Debts | 6. DEBTS Debts consist of the following at December 31, 2020 and 2019: December 31, 2020 December 31, 2019 Note payable– Related Party (1) $ - $ 14,400 Notes payable – Unrelated third parties (Net of discount of $1,500 and $8,921, respectively) (2) 1,346,057 1,385,163 Convertible notes payable – Unrelated third parties (Net of discount of $101,448 and $17,370, respectively) (3) 1,276,902 872,256 Convertible notes payable, at fair value (Net of discount of $0 and $22,344, respectively) (4) 1,832,439 5,814,047 Other advances from an unrelated third party (5) 225,000 175,000 SBA notes payable(6) 214,795 - Ending balances 4,895,193 8,260,866 Less: Long-term portion-Convertible Notes payable-Unrelated third parties (48,477 ) (907,912 ) Less: Long-term portion- SBA notes payable (204,070 ) - Current portion $ 4,642,646 $ 7,352,954 (1) During 2010 we borrowed $200,000 from one of our directors. Under the terms of the loan agreement, this loan was expected to be repaid in nine months to a year from the date of the loan along with interest calculated at 10% for the first month plus 12% after 30 days from funding. We are in default regarding this loan. The loan is under personal guarantee by Mr. Deitsch. We repaid principal balance in full as of December 31, 2016. At December 31, 2020 and 2019, we owed this director accrued interest of $179,522 and $159,555. The interest expense for the years ended December 31, 2020 and 2019 was $19,967 and $17,747. In December 2017, we issued a promissory note to a related party in the amount of $12,000 with original issuance discount of $2,000. The note was amended in December 2018 with original issuance discount of $2,400 and was due in twelve months from the execution and funding of the note. The Note of $14,400 was paid in full in cash during June 2020. In addition, we issued 5,000,000 shares due to the default on repayment of the note. The shares were valued at fair value of $3,000(See Note 7). At December 31, 2020 and 2019, the principal balance of the loan is $0 and $14,400, respectively. (2) At December 31, 2020 and 2019, the balance of $1,346,057 and $1,385,163 net of discount of $1,500 and $8,921, respectively, consisted of the following loans: ● In August 2016, we issued two Promissory Notes for a total of $200,000 ($100,000 each) to a company owned by a former director of the Company. The Notes carry interest at 12% annually and were originally due on the date that was six-months from the execution and funding of the note. At December 31, 2018, we owed principal balance of $192,974, and accrued interest of $40,033. The principal balance of $101,818 and accrued interest of $21,023 were settled on February 15, 2019 for $104,000 with scheduled payments through May 1, 2020. During the first quarter of 2020, the settlement was amended to $88,500. We recorded a gain on settlement of debt in other income for $15,500 and $18,841 during the years ended December 31, 2020 and 2019, respectively. The Company repaid $13,500 and $75,000 during the years ended December 31, 2019 and 2020 to pay the settlement balance of $88,500 in full. At December 31, 2020 and 2019, we owed principal balance of $91,156 and 160,633, respectively, and accrued interest of $40,917 and $50,971, respectively. The remaining principal balance of $91,156 and accrued interest of $40,917 is being disputed in court and negotiation for settlement. (See Note 13). ● On August 2, 2011 under a settlement agreement with Liquid Packaging Resources, Inc. (“LPR”), we agreed to pay LPR a total of $350,000 in monthly installments of $50,000 beginning August 15, 2011 and ending on February 15, 2012. We signed the first amendment to the settlement agreement where we agreed to pay $175,000, which was the balance outstanding at December 31, 2011(this includes a $25,000 penalty for non-payment). We repaid $25,000 during the three months ended March 31, 2012. We did not make all of the payments under such amendment and as a result pursuant to the original settlement agreement, LPR had the right to sell 142,858 shares (5,714,326 shares pre reverse stock split) of our free trading stock held in escrow by their attorney and receive cash settlements for a total amount of $450,000 (the initial $350,000 plus total default penalties of $100,000). LPR sold the note to Southridge Partners, LLP (“Southridge”) for consideration of $281,772 in June 2012. In August 2013 the debt of $281,772 reverted back to LPR. ● At December 31, 2012, we owed University Centre West Ltd. approximately $55,410 for rent, which was assigned and sold to Southridge, and it is currently outstanding and carries no interest. ● In April 2016, we