| Notes payable | Note 7 Notes Payable Promissory Notes
5BARz International, Inc. Unpaid Note Unpaid Balance Balance
December 17, 2012 $ 80,000 (a) $ 27,739 $ 107,739 $ 99,445
January 8, 2013 71,244 (b) 1,618 72,862 81,977
October 6, 2014 250,000 (c) 5,044 255,044 253,123
March 6, 2015 0 (d) 548,283
May 6, 2015 0 (e) 138,000
May 21, 2015 83,000 (f) 83,000 174,064
June 15, 2015 0 (g) 175,000
June 17, 2015 52,500 (h) 10,662 63,162 82,217
June 18, 2015 100,000 (i) 27,977 127,977 163,956
June 18, 2015 52,500 (j) 10,263 62,763 82,193
June 26, 2015 104,500 (k) 95,686 200,186 176,652
July 17, 2015 0 (l) 105,282
July 30, 2015 100,000 (m) 88,500 188,500 172,167
August 27, 2015 22,108 (n) 22,108 92,195
August 27, 2015 100,000 (o) 5,041 105,041 170,764
October 7-9, 2015 35,000 (p) 5,532 40,532 87,514
October 28, 2015 76,956 (q) 76,956 152,915
October 30, 2015 105,000 (r) 4,418 109,418 160,081
Notes payable 5BARz International Inc. $ 1,232,808 $ 282,480 $ 1,515,288 $ 2,915,828
CelLynx Group Inc. Unpaid Note Unpaid Balance Balance
May 24, 2012 $ 15,900 (s) $ 38,144 $ 54,044 $ 46,018
September 12, 2012 12,500 (t) 26,312 38,812 33,048
Notes Payable - CelLynx Group, Inc. $ 28,400 $ 64,456 $ 92,856 $ 79,066
Sub-Total $ 1,261,208 $ 346,936 $ 1,608,144 $ 2,994,894
Debt Discount (27,863 ) (111,630 )
Total, net of debt discount $ 1,261,208 $ 346,936 $ 1,580,281 $ 2,883,264 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, 2016,
interest of $27,739 was accrued on the convertible debenture, resulting in a total principal and interest due at September 30,
2016 of $107,739. A derivative liability at September 30, 2016 of $20,684 (2015 - $24,817) is recorded in these financial statements
in connection with this note. 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 the nine months ended September 30, 2016 interest
of $4,885 (2015 - $1,516) was accrued on the convertible debenture. During the nine months ended September 30, 2016, $36,000 in
past due consulting fees were added to the principal of the note. The total principal and interest due under the note at September
30, 2016 amount of $72,862 (2015 - $81,977). In addition, the Company reflected a derivative liability at September 30, 2016 of
$14,600 (2015 - $12,906) in connection with this note. c) On
October 6, 2014, the Company entered into a Note and Warrant purchase agreement with three parties who 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 at December 31,
2015 was $253,123, net of an unamortized debt discount of $111,630, resulting in a carrying value of $141,493. By September 30,
2016, total interest of $5,044 was accrued to bring the total principal and interest balance to $255,044, net of an unamortized
debt discount of $27,863, resulting in a carrying value of $227,181. d)
On March 6, 2015, the Company entered into a Note and Warrant adjustment purchase agreement
with two parties who 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. On September 6, 2015, the loan maturity was extended
for an additional 6 months in return for the accrual of a 10%, extension fee. The convertible note accrues interest at a rate of
15% semiannually 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 $0.05 per share. Further, warrants to acquire up to 12,441,667 shares which had been
issued in conjunction with previous financings from the note holders at strike prices ranging from $0.20 to $0.30 per share were
re-priced to a strike price of $0.05 per share with the maturity dates changed to March 6, 2017. The Company has the right to repay
the loan by payment of the principal and accrued interest at the date of repayment. On March 6, 2016, the Company settled the aggregate
principal and interest amount of $575,000, by conversion into 11,500,000 shares of common stock, issued at a price of $0.05 per
share. The amount due pursuant to this note at September 30, 2016 is nil. e)
On May 6, 2015, the Company entered into a convertible note arrangement with an investment
Company, in the principal 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. 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 principal and interest due under the note. On November 6, 2015, the Company issued 200,000
shares pursuant to a notice of conversion of a convertible note at a price of $0.041 per share, for the conversion of $8,200. On
November 22, 2015, the Company became delinquent on its filing requirements with the Securities and Exchange Commission, triggering
a default of the note. Upon the Event of Default, the outstanding balance was increased to 120%. The note is payable on demand.
