| Notes payable | Note 7
Notes Payable Promissory Notes
5BARz International, Inc. Unpaid Note Unpaid Balance Balance
December 17, 2012 80,000 (a) 17,832 97,832 93,045
January 8, 2013 68,356 (b) 68,356 96,313
August 21, 2014 (c) 184,667
October 6, 2014 250,000 (d) 2,493 252,493 250,623
March 3, 2015 (e)
March 6, 2015 400,000 (f) 109,836 509,836
May 4, 2015 100,000 (g) 23,200 123,200
May 21, 2015 100,000 (h) 14,817 114,817
May 26, 2015 (i)
June 2, 2015 (j)
June 15, 2015 102,500 (k) 22,500 125,000
June 17, 2015 50,000 (l) 4,494 54,494
June 18, 2015 100,000 (m) 8,000 108,000
June 18, 2015 50,000 (n) 4,326 54,326
June 26, 2015 104,500 (o) 8,976 113,476
July 9, 2015 450,000 (p) 428,571 878,571
July 17, 2015 62,750 (q) 4,880 67,630
July 30, 2015 100,000 (r) 11,868 111,868
August 27, 2016 59,000 (s) 658 59,658
August 27, 2016 100,000 (t) 11,022 111,022
Notes payable 5BARz International Inc. $ 2,177,106 $ 673,473 $ 2,850,579 $ 624,648
CelLynx Group Inc. Unpaid Note Unpaid Balance Balance
May 24, 2012 15,900 (u) 27,701 43,601 37,148
September 12, 2012 12,500 (v) 18,812 31,312 26,676
CelLynx Group, Inc. $ 28,400 $ 46,513 $ 74,913 $ 63,824
Sub-Total $ 2,205,506 $ 719,986 $ 2,925,483 $ 688,472
Debt Discount (767,376) (407,986 )
Total, net of debt discount $ 2,205,506 $ 719,986 $ 2,158,116 $ 280,486
a) In December 2012, a shareholder purchased 1,600,000 common shares
for $80,000. On January 17, 2013, the security was amended to a convertible debenture with an 8% per annum yield and may be converted
into common stock, at the option of the holder, 90 days after the inception of the agreement, at a price which is a 20% discount
to market, but not less than $0.05 per share. During the period from issuance of the convertible debenture issuance
to September 30, 2015, interest of $17,832 was accrued on the convertible debenture, resulting in a total principal and interest
due at September 30, 2015 of $97,832. A derivative liability of $24,817 is recorded on this note payable at September 30,
2015. b)
On January 8, 2013 the Company entered into a convertible debenture agreement with a consultant
in settlement of $147,428 payable to that consultant for services rendered. The convertible debenture yields interest at 8% per
annum and may be converted into common stock, at the option of the holder, 90 days after the inception of the agreement, at a price
which is a 20% discount to market, but not less than $0.05 per share. During period from January 8, 2013 to September 30,
2015, interest of $24,628 was accrued on the convertible debenture and $119,700 was settled by way of conversion into common stock.
