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Convertible Notes Payable and Notes Payable
 6 Months Ended
Jun. 30, 2019
Debt Disclosure [Abstract]  
Convertible Notes Payable And Notes Payable

NOTE 8 - CONVERTIBLE NOTES PAYABLE AND NOTES PAYABLE

 

Upon inception, the Company evaluates each financial instrument to determine whether it meets the definition of “conventional convertible” debt under ASC 470.

 

Convertible Notes Payable

 

The following table reflects the convertible notes payable at June 30, 2019:

 

Date  Due Date  Principal Balance  Rate  Conversion Rate
             
Convertible notes payable                    
01/03/19   07/03/19   $1,000    6.00%   0.00100 
03/16/19   09/16/19   $10,000    6.00%   0.00100 
Subtotal convertible notes payable       $11,000           
                     
Less unamortized discounts       $4,248           
                     
Balance, convertible notes payable       $6,752           
                     
Convertible notes payable - related parties                    
01/08/19   07/08/19   $7,000    6.00%   0.00080 
04/25/19   12/23/19   $20,000    6.00%   0.00400 
06/07/19   12/07/19   $5,100    6.00%   0.00300 
Sub-Total notes payable - related parties       $32,100           
                     
Less unamortized discounts       $12,984           
                     
Balance, convertible notes payable - related parties       $19,116           
Convertible notes payable - in default                    
08/28/09   11/01/09   $4,300    10.00%   0.01500 
04/07/10   11/07/10   $70,000    6.00%   0.00800 
11/12/10   11/12/11   $40,000    6.00%   0.00500 
10/31/12   04/30/13   $8,000    6.00%   0.00400 
11/20/12   05/20/13   $50,000    6.00%   0.00500 
01/19/13   07/30/13   $5,000    6.00%   0.00400 
02/11/13   08/11/13   $9,000    6.00%   0.00600 
09/25/13   03/25/14   $10,000    6.00%   0.01250 
10/04/13   04/04/14   $50,000    6.00%   0.01250 
10/30/13   10/30/14   $50,000    6.00%   0.01250 
05/15/14   11/15/14   $40,000    6.00%   0.00700 
10/13/14   04/13/15   $25,000    6.00%   0.00500 
06/29/15   12/29/15   $25,000    6.00%   0.00300 
09/18/15   03/18/16   $25,000    6.00%   0.00200 
04/04/16   10/04/16   $10,000    6.00%   0.00100 
07/19/16   07/19/17   $4,000    6.00%   0.00150 
08/24/16   02/24/17   $20,000    6.00%   0.00100 
03/06/18   09/06/18   $6,000    6.00%   0.00060 
02/06/18   11/07/18   $6,000    6.00%   0.00060 
10/29/18   04/29/19   $3,000    6.00%   0.00070 
Sub-Total convertible notes payable - in default       $460,300           

     

Convertible notes payable - related parties, in default                    
    01/09/09    01/09/10   $10,000    10.00%  0.01500
    01/25/10    01/25/11   $6,000    6.00%  0.00500
    01/18/12    07/18/12   $50,000    8.00%  0.00400
    01/19/13    07/30/13   $15,000    6.00%  0.00400
    07/26/13    01/26/14   $10,000    6.00%  0.01000
    01/17/14    07/17/14   $31,500    6.00%  0.00600
    05/27/14    11/27/14   $7,000    6.00%  0.00700
    07/21/14    01/25/15   $17,000    6.00%  0.00800
    10/16/14    04/16/15   $21,000    6.00%  0.00450
    07/14/15    01/14/16   $9,000    6.00%  0.00300
    01/12/16    07/12/16   $5,000    6.00%  0.00200
    05/10/16    11/10/16   $5,000    6.00%  0.00050
    05/10/16    11/10/16   $5,000    6.00%  0.00050
    05/20/16    11/20/16   $5,000    6.00%  0.00050
    07/12/16    01/12/17   $2,400    6.00%  0.00060
    01/26/17    03/12/17   $5,000    6.00%  0.00050
    02/14/17    08/14/17   $25,000    6.00%  0.00075
    08/16/17    09/16/17   $3,000    6.00%  0.00080
    03/14/18    05/14/18   $25,000    6.00%  0.00070
    04/04/18    06/04/18   $3,000    6.00%  0.00070
    04/11/18    06/11/18   $25,000    6.00%  0.00070
    05/08/18    07/08/18   $25,000    6.00%  0.00070
    05/30/18    08/30/18   $25,000    6.00%  0.00070
    06/12/18    09/12/18   $3,000    6.00%  0.00070
    06/20/18    09/12/18   $500    6.00%  0.00070
    01/09/18    01/09/19   $12,000    6.00%  0.00060
    08/27/18    02/27/19   $2,000    6.00%  0.00070
    10/02/18    04/02/19   $1,000    6.00%  0.00080
    10/23/18    04/23/19   $4,200    6.00%  0.00070
    11/07/18    05/07/19   $2,000    6.00%  0.00080
    11/14/18    05/14/19   $8,000    6.00%  0.00080
Sub-Total convertible notes payable - related parties, in default            $367,600      
                     
