NOTES PAYABLE | NOTE 4 – NOTES PAYABLE Convertible Notes Payable During 2015, the Company entered into Convertible Debentures with Digital Arts Media Network and Ajene Watson, LLC. The promissory note agreements bear interest from eight (8%) percent to ten (10%) and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the investors’ sole discretion, into shares of common stock at variable conversion prices. As of June 30, 2020 and December 31, 2019, Digital Arts Media Network and Ajene Watson, LLC had an outstanding balance of $148,247. From 2016 to 2018, the Company entered into several Convertible Debentures with a lender which bear interest at eight (8%) percent and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the leaders’ sole discretion, into shares of common stock at variable conversion prices. The lender had an outstanding balance at June 30, 2020 and December 31, 2019 of $852,133. During 2019, the Company entered into several Convertible Debentures with two lenders which bear interest from eight (8%) percent to fifteen (15%) percent and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. During 2019, the two lenders had advanced a total of $354,870, net of discount and attorney fees, in the amount of $33,110 to the Company. On November 25, 2019, Meso Numismatics Inc. pursuant to the certificate of designation of the Series BB, elected to exchange the preferred shares for other indebtedness calculated at a price per share equal to $1.20. Upon the Company’s mailing of the Exchange Agreement, the shareholder shall have the option, within 30 days of such mailing date and subject to the execution of this Agreement to receive the Indebtedness in the form of a convertible note. Should the shareholder not give the Meso Numismatics Inc. notice the Indebtedness shall automatically be issued in the form of a promissory note. The convertible note agreements bear no interest and have a four (4) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the investors’ sole discretion, into shares of common stock at conversion price equal to the lowest bid price of the Common Stock as reported on the National Quotations Bureau OTC Markets exchange for the three prior trading days including the day upon which a Notice of Conversion is received by the Company. As of June 30, 2020 and December 31, 2019, 81,043 Preferred Series BB shares were exchange for an aggregate of $97,252 convertible notes of which 78,620 were cancelled and 2,423 are still outstanding On November 27, 2019, Meso Numismatics Inc. entered into an Assignment and Assumption Agreement with Lans Holdings Inc., whereby Lans Holdings Inc. assigned all of its rights to, obligations and interest in a Binding Letter of Intent entered into on May 23, 2019 with Global Stem Cells Group Inc. and Benito Nova, setting forth the principal terms pursuant to which the Company will acquire 50,000,000 shares of common stock of Global Stem Cells Group Inc. to Meso Numismatics Inc. for assumption of certain Convertible Redeemable Notes issued by Lans holdings Inc. to lenders., pursuant to a securities purchase agreement. Pursuant to the Assignment and Assumption Agreement and subject to any pre-existing defaults under the Notes, Meso Numismatics Inc. reissued the below Notes to a lender upon the following terms: Original Note Date Maturity Principal Interest 12/12/2016 11/27/2019 11/27/2020 $ 239,196.00 10 % 12/15/2016 11/27/2019 11/27/2020 291,930.00 12 % 5/16/2019 11/27/2019 11/27/2020 83,000.00 15 % 6/28/2019 11/27/2019 11/27/2020 191,000.00 15 % 7/15/2019 11/27/2019 11/27/2020 84,500.00 15 % 8/2/2019 11/27/2019 11/27/2020 98,000.00 15 % 9/17/2019 11/27/2019 11/27/2020 92,000.00 15 % $ 1,079,626.00 During the period ended March 31, 2020 and December 31, 2019, the lender converted $4,676 of principal into common stock resulting into a balance of $1,074,950 at June 30, 2020. From January 28, 2020 to March 30, 2020, the Company entered into an aggregate of $58,410 of Convertible Debentures with a lender which bear interest of eight (8%) percent and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. The lender had advanced a total of $52,600, net of discount and attorney fees, in the amount of $5,810 to the Company. From April 30, 2020 to June 24, 2020, the Company entered into an aggregate of $109,620 of Convertible Debentures with a lender which bear interest at eight (8%) percent and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. The lender had advanced a total of $93,300, net of discount in the amount of $15,720 to the Company. From May 4, 2020 to June 1, 2020, the Company entered into an aggregate of $146,200 of Convertible Debentures with a lender which bear interest at fifteen (15%) percent and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. The lender had advanced a total of $132,000, net of discount in the amount of $14,200 to the Company. On May 19, 2020, the Company issued 802,525 shares of common stock in conversion of $3,290 convertible notes payable at conversion price