CONVERTIBLE NOTE PAYABLE

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

CONVERTIBLE NOTE PAYABLE

9 CONVERTIBLE NOTES PAYABLE

Convertible notes payable consists of the following:

Description	Interest rate	Maturity Date	Principal		Accrued interest		Unamortized debt discount			June 30, 2017 Balance, net		December 31, 2016 Balance, net
Power Up Lending Group	8%	September 30, 2017	$	—	$	—	$	—		$	—	$	1,180
	8%	November 30, 2017		53,000		1,498		(28,755	)		25,743		—
	8%	February 10, 2018		33,000		477		(25,515	)		7,962		—
Labrys Fund, LP	8%	July 27, 2017		105,000		3,544		(15,663	)		92,881		—
JSJ Investments, Inc.	8%	November 6, 2017		200,000		6,312		(94,505	)		111,807		—
Vista Capital Investment, LLC	8%	March 9, 2018		100,000		2,477		(69,041	)		33,436		—
Crossover Capital Fund II, LLC	8%	January 6, 2018		100,000		1,863		(69,091	)		32,772		—
GS Capital Partners, LLC	8%	May 22, 2018		75,000		641		(66,986	)		8,655		—
	8%	June 16, 2018		112,500		345		(108,185	)		4,660		—
YP Holdings, LLC	8%	May 26, 2018		133,321		—		(105,629	)		27,692		—
Delinvest Commercial, LTD	12%	December 16, 2017		20,000		72		(17,666	)		2,406		—
	12%	December 26, 2017		54,123		18		(53,823	)		318		—
Viktoria Akhmetova	12%	December 8, 2017		20,164		126		(15,332	)		4,958		—
Strategic IR	12%	December 8, 2017		10,000		69		(8,833	)		1,236		—
	12%	December 8, 2017		20,164		126		(18,036	)		2,254		—
	12%	December 26, 2017		53,740		18		(53,441	)		317		—
	12%	December 26, 2017		115,535		38		(114,893	)		680		—
Joseph W and Patricia G Abrams	12%	December 10, 2017		26,247		147		(16,640	)		9,754		—
Gibbs International Holdings	12%	December 16, 2017		52,494		190		(49,286	)		3,398		—
Roman Shefer	12%	December 24, 2017		10,000		10		(5,900	)		4,110		—
Cobbolo Limited	12%	December 26, 2017		53,438		18		(53,142	)		314		—
	12%	December 26, 2017		52,959		17		(52,664	)		312		—
Total convertible notes payable			$	1,400,685	$	18,006	$	(1,043,026	)	$	375,665	$	1,180

Interest expense, together with amortized debt discount totaled $449,861 and $0 for the six months ended June 30, 2017 and 2016, respectively.

The 12% convertible notes, above have a fixed conversion price of $0.20 per common share and certain investors who met a minimum investment requirement of $30,000 were issued three-year warrants convertible into common shares at a conversion price of; i) $0.20 per share if the convertible notes are converted prior to maturity date; and ii) $0.30 per share if the convertible notes are not converted prior to maturity date. These convertible notes have a beneficial conversion feature and attached warrants valued using a Black-Scholes valuation model, refer note 11 c) below, the value of the beneficial conversion feature of the notes were determined based on fair market price of the common stock at the date of the issuance of the note, the difference between the fair market value of the common stock and the conversion price was recorded as a debt discount with a corresponding credit to additional paid in capital.

The value of the warrants, determined using Black-Scholes, was calculated as a percentage of the total proceeds raised and was recorded as a debt discount with a corresponding credit to additional paid in capital. 

The total value of the beneficial conversion feature and warrant value recorded as a debt discount during the six months ended June 30, 2017 was $473,968. 

Power Up Lending Group Ltd. 

 On December 28, 2016, the Company entered into a Securities Purchase Agreement, pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $77,000 to Power Up Lending Group Ltd. The note had a maturity date of September 30, 2017 and a coupon of eight percent per annum. The Company has the right to prepay the note, provided it makes a payment to the purchaser as set forth in the note within 180 days of its issue date. The note provided that its outstanding principal amount was convertible at any time and from time to time at the election of the note holder during the period beginning on the date that is 180 days following the issue date into shares of the Company’s common stock, at a conversion price equal to 58% of the average of the lowest three closing bid prices of the Company’s common stock for the ten trading days prior to conversion.

