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(5) Convertible Notes Payable

12 Months Ended

Dec. 31, 2017

(5) Convertible Notes Payable:

A description of outstanding convertible notes payable is as follows:

East Shore Equities LLC

On June 2, 2017, the Company entered into a convertible note agreement with East Shore Equities LLC for total principal borrowings of $19,100. The amounts are due on June 2, 2018, and bear interest at a rate of 4% per annum. At the option of the debt holder, beginning 180 days after the issuance of the note, the debt holder may convert the outstanding balance of the Note into shares of the Company’s common stock at a conversion rate equal to 60% of the average of the lowest closing trading price during the 45 trading day period prior to the conversion election date. The unamortized portion of debt as of December 31, 2017 is $11,093 and the interest expense for the year ended December 31, 2017 is $445.

Cardio Infrared Technologies, Inc.

On September 30, 2017, the Company entered into a convertible note agreement with Cardio Infrared Technologies, Inc. for total principal borrowings of $49,800. The amounts are due on demand, and bear interest at a rate of 10% per annum. At the option of the debt holder, beginning 180 days after the issuance of the note, the debt holder may convert the outstanding balance of the Note into shares of the Company’s common stock at a conversion rate equal to 65% of the average of the lowest trading price during the 20 trading day period prior to the conversion election date. The balance of the note was $40,800 as of December 31, 2017 as $9,000 was repaid during the year. The unamortized portion of debt as of December 31, 2017 is $10,284 and the interest expense for the year ended December 31, 2017 is $1,028.

Power Up Lending Group LTD

On November 1, 2017, the Company entered into a convertible note agreement with Power Up Lending Group LTD for total principal borrowings of $45,000. The amounts are due nine months after the issuance of the note on August 10, 2018, and bear interest at a rate of 12% per annum. At the option of the debt holder, beginning 180 days after the issuance of the note, the debt holder may convert the outstanding balance of the Note into shares of the Company’s common stock at a conversion rate equal to 58% of the average of the lowest two closing trading prices during the 15 trading day period prior to the conversion election date. The unamortized portion of debt as of December 31, 2017 is $9,579 and the interest expense for the year ended December 31, 2017 is $888.

EMA Financial, LLC

On November 27, 2017, we entered into a securities purchase agreement (the “November 2017 Purchase Agreement”), dated as of November 27, 2017 (the “Closing Date”), with EMA Financial, LLC (the “Investor”) pursuant to which the Investor purchased an aggregate principal amount of $85,000 of Convertible Notes for an aggregate purchase price of $79,990 (the “November 2017 Notes”). The November 2017 Notes 12% original issue discount. Net proceeds from the sale of the November 2017 Notes were $76,500, which have been used for general corporate purposes.

The November 2017 Notes bear interest at a rate of 12.0% per annum, payable in arrears on the maturity date of November 27, 2018 (the “Maturity Date”). The November 2017 Notes are convertible into shares of Common Stock, as of the earlier of June 1, 2018 or the effectiveness of a registration statement to register the resale of the shares of Common Stock issuable upon conversion of the November 2017 Notes (the “Registration Statement”), at a conversion price equal to the lower of: (i) the closing sale price of the Common Stock on the Principal Market on the Trading Day immediately preceding the Closing Date, and (ii) 50% of either the lowest sale price for the Common Stock on the Principal Market during the twenty (20) consecutive Trading Days including and immediately preceding the Conversion Date, or the closing bid price, whichever is lower (“Conversion Date”).

Until the end of May, 2018 (the “Prepayment Termination Date”), the Company has the right, exercisable on not less than five (5) trading days’ prior written notice to the holder of the November 2017 Notes, to prepay the outstanding balance on the November 2017 Notes (principal and accrued interest), in full. On the date fixed for prepayment (the “Optional Prepayment Date”), the Company must make payment of the Optional Prepayment Amount or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Company exercises its right to prepay the November 2017 Note, the Company must pay Holder an amount in cash (the “Optional Prepayment Amount”) equal to the Prepayment Factor (as defined below), multiplied by the sum of: (w) the then-outstanding principal amount of the November 2017 Note plus (x) accrued and unpaid interest on the unpaid principal amount of the November 2017 Note to the Optional Prepayment Date plus (y) default interest. For purposes hereof, the “Prepayment Factor” shall equal one hundred and fifty percent (150%), provided that such Prepayment factor shall equal one hundred and thirty five percent (135%) if the Optional Prepayment Date occurs on or before the date which is ninety (90) days following the Issue Date hereof.