On January 20, 2016, the Company entered into a settlement agreement on the convertible debt in the principal and interest amount
of $138,000, by the issuance of 200,000 shares issued on January 20, 2016, and the commitment to make a series of payments over
8 months, ending September 15, 2016 in the aggregate amount of $120,000. The Company made payments under the settlement agreement
on February 8, 2016 of $7,500 and on March 15, 2016 of $15,000 as required by the agreement. The principal and interest due under
the note at March 31, 2016 was $109,500. This balance was settled by issuance of 187,500 common shares on May 2, 2016 at a price
of $0.08 per share, in lieu of $15,000 and a further issuance of 1,375,500 common shares at a price of $0.06 per share for the
remaining $82,500 due under the note settlement agreement. After a gain on settlement in the amount of $12,000 for the nine months
ended September 30, 2016, the amount pursuant to this note is nil. f)
On May 21, 2015, the Company entered into a convertible note arrangement with an investment Company,
in the principal 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. On November 22, 2015, the Company became delinquent on its filing requirements with the
Securities and Exchange Commission, triggering a default of the note. Upon the event of default, the outstanding balance was increased
to 118%, in addition to that a default penalty payment of $1,000 per business day was added to the outstanding balance. On
March 10, 2016, a complaint was filed in relation to the unpaid balance of this note payable (see litigation note 14). On June
28, 2016, the parties entered into a settlement agreement in the amount of $153,000 payable in equal payments of $35,000 made in
cash or shares issued at market every 21 days from the date of settlement. On July 14, 2016, 333,333 of common shares were issued
at a price of $0.105 per share in lieu of $35,000 cash. On August 4, 2016, an additional 448,717 common shares were issued at a
price of $0.78 instead of a $35,000 cash payment. The company recognized a gain from settlement of $65,177 for the nine months
ended September 30, 2016. At September 30, 2016, the balance due under this settlement is $83,000. g)
On June 15, 2015, the Company entered into a convertible note arrangement with an investment
company, in the principal 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. On November 22, 2015, the Company became delinquent on its filing requirements with the Securities
and Exchange Commission, triggering a default of the note. Upon the event of default, the outstanding balance was increased to
140%. The note is payable upon demand. On March 17, 2016, the Company settled the convertible debt in the principal and interest
amount of $175,000. The settlement agreement provides for the Company to make eight monthly payments commencing on April 15, 2016,
each in the amount of $21,875, an aggregate amount of $175,000. On May 3, 2016, the Company entered into an amended settlement
agreement for full settlement of the note for $175,000. The Company issued 1,500,000 common shares at a price of $0.05 per share
in settlement of $75,000 due under the note and agreed to a series of 6 monthly payments each in the amount of $11,666, commencing
May 15, 2016. On May 20, 2016, the amended settlement agreement was revised and the Company recorded a gain from settlement
of $57,875 in the nine months ended September 30, 2016. The Company issued 1,000,000 common shares at a price of $0.05 per share
to fulfill the settlement agreement revision. At September 30, 2016, the balance due under this note was nil. h)
On June 17, 2015, the Company entered into a convertible note arrangement with an investment
company, in the principal 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 i) On
June 18, 2015, the Company entered into a convertible note arrangement with an investment company, in the principal 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 j) On
June 18, 2015, the Company entered into a convertible note arrangement with an investment company, in the principal 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 k)
On June 26, 2015, the Company entered into a convertible note arrangement with an investment
company, in the principal 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. On November 22, 2015, the Company became delinquent on its filing requirements
with the Securities and Exchange Commission, triggering an Event of Default of the note. Upon the event of default, the outstanding
balance was increased to 150% and the interest rate was increased to 18% per annum. The note is payable upon demand. On March 7,
2016, the parties entered into a settlement agreement to settle the full amount due under the note for $177,424. The settlement
agreement provides for the Company to make eight monthly payments commencing on April 15, 2016, each in the amount of $22,178.
