Notes Payable | 6. Notes Payable Notes payable consist of the following: December 31, 2019 December 31, 2018 Promissory note issued July 29, 2014 to Ira Gaines. In 2016, the maturity date on the note was extended to December 1, 2017. The note earned interest at a rate of 18% per annum. The Company settled this note with a new note in the same amount on October 1, 2019. $ - $ 100,000 Promissory notes issued between November 26, 2014 and December 31, 2015, to raise up to $2,000,000 in debt. Lenders earn interest at a rate of 10% per annum, plus a pro-rata share of two percent of the Company’s gross receipts for sales of IRT-103-LDN in perpetuity. Notes will be repaid in 36 monthly installments of principal and interest commencing no later than October 15, 2015. These notes were in default at December 31, 2019, as the Company was unable to pay installments on their due dates. 286,000 286,000 Promissory notes issued between May 1, 2015 and December 31, 2016 and maturing between June 14, 2015 and December 1, 2017. Lenders on loans aggregating $675,994 earn interest at rates between 2% and 10% per annum. One loan, in the amount of $100,000, interest was payable in a fixed amount not tied to a specific interest rate. However, this note was extinguished and reassigned to a related party during the year ended December 31, 2019. The Company was unable to repay the remaining notes at maturity and at December 31, 2019 these notes were in default. 625,994 725,994 Promissory notes issued to an officer of the Company effective November 3, 2015 and maturing November 3, 2016 for settlement of accrued payroll, bearing interest at 10% per annum and including a stock conversion feature. The Company was unable to repay the note at maturity and at December 31, 2019 the note was in default. 97,737 97,737 Promissory notes issued between July 1, 2016 and December 31, 2016. Lenders earn interest at 2% per annum. The notes mature on December 31, 2017, and at December 31, 2019 the notes were in default. 206,000 206,000 Promissory notes aggregating $1,350,000 issued in the fourth quarter 2016. The notes accrue interest at 2% per annum and mature between November 1, 2017 and December 31, 2017. As December 31, 2019, the notes were in default. 1,354,000 1,354,000 Promissory notes aggregating $500,000 issued in the first quarter of 2017. The notes accrue interest at 2% per annum and mature between January 12, 2018 and September 30, 2018. At December 31, 2019, the notes were in default. 500,000 500,000 Promissory notes issued January 25, 2017. The lenders earn interest at 7% per month. The notes matured on July 5, 2017, and at December 31, 2019 the notes were in default. The Company settled this note with a new note in the same amount on October 1, 2019. - 50,000 Promissory notes aggregating $300,000 issued in the second quarter of 2017. The notes accrue interest at 2% per annum and mature between April 3, 2018 and May 31, 2018. At December 31, 2019, the notes were in default. 300,000 300,000 Promissory notes aggregating $191,800 issued in the third quarter of 2017. The notes accrue interest at 2% per annum and mature between June 16, 2018 and December 31, 2018. At December 31, 2019, the notes were in default. 191,800 191,800 Promissory note for $425,000 issued in October 2017 with an original issue discount of $70,000. The note is in default, giving the holder an option to convert the note to stock using the lowest value of the Company’s common stock 25 days prior to the conversion. In 2018, The defaults also resulted in certain penalties, as a result of which the principal amount of the note outstanding at December 31, 2019 had increased to $454,032. $49,943 of accrued interest owed on the note has been converted to stock. The Company has accrued a $798,126 derivative liability for the remaining conversion right. 454,032 455,122 Promissory notes aggregating $105,500 issued in the fourth quarter of 2017. The notes accrue interest at 2% per annum. At December 31, 2019, the notes were in default. 105,500 105,500 Promissory notes aggregating $47,975 issued in the first quarter of 2018. The notes accrue interest at 2% per annum and mature between May 2018 and January 2019. At December 31, 2019, the notes were in default. 47,975 47,975 Promissory notes aggregating $125,000 issued in the first quarter of 2018. The notes accrue interest between 2% and 12% per annum and mature between April 2018 and June 2018. These notes include warrants between 5,000 and 20,000 shares with an exercise price of $0.5. At December 31, 2019 the notes were in default 125,000 125,000 Promissory notes aggregating $65,000 issued in the second quarter of 2018. The notes accrue interest between 2% per annum and mature between July 2018 and October 2018. These notes include warrants between 1,000 and 5,000 shares with an exercise price of $5. At December 31, 2019 the notes were in default 65,000 65,000 Promissory notes aggregating $198,000 issued in the third quarter of 2018. The notes accrue interest at 2% per annum and mature between November 2018 and January 2019. These notes include warrants between 600 and 5,000 shares with an exercise price of $5. At December 31, 2019, the notes were in default. 198,000 193,000 Promissory notes aggregating $533,855 issued in the fourth quarter of 2018. The notes accrue interest from 2% to 3.5% per annum and mature between February 2019 and December 2019. These notes include warrants between 200 and 39,500 shares with an exercise price of $5 to $40. At December 31, 2019, the note was in default. 533,855 533,855 Promissory note for $23,000 issued in the first quarter of 2019. The note accrues interest at 2% per annum and matures during July 2019. The note includes warrants for 4,600 shares with an exercise price of $5. At December 31, 2019, the note was in default. 23,000 - Promissory note for $231,478 issued in the first quarter of 2019. The note accrues interest at 6% per annum and matured in February 2020. As of the date of this filing, this note is in default. 231,478 - Promissory notes aggregating $50,000 issued in the second quarter of 2019. The notes accrue interest at 2% per annum and mature between July and September 2019. These notes include warrants for 10,000 shares with an exercise price of $5. At December 31, 2019, the notes were in default. 50,000 - Promissory note in the amount of $150,000 issued on October 1, 2019 for the settlement of outstanding debt in the same amount. The note accrues interest at 15% per annum, with $1,875 due in monthly interest payments. and matures on April 30, 2021. 150,000 - Less: Original issue discount on notes payable and warrants issued with notes. - (149,256 ) Total $ 5,545,371 $ 5,187,727 As of December 31, 2019, the Company had accrued $899,904 in unpaid interest and default penalties. During the year ended December 31, 2019, 18,255 shares with a fair value of $78,500 were issued by the Company for settlement of promissory notes totaling $62,435. As of December 31, 2018, the Company had accrued $877,571 in unpaid interest and default penalties. During the year ended December 31, 2018, 30,351 shares with a fair value of $318,182 were issued by the Company for settlement of promissory notes totaling $175,000. The Company settled a note of $100,000 with accrued interest and penalties in the amount of $596,850 during the yearend December 31, 2019, by assigning them to a related party. In accordance with ASC 470-50-40-2, the extinguishment transactions between related entities may be in essence capital transactions. Therefore, when related parties are involved, recognition of the difference between the retired debt’s reacquisition price and carrying amount as either a gain or loss may not be appropriate. As such, no gain on the extinguishment of the transaction was recorded. |