NOTE 18 – SUBSEQUENT EVENTS

Issuance Series B Preferred Stock for Accrued Compensation

On January 17, 2023, the Board of Directors of the Company agreed to satisfy $144,000 of accrued compensation owed to its executive officers (collectively, the “Management”) which, as of December 31, 2022 was included in accrued compensation on the accompanying consolidated balance sheet. Management agreed to accept 144 shares of the Company’s Series B convertible preferred stock in settlement of this accrued compensation. The conversion feature of the Series B Preferred Stock at the time of issuance was determined not to be beneficial on the commitment date and accordingly, no stock-based compensation or gain or loss was recorded. 

Issuance of Common Shares for Accrued Compensation and Cash

On January 17, 2023, the Company entered into a Subscription Agreement with its Chairman and Chief Executive Officer, Scott R. Silverman (the “Subscription Agreement”), whereby Mr. Silverman purchased 54,545,455 shares (the “Subscription Shares”) of the Company’s common stock for $300,000, or $0.0055 per share, based on the quoted closing price of the Company’s common stock on the measurement date (the “Consideration”). The Consideration consisted of a cash payment of $275,000 the conversion of $25,000 of accrued compensation owed to Mr. Silverman.

On January 17, 2023, Barry Edelstein, a member of the Company’s Board of Directors, elected to convert $53,000 of accrued compensation into 9,636,364 shares of unregistered common stock of the Company. The shares were valued at $53,000, or $0.0055, based on the quoted closing price of the Company’s common stock on the measurement date.

Common Shares Issued for Professional Services

On February 6, 2023, the Company issued 6,666,667 shares of its common stock for investor relations services to be rendered. These shares were valued at $40,000, or $0.006 per common share, based on the quoted closing price of the Company’s common stock on the measurement date. In connection with these shares, the Company recorded stock-based professional fees of $40,000 over the term of the agreement.

Common Stock Issued for Conversion of Series C Preferred Stock

On January 3, 2023, the Company issued 6,546,575 shares its common stock upon the conversion of 250 shares of Series C preferred with a stated redemption value of $25,000. The conversion price was based on contractual terms of the related Series C preferred shares.

On January 13, 2023, the Company issued 5,004,200 shares its common stock upon the conversion of 191 shares of Series C preferred with a stated redemption value of $19,100. The conversion price was based on contractual terms of the related Series C preferred shares.

On January 26, 2023, the Company issued 5,007,601 shares its common stock upon the conversion of 191 shares of Series C preferred with a stated redemption value of $19,100. The conversion price was based on contractual terms of the related Series C preferred shares.

On February 1, 2023, the Company issued 5,009,171 shares its common stock upon the conversion of 191 shares of Series C preferred with a stated redemption value of $19,100. The conversion price was based on contractual terms of the related Series C preferred shares.

On March 7, 2023, the Company issued 5,018,067 shares its common stock upon the conversion of 191 shares of Series C preferred with a stated redemption value of $19,100. The conversion price was based on contractual terms of the related Series C preferred shares.

Convertible Debt

On March 17, 2023, the Company closed a Securities Purchase Agreement dated November 4, 2022, with Diagonal pursuant to which a Promissory Note (the “March 2023 Diagonal Note”) dated March 17, 2023, was made to Diagonal in the aggregate principal amount of $54,250 and the Company received net proceeds of $50,000 which was net of fees of $4,250. The March 2023 Diagonal Note bears interest at a rate of 12% per annum (22% upon the occurrence of an event of a default) and all outstanding principal and accrued and unpaid interest are due on March 17, 2024.

The Company has the right to prepay the March 2023 Diagonal Note (principal and accrued interest) at any time during the first six months the note is outstanding at the rate of 115% during the first 30 days after issuance, 120% during the 31^st to 60^th day after issuance, and 125% during the 61^st to the 180^th day after issuance. The March 2023 Diagonal Note may not be prepaid after the 180th day following the issuance date, unless Diagonal agrees to such repayment and such terms. Diagonal may in its option, at any time beginning 180 days after the date of the Diagonal Note, convert the outstanding principal and interest on the March 2023 Diagonal Note into shares of our common stock at a conversion price per share equal to 65% of the average of the three lowest closing bid prices of our common stock during the 10 trading days prior to the date of conversion. At no time may the March 2023 Diagonal Note be converted into shares of our common stock if such conversion would result in Diagonal and its affiliates owning an aggregate of in excess of 4.99% of the then outstanding shares of our common stock.

The Company has accounted for the March 2023 Diagonal Note as stock settled debt under ASC 480 and recorded an aggregate debt premium of $29,212 with a charge to interest expense.