On June 27, 2017, the Company prepaid this note for a total of $107,005, including accrued interest thereon and an early settlement penalty of 35% of the principal outstanding.

On February 21, 2017, the Company entered into a Securities Purchase Agreement, pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $53,000 to Power Up Lending Group Ltd. The note has a maturity date of November 30, 2017 and a coupon of eight percent per annum. The Company has the right to prepay the note, provided it makes a payment to the Purchaser as set forth in the note within 180 days of its issue date. The outstanding principal amount of the note is convertible at any time and from time to time at the election of the note holder during the period beginning on the date that is 180 days following the issue date into shares of the Company’s common stock, at a conversion price equal to 60% of the average of the lowest three closing bid prices of the Company’s common stock for the ten trading days prior to conversion. The balance of the note plus accrued interest at June 30, 2017 was $25,743, net of unamortized discount of $28,755.

On April 25, 2017, the Company, entered into a Securities Purchase Agreement pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $33,000 to Power Up Lending Group Ltd. The note has a maturity date of February 10, 2018 and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of eight percent per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company has the right to prepay the note in terms of agreement. The outstanding principal amount of the note is convertible at any time and from time to time at the election of the purchaser during the period beginning on the date that is 180 days following the issue date into shares of the Company’s common stock at a conversion price equal to 60% of the average lowest three closing bid prices of the Company’s common stock for the ten trading days prior to conversion. The balance of the note plus accrued interest at June 30, 2017 was $7,962, net of unamortized discount of $25,515.

Labrys Fund, LP 

On January 27, 2017, the Company entered into a Securities Purchase Agreement, pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $105,000 to Labrys Fund, LP. The note had a maturity date of July 27, 2017 and a coupon of eight percent per annum. In connection with the issuance of the note, the Company was required to issue 150,000 shares of common stock as a commitment fee valued at $66,000. The shares were returnable to the Company if no Event of Default has occurred prior to the date the note is fully repaid. Management had determined that it is probable that the Company would meet the conditions under the note and therefore it more likely than not that the Company would not be in Default as defined in the note. As a result, management has concluded that it was probable that the shares would be returned and therefore the value of the 150,000 shares was not recorded.

The Company had the right to prepay the note within 180 days of its Issue Date. After the 180 days, the Company had no right to prepayment. The outstanding principal amount of the note was convertible at any time and from time to time at the election of the note holder during the period beginning on the date that is 180 days following the issue date into shares of the Company’s common stock, at a conversion price equal to 60% of the average of the lowest three closing bid prices of the Company’s common stock for the ten trading days prior to conversion. The balance of the note plus accrued interest at June 30, 2017 was $92,881, net of unamortized discount of $15,663.  

JSJ Investments Inc. 

On February 6, 2017, the Company entered into a Securities Purchase Agreement, pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $200,000 to JSJ Investments Inc. The note has a maturity date of November 6, 2017 and a coupon of eight percent per annum. The Company has the right to prepay the note within 180 days of its issue date. After the 180 days, the Company has no right to prepayment. The outstanding principal amount of the note is convertible at any time and from time to time at the election of the note holder during the period beginning on the date that is 180 days following the issue date into shares of the Company’s common stock, at a conversion price equal to 60% of the average of the lowest three closing bid prices of the Company’s common stock for the ten trading days prior to conversion. The balance of the note plus accrued interest at June 30, 2017 was $111,807, net of unamortized discount of $94,505.

Vista Capital Investments, LLC 

On March 9, 2017, the Company entered into a Securities Purchase Agreement, pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $100,000 to Vista Capital Investments, LLC. The note has a maturity date of March 9, 2018 and a coupon of eight percent per annum. The Company has the right to prepay the note, provided it makes a payment to the Purchaser as set forth in the note through the maturity date. The outstanding principal amount of the note is convertible at any time and from time to time at the election of the note holder during the period beginning on the date that is 150 days following the issue date into shares of the Company’s common stock, at a conversion price equal to 60% of the average of the last two lowest trading bid prices during the fifteen trading days prior to conversion. The balance of the note plus accrued interest at June 30, 2017 was $33,436, net of unamortized discount of $69,041.