On September 30, 2015 the agreement was amended, and $16,000 in past due consulting fees were added to the principal of the note
for a total amount of $68,356. In addition the Company reflected a derivative liability at September 30, 2015 of $12,906 in connection
with this note. c)
On August 21, 2014 the Company entered into a convertible note arrangement with an investment
Company, in the principle amount of $500,000 of which $150,000 was advanced to the Company at the inception of the note. The Company
agreed to pay an original issue discount in an amount up to 10% of the loan amount, or $16,667. The interest rate
on the note is 0% for the first 90 days. The loan may be repaid at any time during the first three months of the note term. Thereafter,
if the note is not repaid, a one-time interest charge of 12% is assessed. The note is convertible into common stock of the issuer
at a discount to market of 40%, with the market defined as the lowest trade price for a period of 25 days prior to the conversion,
with a conversion floor price at no lower than $0.00005. On March 20, 2015 the holder converted $19,200 of principle and interest
on the note for 400,000 shares. On April 24, 2015 the Company entered into an agreement for the settlement of the note for proceeds
of $252,334. On April 27, 2015 the holder converted a further $19,035 for 450,000 shares. On May 6, 2015 the Company paid $240,000
to settle the note and the balance of $12,334 was paid on May 21, 2015. The note has a zero balance at September 30, 2015. d) On
October 6, 2014 the Company entered into a Note and Warrant purchase agreement with three parties who have agreed to provide to
the Company additional resources to run operations. The parties have agreed to loan up to $1,500,000 pursuant to the terms of a
convertible promissory note and warrant agreement. On the closing date, October 6, 2014 the Company received $250,000 cash. The
purchasers have agreed that at any time on or before the earlier of (i) the Purchasers election, or (ii) the execution of
an engagement letter by and between the Company and an Investment Banking Firm acceptable to the purchaser relating to the provision
of financial advisory services by the Investment Banking Firm to the Company, that the Company will sell Notes representing the
balance of the authorized principal amount not sold at the Closing to the Purchasers. The convertible note accrues interest at
a rate of 1% per annum and provides for the conversion of the principal and accrued interest on the note into common stock at any
time, at the election of the holder at a price of $0.15 per share. Further, the number of warrants to be issued will be equal to
the proceeds loaned pursuant to the note and warrant purchase agreement divided by $0.15. The warrant has a term of five (5) years
and provides a strike price of $0.20 per share. The fair value of warrants at the date of issue was $282,767 using the Black-Scholes
pricing model. The convertible promissory note and accrued interest is calculated to be $252,493 at September 30, 2015, net of
an unamortized debt discount of $139,552, resulting in a carrying value of $112,941. The unamortized debt discount will be charged
to interest expense over the remaining term of the Note which matures December 31, 2016. e)
On March 3, 2015 the Company entered into a convertible note arrangement with an investment
company, in the principle amount of $350,000 of which $175,000 was advanced to the Company at the inception of the note. The Company
agreed to pay an original issue discount in an amount up to 10% of the loan amount, or $17,500. The loan may be repaid
at any time during the first six months of the note term, at a prepayment premium on day 90 of 115%, increasing by 5% each month
to month 6. On June 1, 2015, a one-time interest charge of 10% was assessed, or $19,250. After 6 months, the note is convertible
into common stock of the issuer at a discount to market of 35%, with the market defined as the lowest trade price for a period
of 25 days prior to the issuance, with a conversion floor price at no lower than $0.001. On August 26, 2015 the balance due under
the note of $211,750 was fully converted into common stock by the issuance of 4,343,589 common shares at a price of $0.046. The
balance due on the note agreement at September 30, 2015 is nil. f)
On March 6, 2015 the Company entered into a Note and Warrant adjustment purchase agreement
with two parties who have agreed to provide to the Company additional resources to run operations. The parties have agreed to loan
$400,000 pursuant to the terms of a convertible promissory note and warrant adjustment agreement. On the closing date, March 6,
2015 the Company received $400,000 cash. The note matures on September 6, 2015. The loan maturity may be extended for an additional
6 months by payment on the original maturity date of unpaid interest, plus a 10% extension fee. The convertible note accrues interest
at a rate of 15% semi annually and provides for the conversion of the principle and accrued interest on the note into common stock
at any time, at the election of the holder at a price of $0.05 per share. Further, warrants to acquire up to 12,441,667 shares
which had been issued in conjunction with previous financings at strike prices ranging from $0.20 to $0.30 per share are to be