issued a promissory note to an unrelated third party in the amount of $10,000 bearing interest at 10% annually. The note was due in one year from the execution and funding of the note. The note is in default and negotiation of settlement. At December 31, 2020 and 2019, the accrued interest is $4,769 and $3,755. ● In May 2016, the Company issued a promissory note to an unrelated third party in the amount of $75,000 bearing monthly interest at a rate of 2%. The note was due in six months from the execution and funding of the note. During April 2017, we accepted the offer of a settlement to issue 5,000,000 common shares as a repayment of $25,000. The note is in default and in negotiation of settlement. At December 31, 2020 and 2019, the outstanding principal balance is $50,000 and accrued interest is $62,167 and $49,967. ● In June 2016, the Company issued a promissory note to an unrelated third party in the amount of $50,000 bearing monthly interest at a rate of 2%. The note was due in six months from the execution and funding of the note. The note is in default and negotiation of settlement. At December 31, 2020 and 2019, the outstanding principal balance is $50,000 and accrued interest is $55,367 and $43,166. ● A promissory note originally issued to an unrelated third party in August 2016 was restated in the amount of $282,983 bearing monthly interest at a rate of 2.0% and was due June 17, 2019. In connection with this restated note, we issued 10,000,000 shares of our restricted common stock (See Note 7). We recorded a debt discount in the amount of $3,945 to reflect the value of the common stock as a reduction to the carrying amount of the debt and a corresponding increase to common stock and additional paid-in capital. Amortization for this debt discount was fully amortized during the years ended December 31, 2019 and 2018 for $3,616 and $329, respectively. During September 2019, the note of $282,983 plus accrued interest amended in December 2018 was restated. The restated principal balance of $333,543 were due September 2020. In connection with this restated note, we issued 20,000,000 shares of our common stock. During September 2020, we issued a total of 10,000,000 restricted shares due to the default on repayments. The shares were valued at fair value of $6,000 (See Note 7).The common stock was valued at $5,895(See Note 7) and recorded as a debt discount that was amortized over the life of the note. Amortization for this debt discount for the years ended December 31, 2020 and 2019 was $4,421 and $1,474 and debt discount at December 31, 2020 and 2019 is $0 and $4,421. The Note is in default and negotiation of settlement. At December 31, 2020 and 2019, the principal balance is $333,543, and the accrued interest is $106,511 and $25,127, respectively. ● On September 26, 2016, we issued a promissory note to an unrelated third party in the amount of $75,000 bearing interest at 10% annually. The note was due in one year from the execution and funding of the note. In March 2018, $15,000 of the principal balance of the note was assigned to an unrelated third party and is in negotiation of settlement. In January 2019, the remaining principal balance of $60,000 and accrued interest of $15,900 was restated in the form of a Convertible Note (See Note 6(4)). At December 31, 2020 and 2019, the principal balance outstanding is $15,000 and the accrued interest is $1,371. ● In October 2016, we issued a promissory note to an unrelated third party in the amount of $50,000 bearing monthly interest at a rate of 2%. The note was due in six months from the execution and funding of the note. The note is in default and in negotiation of settlement. At December 31, 2020 and 2019, the accrued interest is $51,667 and $39,466, respectively. ● In June 2017, we issued a promissory note to an unrelated third party in the amount of $12,500 bearing interest at 10% annually. The note was due in one year from the execution and funding of the note. The note is in default and in negotiation of settlement. At December 31, 2020 and 2019, the accrued interest is $4,483 and $3,212, respectively. ● During July 2017, we received a loan for a total of $200,000 from an unrelated third party. The loan was repaid through scheduled payments through August 2017 along with interest on average 15% annum. During June 2018, the loan was settled with two unrelated third parties for $130,401 and $40,000, respectively, with the monthly scheduled repayments of approximately $5,000 and $2,000 per month to each unrelated party through July 2020. The Company repaid a total of $34,976, $42,698, and $44,478 during 2018, 2019 and 2020, respectively. At December 