PROMISSORY NOTE	9 Months Ended
Sep. 30, 2016
Notes to Financial Statements
Note 7 - PROMISSORY NOTE	*Tarpon Bay Partners – Line of Credit* In conjunction with the Equity Line as discussed in Note 15 below, the Company issued a promissory note to Tarpon Bay Partners for $50,000, due on January 31, 2016, with 10% interest per annum as consideration for transaction costs incurred by Tarpon. The $50,000 of transaction costs will be treated as a note discount under current Generally Accepted Accounting Principles and the discount will be amortized as costs related to equity financing issuances. At September 30, 2016, the note balance and accrued interest was $50,000 and $5,860, respectively. *Tarpon Bay Partners – Line of Credit – Termination Agreement and Convertible Note* On May 24, 2016, the Company and Tarpon Bay Partners LLC (“Tarpon”) executed a Termination Agreement (the “Termination Agreement”), in which the parties agreed to cancel the original Equity Purchase Agreement (the “Original Purchase Agreement”), dated July 14, 2015 (except for the original Promissory Notes (the “Original Tarpon Note”) which was amended and restated as set forth below), in the original amount of USD $50,000.00, issued by the Company to Tarpon as additional compensation pursuant to Original Purchase Agreement), which gave the Company the right to issue and sell to Tarpon any of the Five Million Dollars ($5,000,000) of the Company’s common stock. In exchange for the Termination Agreement, the Company agreed to (a) amend and restate the terms of the Original Tarpon Note, in the form of the issuance of an amended and restated convertible redeemable note (the “Amended Tarpon Note”), in the principal amount of $50,000.00, at ten percent (10%) interest per annum commencing on July 14, 2015 (the “Effective Date”), to be due and payable to Tarpon by Company in four (4) separate equal quarterly payments of Twelve Thousand Five Hundred Dollars (USD $12,500), plus accrued interest to date, due on the first day of each quarter beginning on July 1, 2016, convertible into shares of the Company’s common stock at a conversion price equal to fifty-eight percent (58%) of the lowest trading price for the ten (10) prior trading days, subject to aggregate conversion limitations of 9.99% and other terms and conditions set forth therein , and (b) execute a new Equity Purchase Agreement (the “New Purchase Agreement”), pursuant to which the Company would have the right to issue and sell to Tarpon a total of Fifteen Million Dollars ($15,000,000) of the Company’s common stock, under the same terms as the Original Purchase Agreement, except for no additional compensation in lieu of the Amended Tarpon Note, to be executed on such mutually agreed upon date in the future after the Company is current on all SEC filings and is relisted on the Over-the-Counter (OTC) OTCBB and OTCQB markets. *Convertible Redeemable Note for Unpaid Invoices* On May 18, 2016, the Company and JMS Law Group PLLC (“JMS”) executed a settlement letter (the “Settlement Letter”) in which the parties agreed to settle unpaid invoices for services rendered by JMS to the Company in the amount of $20,000, and further agreed to pay JSM a total of $7,500 for continued services to the Company until July 31, 2016. Pursuant to the terms of the Settlement Letter, the Company issued to JMS a six month convertible redeemable note (the “Note”) in the principal amount of USD $ 27,500, at a rate of ten percent (10%) per annum commencing on date of issuance , convertible into shares of the Company’s common stock at a conversion price equal to the lesser of $0.01 per share or a discount of fifty-eight percent (58%) of the lowest trading price for the ten (10) prior trading days, and other customary and standard terms and conditions set forth therein. The Note balance and accrued interest was $29,570 at September 30, 2016. *Termination Agreement to Definitive Agreement for the acquisition of a new subsidiary* Company and Properties of Merit Inc. (“POM”) are parties to that certain Definitive Agreement, dated May 20, 2016, incorporated by reference in Form 8K filed with the SEC on May 24, 2016, pursuant to which the Company agreed to acquire one hundred percent (100%)of the ownership interest in POM, in the form of three (3) separate closings with the first closing originally anticipated on or before May 27, 2016, subject to certain performance requirements of both parties prior to each closing. On July 22, 2016, Elite Data Services, Inc. (the “Company”) and Properties of Merit Inc. (“POM”) executed a Termination Agreement, pursuant to which the parties mutually agreed to terminate the Definitive Agreement dated May 20, 2016, incorporated by reference in Form 8K filed with the SEC on May 24, 2016, pursuant to which the Company agreed to acquire one hundred percent (100%)of the ownership interest in POM, in the form of three (3) separate closings, due to, among other reasons, certain events that occurred subsequent to the date of execution of the Definitive Agreement, including, but not limited to, the Company’s inability to (i) become current in its reporting obligations with the Securities and Exchange Commission, and (ii) obtain the financings required to complete the first and subsequent closings to finance the ongoing activities of POM within a reasonable period of time. The Termination Agreement included amongst other provisions, a mutual release of each party related to any future rights and claims against the other, except that the Company is required to repay POM for advances made to Company pursuant to the executed definitive agreement in the total amount of Seventeen Thousand Five Hundred Dollars (USD $17,500.00), on the terms set forth in executed amended convertible redeemable note (the “Amended Note”), which replaces the original note set forth in the Definitive Agreement. The balance of the Note plus accrued interest at September 30, 2016 was $18,410.