re-priced to a strike price of $0.05 per share with the maturity dates changed to March 6, 2016. The Company has the right to repay
the loan by payment of the principle and accrued interest at the date of repayment. On September 6, 2015 the maturity of the loan
was extended for 6 months, with the unpaid interest of $60,000 and $40,000 extension fee being added to the note payable. At September
30, 2015 unpaid principle and interest on the note aggregate $509,836. g)
On May 6, 2015 the Company entered into a convertible note arrangement with an investment
Company, in the principle amount of $250,000 of which $100,000 was advanced to the Company at the inception of the note. The Company
agreed to pay an original issue discount in an amount up to 10% of the loan amount, or $10,000. The interest rate
on the note is 12%, with 6% being charged on the Issuance Date to the Original Principal Amount in the amount of $6,600 and the
remaining 6% being charged to the Original Principal Amount on the 61th calendar day after the issuance date provided the note
has not been paid in full. The loan may be repaid at any time during the first 120 days of the note term. The note is convertible
into common stock of the issuer at the lesser of $0.09 or a discount to market of 50%, with the market defined as the lowest trade
price for a period of 25 days prior to the conversion, with a conversion floor price at no lower than $0.001. In connection with
the convertible debt, the Company recorded $ 95,598 of derivative liability as of September 30, 2015. The principle and interest
due under the note at September 30, 2015 was $123,200, net of an unamortized debt discount of $53,653, resulting in a carrying
value of $69,547 at September 30, 2015. The unamortized debt discount was charged to income over the remaining term of the
note which matured on February 6, 2016. On November 3, 2015 an amending agreement was entered into providing for the prepayment
of the note at any time up to 9 months from the loan origination date at a rate of 145% of the then unpaid principle and interest
due under the note. h)
On May 21, 2015 the Company entered into a convertible note arrangement with an investment
Company, in the principle amount of $200,000 of which $100,000 was advanced to the Company at the inception of the note. The Company
agreed to pay an original issue discount in an amount up to 10% of the loan amount, or $10,000. The interest rate
on the note is 12%. The prepayment penalty of the note is as follows, 5% from day 1 to 90 days, 15% from day 91 to 150 days, 18%
from day 151 to 179 days and 25% there- after on buyout of loan. The note is convertible into common stock of the issuer at a discount
to market of 40%, with the market defined as the lowest trade price for a period of 25 days prior to the conversion, with a conversion
floor price at no lower than $0.00001. In connection with the convertible debt, the Company recorded $ 111,662 of derivative liability
as of September 30, 2015. The principle and interest due under the note at September 30, 2015 was $114,817, net of an unamortized
debt discount of $70,219, resulting in a carrying value of $44,598 at September 30, 2015. The unamortized debt discount will be
charged to income over the remaining term of the note which matures on May 21, 2016. i) On
May 26, 2015 the Company entered into a convertible note arrangement with an investment Company, in the principle amount of $100,000.
The interest rate on the note is 12%. The note is convertible into common stock of the issuer at $0.05. The principle and interest
due under the note at September 30, 2015 was $100,000, net of an unamortized debt discount of $93,617, resulting in a carrying
value of $6,383 at September 30, 2015. The interest in the amount of $1,167 was paid in cash on June 30, 2015. In connection with
the note, a Security Agreement was signed, with a general assignment of the company assets to the note holder, and 3 million warrants
were issued. On j) On
June 2, 2015 the Company entered into a convertible note arrangement with an investment Company, in the principle amount of $100,000.
The interest rate on the note is 12%. The note is convertible into common stock of the issuer at $0.05. The principle and interest
due under the note at September 30, 2015 was $100,000, net of an unamortized debt discount of $94,826, resulting in a carrying
value of $5,174 at September 30, 2015. The interest in the amount of $933 was paid in cash on June 30, 2015. In connection with
the note, a Security Agreement was signed, with a general assignment of the company assets to the note holder, and 3 million warrants
were issued. On k)
On June 15, 2015 the Company entered into a convertible note arrangement with an investment
Company, in the principle amount of $125,000 of which $102,500 was advanced to the Company at the inception of the note. The Company
recorded an interest of $22,500 at inception of the note, and issued 250,000 shares at $0.10.The note is convertible into common
stock of the issuer at 0.05 if converted within 180 days after the Issuance Date, or at a discount to market of 35%, with the market
defined as the lowest trade price for a period of 20 days prior to the conversion, with a conversion floor price at no lower than