31, 2020 and 2019, the principal balance is $48,250 and $92,728, respectively. The portion of settlement of $130,401 was repaid in full in April 2021. The remaining balance of $33,874 is in default and negotiation of settlement. ● In July 2017, we issued a promissory note to an unrelated third party in the amount of $50,000 with original issue discount of $10,000. The note was due in six months from the execution and funding of the note. The note is in default and in negotiation of settlement. At December 31, 2020 and 2019, the principal balance of the note is $50,000. ● During September 2018 and 2019, a promissory note originally issued to an unrelated third party in September 2017 was amended in the amount of $36,000 including original issuance discount of $6,000 each due in September 2019 and 2020. The Note was further restated in September 2020. The restated principal balance was $33,000 with the original issuance discount of $3,000 and was due March 2021. The original issue discount is amortized over the term of the loan. Debt discounts have been fully amortized during 2019 for $7,500 for the restated Notes in September 2018 and 2019. Repayments of $7,000, $5,000, and $6,500 have been made during 2018, 2019, and 2020, respectively. The Note is under personal guarantee by Mr. Deitsch. At December 31, 2020 and 2019, the principal balance of the note is $29,500 and $30,000, net of debt discount of $1,500 and $4,500, respectively. During March 2021, the remaining balance of $30,000 was sold to an unrelated third party in the form of a convertible note at a fixed conversion price of $0.01 per share. The new note carries interest at 12% with scheduled monthly payments of $1,000 beginning in April 2021 through March 2024. ● During November 2018, a promissory note originally issued to an unrelated third party in October 2017 was restated in the amount of $60,000 including original issuance discount of $10,000 due May 2019. During July 2019, payment of original issuance discount of $10,000 was made. During September 2019, we issued additional 10,000,000 restricted shares due to the late payment of the original issuance discount of $10,000. The shares were valued at fair value of $4,000. The restated Note in November 2018 and prior notes are all under personal guarantee by Mr. Deitsch. Debt discount and original issuance discount have been fully amortized during 2019 for $8,254. As of December 31, 2019, the amount due is $60,000. During January 2020, the Note of $60,000 and the Note of $76,076 (See Note 6(3)) plus accrued interest of $12,149 were combined and restated at a rate of 2.0% monthly due July 2020. During July 2020, the restated principal balance of $148,225 plus accrued interest of $18,701 was further restated. The new principal balance of $166,926 carries interest at a rate of 2.0% monthly and was due January 2021. At December 31, 2020, the restated principal balance and accrued interest was $166,926 and $18,917. The principal balance plus accrued interest was further restated in February 2021 and was due in August 2021(See Note 13). The note is in default and in negotiation of settlement. ● In November 2017, we issued a promissory note to an unrelated third party in the amount of $120,000 with original issuance discount of $20,000. During March 2020, $50,000 of the Note was settled for 125,000,000 shares with a fair value of $87,500. We recorded a loss on settlement in other expense for $37,500 (See Note 7). An additional 36,000,000 shares were issued to satisfy the default provision of the original note and 10,000,000 shares were issued along with the restatement. The total fair value of issued stock was $32,200. The remaining balance of $70,000 was restated with additional issuance discount of $14,000. The $84,000 due in September 2020 is in default and negotiation of further settlement. At December 31, 2020 and 2019, the principal balance of the loan is $84,000 and $120,000, respectively. ● In November 2017, we issued a promissory note to an unrelated third party in the amount of $18,000 with original issuance discount of $3,000. The note is in default and in negotiation of settlement. The note was due in six months from the execution and funding of the note. At December 31, 2020 and 2019, the principal balance of the note is $18,000 and the accrued interest is $2,000. (3) At December 31, 2020 and 2019, the balance of $1,276,902 and $872,256 net of discount of $101,448 and $17,370, respectively, consisted of the following convertible loans: ● On March 19, 2014, we issued two Convertible Debentures in the amount of up to $500,000 each (total $1,000,000) to two non-related parties. The