Outstanding Debt |
NOTE 8 - OUTSTANDING DEBT
Convertible notes are as follows as of September
30, 2019:
|
|
Original principal |
|
|
Converted to shares |
|
|
Default penalty |
|
|
Outstanding balance September 30,
2019 (1) (2) |
|
|
Interest rate |
|
|
Accrued interest |
|
|
Maturity (2) |
|
Auctus, May 24, 2017 |
|
$ |
112,250 |
|
|
$ |
(31,681 |
) |
|
$ |
158,982 |
|
|
$ |
239,551 |
|
|
|
12 |
% |
|
$ |
105,416 |
|
|
|
18-Feb-18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMA, June 5, 2017 |
|
|
115,000 |
|
|
|
(58,030 |
) |
|
|
109,472 |
|
|
|
166,442 |
|
|
|
10 |
% |
|
|
51,083 |
|
|
|
5-Jun-18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Auctus, October 11, 2017 |
|
|
85,000 |
|
|
|
|
|
|
|
127,500 |
|
|
|
212,500 |
|
|
|
12 |
% |
|
|
100,547 |
|
|
|
11-Oct-18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMA, October 11, 2017 |
|
|
85,000 |
|
|
|
|
|
|
|
81,442 |
|
|
|
166,442 |
|
|
|
12 |
% |
|
|
51,083 |
|
|
|
11-Oct-18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crown Bridge, December 8, 2017 |
|
|
65,000 |
|
|
|
|
|
|
|
32,500 |
|
|
|
97,500 |
|
|
|
8 |
% |
|
|
17,636 |
|
|
|
8-Dec-18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power Up, December 21, 2017 |
|
|
53,000 |
|
|
|
|
|
|
|
26,500 |
|
|
|
79,500 |
|
|
|
12 |
% |
|
|
22,604 |
|
|
|
21-Dec-18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power Up, April 16, 2018 |
|
|
53,000 |
|
|
|
|
|
|
|
26,500 |
|
|
|
79,500 |
|
|
|
12 |
% |
|
|
20,548 |
|
|
|
30-Sep-18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
568,250 |
|
|
$ |
(89,711 |
) |
|
$ |
562,896 |
|
|
$ |
1,041,435 |
|
|
|
|
|
|
$ |
368,917 |
|
|
|
|
|
(1) |
Included in this amount are estimated aggregate penalties of approximately $562,896 resulting from various events of default. The related penalties are estimates and the actual amounts to be paid could be significantly different. See discussions in NOTE 7. |
|
|
(2) |
All notes are currently in default and due on demand and the Company is currently in litigation with all noteholders. |
During the nine months ended September 30,
2019 and 2018, the Company recorded an aggregate of approximately $5,889 and $0 of debt discount to interest expense, respectively.
On May 24, 2017, the Company entered a Convertible
Promissory Note with Auctus Fund, LLC., (“Auctus”) in the principle amount of $112,250 (the “Auctus Note”)
The Auctus Note bears interest at the rate of 12% per annum (24% upon an event of default) and was due and payable on February
24, 2018. The note is currently in default. The principle amount of the Auctus Note and all accrued interest is convertible at
the option of the holder at the lower of (a) 55% multiplied by the average of the two lowest trading prices during the 25 trading
days prior to the date of the note and (b) 55%, (a 45% discount) multiplied by the average market price (the trading period preceding
25 days of the conversion date). The variable conversion term was a derivative liability and the Company recorded approximately
$100,000 of debt discount upon issuance. The prepayment amount ranges from 135% to 140% of the outstanding principle plus accrued
interest of the note, depending on when such prepayment is made. In addition, the Company recognized issuance costs of $12,750
on the funding date and amortized such costs as interest expense over the term of the note. The Company recorded approximately
$159,000 in default penalty that was added to the note as of September 30, 2019.
On June 5, 2017, the Company entered a Convertible
Promissory Note with EMA Financial, LLC., (“EMA”) in the principle amount of $115,000 (the “EMA Note”).
The EMA Note bears interest at the rate of 10% per annum (24% upon an event of default) and is due and payable on June 5, 2018.