of $0.0041: a loss of $3,378 was recorded. On June 25, 2020, the Company entered into a Convertible Debentures with a lender in the amount of $60,000 which bear interest at fifteen (15%) percent and have a one (1) year maturity date. The note may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory note. The note is convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. The lender had advanced a total of $54,000, net of discount in the amount of $6,000 to the Company. These debentures are convertible, at the investors’ sole option, into common shares at the following terms: ● a 50 percent discount to the lowest closing bid price during the 10 days immediately preceding the conversion date as reported on the National Quotations Bureau OTCQB exchange ● a 50 percent discount to the average of the lowest traded price during the 20 days immediately preceding the conversion date as quoted by Bloomberg LP; ● a 50 percent discount to the lowest closing bid price during the 25 days immediately preceding the conversion date as reported on the National Quotations Bureau OTCQB exchange ● a 40 percent discount to the average of the three lowest traded price during the 20 days immediately preceding the conversion date as quoted by Bloomberg LP; or ● either (i) a 40 percent discount to the 10 days average daily trading price immediately preceding the conversion date, or (ii) at a fixed conversion price of $0.001 per share during any time whereby the current day market price is at or less than $0.075. The balance of outstanding convertible notes as of June 30, 2020 and December 31, 2019 is as follows: June 30, December 31, 2020 2019 Convertible notes payable $ 2,932,432 $ 2,563,145 Less: Discount 901,570 1,288,132 Convertible notes payable, net $ 2,030,862 $ 1,275,013 During the periods ending June 30, 2020 and December 31, 2019 the Company received $331,900 and $387,980, respectively, from funding on new convertible notes. During 2019, the Company assumed an aggregate of $1,079,626 certain Convertible Redeemable Notes issued by Lans Holdings Inc. to lenders pursuant to the Assignment and Assumption Agreement and, pursuant to the company’s exchange of debt for Series BB Preferred Stock, exchanged 78,620 shares of the Company’s Series BB preferred stock for an aggregate of $97,252 in Convertible Notes. During the periods ending June 30, 2020 and 2019, the Company incurred $7,629 and $2,513 losses on the conversion of convertible notes, respectively. In connection with the convertible notes, the Company recorded $152,357 and $42,109, respectively of interest expense and $760,192 and $159,778, respectively of debt discount amortization expense. As of June 30, 2020 and December 31, 2019, the Company had approximately $670,927 and $537,225, respectively of accrued interest. During the periods ending June 30, 2020 and December 31, 2019, the Company made no payments on the outstanding convertible notes, and converted $5,873 and $30,251, respectively, of principal and interest into 1,212,525 and 1,893,595 shares of common stock. As of June 30, 2020 and December 31, 2019, the principal balance of outstanding convertible notes payable was $2,932,432 and $2,563,145, respectively. Promissory Notes Payable The promissory note agreements bear no interest and have a four (4) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. As of December 31, 2019, 270,223 Preferred Series BB shares were exchange for an aggregate of $324,268 promissory notes. On December 3, 2019, Melvin Pereira, the CEO, converted 18,500 shares of the 25,000 shares of Series BB preferred stock to acquire one hundred (100%) percent of Meso’s common stock into 250,999 shares of the Company’s common stock and elected to exchange the remaining 6,500 shares of Series BB preferred stock for a promissory note of $7,800. Derivatives Liabilities The Company determined that the convertible notes outstanding as of June 30, 2020 and December 31, 2019 contained an embedded derivative instrument as the conversion price was based on a variable that was not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 – 40. The Company determined the fair values of the embedded convertible notes derivatives and tainted convertible notes using the lattice valuation model with the following assumptions: June 30, December 31, 2020 2019 Common stock issuable 624,479,496 266,447,568 Market value of common stock on measurement date $ 0.0140 $ 0.0196 Adjusted exercise price $ 0.00005-$0.0080 $ 0.00005-$0.0187 Risk free interest rate 0.16 % 1.60 % Instrument lives in years 1.00 Year 1.00 Years Expected volatility 494 % 575 % Expected dividend yields None None The balance of the fair value of the derivative liability as of June 30, 2020 and December 31, 2019 is as follows: Balance at December 31, 2018 $ 2,938,317 Additions 1,541,248 Fair value loss 295,863 Conversions (44,438 ) Balance at December 31, 2019 4,730,990 Additions 332,400 Fair value loss 3,025,794 Conversions (10,272 ) Balance at June 30, 2020 $ 8,078,912 |