CONVERTIBLE NOTES PAYABLE | Note 5. CONVERTIBLE NOTES PAYABLE Note Payable-BS In March 2011, the Company issued $800 aggregate principal amount of 6% convertible notes due in January 2012. Interest on the notes accrue at the rate of 6% per annum and are payable when the notes mature. The notes matured prior to conversion but have not been repaid. Interest continues to accrue at the rate of 6% per annum. The holder of one of the notes converted $110 of note principal into 1,100 shares of common stock as follows: Date of Conversion Principal Conversion Shares June 2013 $ 70 $ 0.0001 700 August 2013 $ 40 $ 0.0001 400 In August 2013, in a private transaction, the same note holder transferred $330 of the remaining note principal plus $55 in accrued interest to a third party. In August 2013, in a private transaction, the new note holder transferred $5 of the remaining note principal to a third party who then converted the note into 50 shares of common stock. In September 2013, the new note holder converted $100 of note principal into 1,000 shares of common stock. In September 2013, in a private transaction, the new note holder transferred $35 of the remaining note principal to a third party who then converted the note into 350 shares of common stock. In November and December 2013, the new note holder converted an additional $90 of note principal into 900,000 shares of common stock as follows: Date of Conversion Principal Conversion Shares November 2013 $ 40 $ 0.0001 400 December 2013 $ 50 $ 0.0001 500 In March and April 2014, the new note holder converted an additional $90 of note principal into 900,000 shares of common stock as follows: Date of Conversion Principal Conversion Shares March 2014 $ 50 $ 0.0001 500 April 2014 $ 40 $ 0.0001 400 Subsequent to these conversions there remains $125 in note principal outstanding at March 31, 2019. Note Payable-SF In July 2013, the holder of the second note converted $240 of note principal into 400 shares of the Company’s common stock at $0.0006 per share. At March 31, 2019 and December 31, 2018, the note had a remaining principal balance of $60 and $60, respectively. At any time on or after the maturity date, the holders of the notes, have the option of converting any of the unpaid principal and interest into the Company’s common stock. The notes plus any accrued but unpaid interest are convertible at the rate of $0.0001 per share at the time of conversion up to a maximum of 9.99% of the then issued and outstanding common stock, or 580,307 shares at March 31, 2019 and 347,936 shares at December 31, 2018. Note Payable-RK In May 2012, the Company issued a $25,000 6% per annum note that matured in November 2012. In December 2012 the note was amended to be a convertible note. Interest on the note accrues interest at 6% per annum and is payable when the note matures. The holder of the $25,000 note had the option of converting it at any time prior to maturity. The note plus any accrued but unpaid interest were convertible at the rate of $0.001 per share at the time of conversion up to a maximum of 9.99% of the then issued and outstanding common stock. The holder of the note converted $1,010 of note principal into 1,010 shares of common stock as follows: Date of Conversion Principal Conversion Shares December 2012 $ 150 $ 0.001 150 January 2013 $ 660 $ 0.001 660 March 2013 $ 200 $ 0.001 200 In July 2013, the Company retired $14,000 of note principal in payment for consulting services provided to the note holder. In July 2013, the note holder converted $300 of note principal into 300 shares of the Company’s common stock. In July 2013, in a private transaction, the note holder transferred the remaining note principal balance of $9,690 to a third party (See Note Payable-NW Note Payable-NW After receiving the transfer of the principal balance of $9,690 in July 2013 in the private transaction noted in Note Payable-RK In October 2013, the note holder converted $400 of note principal into 400 shares of the Company’s common stock at $0.001 per share. In October 2014, the note holder converted $1,100 of note principal into 1,100 of the Company’s common stock. The note holder has the option of converting the balance at any time with the approval of the Board of Directors. The note plus any accrued but unpaid interest are convertible at the rate of $0.001 per share at the time of conversion up to a maximum of 9.99% of the then issued and outstanding common stock, or 347,936 shares at December 31, 2018 and 49,753,279 shares at March 31, 2019. In August 2016, the note holder converted $3,000 of note principal into 3,000,000 shares of the Company’s common stock. At March 31, 2019 and December 31, 2018, the remaining principal balance on this portion of the note is $715 and $715 respectively. Note Payable-MC #2 In April 2015, the Company issued a $3,000 8% per annum note that matures in October 2015. The holder of the note has the right to convert the principal into shares of the