In connection with the November 2017 Purchase Agreement, we entered into a registration rights agreement with the Investor (the “Registration Rights Agreement”) pursuant to which we agreed to file the Registration Statement with the SEC on or before January 15, 2018, and to use our reasonable best efforts for to cause such Registration Statement to become effective prior to February 25, 2018. Upon certain failures of the Company to file or maintain effectiveness of the Registration Statement, including the failure to file the Registration Statement on or before January 15, 2018, then on such event date and each one-month anniversary of such event date, the Company shall pay to the Investor an amount as part of liquidated damages in cash equal to 1.5% of the aggregate purchase price paid by the Investor pursuant to the November 2017 Purchase Agreement for any unregistered registrable securities then held by the Investor, up to a maximum of 24% of the purchase price of the November 2017 Notes.

The November 2017 Notes contain certain negative covenants preventing the Company from undertaking certain actions without the consent of the Investor. The November 2017 Notes also contain certain events of default, including but not limited to the Company’s failure to pay principal and interest, material defaults under the other transaction documents, material restatements of our financial statements, material defaults in other payment obligations, failure of the Company to comply with its reporting requirements with the SEC, bankruptcy or appointment of a receiver, the Company’s failure to deliver certificates representing the shares of Common Stock after a conversion, the entry of judgments in excess of $50,000 against the Company, failure to maintain a listing for our Common Stock on NASDAQ, OTCQX, NYSE, AMEX or an equivalent exchange, cessation of operations,. Any amount of principal or interest on the November 2017 Notes which is not paid when due shall bear interest at the default rate of 24% per annum.

In the case of certain defaults, including the failure to pay principal and interest when due at the maturity date, we are required to pay a “Default Sum” equal to the outstanding principal amount of the November 2017 Notes, plus accrued and unpaid interest on the principal amount of the November 2017 Notes, plus default interest (if any), plus any other amounts owed to the Investor. In the case of a default due to failure to deliver conversion shares, we may be required to pay twice the Default Sum. In the case of certain other defaults, including without limitation the failure to pay principal and interest when due after acceleration of the November 2017 Notes, we may be required to pay the greater of 150% of the Default Sum or the “parity value” of the Default Sum to be prepaid. For these purposes, the parity value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum, treating the trading day immediately preceding the mandatory prepayment date as the “conversion date” for purposes of determining the lowest applicable conversion price (unless the default arises as a result of a breach in respect of a specific conversion date, in which case such conversion date shall be the “conversion date”), multiplied by (b) the highest closing price for the Common Stock during the period beginning on the date of first occurrence of the event of default and ending one day prior to the mandatory prepayment date.

The unamortized portion of debt as of December 31, 2017 is $7,918 and the interest expense for the year ended December 31, 2017 is $950.

Adar Bays, LLC

On December 18, 2017, the Company entered into a security purchase agreement with ADAR Bays, LLC providing for total borrowings of $120,000, with the first note being of $40,000 and the second and third notes being in the total amount of $80,000. Interest on the note equals 12% of the total principal balance. The Company received payment of $38,000 on December 19, 2017, which represents the total amount outstanding as of September 30, 2017. The convertible note matures 12 months after the issuance, at which point the outstanding principal and interest is due. The outstanding amounts are convertible into shares of common stock at a conversion rate equal to 50% of the lowest of: (i) the lowest trading price during the twenty trading days prior to the conversion, or (ii) the lowest trading price during the twenty trading days preceding the date of this Agreement. The unamortized portion of debt as of December 31, 2017 is $1,425 and the interest expense for the year ended December 31, 2017 is $171.