As of September 30, 2016, the unpaid interest of $95,686 has been accrued. The principal and interest due under the note at
September 30, 2016 was $200,186. The holder filed a lawsuit under the terms of the note, which the Company has answered see litigation
note 14. l)
On July 17, 2015, the Company entered into a convertible note arrangement
with an investment company, in the principal 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. On November 22,
2015, the Company became delinquent on its filing requirements with the Securities and Exchange Commission, triggering an event
of default of the note. Upon the Event of Default, the outstanding balance was increased to 150% and the interest rate was increased
to 24% per annum. The note is payable on demand. On January 19, 2016, the Company settled convertible debt in the principal
and interest amount of $69,626 by the issuance of 1,578,463 shares, at a price of $0.041 per share. The settlement amount does
not require the payment of default penalties contemplated in the note agreement. The principal and interest due under the note at September 30, 2016 was
nil. m) On
July 30, 2015, the Company entered into a convertible note arrangement with an investment company, in the principal 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. On November 22, 2015, the Company became delinquent on its filing
requirements with the Securities and Exchange Commission, triggering an event of default of the note. Upon the event of
default, the outstanding balance was increased to 150%. The note is payable upon demand. The Company has completed a
settlement agreement, dated August 31, 2016 to repay $188,500 due under the note monthly in cash or shares valued at $30,000
in the first month and $31,700 over a five-month period. The Company recorded a gain from settlement of $3,486 during the
nine months ended September 30, 2016. The outstanding settlement balance at September 30, 2016 was $188,500. n) On
August 27, 2015, the Company entered into a convertible note arrangement with an investment company, in the principal 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. On November 22, 2015, the Company became
delinquent on its filing requirements with the Securities and Exchange Commission, triggering an event of default of the note.
Upon the event of default, the outstanding balance was increased to 150%. The note is payable upon demand. On February 26, 2016,
the Company settled the convertible debt for an aggregate amount of $83,900. The settlement agreement provides for the issuance
of 312,650 common shares at a price of $0.05 per share for aggregate proceeds of $15,632 issued on February 26, 2016 and the balance
to be repaid by a series of monthly payments in the aggregate amount of $68,268 over a five-month period commencing on April 15,
2016. The Company issued 391,740 common shares at a price of $0.06 per share on May 15, 2016 for a value of $23,504. On July 15,
2016, the Company issued $22,655 in 323,648 common shares at a price of $0.07 per share. The outstanding settlement balance at September 30, 2016 was $22,108. o)
On August 27, 2015, the Company entered into a convertible note arrangement with an investment company, in the principal 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 p) During
the period October 7, 2015 to October 10, 2015 the Company entered into four convertible note arrangements with certain investors,
in the principal amount of $85,000. Interest is accrued on the notes at a rate of 8% per annum, and the notes mature one year from
the date of issue. The notes are convertible after 183 days by the borrower at a conversion price of the lesser of $0.05 per share
or 70% of market, defined as the lowest trade price for a period 20 days prior to the notice of conversion, if VWAP . In no case may the debt be converted at less than
$0.01 per share. The Company may prepay the note principal and interest at a rate of 125% of principal and interest within 90 days
of the issue date and at a rate of 135% after 90 days from the issue date. On November 22, 2015, the Company became delinquent
on its filing requirements with the Securities and Exchange Commission, triggering an event of default of the note. Upon the event
of default, the interest rate was increased to 20% per annum. The notes are payable upon demand. On September 6, 2016 one convertible
