Convertible Notes Payable and Exchange Program

6 Months Ended

Jun. 30, 2021

Convertible Notes Payable and Exchange Program

Note 8. Convertible Notes Payable and Exchange Program

Note 8. Convertible Notes Payable and Exchange Program

Debt to Equity Exchange Program

In the period from June 2017 through the end of December 2019, the Company entered eight Convertible Note Holder agreements with eight Note Holders totaling, with all fees, interest, and principal, $2,008,812 as of December 31, 2020. The notes were not considered to be in default and were being renegotiated at March 31, 2021. Subsequently, as of May 31, 2021, each Convertible Noteholder received their fees, interest, and principal totaling $2,107,414 in shares of Common stock of the Company (at $.030 per share) with 50% warrant coverage (1 year cash warrant with a strike price of $0.30). All documents were executed by June 30, 2021 with all equity/warrants issued by July 31, 2021. The Company issued 7,036,668 Common shares, and 3,576,733 Warrant shares in this transaction.

The Company’s convertible promissory notes at June 30, 2021 and December 31, 2020 are as follows:

	June 30, 2021		December 31, 2020
Convertible notes payable, bearing interest at 8-10%	$	-	$	1,453,960
Current portion	$	-	$	1,453,960

The company entered into various convertible notes during 2019 and 2018, aggregating $1,453,960 at the time of settlement in the second quarter of 2021. During the second quarter of 2021 the Company issued 7,036,668 shares of common stock, valued at $1,829,534 and 3,576,733 warrants, valued at $857,600, in settlement of $1,453,960 of notes payable and $653,454 of accrued interest. Derivative liability of $1,728,274 was extinguished as a result of the settlement. The Company recorded a gain on extinguishment of $1,148,554.

During the three months ended June 30, 2020, the Company amortized $20,373 of debt discount and $1,250 of debt issue costs to interest expense. During the six months ended June 30, 2020, the Company amortized $101,899 of debt discount and $5,848 of debt issue costs to interest expense.