Notes Payable, Third Parties | NOTE H - NOTES PAYABLE, THIRD PARTIES Notes payable to third parties consist of: June 30, 2019 December 31, 2018 (Unaudited) Unsecured Convertible Promissory Note payable to Armada Investment Fund, LLC (“Armada”), with interest at 8% payable at maturity with principal (default interest rates ranging from 18% to 24%); convertible into shares of common stock at a variable conversion price equal to 50% of the Market Price which is defined as the lowest Trading Price for the common stock during the 20 trading day period prior to the Conversion Date: Issue date October 9, 2018, maturity date of October 9, 2019- net of unamortized debt discount of $8,302 and $23,178 at June 30, 2019 and December 31, 2018, respectively 21,698 6,822 Issue date December 31, 2018, maturity date of December 31, 2019- net of unamortized debt discount of $16,636 and $33,000 at June 30, 2019 and December 31, 2018, respectively 16,364 - Amended and Restated Replacement Convertible Promissory Note, Issue date February 12, 2019, maturity date of February 12, 2019- net of amounts converted into Sylios common stock and net of unamortized debt discount of $13,763 and $0 at June 30, 2019 and December 31, 2018, respectively 6,637 - Issue date February 18, 2019, maturity date of February 18, 2020- net of unamortized debt discount of $7,373 and $0 at June 30, 2019 and December 31, 2018 respectively 4,177 - Issue date June 5, 2019, maturity date of June 5, 2020- net of unamortized debt discount of $15,370 and $0 at June 30, 2019, December 31, 2018, respectively 1,130 - Subtotal Armada 50,006 6,822 Unsecured Convertible Promissory Notes payable to Darling Capital, LLC and its affiliate Darling Investments, LLC (“Darling”), all in technical default, with interest at 12% payable at maturity with principal (default interest rates ranging from 18% to 22%); convertible into shares of common stock at a variable conversion price equal to 40% of the Market Price (20% for the note due March 7, 2018), which is defined as the lowest Trading Price for the common stock during the 20 trading day period prior to the Conversion Date. Issue date January 28, 2017, maturity date September 28, 2017, net of amounts converted into Sylios common stock 3,984 3,984 Issue date February 1, 2017, maturity date November 30, 2017, net of amounts converted into Sylios common stock 4,742 4,742 Issue date February 13, 2017, maturity date November 30, 2017 10,000 10,000 Issue date March 7, 2017, maturity date March 7, 2018, - net of amounts converted into Sylios common stock 10,000 10,000 Issue date January 9, 2019, maturity date January 9, 2020, -net of unamortized debt discount of $6,610 and $0 at June 30, 2019 and December 31, 2018, respectively 5,890 - Subtotal Darling 34,616 28,726 Unsecured Convertible Promissory Notes payable to Tangiers Investment Group, LLC (“Tangiers”), all in technical default, with interest ranging from 0% to 15% payable at maturity with principal (default interest rates ranging from 0% to 20%); except for the March 16, 2016 Promissory Note, convertible into shares of common stock at a variable conversion price equal to 50% of the Market Price (40% for the note due April 25, 2014), which is defined as the lowest Trading Price for the common stock during the 20 trading day period prior to the Conversion Date. Issue date April 2, 2014, maturity date April 2, 2015, net of amounts converted into Sylios common stock 5,500 3,086 Issue date April 28, 2014, maturity date April 28, 2015, net of amounts converted into Sylios common stock 521 521 Issue date June 2, 2014, maturity date June 2, 2015, net of amounts converted into Sylios common stock 26,086 26,086 Issue date August 12, 2014, maturity date August 12, 2015 112,500 112,500 Issue date July 3, 2014, maturity date July 3, 2015 50,000 50,000 Issue date June 3, 2015, maturity date June 3, 2016 17,250 17,250 Issue date March 16, 2016, maturity date June 14, 2016 17,500 17,500 Issue date January 27, 2017, maturity date January 27, 2018 55,000 55,000 