first tranche of $15,000 each (total $30,000) of the funds was received during the first quarter of 2014. The notes carry interest at 8% and were due on March 19, 2018. During 2018, repayment of $3,000 was made. At December 31, 2018, the principal balance of the note is $27,000 and the accrued interest is $11,412. The two outstanding Notes were settled in connection with issuance of the convertible note in the amount of up to $1,000,000 in February 2019 (See Note 6(4)), as a result, we recorded a gain on settlement of debt in other income for $38,412. ● During August 2018, a promissory note originally issued to an unrelated third party in July 2016 was restated in the amount of $76,076 bearing monthly interest at a rate of 2.5% and was due February 2019. The debt discount from 2018 has been fully amortized with the remaining $950 amortized during the three months ended March 31, 2019. The note is under personal guarantee by Mr. Deitsch. At December 31, 2019, the convertible note payable and accrued interest was recorded at $76,076 and $12,150, respectively. During January 2020, this Note and the Note of $60,000 amended in November 2018(See Note 6(2)) were combined and restated. The principal balance plus accrued interest was further restated in July 2020 and February 2021 and is due in August 2021. ● In October 2017, we issued a promissory note to an unrelated third party in the amount of $60,000 with original issuance discount of $10,000 and a conversion option. The note was due in six months from the execution and funding of the note. The loan is in default and in negotiation of settlement. At December 31, 2020 and 2019, the principal balance of the note is $60,000. ● During January through December 2018, we issued convertible notes payable to the 20 unrelated third parties for a total of $618,250 with original issue discount of $62,950. The notes were due in six months from the execution and funding of each note. The notes are convertible into shares of Company’s common stock at a conversion price ranging from $0.0003 to $0.001 per share. The total discount of $255,655 and original issuance discount of $62,950 have been fully amortized during 2019 for $28,421. During February 2019, we issued convertible notes payable of $70,000 with original issuance discount of $5,000. The notes were due in six months from the execution and funding of each note. The notes are convertible into shares of Company’s common stock at a conversion price of $0.0005 per share. During December 2019, $22,000 of the Note was amended to extend the maturity date to June 2020. In connection with the issuance and restatements of the notes, the Company granted the following warrants at an exercise price of $0.001 per share. The warrants were valued using the Black-Scholes method and recorded as a debt discount that was amortized over the life of the notes. During August 2020, the convertible promissory notes of $38,500 was amended to add additional original issuance discount (OID) of $7,550 due February 2021. During October 2020, a convertible promissory note of $16,500 was amended to add additional OID of $1,650 due April 2021.The Noteholders have the right to convert the note into shares of Common Stock at a conversion price of $0.0005. In connection with the issuance of amended convertible notes, the Company granted the following warrants at an exercise price of $0.001 per share. The warrants were valued using the Black-Scholes method and recorded as a debt discount. No warrants have been exercised. The Company classified embedded conversion features in the warrants as a derivative liability. The warrants were valued at their fair value of $123,900 on December 31, 2020 (See Note 8). The debt discounts associated with the warrants in August was for $38,500. The debt discounts associated with the warrants in October was for $16,500. The debt discounts are amortized over the life of the notes. Month of Issuance Number of Warrants Fair Value of Warrants Recorded as Debt Discount Month of Expiration February, 2019 110,000,000 $ 8,147 August, 2019 December, 2019 44,000,000 $ 7,370 August, 2020 August, 2020 92,100,000 $ 38,500 August, 2021 October, 2020 36,300,000 $ 16,500 October, 2022 During May 2019, we restated two convertible notes payable with additional original issue discount of $6,400 and issued 6,000,001 shares of common stock with a fair value of $1,800 (See Note 7). The two restated notes were due in August 2019 and are in default. The total discount of $8,200 was amortized over the term of the notes. During November 2019, we issued a convertible promissory note to an unrelated third party for $137,500 with original