Convertible Notes Payable

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Convertible Notes Payable

NOTE 5: CONVERTIBLE NOTES PAYABLE

As of March 31, 2019 (unaudited) and December 31, 2018, the Company had the following convertible notes outstanding:

	March 31, 2019				December 31, 2018
	Principal (net)		Accrued Interest		Principal (net)		Accrued Interest
July and August 2012 $1,060,000 Notes convertible into common stock at $4.60 per share, 12% interest, due December 2013 and January 2014	$	45,000	$	35,931	$	45,000		34,603
May through October 2015 $605,000 Notes convertible into preferred stock at $1 per share, 8-10% interest, due September 30, 2015		-		17,341		-		17,341
October through December 2015 $613,000 Notes convertible into preferred stock at $1 per share, 8% interest, due June 30, 2016, net of debt discount of $0 and $560,913, respectively		-		5,953		-		5,953
January through March 2016 $345,000 Notes convertible into preferred stock at $1 per share, 8% interest, due June 30, 2016		-		696		-		696
Penalties on notes in default		9,266		-		8,824		-
Total Convertible Notes Payable, Net	$	54,266	$	59,921	$	53,824	$	58,593

Interest expense for the three-months ended March 31, 2019 and 2018 on the convertible notes payable amounted to $1,328 and $57,757, respectively.

The May 2017 notes totaling $3,136,506, $2,419,240 after debt discounts, had a December 2017 due date which was extended to May 2018.

The November 2017 Note totaling $166,666, $92,004 after debt discount, included an Investor’s Put Option whereby if the Company’s stock was not listed on the Nasdaq or NYSE by January 31, 2018, the lender had the right to require the Company to repurchase the Note at any time after January 31, 2018 in an amount equal to 130% of the sum of the Principal plus all accrued and unpaid interest. The Investor issued notice February 2, 2018 exercising it’s Put Option and requiring the Company repurchase the Note on April 19, 2018 in the aggregate amount of $228,332. The investor may elect to cancel the repurchase notice at any time prior to receiving the repurchase payment.

On October 10, 2018, the Company successfully completed the terms of the Path Forward Agreements, resulting in the automatic conversion of the outstanding balance due under certain outstanding convertible secured debentures and convertible promissory, amounting to an aggregate of $2,253,538, into an aggregate of 302,339,252 shares of Company common stock and 2,610,453 shares of Series B Convertible Preferred at a fixed conversion price of $0.004 per share. These shares were subject to a restriction on any sales below $0.02 through December 31, 2018 and will have volume limitations on any sales below $0.01 during the first six months of 2019.

The Company entered into a convertible note in the amount of $50,000 in July 2018 with an interest rate of 8%. This note was convertible upon a Company capital raise of at least $500,000. On October 30, 2018, the Company converted this note into 12,000,000 shares of common stock at a conversion rate of $0.014 (total of $60,000 which includes $10,000 of interest and other costs) and recognized a loss on extinguishment of $108,916 on this conversion.