The principle amount of the EMA Note and all accrued interest is convertible at the option of the holder at the lower of (a) the
closing sales price 50% and (b) (a 50% discount) multiplied by the average market price (the trading period preceding 25 days of
the conversion date) or the closing bid price. The variable conversion term was a derivative liability, see Note 7, and the Company
recorded approximately $115,000 of debt discount upon issuance and is amortizing such costs to interest expense over the term of
the note. The prepayment amount ranges from 135% to 150% of the outstanding principle plus accrued interest of the note, depending
on when such prepayment is made. In addition, the Company recognized issuance costs of $6,900 on the funding date and is amortizing
such costs as interest expense over the term of the note. The Company recorded approximately $109,000 in default penalty that was
added to the note as of September 30, 2019.
On October 11, 2017, the Company entered into
a securities purchase agreement (“SPA AUC”) with Auctus Fund, LLC, upon the terms and subject to the conditions of
SPA3, we issued a convertible promissory note in the principal amount of $85,000.00 (the “Note”) to Auctus. The Company
received proceeds of $77,000.00 in cash from Auctus. Interest accrues on the outstanding principal amount of the Note at the rate
of subject 12% per annum (24% upon an event of default). The Note is due and payable on July 11, 2018. The Note is convertible
into common stock, subject to Rule 144, at any time after the issue date, at the lower of (i) the closing sale price of the common
stock on the on the trading day immediately preceding the closing date, and (ii) 50% of the lowest sale price for the common stock
during the two (2) lowest trading days during the twenty-five (25) Trading Day period ending on the last complete Trading Day prior
to the Conversion Date. The variable conversion term was a derivative liability and the Company recorded approximately $74,000
of debt discount upon issuance, which is being amortized to interest expense over the life of the note Regarding the Note, the
Company paid Auctus $10,750 for its expenses and legal fees. The Company recorded approximately $127,000 in default penalty that
was added to the note as of September 30, 2019.
On October 11, 2017, the Company entered into
a securities purchase agreement (“SPA4”) with EMA Financial, LLC (“EMA2”), upon the terms and subject to
the conditions of SPA4, we issued a convertible promissory note in the principal amount of $85,000.00 (the “Note4”)
to EMA. The Company received proceeds of $79,395.00 in cash from EMA2. Interest accrues on the outstanding principal amount of
the Note4 at the rate of 10% per annum (24% upon an event of default). The Note4 is due and payable on October 11, 2018. The Note4
is convertible into common stock, subject to Rule 144, at any time after the issue date, at the lower of (i) the closing sale price
of the common stock on the on the trading day immediately preceding the closing date, and (ii) 50% of the lowest sale price for
the common stock during the twenty (25) consecutive trading days immediately preceding the conversion date. The variable conversion
term was a derivative liability and the Company recorded approximately $85,000 of debt discount upon issuance, which is being amortized
to interest expense over the life of the note. If the closing sale price at any time fall below $0.17 or less. (as appropriately
and equitably adjusted for stock splits, stock dividends, stock contributions and similar events), then such 50% figure mentioned
above shall be reduced to 35%. In connection with the EMA Note, the Company paid EMA2 $5,100 for its expenses and legal fees. The
Company recorded approximately $81,000 in default penalty that was added to the note as of September 30, 2019.
On October 24, 2017, the Company entered into
a securities purchase agreement (“SPA5”) with Powerup Lending Group, LTD (“POWER”), upon the terms and
subject to the conditions of SPA5, we issued a convertible promissory note in the principal amount of $108,000.00 (the “Note5”)
to POWER. The Company received proceeds of $108,000 in cash from POWER. Interest accrues on the outstanding principal amount of
the Note5 at the rate of 12% per annum (22% upon an event of default). The Note5 is due and payable on July 30, 2018. The Note5
is convertible into common stock, subject to Rule 144, at any time after the issue date, at the lower of (i) the closing sale price
of the common stock on the on the trading day immediately preceding the closing date, and (ii) 61% of the lowest three sale prices
for the common stock during the fifteen (15) consecutive trading days immediately preceding the conversion date. The variable conversion
term was a derivative liability and the Company recorded approximately $108,000 of debt discount upon issuance, which is being
amortized to interest expense over the life of the note. If the closing sale price at any time fall below $0.17 or less. (as appropriately
and equitably adjusted for stock splits, stock dividends, stock contributions and similar events), then such 61% figure mentioned
above shall be reduced to 39%. In connection with the Note5, the Company paid POWER $3,000 for its expenses and legal fees. The
Company recorded approximately $590 in default penalty that was added to the note as of September 30, 2019. The default penalty
was reversed as of September 30, 2019, as the entire principal and related accrued interest were converted to common shares as
of September 30, 2019.