issuance discount of $12,500. The note was due six months from the execution and funding of the notes. The Noteholder had the right to convert the note into shares of Common Stock at a fixed conversion price of $0.000275. The Note is in default and negotiation of settlement. During December 2019, we issued a convertible promissory note to an unrelated third party for $22,000 with original issuance discount of $2,000. The note was due six months from the execution and funding of the notes. The Noteholder had the right to convert the note into shares of Common Stock at a fixed conversion price of $0.0002. The Note is in default and negotiation of settlement. During 2019, repayments of $13,500 were made in cash to three of the Notes. Six of the Notes for a total of $87,100 were repaid in stocks as the part of settlement of issuances of 800,000,000 shares of common stocks during December 2019(see Note 7). Amortization for the year ended December 31, 2019 was $55,222. At December 31, 2019, the principal balance of the notes, net of discount of $17,370 was $736,180. The remaining debt discount of $17,370 has been fully amortized during the fiscal year 2020. Two of the above mentioned convertible notes payable for a total of $19,500 were settled in full in March and April 2021(See Note 13). During the year ended December 31, 2020, we issued convertible notes payable of $555,600 with original issuance discount of $53,600. $287,400 of these notes were due in a year, and $268,200 of the Notes are due in six months from the execution and funding of each note. The notes are convertible into shares of Company’s common stock at a conversion price ranging from $0.0002 to 0.0008 per share. During July 2020, we issued a total of 1,000,000 restricted shares to a Note holder due to the default on repayments of the promissory note of $22,000 originated in December 2019. The shares were valued at fair value of $700 (See Note 7). In addition, in connection with the issuance of two of the above mentioned convertible notes of $57,500 with original issuance discount of $7,500 due in one year, the Company granted the 71,875,000 warrants at an exercise price of $0.002 per share that expire one year from the date of issuance. The warrants are valued using the Black-Scholes method and recorded as a debt discount. No warrants have been exercised. The debt discounts associated with the warrants and OID for $50,000 and $7,500, respectively, are amortized over the life of the notes. Amortization for the year ended December 31, 2020 was $83,720. The Company classified embedded conversion features in the warrants as a derivative liability. The warrants were valued at their fair value of $65,634 using the Black-Scholes method on December 31, 2020 (See Note 8). At the date of this report, $1,121,700 of the above mentioned convertible notes payable are in default and in negotiation of settlement. At December 31, 2020, the principal balance of the notes, net of discount of $101,448 is $1,276,902. (4) At December 31, 2020 and 2019, the balance of $1,832,439 and $5,814,047 net of discount of $0 and $22,344, respectively, consisted of the following convertible loans: ● The remaining balance of $20,000 of a Convertible Note of $120,000 originated in March 2016 is in default and negotiation of settlement. The conversion price is equal to 55% of the average of the three lowest volume weighted average prices for the three consecutive trading days immediately prior to but not including the conversion date. At December 31, 2020 and 2019, the convertible notes payable with principal balance of $20,000, at fair value, were recorded at $69,433 and $56,373, respectively. ● During May 2017, we issued a Convertible Debenture in the amount of $64,000 to an unrelated third party. The note was due on May 4, 2018. The Note holder has the right to convert the note into shares of Common Stock at a sixty percent (60%) of the lowest trading price of our restricted common stock for the twenty trading days preceding the conversion date. We have accrued interest at default interest rate of 20% after the note’s maturity date. After prior conversions, during December 2019, the principal balance of $16,752 with accrued interest of $3,232 previously assigned and sold to a third party in February 2018 was settled as part of issuances of 800,000,000 shares of common stocks (See Note 7). At December 31, 2020 and 2019, the remaining principal of $12,629 plus accrued interest of $12,308 and $9,782, respectively, at fair value, was recorded at $49,875 and $62,253, respectively. The remaining principal balance of the Note is in default. All of the convertible notes