Crossover Capital Fund II, LLC 

On April 6, 2017, the Company issued a Convertible Promissory Note in the aggregate principal amount of $100,000 to Crossover Capital Fund II, LLC. The note has a maturity date of January 6, 2018 and a coupon of eight percent (8%) per annum. The Company has the right to prepay the note, provided it makes a pre-payment penalty as specified in the note. The outstanding principal amount of the note is convertible at any time and from time to time at the election of the holder into shares of the Company’s common stock at a conversion price equal to 60% of the average of the two (2) lowest trading bid prices during the previous fifteen (15) trading days to the date of conversion. The balance of the note plus accrued interest at June 30, 2017 was $32,772, net of unamortized discount of $69,091.

GS Capital Partners, LLC 

On May 22, 2017, the Company issued a Convertible Promissory Note in the aggregate principal amount of $75,000 to GS Capital Partners, LLC. The note has a maturity date of May 22, 2018 and a coupon of eight percent (8%) per annum. The Company has the right to prepay the note, provided it makes a pre-payment penalty as specified in the note. The outstanding principal amount of the note is convertible at any time and from time to time at the election of the holder into shares of the Company’s common stock at a conversion price equal to 62% of lowest trading bid prices during the previous ten (10) trading days, including the date the notice of conversion is received. The balance of the note plus accrued interest at June 30, 2017 was $8,655, net of unamortized discount of $66,986.

On June 16, 2017, the Company issued a Convertible Promissory Note in the aggregate principal amount of $112,500 to GS Capital Partners, LLC. The note has a maturity date of June 16, 2018 and a coupon of eight percent (8%) per annum. The Company has the right to prepay the note, provided it makes a pre-payment penalty as specified in the note. The outstanding principal amount of the note is convertible at any time and from time to time at the election of the holder into shares of the Company’s common stock at a conversion price equal to 62% of lowest trading bid prices during the previous ten (10) trading days, including the date the notice of conversion is received. The balance of the note plus accrued interest at June 30, 2017 was $4,660, net of unamortized discount of $108,185.

YP Holdings, LLC 

YP Holdings forgave $19,553 of accrued interest on a note with a principal amount of $100,000 (refer note 8 above), with the remaining accrued interest of $43,759 and was issued in lieu thereof a convertible note with a principal amount of $143,759, bearing interest at 8% per annum, maturing on May 26, 2018. The Company has the right to prepay the note within 180 days of its issue date. The outstanding principal amount of the Note is convertible at any time and from time to time at the election of the Note holder during the period beginning on the date that is 180 days following the Issue Date. The note is convertible into shares of the Company’s common stock, at a conversion price equal to 70% of the average of the lowest three closing bid prices of the Company’s common stock for the ten prior trading days.

On June 12, 2017, YP Holdings converted a total of $11,556 of the principal and interest of the convertible note outstanding into 57,143 common shares of the Company at a net issue price of $0.202 per share. As of June 30, 2017, the Company has a principal balance of $133,321 and an unamortized discount balance of $105,629.

Delinvest Commercial, LTD. 

On June 19, 2017, the Company issued Delinvest Commercial a convertible promissory note in the aggregate principal amount of $20,000. The note bears interest at 12% per annum and matures on December 16, 2017. The note is convertible into common shares at a conversion price of $.20 per share.

On June 29, 2017, the Company exchanged a Delinvest Commercial note with a principal amount of $50,000, together with accrued interest thereon of $4,123, totaling $54,123, for a convertible note, principal amount of $54,123, bearing interest at 12% per annum and maturing on December 26, 2017. The note is convertible into common shares of the Company at a conversion price of $0.20 per share. 

In connection with the convertible notes above, the Company issued warrants to purchase 370,616 common shares of the Company at a variable exercise price of $0.20 per share, if the convertible note above is converted into common shares prior to its maturity date or $0.30 per share if the convertible note is not converted prior to its maturity date.

