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NOTE 13 - SUBSEQUENT EVENTS
3 Months Ended
Mar. 31, 2019
Subsequent Events [Abstract]  
(13) SUBSEQUENT EVENTS

(13) SUBSEQUENT EVENTS

 

a) Convertible Notes - Variable Conversion

In the second quarter 2019 the Company entered into four convertible notes in exchange for $215,000. These notes mature in 9 months. These notes carry an interest rate of 12% and 3 have a 10% Original issue Discount (OID). The OID will be recorded as a debt discount and amortized over the life of the loan. The notes convert into shares of the Company’s common stock at a price of 55% and 65% of the average of the two lowest trade prices and the lowest trade price for the Common Stock during the 20 Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Based on the variable conversion terms the beneficial conversion rights embedded in these convertible notes has been recorded as a derivative liability in the amount of $359,504, with a related debt discount of $233,000, and an immediate loss of $126,504.

 

b) Third Party Note Payable

In the second quarter 2019 the Company entered into a note in exchange for $200,000. This note matures in one year and carries a 20% interest rate. 50% of this loan is secured as a second mortgage on the CEO’s personal residence and the second 50% is personally guaranteed by the CEO. The Company is required to issue 2,500,000 shares of common stock valued at $156,250 as an inducement for this loan.

 

c) Stockholder’s Deficit

In the second quarter 2019 the Company issued 5,000,000 shares of common stock valued at $332,500 in exchange for $279,990 fixed assets at its new location in Lauderhill, Florida plus $50,000 in cash. The Company issued 2,500,000 shares of common stock valued at $156,250 as a debt inducement fee. The Company issued 300,000 shares of common stock valued at $18,420 as a debt inducement fee. The Company issued 1,666,666 shares of common stock valued at $125,000 for services. The Company issued 1,900,000 shares of common stock valued at $140,600 to settle $19,000 of debt. The Company issued 312,000 shares of common stock valued at $26,520 for one-half of the first year rent for the Company’s new corporate office space.

 

d) Acquisition of New Location

In April 2019, the Company entered into an agreement to acquire a new location that is a pizza quick casual restaurant. The Company is re-branding it into the Company’s new concept - Illegal Pizza, and expects it to open for business at the end of May 2019. (See Note 14)

 

The restaurant is located in Lauderhill, Florida. The Company issued 5,000,000 shares of common stock to purchase $279,990 in existing fixed assets and received an additional $50,000 in cash,

 

e) Leases

In the second quarter 2019 the Company entered into one (1) new two-year lease agreement for new corporate office space and received an assignment of the existing lease for the Lauderhill, Florida location with eight (8) years remaining. The Lauderhill rent is $4,780 per month.

 

The rent for the new corporate office space is for $4,420 per month, half paid with the issuance of 312,000 shares of common stock for the year at lease inception and half for the second year at the first anniversary.