On December 8, 2017, the Company entered into
a securities purchase agreement (“SPA3”) with Crown Bridge Partners, LLC (“CROWN”), upon the terms and
subject to the conditions of SPA6, we issued a convertible promissory note in the principal amount of $65,000.00 (the “Note6”)
to CROWN. The Company received proceeds of $56,000 in cash from CROWN. Interest accrues on the outstanding principal amount of
the Note6 at the rate of 8% per annum (15% upon an event of default). The Note6 is due and payable on December 8, 2018. The Note6
is convertible into common stock, subject to Rule 144, at any time after the issue date, at the lower of (i) the closing sale price
of the common stock on the on the trading day immediately preceding the closing date, and (ii) 55% of the lowest sale price for
the common stock during the twenty (25) consecutive trading days immediately preceding the conversion date. If the closing sale
price at any time fall below $0.10 or less. (as appropriately and equitably adjusted for stock splits, stock dividends, stock contributions
and similar events), then such 55% figure mentioned above shall be reduced to 45%. The variable conversion term was a derivative
liability and the Company recorded approximately $65,000 of debt discount upon issuance, which is being amortized to interest expense
over the life of the note. In connection with the Note6, the Company paid CROWN $2,500 for its expenses and legal fees. The Company
recorded approximately $32,000 in default penalty that was added to the note as of September 30, 2019.
On December 21, 2017, the Company entered into
a securities purchase agreement (“SPA7”) with Powerup Lending Group, LTD (“POWER2”), upon the terms and
subject to the conditions of SPA7 we issued a convertible promissory note in the principal amount of $53,000 (the “Note7”)
to POWER2. The Company received proceeds of $50,000 in cash from POWER2. Interest accrues on the outstanding principal amount of
the Note7 at the rate of 12% per annum (22% upon an event of default). The Note7 is due and payable on September 30, 2018. The
Note7 is convertible into common stock, subject to Rule 144, at any time after the issue date, at the lower of (i) the closing
sale price of the common stock on the on the trading day immediately preceding the closing date, and (ii) 61% of the lowest three
sale prices for the common stock during the fifteen (15) consecutive trading days immediately preceding the conversion date. If
the closing sale price at any time fall below $0.10 or less. (as appropriately and equitably adjusted for stock splits, stock dividends,
stock contributions and similar events), then such 61% figure mentioned above shall be reduced to 39%. In connection with the Note7,
the Company paid POWER2 $3,000 for its expenses and legal fees. The Company recorded approximately $26,000 in default penalty that
was added to the note as of September 30, 2019.
On April 16, 2018, the Company entered into
a securities purchase agreement (“SPA8”) with Powerup Lending Group, LTD (“POWER3”), upon the terms and
subject to the conditions of SPA8 we issued a convertible promissory note in the principal amount of $53,000.00 (the “Note8”)
to POWER3. The Company received proceeds of $50,000 in cash from POWER3. Interest accrues on the outstanding principal amount of
the Note8 at the rate of 12% per annum (22% upon an event of default. The Note8 is due and payable on January 30, 2019. The Note8
is convertible into common stock, subject to Rule 144, at any time after the issue date, at the lower of (i) the closing sale price
of the common stock on the on the trading day immediately preceding the closing date, and (ii) 61% of the lowest sale price for
the common stock during the fifteen (15) consecutive trading days immediately preceding the conversion date.
In connection with the Note, the Company paid
POWER3 $3,000 for its expenses and legal fees. The Company recorded approximately $26,000 in default penalty that was added to
the note as of September 30, 2019.
|