48,048 for the six months ended June 30, 2022 and 2021, respectively, which is included in interest expense in the statements of operation.

Conversion

During the six months ended June 30, 2022, the Company converted notes with principal amounts of $75,650 and accrued interest of $3,783 into 26,637,703 shares of common stock. The corresponding derivative liability at the date of conversion of $94,200 was credited to additional paid in capital.

Convertible Notes - Issued during the year ended December 31, 2018

During the year ended December 31, 2018, the Company issued a total principal amount of $426,000 convertible notes for cash proceeds of $426,000. The convertible notes were also provided with a total of 107,000 common shares valued at $22,210. The terms of convertible notes are summarized as follows:

· Term two years;

· Annual interest rates 12%;

· Convertible at the option of the holders at any time

· Conversion prices are based on 50% discount to market value for the common stock based on a 4-week weekly average of the closing price.

Convertible Notes - Issued during the year ended December 31, 2021

During the year ended December 31, 2021, the Company issued a total principal amount of $277,500 in convertible note for cash proceeds of $257,000. The terms of convertible note are summarized as follows:

· Term one year;

· Annual interest rates 10%;

· Convertible at 180 days from issuance

· Conversion prices are based on 39% discount to the lowest trading price during the 20-trading day period ending on the latest complete training day prior to the conversion date.

During the six months ended June 30, 2022, the Company converted principal of $50,450 and accrued interest of $3,783 into 16,557,703 shares of common stock.

Convertible Notes - Issued during the year ended December 31, 2022

During the six months ended June 30, 2022, the Company issued a total principal amount of $134,000 in convertible notes for cash proceeds of $125,000. The terms of convertible notes are summarized as follows:

· Term one year;

· Annual interest rates 10%;

· Convertible at 180 days from issuance

· Conversion prices are based on 39% discount to the lowest trading price during the 20-trading day period ending on the latest complete training day prior to the conversion date.

The Company valued the conversion feature using the Black-Scholes pricing model. The fair value of the derivative liability for all the notes that became convertible, including the notes issued in prior years, during the six months ended June 30, 2022, amounted to $120,960, and $92,000 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $28,960 was recognized as a “day 1” derivative loss.