Subtotal Tangiers 284,357 281,943 Unsecured Convertible Promissory Notes payable to Bullfly Trading Company, Inc. (“Bullfly”), all in technical default until assigned to Armada on February 12, 2019, with interest at 15% payable at maturity with principal, convertible into shares of common stock at a conversion price equal to a 50% discount to the 5-day moving bid average: Issue date June 1, 2016, maturity date December 1, 2016 - 4,000 Issue date July 11, 2016, maturity date January 11, 2017 - 4,000 Subtotal Bullfly - 8,000 Unsecured Convertible Promissory Notes payable to Mountain Properties, Inc. (“Mountain”), all in technical default until assigned to Armada on February 12, 2019, with interest at 15% payable at maturity with principal, convertible into shares of common stock at a conversion price equal to a 50% discount to the 5-day moving bid average: Issue date February 24, 2016, maturity date August 24, 2016 - 7,500 Subtotal Mountain - 7,500 Secured Renewal Notes payable to SLMI Energy Holdings, LLC (“SLMI”), with interest at 3% payable on demand with principal, secured by substantially all assets of the Company per UCC filing dated June 30, 2015: Issue date June 6, 2018 (renewing note dated September 4, 2009) 790,000 790,000 Issue date June 6, 2018 (renewing note dated November 12, 2009) 120,000 120,000 Subtotal SLMI 910,000 910,000 Secured Note payable to MTEL Investment and Management (“MTEL”) in technical default, with interest of $50,000 payable at maturity with principal: Issue date January 11, 2010, maturity date July 10, 2010 100,000 100,000 Subtotal MTEL 100,000 100,000 Unsecured Notes payable to Valvasone Trust (“Valvasone”), all in technical default until satisfied on January 9, 2019, with interest at 3% payable at maturity with principal: Issue date October 7, 2013, maturity date January 31, 2014 - 10,000 Issue date March 30, 2014, maturity date June 30, 2014 - 15,000 Issue date January 11, 2016, maturity date March 31, 2016 - 22,000 Issue date July 1, 2017, maturity date September 30, 2017 - 40,000 Subtotal Valvasone - 87,000 Unsecured Note payable to Mt. Atlas Consulting (“Atlas”) in technical default, with interest at 20% payable at maturity with principal: Issue date November 17, 2017, maturity date April 17, 2018 4,000 4,000 Subtotal Atlas 4,000 4,000 Unsecured Promissory Note payable to Jefferson Street Capital (“Jefferson”), with interest at 8% payable at maturity with principal: Issue date February 18, 2019, maturity date February 18, 2020- net of unamortized debt discount of $7,373 and $0 at June 30, 2019 and December 31, 2018, respectively 4,177 - Issue date May 2, 2019, maturity date February 3, 2020- net of unamortized debt discount of $8,657 and $0 at June 30, 2019 and December 31, 2018, respectively 2,343 - Subtotal Jefferson 6,520 Unsecured Promissory Note payable to BHP Capital NY, Inc. (“BHP”), with interest at 8% payable at maturity with principal: Issue date February 18, 2019, maturity date February 18, 2020- net of unamortized debt discount of $7,373 and $0 at June 30, 2019 and December 31, 2018, respectively 4,177 - Issue date May 2, 2019, maturity date February 3, 2020- net of unamortized debt discount of $8,657 and $0 at June 30, 2019 and December 31, 2018, respectively 2,343 - Subtotal BHP 6,520 Unsecured Promissory Note payable to Pacific Stock Transfer Company (“Pacific”) in technical default, with interest at 5% payable at maturity with principal: Issue date August 11, 2017, maturity date November 11, 2017 3,250 6,250 Subtotal Pacific 3,250 6,250 Total $ 1,396,855 $ 1,440,242 Concentration of Debt Due Lenders: SLMI Tangiers Other Total June 30, 2019 Promissory notes payable, net of discount $ 910,000 $ 284,357 $ 204,912 $ 1,396,855 Accrued interest: Stated interest 292,934 91,111 79,946 463,991 Additional default interest - - - - Total accrued interest 292,934 91,111 79,946 463,991 Total debt (Unaudited) $ 1,202,934 $ 375,468 $ 284,858 $ 1,860,846 December 31, 2018 Promissory notes payable, net of discount $ 910,000 $ 281,943 $ 248,299 $ 1,440,242 Accrued interest: - Stated interest 279,284 79,145 80,985 439,414 Additional default interest - - - - Total accrued interest 279,284 79,145 80,985 439,414 Total debt $ 1,189,284 $ 361,088 $ 329,284 $ 1,879,656 Interest expense consists of: Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Stated interest $ 18,945 $ 19,856 $ 40,320 $ 39,693 Additional default interest - 28,820 - 64,347 Totals $ 18,945 $ 48,676 $ 40,320 $ 104,040 The stated interest and additional default interest expense relates to the following lenders: Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) SLMI $ $ $ $ Stated Interest 6,825 7,140 13,650 13,650 Additional default interest - 12,267 - 30,667 Total SLMI 6,825 19,407 13,650 44,317 Tangiers: Stated Interest 5,983 5,920 11,966 11,820 Additional default interest - 12,656 - 25,689 Total Tangiers 5,983 18,576 11,966 37,509 Other lenders Stated Interest 6,029 6,796 14,704 14,223 Additional default interest - 3,897 - 7,991 Total others 6,029 10,693 14,704 22,214 Totals Stated Interest 18,945 19,856 40,320 39,693 Additional default interest - 28,820 - 64,347 Total all Lenders $ 18,945 $ 48,676 $ 40,320 $ 104,040 Income from modification of convertible and non-convertible notes payable consists of: Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Waiver of prior and future additional default interest pursuant to debt modifications with SLMI Energy Holdings, LLC on June 8, 2018 (1) $ - $ 343,540 $ - $ 343,540 Waiver of prior and future additional default interest pursuant to debt modifications with Darling Capital, LLC on December 6, 2018 (2) - - - - Waiver of prior and future additional default interest pursuant to debt modifications with Tangiers Investment Group, LLC on December 18, 2018 (2) - - - - Total $ - $ 343,540 $ - $ 343,540 (1) The debt modifications with SLMI Energy Holdings, LLC (“SLMI”) provide that in the event that the Company does not make a payment to SMLI within 30 days written notice of demand by SLMI, all unpaid interest accruing since September 4, 2009 (in the case of the original September 4, 2009 Note) and accruing since November 12, 2009 (in the case of the original November 12, 2009 Note) shall accrue at a 18% default interest rate rather than the 3% stated interest rate in the Renewal Notes. If that had occurred on December 31, 2018, the additional default interest accruable would have been approximately $1,200,000. As of the date of the issuance of these financial statements, SLMI has not provided the Company any notice of demand for payment and accordingly, the Company is not in default of these obligations. (2) As of the date of the issuance of these financial statements, waivers of the additional default interest for both Darling and Tangiers obligations remain in effect. However, the Company is still in technical default for the principal and stated interest of these significantly past-due convertible promissory notes. Gain on settlement of convertible notes payable consists of: Three Months Ended Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Company payment of $15,000 on October 5, 2018 in full and final settlement of $130,298 debt and $83,100 accrued interest due Beaufort Capital Partners, LLC $ - $ - $ - $ - Total $ - $ - $ - $ - Convertible Note Conversions: During the six months ended June 30, 2019, the Company issued the following shares of common stock upon the conversions of portions of the Convertible Notes: Principal Interest Total Conversion Shares Date Conversion Conversion Conversion Price Issued Issued to 2/7/2019 $ — $ 642 $ 642 $ 0.00108 594,066 Darling 2/20/2019 1,100 — 1,100 0.00205 536,585 Armada $ 1,100 $ 642 $ 1,742 1,130,651 Loss on conversions of notes payable consists of: Three Months Ended Six Months June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Armada convertible notes $ - $ - $ ( 52,599 ) $ - Beaufort convertible notes - - - - Darling convertible notes - - (59,418 ) - Tangiers convertible notes - - - - Other convertible notes - - - - Total $ - $ - $ (111,977 ) $ - |