$0.0001, if converted after 180 days. In connection with the convertible debt, the Company recorded $ 178,337 of derivative liability
as of September 30, 2015. The principle and interest due under the note at September 30, 2015 was $125,000. The note matures on
June 15, 2018. l)
On June 17, 2015 the Company entered into a convertible note arrangement with an investment
Company, in the principle amount of $52,500 of which $50,000 was advanced to the Company at the inception of the note. The Company
recorded an interest of $2,500 at inception of the note. The interest rate on the note is 8%. The prepayment penalty of the note
is as follows, 15% from day 1 to 60 days, 21% from day 61 to 90 days, 27% from day 91 to 120 days, 33% from day 121 to 150 days
and 39% from day 151 to 180 days. This note may not be prepaid after the 180 th m) On June
18, 2015 the Company entered into a convertible note arrangement with an investment Company, in the principle amount of $105,000
of which $100,000 was advanced to the Company at the inception of the note. The Company agreed to pay an original issue
discount in an amount up to 5% of the loan amount, or $5,000. The interest rate on the note is 10%. The prepayment penalty
of the note is as follows, 15% from day 1 to 60 days, 21% from day 61 to 90 days, 27% from day 91 to 120 days, 33% from day 121
to 150 days and 39% from day 151 to 180 days. This note may not be prepaid after the 180 th n)
On June 18, 2015 the Company entered into a convertible note arrangement with an investment
Company, in the principle amount of $52,500 of which $50,000 was advanced to the Company at the inception of the note. The Company
recorded an interest of $2,500 at inception of the note. The interest rate on the note is 8%. The prepayment penalty of the note
is as follows, 15% from day 1 to 60 days, 21% from day 61 to 90 days, 27% from day 91 to 120 days, 33% from day 121 to 150 days
and 39% from day 151 to 180 days. This note may not be prepaid after the 180 th o)
On June 26, 2015 the Company entered into a convertible note arrangement with an investment
Company, in the principle amount of $110,000 of which $104,500 was advanced to the Company at the inception of the note. The Company
agreed to pay an original issue discount in an amount of $5,500. The interest rate on the note is 12%. Upon an Event
of Default the interest rate shall increase to 18%. The prepayment penalty of the note is as follows, 35% from day 1 to 90 days,
45% from day 91 to 120 days, and 50% there- after on buyout of loan. The note is convertible into common stock of the issuer at
a discount to market of 42%, with the market defined as the lowest trade price for a period of 20 days prior to the conversion,
with a conversion floor price at no lower than $0.0001. In connection with the convertible debt, the Company recorded $ 99,788
of derivative liability as of September 30, 2015. The principle and interest due under the note at September 30, 2015 was $113,476,
net of an unamortized debt discount of $81,068, resulting in a carrying value of $32,408 at September 30, 2015. The unamortized
debt discount will be charged to income over the remaining term of the note which matures on December 26, 2015. p)
On July 9, 2015 the Company entered into a convertible note arrangement with an investment
Company, in the principle amount of $450,000. The interest rate on the note accrues at a rate of $50,000 within 30 days and $50,000
weekly thereafter. The principle and accrued interest is convertible into common stock after 60 days, if not repaid, in whole or
in part at a conversion price of $0.02 per share. The principle and interest due under the note at September 30, 2015 was $878,571.
Subsequent to September 30, 2015 the Company repaid $195,000 and is continuing to make payments under the note. q)
On July 17, 2015 the Company entered into a convertible note arrangement with an investment
Company, in the principle amount of $66,250 of which $60,000 was advanced to the Company at the inception of the note. The interest
rate on the note is 10%. Upon an Event of Default the interest rate shall increase to 24%. The prepayment penalty of the note is
as follows, 25% from day 1 to 30 days, 30% from day 31 to 60 days, 35% from day 61 to 90 days, 40% from day 91 to 120 days, 45%
from day 121 to 150 days, 50% from day 151 to 180 days. There is no right to prepayment after 180 days. The note is convertible
into common stock of the issuer at a discount to market of 45%, with the market defined as the lowest trade price for a period
of 25 days prior to the conversion, with a conversion floor price at no lower than $0.0001. In connection with the convertible
debt, the Company recorded $ 74,583 of derivative liability as of September 30, 2015. The principle and interest due under the
note at September 30, 2015 was $67,630, net of an unamortized debt discount of $48,247, resulting in a carrying value of $19,383
at September 30, 2015. The unamortized debt discount will be charged to income over the remaining term of the note which matures
on April 17, 2016. r) On
July 30, 2015 the Company entered into a convertible note arrangement with an investment Company, in the principle amount of $110,000