discussed below are with a single unrelated third party. ● During December 2016, we issued a Convertible Debenture to an unrelated third party in the amount of $110,000. The note carries interest at 12% and matured on September 8, 2017. Unless previously converted into shares of restricted common stock, the Note holder has the right to convert the note into shares of Common Stock at a sixty percent (60%) of the lowest trading prices of our restricted common stock for the twenty-five trading days preceding the conversion date. During February 2018, the remaining balance of $46,999 with accrued interest of $2,820 was assigned and sold to an unrelated third party in the form of a Convertible Redeemable Note. As part of the debt sale, the Company entered into a settlement agreement with the original noteholder for a settlement of a default penalty of the original debt. At December 31, 2018, the Company owed additional shares to the original noteholder and recorded an accrual of $32,400 to account for the cost of the shares, and the shares were issued in January 2019 (See Note 7). The new note of $49,819 carries interest at 8% and was due on February 13, 2019, unless previously converted into shares of restricted common stock. We have increased the outstanding principal due by 10% and accrued interest at default interest rate of 24% after the note’s maturity date. The Noteholder has the right to convert the note into shares of our restricted common stock at sixty percent of the lowest trading price of our restricted common stock for the twenty-five prior trading days including the conversion date. The conversion discount was further decreased to fifty percent due to the default on the Note. During September 2018, the Noteholder made a conversion of 52,244,433 shares of our restricted common stock with a fair value of $37,011 in satisfaction of principal balance of $15,000 and accrued interest in full. At December 31, 2019, the convertible note payable with principal balance of $38,301, at fair value, was recorded at $246,819. ● During February 2018, we issued a convertible debenture in the amount of $200,000 to an unrelated third party. The note carries interest at 8% and was due in February 2019, unless previously converted into shares of restricted common stock. We have increased the outstanding principal due by 10% and accrued interest at default interest rate of 24% after the note’s maturity date. The Note holder has the right to convert the note into shares of Common Stock at sixty percent of the lowest trading price of our restricted common stock for the twenty-five trading days including the date of receipt of conversion notice. The conversion discount was further decreased to fifty percent due to the default on the Note. In connection with the issuance of the convertible note payable, we recorded a day-one derivative loss of $1,646,242. At December 31, 2019, the convertible note payable with principal balance of $220,000, at fair value, was recorded at $1,412,175. The note carries additional $200,000 “Back-end Note” ($100,000 each) with the same terms as the original note. ● During April 2018, $65,000 of one of the $100,000 Back-end Note was funded. The note carries interest at 8% and was due in February 2019, unless previously converted into shares of restricted common stock. We have increased the outstanding principal due by 10% and accrued interest at default interest rate of 24% after the note’s maturity date. The Note holder has the right to convert the note into shares of Common Stock at sixty percent of the lowest trading price of our restricted common stock for the twenty-five trading days including the date of receipt of conversion notice. The conversion discount was further decreased to fifty percent due to the default on the Note. In connection with the issuance of the convertible note payable, we recorded a day-one derivative loss of $110,700. At December 31, 2019, the convertible note payable with principal balance of $71,500, at fair value, was recorded at $458,957. ● During March 2018, we issued a convertible debenture in the amount of $60,000 to an unrelated third party. The note carries interest at 8% and was due in March 2019, unless previously converted into shares of restricted common stock. We have increased the outstanding principal due by 10% and accrued interest at default interest rate of 24% after the note’s maturity date. The Note holder has the right to convert the note into shares of Common Stock at sixty percent of the lowest trading price of our restricted common stock for the twenty-five trading days including the date of receipt of conversion notice. The conversion