NOTE 19 – SUBSEQUENT EVENTS

The Company evaluated all material events through the date the financials were ready for issuance and identified the following for additional disclosure.

Preferred stock issuance

On January 11, 2021, the Company sold 2,000 shares of Series A Preferred Stock for an aggregate purchase price of $50,000. In accordance with the Certificate of Designation of Series A Preferred Stock dated January 7, 2021: (i) each share of Series A Preferred Stock shall be convertible, at the option of the holder thereof, from and after October 15, 2022, into shares of common stock; (ii) all outstanding shares of Series A Preferred Stock shall be automatically converted into shares of common stock in the event any of the Company’s securities are listed for trading on any national exchange; and (iii) the Company may redeem any or all of the outstanding shares of Series A Preferred Stock at any time after October 15, 2023.

Related party notes payable

On January 1, 2021, an amendment to the revolving inventory financing facility issued January 11, 2019, in the aggregate amount of $1,000,000, provided that interest shall be payable at maturity. All other terms remain unchanged.

On January 1, 2021, an amendment to the related party note payable issued December 30, 2020, in the original principal amount of $100,000, provided that interest shall be payable at maturity. All other terms remain unchanged. This note was subsequently amended as described below.

On March 30, 2021, an amendment to the related party note payable issued December 30, 2020, in the original principal amount of $100,000, extended the maturity date to June 30, 2021. All other terms remain unchanged.

Notes payable

On February 6, 2021, the Company received a Second Draw Paycheck Protection Program (“PPP”) loan for $211,359. Under the terms of the program, the loan amount may be forgiven if certain terms and conditions are met.

Related party convertible notes payable

On January 1, 2021, amendments to the related party convertible notes payable issued July 19, 2019 (original principal amount of $815,217), October 16, 2019 (original principal amount of $217,391), November 15, 2019 (original principal amount of $100,000), and September 17, 2020 (original principal amount of $271,739), provided that interest shall be payable at maturity. All other terms remain unchanged. The amendments were not considered material modifications under ASC 470-50-40, and as a result, were not considered accounting extinguishments in the period the notes were modified.

On January 28, 2021, the Company and the Chairman of the Board of Directors, as a lender to the Company, entered into a convertible note payable in the amount of $100,000. This note accrues interest at the rate of 8% per annum and matures on December 31, 2021. This note and accrued interest may convert into shares of common stock at $5.00 per share any time at the holder’s option. The Company has the right to prepay this note without penalty or premium. If this note has not been repaid or converted in full on or prior to the maturity date, then repayment of the outstanding principal balance shall be amortized over the following thirty-six (36) months. This note was also issued with a detachable warrant exercisable for 5 years to purchase 20,000 shares of common stock at $5.00 per share.

On March 8, 2021, the Company and a current stockholder that beneficially owns more than 5% of the Company’s common stock, as a lender to the Company, entered into a convertible note payable in the amount of $150,000. This note accrues interest at the rate of 8% per annum and matures on March 8, 2022. This note and accrued interest may convert into shares of common stock at $5.00 per share any time at the holder’s option. The Company has the right to prepay this note without penalty or premium. If this note has not been repaid or converted in full on or prior to the maturity date, then repayment of the outstanding principal balance shall be amortized over the following thirty-six (36) months. This note was also issued with a detachable warrant exercisable for 5 years to purchase 30,000 shares of common stock at $5.00 per share.

Convertible notes payable amendments

On January 1, 2021, amendments to the convertible notes payable issued September 4, 2019 (original principal amount of $108,696), September 25, 2019 (original principal amount of $54,348), October 3, 2019 (original principal amount of $27,174), October 10, 2019 (original principal amount of $27,174), October 23, 2019 (original principal amount of $108,696), October 29, 2019 (original principal amount of $27,174), November 8, 2019 (original principal amount of $16,304), January 6, 2020 (original principal amount of $10,870), February 25, 2020 (original principal amount of $52,632), July 30, 2020 (original principal amount of $25,000), September 22, 2020 (original principal amount of $25,000), September 28, 2020 (original principal amount of $108,696), October 8, 2020 (original principal amount of $60,000), October 8, 2020 (original principal amount of $20,000), and December 28, 2020 (original principal amount of $55,556), provided that interest shall be payable at maturity. All other terms remain unchanged. The amendments were not considered material modifications under ASC 470-50-40, and as a result, were not considered accounting extinguishments in the period the notes were modified.