of which $100,000 was advanced to the Company at the inception of the note. The interest rate on the note is 10%. Upon an Event
of Default the interest rate shall increase to 24%. The prepayment penalty of the note is as follows, 35% from day 1 to 90 days,
and 50% there- after on buyout of loan. The note is convertible into common stock of the issuer at a discount to market of 42%,
with the market defined as the lowest trade price for a period of 25 days prior to the conversion, with a conversion floor price
at no lower than $0.00001. In connection with the convertible debt, the Company recorded $ 119,672 of derivative liability as
of September 30, 2015. The principle and interest due under the note at September 30, 2015 was $111,868, net of an unamortized
debt discount of $81,315, resulting in a carrying value of $30,553 at September 30, 2015. The unamortized debt discount will be
charged to income over the remaining term of the note which matures on July 30, 2016. s)
On August 27, 2015 the Company entered into a convertible note arrangement with an investment
Company, in the principle amount of $59,000 of which $55,000 was advanced to the Company at the inception of the note. The interest
rate on the note is 12%. Upon an Event of Default the interest rate shall increase to 24%. The prepayment penalty of the note is
40%. The note is convertible into common stock of the issuer at a discount to market of 42%, with the market defined as the lowest
trade price for a period of 20 days prior to the conversion, with a conversion floor price at no lower than $0.000058. In connection
with the convertible debt, the Company recorded $ 64,727 of derivative liability as of September 30, 2015. The principle and interest
due under the note at September 30, 2015 was $59,658, net of an unamortized debt discount of $53,519, resulting in a carrying value
of $6,139 at September 30, 2015. The unamortized debt discount will be charged to income over the remaining term of the note which
matures on August 27, 2016. t) On August 27, 2015 the Company entered into a convertible note arrangement with an investment Company, in the principle amount of $110,000
of which $100,000 was advanced to the Company at the inception of the note. The Company agreed to pay an original issue
discount in an amount up to 10% of the loan amount, or $10,000. The interest rate on the note is 10%. The prepayment penalty
of the note is as follows, 35% from day 1 to 90 days, 45% from day 91 to 180 days. This note may not be prepaid after the 180 th u)
On May 24, 2012, CelLynx Group, Inc., completed a transaction pursuant to a Promissory Note
agreement, through which the Company borrowed $37,500. The Note bears interest at a rate of 8%, and was due on November 24, 2012,
(the Due Date). The Company could settle that note within the first 90 days following the issue date by
paying to the Lender 140% of the principal amount of the note plus accrued interest. The Company may settle the note during
the period which is 91 days from the issue date of the note to 180 days from the issue date of the note by payment of 150% of the
principal amount of the note plus accrued interest. In the event that the note is not repaid 180 days from the date of issue, the
note and accrued interest are convertible into common stock at a variable conversion price equal to 51% of the average of the three
lowest closing bid prices for CelLynx Group, Incs common stock for a period of 10 days prior to the date of notice of conversion.
The Company redeemed $21,600 payable on that note, by the issuance of CelLynx Group, Inc. common shares. As of September 30, 2015
the note is past due. The value of the derivative liability associated with this note at September 30, 2015 and 2014 was immaterial.
The note principle and accrued interest outstanding at September 30, 2015 was $43,601.
v) On September 12, 2012, CelLynx Group, Inc. completed a transaction pursuant to a Promissory Note agreement, through which the Company borrowed $12,500. The Note bears interest at a rate of 8%, and is due on March 12, 2013, (the Due Date). The Company may settle that note within the first 90 days following the issue date by paying to the Lender 140% of the principal amount of the note plus accrued interest. The Company may settle the note during the period which is 91 days from the issue date of the note to 180 days from the issue date of the note by payment of 150% of the principal amount of the note plus accrued interest. In the event that the note is not repaid 180 days from the date of issue, the note and accrued interest are convertible into common stock at a variable conversion price equal to 51% of the average of the three lowest closing bid prices for CelLynx Group, Incs common stock for a period of 10 days prior to the date of notice of conversion. As of June 30, 2015 the note is past due. The value of the derivative liability associated with this note at June 30, 2015 and 2014 was immaterial The note was carried at $31,312 comprised of principle and interest due at September 30, 2015. Several of the above notes require that the Company must be current in its filing with the Securities and
Exchange Commissions. The Company is delinquent in its filing of its September 30, 2015 10-Q and therefore such notes are in technical
default. |
