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Note 7 - Convertible Notes Payable
12 Months Ended
Dec. 31, 2018
Disclosure Text Block [Abstract]  
Note 7 - Convertible Notes Payable

NOTE 7 – CONVERTIBLE NOTES PAYABLE

 

Effective May 4, 2018 (prior to the July 14, 2018 acquisition), NewBridge 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, NewBridge had received the first tranche of $125,000. Actual cash received was net of a $14,750 origination fee. NewBridge 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. As of the July 14, 2018 acquisition date, the derivative had a fair market value of $743,269 and the debt discount was $90,277.  The Company settled the note payable on July 24, 2018 through a cash payment of $173,244, which covered the $125,000 principal plus an early termination fee of $44,915 and accrued interest of $3,329.  The derivative was remeasured on July 24, 2018, which resulted in a loss on derivative of $4,631,731 for the change in the valuation from July 14, 2018 to July 24, 2018.  The change in the valuation was mainly due to the increase in the share price from $0.85 to $5.50, respectively. The Company recognized a gain on debt settlement of $5,236,479.