Auctus Fund, LLC

On December 20, 2017, the Company entered into a convertible note agreement with Auctus Fund, LLC for total principal borrowings of $112,000. The amounts are due nine months after the issuance of the note on September 20, 2018, and bear interest at a rate of 12% per annum. At the option of the debt holder, beginning 180 days after the issuance of the note, the debt holder may convert the outstanding balance of the Note into shares of the Company’s common stock at a conversion rate equal to 50% of the lowest closing trading price during the 25 trading day period prior to the conversion election date. The unamortized portion of debt as of December 31, 2017 is $4,496 and the interest expense for the year ended December 31, 2017 is $405.

Power Up Lending Group LTD

On December 21, 2017, the Company entered into a convertible note agreement with Power Up Lending Group LTD for total principal borrowings of $28,000. The amounts are due nine months after the issuance of the note on September 30, 2018, and bear interest at a rate of 12% per annum. At the option of the debt holder, beginning 180 days after the issuance of the note, the debt holder may convert the outstanding balance of the Note into shares of the Company’s common stock at a conversion rate equal to 51% of the lowest closing trading price during the 30 trading day period prior to the conversion election date. The unamortized portion of debt as of December 31, 2017 is $989 and the interest expense for the year ended December 31, 2017 is $91.

The following summarizes the book value of the convertible notes payable outstanding as of December 31, 2017 and December 31, 2016:

		December 31,	December 31,
		2017	2016
Promissory note, dated April 30, 2008, bearing interest
at 10% annually, payable on demand, convertible to		$ -	$ 82,500
shares of common stock at $.05 per share

Promissory note, dated May 12, 2016, bearing interest
at 10% annually, payable within a year, convertible to		-	60,000
shares of common stock at $.05 per share

Promissory note, dated May 19, 2016, bearing interest
at 10% annually, payable within a year, convertible to		-	20,000
shares of common stock at $.05 per share

Promissory note, dated May 20, 2016, bearing interest
at 10% annually, payable within a year, convertible to		-	20,000
shares of common stock at $.05 per share

Promissory note, dated May 31, 2016, bearing interest
at 10% annually, payable within a year, convertible to		-	40,000
shares of common stock at $.05 per share

Promissory note, dated June 3, 2016, bearing interest
at 10% annually, payable within a year, convertible to		-	350,000
shares of common stock at $.05 per share

Promissory note, dated June 2, 2017, bearing interest
of 4% annually, payable within a year, convertible to
common stock at a discount of 40% of the lowest
traded price of the common stock during 45 trading days
prior the conversion date.		19,100	-

Promissory note, dated September 30, 2017, bearing 10% interest,
payable on demand, convertible to common stock at the discount			-
of 35% of the lowest traded price of the common stock during 20
trading days prior conversion		40,800

Promissory note, dated November 1, 2017, bearing interest
of 12% annually, payable on August 10, 2018, convertible to
common stock at a discount of 42% of the lowest
two traded prices of the common stock during the 15 trading
days prior the conversion date.		45,000	-

Promissory note, dated November 27, 2017, with principal amount
of $85,000 and aggregate purchase price of $79,900 , bearing interest
of 12% annually, payable within a year, convertible to common stock
at the conversion price equal to the lower of (i) the closing sale price
of the common stock on the principal market on the trading day
immediately preceding the closing date, and (ii) 50% of either the
lowest sale price for the common stock during the 20 consecutive
trading days including and immediately preceding the conversion date		85,000	-

Promissory note, dated December 18, 2017, bearing interest
of 12% annually, payable within a year convertible at a conversion rate
equal to 50% of the lowest of: (i) the lowest trading price during the twenty
trading days prior to the conversion, or (ii) the lowest trading price during
the twenty trading days preceding the date of this note		40,000	-

Promissory note, dated December 20, 2017, bearing interest
of 12% annually, payable on September 20, 2018, convertible to
common stock at a discount of 50% of the lowest
two traded prices of the common stock during the 25 trading
days prior the conversion date.		112,000	-

Promissory note, dated December 21, 2017, bearing interest
of 12% annually, payable on September 30, 2018, convertible to
common stock at a discount of 49% of the lowest
two traded prices of the common stock during the 30 trading
days prior to the conversion date.		28,000	-

Convertible notes before debt discount		369,900	572,500

Less debt discount		(324,121)	(361,554)

Total outstanding convertible notes payable	$	45,779	210,946

All convertible notes outstanding as of December 31, 2016, have been converted into shares of common stock by December 31, 2017.