NOTES PAYABLE | NOTE 5 – NOTES PAYABLE The Company had the following unsecured notes payable as at June 30, 2017 and December 31, 2016: June 30, December 31, Convertible Promissory Note to Crown Bridge $ 7,247 $ 13,289 Convertible Promissory Notes to Auctus Fund 104,509 68,226 Convertible Promissory Notes to EMA Financial 21,832 11,667 Convertible Promissory Notes to Black Bridge Capital 106,202 26,667 Convertible Promissory Notes to Tangiers 23,801 100,000 Convertible Promissory Notes to Denali 31,615 4,791 Convertible Promissory Notes to Tangiers - 955 Convertible Promissory Notes to Powerup 22,500 - Total Convertible Debt $ 317,706 $ 225,595 Promissory Note Payable to Crown Bridge Partners On April 1, 2016, the Company entered into an agreement to issue a convertible promissory note to an unrelated party for an amount of $40,000 with a $6,000 original issue discount. The convertible promissory note bears interest at 10% per annum and matures twelve months from issue date. The conversion price is 55% of the lowest trading price 25 days prior to conversion. The note was discounted for a derivative and the discount of $34,000 is being amortized over the life of the note using the effective interest method resulting in $10,000 of interest expense for the six months ended June 30, 2017. During the six months ended June 30, 2017, principal of $16,042 was converted for 55,749,000 common shares. As at June 30, 2017, the note is presented net of a debt discount of $0. The note is currently in default. Promissory Notes Payable to Auctus Fund Auctus #1 On May 20, 2016, the Company entered into an agreement to issue a convertible promissory note to an unrelated party for an amount of $67,750 with a $7,750 original issue discount. The convertible promissory note bears interest at 10% per annum and matures nine months from issue date. The conversion price is 50% of the lowest trading price 25 days prior to conversion. The note was discounted for a derivative and the discount of $60,000 is being amortized over the life of the note using the effective interest method resulting in $14,542 of interest expense for the six months ended June 30, 2017. During the six months ended June 30, 2017, principal of $12,771 and accrued interest of $2,089 were converted for 56,460,000 common shares. The note is currently in default. Auctus #2 On September 20, 2016, the Company entered into an agreement to issue a convertible promissory note to an unrelated party for an amount of $56,750 with a $6,750 original issue discount. The convertible promissory note bears interest at 10% per annum and matures nine months from issue date. The conversion price is 50% of the lowest trading price 25 days prior to conversion. The note was discounted for a derivative and the discount of $50,000 is being amortized over the life of the note using the effective interest method resulting in $35,607 of interest expense for the six months ended June 30, 2017. As of June 30, 2017, the notes are presented net of a debt discount of $0. The note is currently in default. Promissory Note Payable to EMA Financial On September 7, 2016, the Company entered into an agreement to issue a convertible promissory note to an unrelated party for an amount of $35,000 with a $5,250 original issue discount. The convertible promissory note bears interest at 10% per annum and matures twelve months from issue date. The conversion price is 50% of the lowest trading price 25 days prior to conversion. The note was discounted for a derivative and the discount of $29,750 is being amortized over the life of the note using the effective interest method resulting in $14,876 of interest expense for the six months ended June 30, 2017. During the six months ended June 30, 2017, principal of $6,270 were converted for 39,592,000 common shares. As of June 30, 2017, the note is presented net of a debt discount of $6,898. Promissory Note Payable to Blackbridge Capital Growth Fund, LLC On November 3, 2016, the Company entered into an agreement to issue a convertible promissory note to an unrelated party for an amount of $60,000. The convertible promissory note bears interest at 8% per annum and matures twelve months from issue date. The conversion price is 50% of the lowest trading price 20 days prior to conversion. The note was discounted for a derivative and the discount of $60,000 is being amortized over the life of the note using the effective interest method resulting in $30,000 of interest expense for the six months ended June 30, 2017. As of June 30, 2017, the note is presented net of a debt discount of $20,465. Commitment Note On November 3, 2016, the Company entered into an investment agreement with Blackridge Capital Growth Fund, LLC. Per the investment agreement, the investor will invest up to $2,000,000 to purchase the Company’s common stock, par value of $.001 per share. The Company issued a convertible promissory note for $100,000, as a commitment fee, which bears interest at 8% of the principle amount and matures on November 3, 2017. The commitment fee expense of $100,000 was recognized on November 3, 2016. The conversion price is equal to 57.5% of the lowest trading price during the 20 days prior to the conversion. On November 3, 2016, a derivative debt discount of $100,000 was recorded. For the six months ended June 30, 2017, an amount of $50,000 was amortized into interest expense in relation to the debt discount. As of June 30, 2017, the note is presented net of a debt discount of $33,333. Commitment Note Payable to Tangiers On April 4, 2016, the Company entered into an investment agreement with an unrelated party. Per the investment agreement, the investor will invest up to $5,000,000 to purchase the Company’s common stock, par value of $.001 per share. In connection with the investment agreement, the Company entered into a registration rights agreement with the unrelated party which has been filed with the SEC. The maximum investment amount is equal to one hundred percent of the average of the daily trading volume of the common stock for the ten days prior to the put notice entered into by the unrelated party. The total purchase price to be paid in connection with the put notice, is calculated at eighteen percent discount of the lowest trading price of the common stock during the five consecutive trading days immediately succeeding the put notice date. The Company issued a promissory note to the unrelated party for $100,000, as a commitment fee, which bears interest at 10% of the principle amount and matures seven months from April 4, 2016 