(5) Convertible Notes Payable

12 Months Ended

Dec. 31, 2018

Notes

(5) Convertible Notes Payable:

(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 interest expense for the year ended December 31, 2018 is $1,209 and $445 for 2017.

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 $12,000 as of December 31, 2018. The interest expense for the year ended December 31, 2018 is $302 and $1,028 for 2017 and the derivative liability of $3,231 as of December 31, 2018.

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 note is currently in default and the interest rate is increased to 24% per annum. 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”).

The interest expense for the year ended December 31, 2018 is $2,174 and $950 for 2017. The derivative liability is $49,982 as of December 31, 2018.

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 interest expense for the year ended December 31, 2018 is $13,846 and $405 for 2017. The derivative liability is $56,000 as of December 31, 2018.

L2 Capital, LLC

On April 17, 2018, the Company entered into a convertible note agreement with L2 Capital, LLC for total principal borrowings of $75,000.  The amounts are due six months after the issuance of the note on October 17, 2018, and bear interest at a rate of 8% per annum. The note is currently in default and the interest rate is increased to 24% per annum. This note is being issued by the borrower to the holder as a commitment fee, pursuant to that certain $2,000,000 equity purchase agreement. 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 $15.  The interest expense for the year ended December 31, 2018 is $4,241 and $0 for 2017.

Albee There Too

On April 20, 2018, the Company entered into a convertible note agreement with Albee There Too, LP for total principal borrowings of $50,000.  The amounts are due twelve months after the issuance of the note on April 19, 2019, 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 average closing trading price during the 10 trading day period prior to the conversion election date.  The unamortized portion of debt as of December 31, 2018 is $34,931with day-one discount of $50,000 and the interest expense for the year ended December 31, 2018 is $4,191 and $0 for 2017. The derivative liability is $105,287 as of December 31, 2018.

BGR Government Affairs, LLC

On April 30, 2018, the Company entered into a convertible note agreement with BGR Government Affairs, LLC for total principal borrowings of $50,000.  The amounts are due twelve months after the issuance of the note on April 30, 2019, 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 average closing trading price during the 10 trading day period prior to the conversion election date.  The unamortized portion of debt as of December 31, 2018 is $33,562 with the day-one discount of $50,000 and the interest expense for the year ended December 31, 2018 is $4,027 and $0 for 2017. The derivative liability is $62,992 as of December 31, 2018.

GPL Ventures LLC

On January 5, 2018, the Company entered into a convertible note agreement with GPL Ventures LLC for total principal borrowings of $150,000.  The amounts are due six months after the issuance of the note on July 5, 2018, 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 75% of the average of the five lowest closing trading prices during the 10 trading day period prior to the conversion election date.  On November 16, 2018, GPL converted $112,384 of the note and $12,616 of accrued interest into 4,306,632 shares of common stock. The interest expense for the year ended December 31, 2018 is $564 and $0 for 2017. The derivative liability is $7,941 as of December 31, 2018.

Power Up Lending Group LTD

On November 14, 2018, the Company entered into a convertible note agreement with Power Up Lending Group LTD for total principal borrowings of $40,000.  The amounts are due nine months after the issuance of the note on August 30, 2019, and bear interest at a rate of 14% 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 55% 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, 2018 is $13,479 with day-one discount of $26,521 and the interest expense for the year ended December 31, 2018 is $721 and $0 for 2017. The derivative liability is $77,576 as of December 31, 2018.

The following summarizes the book value of the convertible notes payable outstanding as of December 31, 2018 and December 31, 2017:

		December 31,		December 31,
		2018		2017
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 to the conversion date.		19,100		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 to the conversion		12,000		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 to 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		68,396		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 20 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 to the conversion date.		112,000		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
Promissory note,  dated  April 17, 2018, bearing interest
of 8% annually, payable on October 17, 2019, convertible to
common stock at $15		75,000		-
Promissory note,  dated  April 20, 2018, bearing interest
of 12% annually, payable on April 20, 2019, convertible to
common stock at a discount of 50% of the average
closing bid of the common stock during the 10 trading
days  prior to the conversion date.		50,000		-
Promissory note,  dated  April 30, 2018, bearing interest
of 12% annually, payable on April 30, 2019, convertible to
common stock at a discount of 50% of the average
closing bid of the common stock during the 10 trading
days  prior to the conversion date.		50,000		-
Promissory note,  dated  January 5, 2018, bearing interest
of 10% annually, payable on July 5, 2018, convertible to
common stock at a discount of 25% of the average of 5 lowest
traded prices of the common stock during the 10 trading
days  prior to the conversion date.		37,616		-
Promissory note,  dated  November 14, 2018, bearing interest
of 14% annually, payable on August 30, 2019, convertible to
common stock at a discount of 45% of the one lowest
traded price of the common stock during the 25 trading
days  prior to the conversion date.		40,000		-
Convertible notes before debt discount		464,112		369,900
Less debt discount		(65,001)		(324,121)
Total outstanding convertible notes payable	$	399,111	$	45,779