XML 27 R13.htm IDEA: XBRL DOCUMENT v3.19.3
Convertible Notes Payable
6 Months Ended
Jun. 30, 2019
Convertible Notes Payable  
Note 7. Convertible Notes Payable

The Companys convertible promissory notes at June 30, 2019 and December 31, 2018 are as follows:

 

 

June 30,

2019

 

December 31,

2018

 

Convertible notes payable, bearing interest at 8%-10%

 

$

1,312,740

 

$

1,284,250

 

Unamortized debt discount

 

(281,617

)

 

(440,315

)

Unamortized deferred debt issuance cost

 

(18,466

)

 

(34,738

)

Total

 

$

1,012,657

 

$

809,197

 

Current portion

 

1,012,657

 

809,197

 

February 2019 Note

 

On February 20, 2019, the Company issued a convertible note with a face amount of $155,000. The note and related accrued interest are convertible, at the option of the holder, into shares of the Companys common stock at a conversion price of 60% of the lowest trading price for 15 days prior to conversion. The note bears interest at 8% per year and matures on February 20, 2019. The note contains original issue discount aggregating $12,500 which is being amortized over the life of the note. The Company has also agreed to issue 1,100,000 shares of common stock with a value of $10,000 in connection with the note. The shares have been valued at $10,000. This cost will also be amortized over the life of the note. The Company received cash proceeds of $142,500.

 

March 2019 Note

 

On March 26, 2019, the Company issued a convertible note with a face amount of $78,750. The note and related accrued interest are convertible, at the option of the holder, into shares of the Companys common stock at a conversion price of 60% of the lowest trading price for 15 days prior to conversion. The note bears interest at 8% per year and matures on March 7, 2020. The note included legal costs of $3,750 which were deducted from the proceeds and which will be amortized over the life of the note. Proceeds of $75,000 were used for legal fees and were disbursed directly to the attorney.

 

2018 Notes

 

The company entered into various convertible notes during 2018, aggregating $1,071,490 at June 30, 2019. The notes all mature during 2019. During the six months ended June 30, 2019, four notes that came due during the period were extended to August 15, 2019. Pursuant to the terms of the extensions, we have agreed to issue one million shares of common stock for each month that the notes are outstanding, commencing in April 2019. The shares have not been issued at June 30, 2019. We have accrued $27,300 as interest expense during the three months ended June 30, 2019 for the 9 million shares due for the extensions. The four notes are currently being renegotiated.

 

During the three months ended June 30, 2019, the Company amortized $158,186 of debt discount and $12,723 of debt issue costs to interest expense. During the six months ended June 30, 2019, the Company amortized $327,885 of debt discount and $26,825 of debt issue costs to interest expense.

 

During the three months ended June 30, 2018, the Company amortized $68,672 of debt discount and $3,357 of debt issue costs to interest expense. During the six months ended June 30, 2018, the Company amortized $125,756 of debt discount and $5,971 of debt issue costs to interest expense.

 

During the six months ended June 30, 2019, the Company issued 101,725,726 shares of common stock upon the conversion of $179,080 principal amount of notes and related accrued interest of $12,846. The Company also made a cash payment of $33,680 against principal.