Company’s common stock at any time 180 days after the closing date at $0.0001 per share. Interest on the note accrues interest at 8% per annum and is payable when the note matures. During January 2017, the current noteholder converted $1,100 in principal balance into 11,000 shares of common stock. During the same period, the current noteholder transferred $600 of the remaining principal balance to another investor who then converted the entire principal balance he received into 6,000 shares of common stock. During April 2017, the current noteholder converted $410 of remaining principal into 6,000 shares of common stock. There remains $890 in principal balance at March 31, 2019 and at December 31, 2018. Convertible Notes Payable-SO (8%) On May 2, 2016, the Company issued to an Investor a convertible redeemable note in the principal amount of $57,750 (“the Note”). The Note, which matures on May 2, 2017, pays interest at the rate of 8% per annum. The note contains a 10% original issue discount. The holder of the note is entitled, at its option beginning on the 6 month anniversary, to convert all or any of the principal face amount of the Note then outstanding into shares of the Company’s common stock at the price equal to 55% of the lowest trading price for the twenty prior trading days including the date of conversion. During the quarter ended March 31, 2017 the noteholder converted $32,298 of the principle balance into 23,490 shares of common stock thereby leaving a principal balance of $25,452 on the note at December 31, 2017. During the first quarter of 2018, the noteholder converted $23,000 of the principle balance into 122,727 shares of common stock thereby leaving a principal balance of $2,452 on the note at June 30, 2018. During the quarter ended September 30, 2018, the noteholder converted the remaining balance of the note into 148,316 shares on common leaving no balance due on the note as of December 31, 2018. There is $12,896 in accrued interest and penalty assessments on this note as of December 31, 2018 which is included in accrued expenses payable on the balance sheet. During the quarter-ended March 31, 2019 the Company reached a settlement agreement with the noteholder where it paid in cash or through conversion all the outstanding interest and penalty and nothing is due to the noteholder as of March 31, 2019. The noteholder converted $5,813 of interest and penalty into 398,859 shares of common stock of the Company and $9,815 was paid in cash to the noteholder by the Company thereby resulting in a recognized loss on the extinguishment of the debt in the amount of $2,732. Convertible Notes Payable - Funding (8%) On May 1, 2017, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an accredited investor (the “Investor”) for the sale of convertible redeemable notes in aggregate principal amount of $1,012,500. The back end-notes were all cancelled so only a total of $506,250 were actually funded. On May 1st, 2017 and June 2, 2017, the Company and the Investor conducted the first two closings under the Purchase Agreement, pursuant to which the Company issued to the Investor (i) a convertible redeemable note in principal amount of $131,250 (the “$131K Note”); and (ii) a convertible redeemable note in principal amount of $125,000 (the “$125K Note”). On July 10, 2017 and August 7, 2017, the Company and the Investor conducted the second two closings under the Purchase Agreement, pursuant to which the Company issued to the Investor two convertible redeemable notes each in the principal amount of $125,000; The two notes issued May 1, 2017 ($131,250) and June 2, 2017 ($125,000) became convertible on October 28, 2017 and December 4, 2017 respectively and required derivative treatment at that time. The embedded derivative was bifurcated and accounted for separately along with the derivative discount. The derivative liability is marked-to-market each quarter with the resulting gain or loss valuation being reported in the statement of operations. During the quarter ended December 31, 2017 (after the six-month waiting period) the holder of the original note in the principal amount of $131,250 converted $21,500 and $15,350 of the note’s principal balance into 35,058 and 39,714 shares of the Company’s common stock, respectively. The principal balance remaining on this convertible note is $94,400 as of December 31,2017. During the quarter ended March 31, 2018 the holder of the original note converted, through four separate conversion transactions, a total of $38,870 of the note’s principal balance into total of 193,384 shares of the Company’s common stock. During the quarter ended June 30, 2018 the holder of the original note converted $10,030 of the note’s principal balance into total of 62,015 shares of the Company’s common stock. During the quarter ended September 30, 2018 the holder of the original note converted $2,200 of the note’s principal balance into total of 69,439 shares of the Company’s common