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NOTE 5 - CONVERTIBLE NOTES PAYABLE
6 Months Ended
Jun. 30, 2018
Disclosure Text Block [Abstract]  
NOTE 5 - CONVERTIBLE NOTES PAYABLE

NOTE 5 – CONVERTIBLE NOTES PAYABLE

 

Effective May 4, 2018, the Company entered into a Securities Purchase Agreement (“Auctus Purchase Agreement”) dated April 30, 2018 with Auctus Fund, LLC (“Auctus”).  In conjunction with the Auctus Purchase Agreement, the Company signed a Convertible Promissory Note for $250,000 (“Auctus Note”). The Auctus Note was convertible into shares of the Company’s common stock and had an initial maturity date of nine months from the issue date of each funding tranche. The first $125,000 was received May 3, 2018.  In connection with the Auctus Purchase Agreement and the Auctus Note, the Company also entered into a Registration Rights Agreement pursuant to which the Company agreed to register the conversion shares for resell by Auctus.  The conversion price was equal to (1) the lessor of the lowest trading price during the previous 25 day trading period ending on April 27, 2018, the last full trading day prior to the date of the note, which was $0.41 or (2) a variable conversion price equal to 50% of the lowest trading price during the 25 trading days leading up to the date of the conversion.  

 

As of June 30, 2018, the Company had received the first tranche of $125,000. Actual cash received was net of a $14,750 origination fee. The Company recorded a derivative of $199,927 on April 30, 2018 due to the variable nature of the conversion price, as well as, a debt discount of $125,000 and a loss on derivative of $74,927. The discount is amortized over the nine-month term of the note. The derivative was remeasured on June 30, 2018, which resulted in a loss on derivative of $73,588. On July 24, 2018, the Auctus Note was paid back in full.