Viktoria Akhmetova

On June 11, 2017, the Company exchanged a note issued to Viktoria Akhmetova, with a principal amount of $20,000, together with accrued interest thereon of $164, totaling $20,164, for a convertible note, principal amount of $20,164, bearing interest at 12% per annum and maturing on December 8, 2017. The note is convertible into common shares of the Company at a conversion price of $0.20 per share.

Strategic IR 

On June 11, 2017, the Company issued a convertible promissory note in the aggregate principal amount of $10,000. The note bears interest at 12% per annum and matures on December 16, 2017. The note is convertible into common shares at a conversion price of $.20 per share.

On June 11, 2017, the Company exchanged a note issued to Strategic IR note with a principal amount of $20,000, together with accrued interest thereon of $164, totaling $20,164, for a convertible note, principal amount of $20,164, bearing interest at 12% per annum and maturing on December 8, 2017. The note is convertible into common shares of the Company at a conversion price of $0.20 per share.

On June 29, 2017, the Company exchanged a note issued to Strategic IR note with a principal amount of $50,000, together with accrued interest thereon of $3,740, totaling $53,740, for a convertible note, principal amount of $53,740, bearing interest at 12% per annum and maturing on December 26, 2017. The note is convertible into common shares of the Company at a conversion price of $0.20 per share.

On June 29, 2017, the Company exchanged a note issued to Strategic IR grid note with a principal amount of $110,000, together with accrued interest thereon of $5,535, totaling $115,535, for a convertible note, principal amount of $115,535, bearing interest at 12% per annum and maturing on December 26, 2017. The convertible note is convertible into common shares of the Company at a conversion price of $0.20 per share.

In connection with the convertible notes above, the Company issued warrants to purchase 997,195 common shares of the Company at a variable exercise price of $0.20 per share, if the convertible note above is converted into common shares prior to its maturity date or $0.30 per share if the convertible note is not converted prior to its maturity date.

Joseph W and Patricia G Abrams 

Effective June 13, 2017, the Company exchanged a note issued to Joseph W and Patricia G Abrams with a principal amount of $25,000, together with accrued interest thereon of $1,247, totaling $26,147, for a convertible note, principal amount of $26,147, bearing interest at 12% per annum and maturing on December 10, 2017. The convertible note is convertible into common shares of the Company at a conversion price of $0.20 per share.

Gibbs International Holdings 

Effective June 19, 2017, the Company exchanged a note issued to Gibbs International Holdings with a principal amount of $50,000, together with accrued interest thereon of $2,494, totaling $52,494, for a convertible note, principal amount of $52,494, bearing interest at 12% per annum and maturing on December 16, 2017. The convertible note is convertible into common shares of the Company at a conversion price of $0.20 per share.

In connection with the Convertible note above, the Company issued a warrant to purchase 262,468 common shares of the Company at a variable exercise price of $0.20 per share, if the convertible note above is converted into common shares prior to its maturity date or $0.30 per share if the convertible note is not converted prior to its maturity date.

Roman Shefer 

On June 27, 2017, the Company entered into a convertible promissory note in the aggregate principal amount of $10,000. The note bears interest at 12% per annum and matures on December 16, 2017. The note is convertible into common shares at a conversion price of $.20 per share.

Cobbolo Limited 

On June 29, 2017, the Company exchanged a note issued to Cobbolo Limited with a principal amount of $50,000, together with accrued interest thereon of $3,438, totaling $53,438, for a convertible note, principal amount of $53,438, bearing interest at 12% per annum and maturing on December 26, 2017. The convertible note is convertible into common shares of the Company at a conversion price of $0.20 per share.

On June 29, 2017, the Company exchanged a note issued to Cobbolo Limited with a principal amount of $50,000, together with accrued interest thereon of $2,959, totaling $52,959, for a convertible note, principal amount of $52,959, bearing interest at 12% per annum and maturing on December 26, 2017. The convertible note is convertible into common shares of the Company at a conversion price of $0.20 per share.

In connection with the Convertible notes above, the Company issued a warrant to purchase 531,987 common shares of the Company at a variable exercise price of $0.20 per share, if the convertible note above is converted into common shares prior to its maturity date or $0.30 per share if the convertible note is not converted prior to its maturity date.