stock. During the quarter ended December 31, 2018 the holder of the original note converted $10,640 of the note’s principal balance and $1,312 of accrued interest into total of 148,545 shares of the Company’s common stock. During the quarter-ended March 31, 2019 the noteholder converted $21,125 in principal and $2,977 in accrued interest into 1,249,684 shares of common stock. The principal balance remaining on this convertible note is $11,535 as of March 31, 2019. Convertible Notes Payable - JR (5%) On August 2, 2017 the Company issued a convertible note payable (promissory note) to an investor in the principal amount of $50,000. The note matures on August 2, 2018 and bears interest at 5%. The note holder has the right at any time on or after the day that is six months from August 2, 2018 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock at a fixed price of .003 per share. The embedded derivative on the note was valued and bifurcated effective October 1, 2018. During the quarter ended December 31, 2018, $4,500 in principal on this note was satisfied by the noteholder converting such amount into 150,000 shares of the Company’s common stock. During the quarter-ended March 31, 2019 the noteholder converted $3,300 in principal balance into 200,000 shares of the Company’s common stock. The remaining principal balance outstanding on the note is $42,200 as of March 31, 2019. Convertible Notes Payable - MLM (10%) As more fully described in Note 1 to the financial statements, on March 8th 2016 (with an effective date of October 1, 2015), the company, through it’s sole wholly-owned subsidiary (“Licensee”), entered into a Product and Know-How License Agreement (“Agreement”) with a Florida Corporation (“Licensor”) which is owned by a related party - the son of the Company’s CEO. The consideration for the licensing agreement consisted of the issuance of 25,000 Series B Preferred stock shares to the Licensor (at par) plus a $150,000 promissory note issued by the Company to the licensor. During the quarter-ended June 30, 2017, $18,986 in accrued interest was satisfied through the issuance of 17,273 shares of the Company’s common stock. On September 15, 2017 the Note was amended to include provisions to allow conversion of the Note into common stock of the Company. At such time the Note was valued with it’s embedded derivative and discount. On September 25, 2017, $16,250 in principal on this note was satisfied by the conversion into 25,000 shares of the Company’s common stock leaving a balance on the note of $133,750 at December 31, 2017. During the year ended December 31, 2018 the Company made cash paydowns to the noteholder in the total amount of $32,550. In addition, $30,195 in principal balance on the note was converted into 495,000 shares of the Company’s common stock. The ending principal balance on this note at December 31, 2018 is $51,005 to the original noteholder. During the year-ended December 31, 2018 the unrelated third-party noteholder converted $3,350 in principal balance into 120,000 shares of the Company’s common stock thereby leaving a principal balance to this unrelated noteholder in the amount of $16,650. During the quarter-ended March 31, 2019 the Company made principal paydowns in the amount of $5,700 to the original noteholder and the original noteholder converted $3,800 in principal balance into 200,000 shares of the Company’s common stock. The ending principal balance on this note at March 31, 2019 is $41,505 to the original noteholder and $16,650 to the unrelated third-party noteholder. Convertible Notes Payable - LG (8%) (Notes 5 & 6) On January 25, 2018 the Company issued a convertible note payable (promissory note) to an investor in the principal amount of $78,750. The note matures on January 25, 2019 and bears interest at 8%. The note holder has the right at any time on or after the day that is six months from January 25, 2018 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $78,750 is outstanding as of March 31, 2019. On June 4, 2018 the Company issued a convertible note payable (promissory note) to an investor in the principal amount of $52,500. The note matures on June 4, 2019 and bears interest at 8%. The note holder has the right at any time on or after the day that is six months from June 4, 2018 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $52,500 is outstanding as of March 31, 2019. Convertible Notes Payable - PULG (8%) (Notes 1 & 2) On October 1, 2018 the Company issued a convertible note payable (convertible promissory note PULG (8%) Note 1) to an investor in the principal amount of $58,000. The note matures on April 1, 2020 and bears interest at 8%. The note holder has the right at any time on or after the day that is six months from October 1, 2018 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $58,000 is outstanding as of March 31, 2019. On November 19, 2018 the Company issued a convertible note payable (convertible promissory note PULG (8%) Note 2) to an investor in the principal amount of $65,000. The note matures on May 19, 2020 and bears interest at 8%. The note holder has the right at any time on or after the day that is six months from November 19, 2018 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $65,000 is outstanding as of March 31, 2019. Convertible Notes Payable - PULG (8%) (Notes 3, 4 & 5) On January 24, 2019 the Company issued a convertible note payable (convertible promissory note PULG (12%) Note 3) to an investor in the principal amount of $43,000. The note matures on May 24, 2020 and bears interest at 12%. The note holder has the right at any time on or after the day that is six months from January 24, 2019 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $43,000 is outstanding as of March 31, 2019. On February 4, 2019 the Company issued a convertible note payable (convertible promissory note PULG (12%) Note 4) to an investor in the principal amount of $38,000. The note matures on November 30, 2019 and bears interest at 12%. The note holder has the right at any time on or after the day that is six months from February 4, 2019, 2018 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $38,000 is outstanding as of March 31, 2019. On March 26, 2019 the Company issued a convertible note payable (convertible promissory note PULG (8%) Note 5) to an investor in the principal amount of $43,000. The note matures on September 21, 2020 and bears interest at 8%. The note holder has the right at any time on or after the day that is six months from March 26, 2019 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $43,000 is outstanding as of March 31, 2019. Convertible Notes Payable - BR (12%) (Note 1) On February 25, 2019 the Company issued a convertible note payable (convertible promissory note BR (12%) Note 1) to an investor in the principal amount of $65,000. The note matures on February 25, 2020 and bears interest at 12%. The note holder has the right at any time on or after the day that is six months from February 25, 2019 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $65,000 is outstanding as of March 31, 2019. Convertible Notes Payable - CB (8%) (Note 1) On February 27, 2019 the Company issued a convertible note payable (convertible promissory note CB (8%) Note 2) to an investor in the principal amount of $51,500. The note matures on August 20, 2020 and bears interest at 8%. The note holder has the right at any time on or after the day that is six months from February 27, 2019 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $51,500 is outstanding as of March 31, 2019. Convertible Notes Payable - GS (8%) (Note 1) On February 20, 2019 the Company issued a convertible note payable (convertible promissory note GS (8%) Note 1) to an investor in the principal amount of $54,000. The note matures on August 20, 2020 and bears interest at 8%. The note holder has the right at any time after issuance to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $54,000 is outstanding as of March 31, 2019. The Company’s convertible notes payable and the related derivative liabilities, derivative discount, deferred financing costs and original-issue discount are presented in the financial statements at March 31, 2019 as follows: 3/31/2019 Remaining Original Deferred Total Principal Issue Derivative Financing Convertible Derivative Debt Amount Discount Discount Costs Notes Payable Liability Note Payable - BS $ 125 $ 125 Note Payable - SF 60 60 Note Payable - SD 15,000 15,000 Note Payable - NW 715 715 Note Payable - MC #2 890 890 Convertible Note Payable - JR (5%) 42,200 (40,873 ) 1,327 69,078 Convertible Note Payable - HG (10%) 16,650 16,650 Convertible Note Payable - LGC (8%) 1 11,535 11,535 12,784 Convertible Note Payable - LGC (8%) 2 125,000 - 125,000 59,043 Convertible Note Payable - LGC (8%) 3 125,000 - - 125,000 59,194 Convertible Note Payable - LGC (8%) 4 125,000 - - 125,000 59,122 Convertible Note Payable - MLM (10%) (Related party) 41,505 - 41,505 72,071 Convertible Note Payable - LGC (8%) 5 78,750 - 78,750 54,656 Convertible Note Payable - LGC (8%) 6 52,500 (13,563 ) (185 ) 38,752 29,732 Convertible Notes Payable- PULG (8%) 1 65,000 (62,319 ) (1,907 ) 774 77,298 Convertible Notes Payable- PULG (8%) 2 58,000 (43,738 ) (1,496 ) 12,766 69,662 Convertible Notes Payable- PULG (8%) 3 43,000 (42,606 ) (2,593 ) (2,199 ) 50,143 Convertible Notes Payable- PULG (8%) 4 38,000 (30,457 ) (2,448 ) 5,095 43,308 Convertible Notes Payable- PULG (8%) 5 43,000 (25,225 ) (2,972 ) 14,803 57,866 Convertible Notes Payable- BR (12%) 1 65,000 (34,103 ) (4,534 ) 26,363 70,346 Convertible Notes Payable- CB (8%) 1 51,500 (4,708 ) (51,396 ) (1,412 ) (6,016 ) 78,975 Convertible Notes Payable- GS (8%) 1 54,000 (392 ) (53,156 ) (2,750 ) (2,298 ) 83,425 $ 1,052,430 $ (5,100 ) $ (397,436 ) $ (20,297 ) $ 629,597 $ 946,703 As of March 31, 2019, the convertible notes payable can be converted into approximately 49,753,279 shares of common stock. |