with a possible extension to ten months based on whether the Company executes the related investment agreement within 180 days from April 4, 2016. If the registration statement is declared effective within 90 days of the execution of the investment agreement, the Company and the unrelated party agree the principal balance of the note will be immediately reduced by $40,000. The note payable will be available to be converted upon default. Per the agreement, default could occur based on: failure of payment on any outstanding amounts longer than five days after the due date, failure to issue shares after request, or failure to comply with all of the other material provisions included in the agreement. The conversion price is equal to the lower of: (a) 90% of the lowest trading price of the Company’s common stock during the 25 consecutive trading days prior to the date on which the unrelated party elects to convert all or part of the note, or (b) 90% of the lowest trading price of the Company’s common stock during the 25 consecutive trading days prior to the effective date of April 4, 2016. At the election of the unrelated party, at each closing date (as defined in the investment agreement) after the date which is six months after April 4, 2016, the unrelated party shall retain (or the Company shall pay to the unrelated party) an amount equal to ten percent of each Put Amount (as defined in the agreement), and the amounts shall be applied by the unrelated party as follows: first against the amount of any unpaid interest or other fees, and second against any unpaid principal amounts, until all interest, fees, and principal have been paid. On April 28, 2016, the Company filed a registration statement with the Securities and Exchange Commission to register 3,500,000 shares of common stock pursuant to the Investment Agreement and the Registration Rights Agreement. On May 24, 2016, the Company received a comment letter from the Securities and Exchange Commission regarding the registration statement. On March 3, 2017, the Company voluntarily withdrew the registration statement. The Company expensed the $100,000 as commitment fee during the year ended December 31, 2016. The note was discounted for a derivative and the discount of $65,238 is fully amortized into interest expense for the year ended December 31, 2016. As of June 30, 2017, the note is presented net of a debt discount of $0. On January 10, 2017, the Company entered into an Assignment Agreement that Denali acquired $50,000 of the $100,000 note held by Tangiers. As at January 10, 2017, $50,000 of principal remained with Tangiers. During the six months ended June 30, 2017, principal of $26,199 was converted for 49,905,900 common shares. The note is currently in default. Notes Payable to Denali Denali #1 On December 5, 2016, the Company entered into an Assignment Agreement that Denali acquired $16,000 of the $57,500 note held by Tangiers. During the six months ended June 30, 2017, principal of $4,791and accrued interest of $38 was converted for 3,974,500 common shares. The note has been fully converted and has no remaining balance as of June 30, 2017. Denali #2 On January 10, 2017, the Company entered into an Assignment Agreement that Denali acquired $50,000 of the $100,000 note held by Tangiers. During the six months ended June 30, 2017, principal of $18,385 was converted for 9,884,400 common shares. The note is currently in default. Note Payable to Tangiers On April 4, 2016, the Company entered into a separate promissory note of $57,500 with a $7,500 original issue discount to the unrelated party, which bears interest at 10% of the principal amount. The $57,500 promissory note matures six months from the issue date. The note may be prepaid by the company, in whole, or part, as follows: (a) under thirty days, 105% of principal amount, (b) thirty one to sixty days, 110% of principal amount, (c) sixty one to ninety days, 115% of principal amount, (d) ninety one to one hundred and twenty days, 120% of principal amount, (e) one hundred twenty one to one hundred fifty one days, 125% of principal amount, and (f) one hundred and fifty one to one hundred and eighty days, 135% of principal amount. The note payable will be available to be converted upon default. Per the agreement, default could occur based on: failure of payment on any outstanding amounts longer than five days after the due date, failure to issue shares after request, or failure to comply with all of the other material provisions included in the agreement. The conversion price shall be equal to the lower of 50% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days prior to the date on which the unrelated party elects to convert all or part of the note. The note was discounted for a derivative and the discount of $50,000 is being amortized over the life of the note using the effective interest method. Total of $57,500 of the discount was recorded as interest expense for the year ended December 31, 2016. On December 5, 2016, Tangiers assigned $16,000 of the note payable to Denali. During the six months ended June 30, 2017, principal of $955 and interest of $1,838 was converted for 2,298,897 common shares. The note has been fully converted and has no remaining balance as of June 30, 2017. Note Payable to Power Up Lending Group On January 13, 2017, the Company entered into a promissory note of $45,000 with a $2,500 original issue discount to the unrelated party, which bears interest at 8% of the principal amount. The promissory note matures twelve months from the issue date. The conversion price shall be equal to the lower of 57.5% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days prior to the date on which the unrelated party elects to convert all or part of the note. The note was discounted for a derivative and the discount of $45,000 is being amortized over the life of the note using the effective interest method. Total of $22,500 of the discount was recorded as interest expense for the six months ended June 30, 2017. The note is presented net of a debt discount of $22,500. Accrued interest on convertible notes During the six months ended June 30, 2017 and 2016, interest expense of $22,942 and $7,731 was incurred on convertible notes, respectively. As of June 30, 2017 and December 31, 2016, accrued interest payable on convertible notes was $39,191 and $20,214, respectively. Summary of Conversions During the six months ended June 30, 2017, $85,414 principal amount of the convertible note and $3,965 accrued interest was converted for 217,864,718 common shares. |