PROMISSORY NOTE

9 Months Ended

Sep. 30, 2016

Tarpon Bay Partners – Line of Credit

In conjunction with the Equity Line as discussed in Note 15 below, the Company issued a promissory note to Tarpon Bay Partners for $50,000, due on January 31, 2016, with 10% interest per annum as consideration for transaction costs incurred by Tarpon. The $50,000 of transaction costs will be treated as a note discount under current Generally Accepted Accounting Principles and the discount will be amortized as costs related to equity financing issuances. At September 30, 2016, the note balance and accrued interest was $50,000 and $5,860, respectively.

Tarpon Bay Partners – Line of Credit – Termination Agreement and Convertible Note

On May 24, 2016, the Company and Tarpon Bay Partners LLC (“Tarpon”) executed a Termination Agreement (the “Termination Agreement”), in which the parties agreed to cancel the original Equity Purchase Agreement (the “Original Purchase Agreement”), dated July 14, 2015 (except for the original Promissory Notes (the “Original Tarpon Note”) which was amended and restated as set forth below), in the original amount of USD $50,000.00, issued by the Company to Tarpon as additional compensation pursuant to Original Purchase Agreement), which gave the Company the right to issue and sell to Tarpon any of the Five Million Dollars ($5,000,000) of the Company’s common stock.

In exchange for the Termination Agreement, the Company agreed to (a) amend and restate the terms of the Original Tarpon Note, in the form of the issuance of an amended and restated convertible redeemable note (the “Amended Tarpon Note”), in the principal amount of $50,000.00, at ten percent (10%) interest per annum commencing on July 14, 2015 (the “Effective Date”), to be due and payable to Tarpon by Company in four (4) separate equal quarterly payments of Twelve Thousand Five Hundred Dollars (USD $12,500), plus accrued interest to date, due on the first day of each quarter beginning on July 1, 2016, convertible into shares of the Company’s common stock at a conversion price equal to fifty-eight percent (58%) of the lowest trading price for the ten (10) prior trading days, subject to aggregate conversion limitations of 9.99% and other terms and conditions set forth therein , and (b) execute a new Equity Purchase Agreement (the “New Purchase Agreement”), pursuant to which the Company would have the right to issue and sell to Tarpon a total of Fifteen Million Dollars ($15,000,000) of the Company’s common stock, under the same terms as the Original Purchase Agreement, except for no additional compensation in lieu of the Amended Tarpon Note, to be executed on such mutually agreed upon date in the future after the Company is current on all SEC filings and is relisted on the Over-the-Counter (OTC) OTCBB and OTCQB markets.

Convertible Redeemable Note for Unpaid Invoices

On May 18, 2016, the Company and JMS Law Group PLLC (“JMS”) executed a settlement letter (the “Settlement Letter”) in which the parties agreed to settle unpaid invoices for services rendered by JMS to the Company in the amount of $20,000, and further agreed to pay JSM a total of $7,500 for continued services to the Company until July 31, 2016.

Pursuant to the terms of the Settlement Letter, the Company issued to JMS a six month convertible redeemable note (the “Note”) in the principal amount of USD $ 27,500, at a rate of ten percent (10%) per annum commencing on date of issuance , convertible into shares of the Company’s common stock at a conversion price equal to the lesser of $0.01 per share or a discount of fifty-eight percent (58%) of the lowest trading price for the ten (10) prior trading days, and other customary and standard terms and conditions set forth therein. The Note balance and accrued interest was $29,570 at September 30, 2016.

Termination Agreement to Definitive Agreement for the acquisition of a new subsidiary

Company and Properties of Merit Inc. (“POM”) are parties to that certain Definitive Agreement, dated May 20, 2016, incorporated by reference in Form 8K filed with the SEC on May 24, 2016, pursuant to which the Company agreed to acquire one hundred percent (100%)of the ownership interest in POM, in the form of three (3) separate closings with the first closing originally anticipated on or before May 27, 2016, subject to certain performance requirements of both parties prior to each closing.

On July 22, 2016, Elite Data Services, Inc. (the “Company”) and Properties of Merit Inc. (“POM”) executed a Termination Agreement, pursuant to which the parties mutually agreed to terminate the Definitive Agreement dated May 20, 2016, incorporated by reference in Form 8K filed with the SEC on May 24, 2016, pursuant to which the Company agreed to acquire one hundred percent (100%)of the ownership interest in POM, in the form of three (3) separate closings, due to, among other reasons, certain events that occurred subsequent to the date of execution of the Definitive Agreement, including, but not limited to, the Company’s inability to (i) become current in its reporting obligations with the Securities and Exchange Commission, and (ii) obtain the financings required to complete the first and subsequent closings to finance the ongoing activities of POM within a reasonable period of time.

The Termination Agreement included amongst other provisions, a mutual release of each party related to any future rights and claims against the other, except that the Company is required to repay POM for advances made to Company pursuant to the executed definitive agreement in the total amount of Seventeen Thousand Five Hundred Dollars (USD $17,500.00), on the terms set forth in executed amended convertible redeemable note (the “Amended Note”), which replaces the original note set forth in the Definitive Agreement. The balance of the Note plus accrued interest at September 30, 2016 was $18,410.