TransBiotec, Inc.

During 2020, the Company entered into two consulting agreements for marketing services. The Company has to issue a total of 87,500 of its common shares valued at $142,714 under the terms of the agreements. On February 26, 2021, the Company entered into a new lease agreement for its office facility for a 12 month term beginning March 1, 2021. In addition to monthly base rent of $6,000, the agreement requires the issuance on 16,000 shares of its common stock valued at $49,600. As of March 31, 2021 and December 31, 2020, the share value of $192,314 and $142,714, respectively, is included in common stock subscriptions payable as the shares had not been issued. Stock-based compensation expense for the three month periods ended March 31, 2021 and 2020 includes approximately $19,000 and none, respectively, for these agreements.

On February 12, 2021, the Company entered into a note payable agreement with David Gandini, an officer and shareholder, under which Mr. Gandini advanced the Company $30,000 for working capital purposes. The unsecured note carried interest at 0% and was paid in April 2021.

On March 30, 2021, the Company received notification from IDTEC that it was exercising a portion of the 320,000 warrants issued resulting from the Waiver Under Asset Purchase Agreement and Post-Closing Covenant Agreement with IDTEC. The warrant exercise price is $0.50 per share. We paid $88,469 during the three month period ended March 31, 2021 to settle an outstanding judgement (see Note 13) against the Company which was considered as a non-permitted liability under the Post-Closing Covenant Agreement. We will issue 176,938 shares of our common stock for the $88,469 we received from IDTEC to pay the settlement. As the shares had not been issued by March 31, 2021, the amount received from IDTEC is included in the common stock subscriptions payable balance at March 31, 2021.

On March 3 and 31, 2021, the Company issued convertible notes payable (see Note 7) totaling $400,000 to existing shareholders holding a direct or indirect interest in the Company and $100,000 to a Company’s director and another director’s family member. The principal amount of the secured convertible debentures are convertible at $3 per share, and include warrants to purchase in total 250,000 shares of the Company’s common stock at $3 per share.

Related Party Convertible Notes Payable with Warrants

The Company has eight convertible notes payable to related parties, each with detached free-standing warrants to purchase the Company’s common stock at $3 per share, that have a total principal balance of $500,000 as of March 31, 2021. The notes, secured by the Company’s patents and patents applications, include interest at 12%, are convertible at $3 per share of the Company’s common stock and are due 24 months after issuance.  The note holders may elect to have the interest paid in cash monthly or have the interest accrue and be payable on the maturity date.  Interest elected to be accrued will be paid in cash or may be converted into shares of our common stock under the same terms as the principal amount on the maturity date.  The notes contain both voluntary and automatic conversion features. The notes will be convertible at any time, by the holders, beginning on the date of issuance.  However, the holders may not convert any outstanding amounts due under the note if at the time of such conversion the amount of common stock issued for the conversion, when added to other shares of Company common stock owned by the holders or which can be acquired by holders upon exercise or conversion of any other instrument, would cause the holder to own more than 4.9% of the Company’s outstanding common stock.  Beginning on the issuance date, the outstanding principal amount of the note, and any accrued interest, will automatically convert into shares of the Company’s common stock if the Company’s common stock closes at or above $6 per share for five (5) consecutive trading days while listed on NASDAQ.  The Company evaluated the convertible notes payable for derivative embedded and beneficial conversion features. The Company determined that there were beneficial conversion features to record. The total beneficial conversion feature debt discount of $212,219 is amortized over the life of the convertible notes payable.  The debt discount amortization expense recorded as amortization of interest – beneficial conversion feature in the consolidated statements of operations was $6,361 for the three month period ended March 31, 2021.   As of March 31, 2021 these notes carry outstanding warrants of 250,000.  The relative fair market value of the related stock warrants granted during the three month period ended March 31, 2021 and 2020 was $287,781 and none, respectively.  The unamortized discount at March 31, 2021 and December 31, 2020 is $278,800 and none, respectively. Stock warrants amortization expense recorded as interest expense was $8,981 for the three month period ended March 31, 2021.

On October 15, 2019, the Company entered into a short-term lease agreement that is between $2,800 - $2,900 per month and ended on October 31, 2020. The lease has been renewed for another twelve months under the same general terms and conditions.  The lease was subsequently canceled to accommodate additional space, and a new lease was executed February 26, 2021, effective for a 12 month term beginning March 1, 2021.  The lease requires monthly base rent payments of $6,000 and the issuance of 16,000 shares of the Company’s common stock.  The value of the common stock of $49,600 is amortized to rent expense on a monthly basis over the lease term.  As of March 31, 2021, the stock has not yet been issued (see Notes 4 and 9).  The stock was subsequently issued after March 31, 2021.  The Company also leases an office space for approximately $1,800 per month on a short-term (month to month) basis through a related party that terminates at any time.  Rent expense under office leases, including CAM charges, was $25,396 and $14,147 for the three month period ended March 31, 2021 and 2020, respectively.