Balance - convertible notes payable            $853,768      

    

Notes Payable

 

The following table reflects the notes payable at June 30, 2019:

 

Date  Due Date  Principal Balance  Rate   
             
Notes payable                  
11/29/17  11/29/19  $105,000    2.06%   NA 
Balance     $105,000           
                   
Less unamortized discounts     $7,071           
                   
Balance notes payable     $97,929           
                   
Notes payable - in default                  
04/27/11  04/27/12  $5,000    6.00%   NA 
06/23/11  08/23/11  $25,000    6.00%   NA 
12/14/17  12/14/18  $75,000    6.00%   NA 
Balance     $105,000           
                   

 

Notes payable - related parties, in default

 

02/24/10   02/24/11   $7,500    6.00%   NA 
10/06/15   11/15/15   $10,000    6.00%   NA 
02/08/18   04/09/18   $1,000    6.00%   NA 
Balance       $18,500           
                     
Balance - notes payable       $221,429           

 

New Convertible Notes Payable and Notes Payable

 

During the six month period ended June 30, 2019 the Company entered into the following Convertible Notes Payable and Notes Payable Agreements:

 

In January of 2019, the Company entered into a convertible promissory note agreement in the amount of $1,000 with an individual. This loan pays interest at a rate of 6% per annum and the principal and accrued interest was due on or before July 3, 2019. The note is unsecured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.001 per share.

 

In January of 2019, the Company entered into a convertible promissory note agreement in the amount of $7,000 with a related party. This note pays interest at a rate of 6% per annum and the principal and accrued interest are due on or before July 8, 2019. The note is unsecured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.008 per share.

 

In March of 2019, the Company entered into a convertible promissory note agreement in the amount of $10,000 with an individual. This loan pays interest at a rate of 6% per annum and the principal and accrued interest are due on or before September 16, 2019. The note is unsecured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.0010 per share.

 

In April of 2019, the Company entered into a convertible promissory note agreement in the amount of $20,000 with a related party. This note pays interest at a rate of 6% per annum and the principal and accrued interest are due on or before October 23, 2019. The note is unsecured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.004 per share.

 

In June of 2019, the Company entered into a convertible promissory note agreement in the amount of $5,100 with a related party. This note pays interest at a rate of 6% per annum and the principal and accrued interest are due on or before December 7, 2019. The note is unsecured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.003 per share.

 

For the six month period ended June 30, 2019, the Company recorded a beneficial conversion feature of $35,600 on the convertible notes payable issued which was recorded as discount and will be amortized to interest expense over the related term of the convertible debt. For the six month period ended June 30, 2019, the Company recorded amortization of debt discounts of $27,357. For the three month period ended June 30, 2019, the Company recorded a beneficial conversion feature of $25,100 on the convertible notes payable issued which was recorded as discount and will be amortized to interest expense over the related term of the convertible debt. For the three month period ended June 30, 2019, the Company recorded amortization of debt discounts of $17,594.

 

Note Conversions

 

During the three month period ended March 31, 2019: 

 

A lender converted the principal and accrued interest for a convertible promissory note outstanding with a principal balance of $1,000 into 1,284,938 shares of the Company’s common stock. The remaining principal balance of this note was $0 at June 30, 2019.

 

During the three month period ended June 30, 2019:

 

The Company issued 18,869,220 shares to settle $90,182 of accrued interest owed on fourteen convertible notes payable.

 

Shareholder Loans

 

At June 30, 2019 the Company had a loan outstanding to its CEO in the amount of $1,500. The loan has a 2% annual rate of interest and an option to convert the loan into restricted shares of the Company’s common stock at $0.0005. During the three month period ended June 30, 2019 the Company repaid the principal balance of $200 of a loan owed to its CEO.

 

Convertible Notes Payable and Notes Payable, in Default

 

The Company does not have additional sources of debt financing to refinance its convertible notes payable and notes payable that are currently in default. If the Company is unable to obtain additional capital, such lenders may file suit, including suit to foreclose on the assets held as collateral for the obligations arising under the secured notes. If any of the lenders file suit to foreclose on the assets held as collateral, then the Company may be forced to significantly scale back or cease its operations which would more than likely result in a complete loss of all capital that has been invested in or borrowed by the Company. The fact that the Company is in default of several promissory notes held by various lenders makes investing in the Company or providing any loans to the Company extremely risky with a very high potential for a complete loss of capital.  

 

The convertible notes that have been issued by the Company are convertible at the lender’s option. These convertible notes represent significant potential dilution to the Company’s current shareholders as the convertible price of these notes is generally lower than the current market price of the Company’s shares. As such when these notes are converted into shares of the Company’s common stock there is typically a highly dilutive effect on current shareholders and very possible that such dilution may significantly negatively affect the trading price of the Company’s common stock.