On January 13, 2021, an amendment to the convertible note payable issued March 16, 2020, in the original principal amount of $250,000, extended the maturity date to February 28, 2021. The amendment also provided that the 27,777 shares of common stock issued in connection with the purchase of the note shall be subject to return if the note is fully repaid by February 28, 2021. As consideration for the extension, the Company paid an extension fee of $15,000 ($7,500 on January 28, 2021, and $7,500 on February 22, 2021). All other terms remain unchanged. The amendment to this note was not considered a material modification under ASC 470-50-40, and as a result, is not considered an accounting extinguishment in the period the note was modified. This note was subsequently amended as described below.

On March 29, 2021, an amendment to the convertible note payable issued March 16, 2020, in the original principal amount of $250,000, extended the maturity date to May 25, 2021. The amendment also provided that the 27,777 shares of common stock issued in connection with the purchase of the note shall be subject to return if the note is fully repaid by May 25, 2021. As consideration for the extension, the Company agreed to pay an extension fee of $15,000 ($7,500 by April 22, 2021, and $7,500 by May 14, 2021). All other terms remain unchanged. The amendment to this note was not considered a material modification under ASC 470-50-40, and as a result, is not considered an accounting extinguishment in the period the note was modified.

On January 19, 2021, an amendment to the convertible note payable issued May 14, 2020, in the original principal amount of $500,000, provided the Company with options to extend the period before the conversion price adjusts from a fixed price to a variable price at a discount to market and the period the Company may prepay the note without penalty or premium. The Company elected to extend such periods to nine (9) months following issuance (February 14, 2021) with payment of an extension fee of $25,000 ($12,500 on January 28, 2021, and $12,500 on February 12, 2021), to nine and one-half (9.5) months following issuance (February 28, 2021) with payment of an additional extension fee of $12,500 on February 26, 2021, to ten (10) months following issuance (March 14, 2021) with payment of an additional extension fee of $12,500 on March 12, 2021, and to ten and one-half (10.5) months following issuance (March 31, 2021) with payment of an additional extension fee of $12,500 on March 30, 2021. All other terms remain unchanged. Each amendment to extend the respective periods to this note was not considered a material modification under ASC 470-50-40, and as a result, is not considered an accounting extinguishment in the period the note was modified.

On January 29, 2021, and March 31, 2021, amendments to the convertible note payable issued January 21, 2020, in the original principal amount of $262,500, provided terms for settlement of the note. In accordance with the amendment, the Company paid $130,000 to the holder ($100,000 on February 1, 2021, $10,000 on March 8, 2021, and $20,000 on March 31, 2021) in full settlement of the note.

Convertible notes payable issuances

On January 27, 2021, the Company issued a convertible note payable in the amount of $55,556 with an original issue discount of $5,556 in exchange for $50,000. This note accrues interest at 8% per annum and matures on December 31, 2021. This note and accrued interest may convert into shares of common stock at $5.00 per share any time at the holder’s option. The Company has the right to prepay this note without penalty or premium. If this note has not been repaid or converted in full on or prior to the maturity date, then repayment of the outstanding principal balance shall be amortized over the following thirty-six (36) months. This note was also issued with a detachable warrant exercisable for 5 years to purchase 15,000 shares of common stock at $5.00 per share.

On March 26, 2021, the Company issued a convertible note payable in the amount of $100,000. This note accrues interest at 8% per annum and matures on March 31, 2022. This note and accrued interest may convert into shares of common stock at $5.00 per share any time at the holder’s option. The Company has the right to prepay this note without penalty or premium. If this note has not been repaid or converted in full on or prior to the maturity date, then repayment of the outstanding principal balance shall be amortized over the following thirty-six (36) months. This note was also issued with a detachable warrant exercisable for 5 years to purchase 20,000 shares of common stock at $5.00 per share.