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NOTE 14 - SUBSEQUENT EVENTS
12 Months Ended
Dec. 31, 2017
Subsequent Events [Abstract]  
(14) SUBSEQUENT EVENTS

(14) SUBSEQUENT EVENTS

 

a) Convertible Notes

In 2018 the Company entered into three convertible notes in exchange for $289,000. These notes mature in 6 months and 9 months. These notes carry an interest rate of 12% and a 10% Original issue Discount (OID). The OID will be recorded as a debt discount and amortized over the life of the loan. In addition the Company issued 340,000 returnable shares to one lender as an inducement. These shares were valued at $85,000, or $0.25 per share. These shares value will be recorded as a debt discount and amortized over the life of the loan. The Company also issued a warrant for 500,000 shares to the same lender as the returnable shares. The warrant contains terms allowing for a cash-less exercise. The notes convert into shares of the Company’s common stock at a price of 61% and 65% of the average of the two lowest trade prices and the lowest trade price for the Common Stock during the 15 and 20 Trading Day period ending on the latest complete Trading Day prior to the Conversion Date.

 

Shortly after issuance of the note, the Company agreed to remove the returnable designation from the 340,000 shares issued as an inducement. In addition the lender exercised the warrant under the cash-less provision for 50,898 shares and converted $16,528 of the note into 1,155,829 shares at a conversion price of $0.0143 per share.

 

b) Future Receivables Sale Agreements

In February and March 2018, we negotiate settlement agreements with two of these lenders to pay off the balances owed at the rate of $6,000 per month over two years and $4,000 per month over one year.