discount was further decreased to fifty percent due to the default on the Note. In connection with the issuance of the convertible note payable, we recorded a day-one derivative loss of $48,418. At December 31, 2019, the convertible note payable with principal balance of $66,000, at fair value, was recorded at $417,576. The note carries an additional “Back-end Note” with the same terms as the original note that enables the lender to lend to us another $60,000. ● During June 2018, the $60,000 Back-end Note was funded. The note carries interest at 8% and was due in March 2019, unless previously converted into shares of restricted common stock. We have increased the outstanding principal due by 10% and accrued interest at default interest rate of 24% after the note’s maturity date. The Note holder has the right to convert the note into shares of Common Stock at sixty percent of the lowest trading price of our restricted common stock for the twenty-five trading days including the date of receipt of conversion notice. The conversion discount was further decreased to fifty percent due to the default on the Note. In connection with the issuance of the convertible note payable, we recorded a day-one derivative loss of $68,067. At December 31, 2019, the convertible note payable with principal balance of $66,000, at fair value, was recorded at $417,577. ● During May 2018, we issued a convertible debenture in the amount of $60,000 to an unrelated third party. The note carries interest at 8% and was due in May 2019, unless previously converted into shares of restricted common stock. We have accrued interest at default interest rate of 24% after the note’s maturity date. The Note holder has the right to convert the note into shares of Common Stock at sixty percent of the lowest trading price of our restricted common stock for the twenty-five trading days including the date of receipt of conversion notice. The conversion discount was further decreased to fifty percent due to the default on the Note. In connection with the issuance of the convertible note payable, we recorded a day-one derivative loss of $59,257. At December 31, 2019, the convertible note payable with principal balance of $60,000, at fair value, was recorded at $369,372. ● During August 2018, we issued a convertible debenture in the amount of $31,500 to an unrelated third party. The note carries interest at 8% and was due in August 2019, unless previously converted into shares of restricted common stock. We have accrued interest at default interest rate of 24% after the note’s maturity date. The Note holder has the right to convert the note into shares of Common Stock at sixty percent of the lowest trading price of our restricted common stock for the twenty-five trading days including the date of receipt of conversion notice. The conversion discount was further decreased to fifty percent due to the default on the Note. In connection with the issuance of the convertible note payable, we recorded a day-one derivative loss of $23,794. At December 31, 2019, the convertible note payable with principal balance of $31,500, at fair value, was recorded at $183,565. All of the above convertible notes with principal balance of a total of $511,319 as of December 31, 2019, plus the additional principal increases due to the default terms, were settled in October 2020. During September 2020, the Note holder received a total of 107,133,333 shares of our restricted common stock in satisfaction of the principal balance of $22,000 and accrued interest of $10,140. During October 2020, the Note holder received a total of 107,817,770 shares of our restricted common stock in satisfaction of the principal balance of $22,000 and accrued interest of $10,345 (See Note 7). During October 2020, the Note holder sold the remaining debt principal value as of October 22, 2020 of $509,301 and accrued interest of $234,417 for $250,000 to a non-related party. Based on the conversion methodology, the debt was valued at $1,859,294 prior to conversion, and the Company recorded a gain on settlement of $1,609,294, which is recorded within gain (loss) on settlement of debt, net, within the statement of operations. Number of Fair Value of Date shares converted Debt 9/21/2020 107,133,333 $ 171,413 10/5/2020 107,817,770 $ 64,691 ● The new note of $250,000 carries interest at 8%. The Noteholder has the right to convert the note into shares of our restricted common stock at sixty percent of the lowest trading price of our restricted common stock for the twenty-five prior trading days including the conversion date. In connection with the issuance of the convertible note payable, we rec |