| CONVERTIBLE LOANS [Text Block] | NOTE 6 – CONVERTIBLE LOANS At September 30, 2016 and December 31, 2015, convertible loans consisted on the following:
September 30, 2016 December 31, 2015
February 2016 Note $
-
-
March 2016 Note
99,280
-
April 2016 Note
75,000
-
May 2016 Note
52,500
-
Total notes payable
226,780
-
Less: Unamortized debt discounts
(149,840
)
-
Total convertible loans, net
76,940
-
Less: current portion of convertible loans
(67,642
)
-
Long-term convertible loans, net $
9,298
-
February 2016 Note
Effective February 29, 2016 the Company entered into a Convertible Promissory Note (“Vista Note”) with Vista Capital Investments, LLC pursuant to which the Company issued Vista Capital Investments, LLC a convertible note in the amount of $275,000
with an original issue discount in the amount of $25,000. The principal amount due Vista Capital Investments, LLC is based on the consideration paid. The maturity date is two years from the effective date of each payment. On February 29, 2016 the Company received consideration of $75,000
for which an original issue discount of $7,500
was recorded. In addition, the Company recognized a discount of $5,625
on fees paid upon entering into this agreement and recognized accrued interest under the Vista Note totaling $16,500. There were no additional borrowings under the Vista Note during the nine months ended September 30, 2016. The Vista Note carries an interest rate of
6% which shall be applied on the issuance date to the original principal amount.
The Vista Note provides Vista Capital Investments, LLC the right at any time, to convert the outstanding balance (including accrued and unpaid interest) into shares of the Company’s common stock at
70% of the lowest trade price in the
25
trading days previous to the conversion, additional discounts may apply in the case that conversion shares are not deliverable or if the shares are ineligible. As a result of the derivatives calculation (see Note 8) an additional discount of $72,775
was recorded. On September 1, 2016 Vista converted $9,951
of the Vista Convertible Note into a total of
790,000
shares of Common Stock at a fair value of $0.01260
per share. On September 28, 2016 Vista converted $10,200
of the Vista Convertible Note into a total of
2,000,000
shares of Common Stock at a fair value of $0.0051
per share. See Note 9.
Amortization of the debt discount totaled $102,400
for the nine months ended September 30, 2016. There was no remaining principal balance or accrued interest due under the Vista Note at September 30, 2016.
March 2016 Note
Effective March 2, 2016 the Company entered into a Convertible Promissory Note (“JMJ Note”) with JMJ Financial pursuant to which the Company issued JMJ Financial a convertible note in the amount of $500,000
with an original issue discount in the amount of $50,000. The principal amount due JMJ is based on the consideration paid. The maturity date is two years from the effective date of each payment. On March 2, 2016 the Company received consideration of $100,000
for which an original issue discount of $10,000
was recorded. In addition, the Company recognized a discount of $7,500
on fees paid upon entering into this agreement. There were no additional borrowings under the JMJ Note during the nine months ended September 30, 2016. If the Company doesn’t repay the JMJ Note on or before
90
days from the effective date the Company may not make further payments on this JMJ Note prior to the maturity date and a one-time interest charge of
12% will be applied to the principal amount. Since no payments were made on the note on or before
90
days from the effective date of the note, accrued interest due was recorded in the amount of $13,200
on June 1, 2016.
The JMJ Note provides JMJ Financial the right at any time, to convert the outstanding balance (including accrued and unpaid interest) into shares of the Company’s common stock at
60% of the lowest trade price in the
25
trading days previous to the conversion, additional discounts may apply in the case that conversion shares are not deliverable or if the shares are ineligible. As a result of the derivatives calculation (see Note 8) an additional discount of $92,500
was recorded. On September 12, 2016 JMJ converted $8,820
of the JMJ Convertible Note into a total of
700,000
shares of Common Stock at a fair value of $0.01260
per share. On September 21, 2016 JMJ converted $9,000
of the JMJ Convertible Note into a total of
750,000
shares of Common Stock at a fair value of $0.01200
per share. On September 28, 2016 JMJ converted $7,344
of the JMJ Convertible Note into a total of
1,200,000
shares of Common Stock at a fair value of $0.006120
per share. See Note 9.
Amortization of the debt discount totaled $34,462
for the nine months ended September 30, 2016. The principal balance due, net of the amortized discount under the JMJ Note was $9,298
at September 30, 2016.
April 2016 Note
Effective April 22, 2016 the Company entered into a Convertible Promissory Note (“Auctus Note”) with Auctus Fund, LLC pursuant to which the Company issued Auctus Fund, LLC a convertible note in the amount of $75,000. The maturity date is January 22, 2017. On April 22, 2016 the Company received consideration of $75,000. In addition, the Company recognized a discount of $6,750
on fees paid upon entering into this agreement. The Auctus Note carries an interest rate of
10% which shall be applied on the issuance date to the original principal amount. Interest paid under the Auctus Note totaled $5,625
at September 30, 2016.
The Auctus Note provides Auctus Fund, LLC the right at any time, to convert the outstanding balance (including accrued and unpaid interest) into shares of the Company’s common stock at
60% of the lowest trade price in the
25
trading days previous to the conversion, additional discounts may apply in the case that conversion shares are not deliverable or if the shares are ineligible. As a result of the derivatives calculation (see Note 8) an additional discount of $62,625
was recorded. Amortization of the debt discount totaled $43,909
for the nine months ended September 30, 2016. The principal balance due, net of the amortized discount under the Auctus Note was $43,909
at September 30, 2016.
May 2016 Note
Effective April 18, 2016 the Company entered into a Convertible Promissory Note (“Adar Note”) with Adar Bays, LLC pursuant to which the Company issued Adar Bays, LLC a convertible note in the amount of $52,500
with an original issue discount in the amount of $2,500. The maturity date is April 18, 2017. On May 12, 2016 the Company received consideration of $50,000
for which an original issue discount of $2,500
was recorded. In addition, the Company recognized a discount of $6,250
on fees paid upon entering into this agreement. The Adar Note carries an interest rate of
8% which shall be applied on the issuance date to the original principal amount. Accrued interest due under the Adar Note totaled $4,200
at September 30, 2016.
The Adar Note provides Adar Bays, LLC the right at any time, to convert the outstanding balance (including accrued and unpaid interest) into shares of the Company’s common stock at
60% of the lowest trade price in the
20
trading days previous to the conversion, additional discounts may apply in the case that conversion shares are not deliverable or if the shares are ineligible. As a result of the derivatives calculation (see Note 8) an additional discount of $39,550
was recorded. Amortization of the debt discount totaled $23,733
for the nine months ended September 30, 2016. The principal balance due, net of the amortized discount under the Adar Note was $23,733
at September 30, 2016. |