note principle and interest of $37,567 was settled for 751,333 common shares at a price of $0.05 per share. The Company recorded
a gain from this settlement of $3,132 during the nine months ended September 30, 2016. Further on September 27, 2016, a second
convertible note principle and interest of $17,390 was settled by the issuance of 347,808 common shares at a price of $0.05 per
share. The principal and interest due under the remaining two notes at September 30, 2016 was $40,532. q) On
October 28, 2015, the Company entered into a convertible note arrangement with an investment company, in the principal amount of
$100,000. Interest is accrued on the note at a rate of 12% per annum, and the note matures on July 28, 2016. The note is convertible
at any time by the borrower at a conversion price which is the lesser of closing sale price on the close date of the note or 60%
of market, defined as the lowest trade price for a period 25 days prior to the notice of conversion. The Company may prepay the
note principal and interest at rates from 145% of principal and interest within 180 days from the issue date. After 180 days the
note may not be prepaid. On November 22, 2015, the Company became delinquent on its filing requirements with the Securities and
Exchange Commission, triggering an event of default of the note. Upon the event of default, the outstanding balance was increased
to 150%. The note is payable upon demand. On May 2, 2016, the Company entered into a settlement agreement, to pay $153,912 by way
of six monthly payments, each in the amount of $25,652, with the first payment due on May 15, 2016. Two of the six payments
were completed on May 31, 2016 and June 20, 2016. On August 15, 2016, the Company issued 388,667 common stock at a price of $0.066
per share in payment of $25,652 under the settlement agreement. The Company recorded a gain from settlement of $5,026 in the nine
months ended September 30, 2016. At September 30, 2016, the remaining settlement balance was $76,956. r) On
October 30, 2015, the Company entered into a convertible note arrangement with an investment company, in the principal amount
of $105,000 of which $100,000 was advanced to the Company at the inception of the note. Interest is accrued on the note at a rate
of 8% per annum, and the note matures on October 30, 2016. The note is convertible at any time by the borrower at a conversion
price which is the lesser of closing sale price on the close date of the note or 60% of market, defined as the lowest trade price
for a period 10 days prior to the notice of conversion. The Company may prepay the note principal and interest as follows, 125%
from day 1 to 90 days, 140% from day 91 to 180 days, 150% after 180 days. On November 22, 2015, the Company became delinquent
on its filing requirements with the Securities and Exchange Commission, triggering an event of default of the note. Upon the event
of default, the outstanding balance was increased to 150% and the interest rate was increased to 18% per annum. The note is payable
upon demand. On May 31, 2016, the Company entered into a settlement agreement to make a series of six payments, each in the amount
of $27,354, for an aggregate amount of $164,128, in full settlement of the amounts due under this note agreement. On May 31, 2016,
the Company issued 547,100 common stock at a price of $0.05 per share valued at $27,355. On June 30, 2016, the Company issued
another 547,100 common shares at a price of $0.05 valued at $27,355. The Company recorded a gain from settlement of $3,056 in
the nine months ended September 30, 2016. As of September 30, 2016, the remaining amount under the settlement agreement was $109,418. s)
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, Inc.s 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, 2016,
the note is past due. The note principal and accrued interest outstanding at September 30, 2016 was $54,044. t)
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, Inc.s common stock for a period of
10 days prior to the date of notice of conversion. As of September 30, 2016, the note is past due. The note principal and accrued
interest outstanding at September 30, 2016 was $38,812. At September 30, 2016, substantially all the
above debt is in default and is immediately due and payable. Fair market value of the conversion option at September 30, 2016 was
therefore de minimus. |
