XML 24 R15.htm IDEA: XBRL DOCUMENT

CONVERTIBLE NOTE PAYABLE

6 Months Ended

Sep. 30, 2021

NOTE 9 – CONVERTIBLE NOTE PAYABLE

The following is a summary of convertible notes payable as of September 30, 2021:

Schedule of convertible notes payable
Note*	Inception Date	Maturity	Coupon		Face Value		Unamortized Discount		Carrying Value
Note 5	1/27/2020	1/27/2021		8%	$	202,400	$	–	$	202,400
Note 6	2/19/2020	2/19/2021		8%		85,800		–		85,800
Note 7	3/10/2020	3/10/2021		8%		85,800		–		85,800
Note 8	8/4/2020	8/4/2021		8%		156,000		–		156,000
Note 9	10/2/2020	10/2/2021		8%		205,000		–		205,000
Note 10	10/15/2020	10/15/2021		8%		172,000		7,463		164,537
Note 11	11/2/2020	11/2/2021		8%		69,000		3,542		65,458
Note 12	11/12/2020	11/12/2021		8%		69,000		2,181		66,819
Note 14	12/10/2020	12/10/2021		8%		80,000		7,067		72,933
Note 16	1/14/2021	1/14/2022		8%		107,000		13,863		93,137
Note 17	1/27/2021	1/27/2021		8%		60,000		9,724		50,276
Note 20	4/30/2021	4/30/2022		8%		104,000		2,352		101,648
Note 21	5/25/2021	5/25/2022		8%		104,000		4,094		99,906
Note 22	06/24/2021	06/24/2022		8%		185,652		45,081		140,571
Note 23	07/01/2021	07/01/2022		8%		180,400		30,317		150,083
Note 24	07/24/2021	07/24/2022		8%		265,000		60,970		204,030
Note 25	08/04/2021	08/04/2022		8%		129,800		31,372		98,428
Note 26	08/11/2021	08/11/2022		8%		151,500		35,572		115,928
Note 27	08/16/2021	08/16/2022		8%		88,400		24,411		63,989
Note 28	08/20/2021	08/20/2022		8%		151,500		40,075		111,425
Note 29	08/30/2021	08/30/2022		8%		140,650		34,054		106,596
Note 30	09/02/2021	09/02/2022		8%		216,385		58,052		158,333
Note 31	09/17/2021	09/17/2022		8%		270,480		63,833		206,647
Note 32	09/30/2021	09/30/2022		8%		270,480		63,805		206,675

Total					$	3,550,247	$	537,828	$	3,012,419

* Notes 1, 2, 3 and 4 in the amounts of $82,000, $208,000, $27,000 and $62,000, respectively, were fully converted as of March 31, 2021.

Between April 1, 2021 and September 30, 2021, the Company issued to “accredited investors,” Convertible Promissory Notes aggregating a principal amount of $2,258,247. The Company received an aggregate net proceeds of $2,096,681 after $154,566 in original note discount and $7,000 in legal fees. The Company has agreed to pay interest on the unpaid principal balance at the rate of eight percent (8%) per annum from the dates on which Notes are issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the Notes, provided it makes a payment as set forth in the agreements.

The outstanding principal amount of the Notes is convertible into the Company’s common stock at the lender’s option at $0.01 per share for the first six months of the term of the Notes. After the six-month anniversary, the conversion price is equal to 63% of the average of the three lowest trading prices of the Company’s common stock.

Accounting Considerations

The Company has accounted for the Notes as a financing transaction, wherein the net proceeds that were received were allocated to the financial instrument issued. Prior to making the accounting allocation, the Company evaluated the agreement under ASC 815 Derivatives and Hedging (“ASC 815”). ASC 815 generally requires the analysis embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract. The material embedded derivative features consisted of the embedded conversion option and default puts. The conversion option and default puts bear risks of equity which were not clearly and closely related to the host debt agreement and required bifurcation. The contracts do not permit the Company to settle in registered shares and the contracts also contain make-whole provisions both of which preclude equity classification. Current accounting principles that are also provided in ASC 815 do not permit an issuer to account separately for individual derivative terms and features that require bifurcation and liability classification. Rather, such terms and features must be and were bundled together and fair valued as a single, compound embedded derivative.

The net proceeds were allocated to the compound embedded derivative and original issue discount. The notes will be amortized up to its face value over the life of Notes based on an effective interest rate. Amortization expense and interest expense for the six months ended September 30, 2021 is as follows:


Note	Interest Expense		Accrued Interest		Amortization of Debt Discount		Unamortized
Note 5	$	9,183	$	39,315	$	–	$	–
Note 6		3,892		15,693		–		–
Note 7		3,893		14,872		–		–
Note 8		1,949		14,429		9,379		–
Note 9		4,224		16,400		37,415		–
Note 10		3,468		13,195		20,501		7,463
Note 11		1,391		5,021		9,572		3,542
Note 12		1,391		4,870		6,137		2,181
Note 14		1,613		5,155		9,447		7,067
Note 16		2,158		6,074		9,205		13,863
Note 17		1,210		3,235		6,244		9,724
Note 18		912		2,370		9,192		24,247
Note 19		1,391		3,478		13,932		33,469
Note 20		2,097		3,488		992		2,352
Note 21		2,097		2,918		1,493		4,094
Note 22		3,744		3,988		12,448		45,081
Note 23		3,598		3,598		8,928		30,317
Note 24		3,775		3,775		10,395		60,970
Note 25		1,622		1,622		5,337		31,372
Note 26		1,660		1,660		6,042		35,572
Note 27		872		872		4,012		24,411
Note 28		1,361		1,361		6,641		40,075
Note 29		956		956		2,653		34,054
Note 30		1,328		1,328		4,433		58,052
Note 31		1,660		1,660		4,996		63,833
Note 32		–		–		–		63,805
Total	$	61,445	$	171,333	$	199,394	$	595,544

As of September 30, 2021, Note 5, Note 6, and Note 7 are considered in default. Upon an event of default, the interest accrues at 18%. Additionally, upon non-payment at maturity, the principal increases by 10%. The principal on Note 5 increased by $18,400, Note 6 increased by $7,800 and Note 7 increased by $7,800.