Quarterly report pursuant to Section 13 or 15(d)

DEBT

v3.20.1
DEBT
3 Months Ended
Mar. 31, 2020
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]

NOTE 5: DEBT


Accounts Payable


In January2020, following mediation with a vendor of an outstanding balance, the Company successfully won the case and the balance of $131,539 was waived. The company had previously recognized the $131,539 balance in accounts payable, which was reversed in 2020 and recognized as a gain on debt settlement.


Notes Payable


As of March 31, 2020 and December 31, 2019, the Company had outstanding notes payable to former affiliates of the Company of $413,185 and $413,185, respectively. The notes payable are unsecured, bear no interest and are due on demand.


Convertible Debt


During October 2018, the Company borrowed $345,000, net of original debt discount of $45,000 under a note payable bearing interest at 7% per annum, unsecured and was due January 18, 2019. During January 2019, the due date on the note was extended to April 18, 2019 in exchange for a $55,000 debt extension fee added to the principal of the note and the addition of a conversion feature. The conversion feature allowed the holder to convert the principal and accrued interest into shares of the Company’s common stock at a discount of 70% of the lowest trading price for the Company’s common stock during the twenty trading days immediately preceding the conversion. Between April and December 2019, the note was extended several times through January 1, 2020.


Between January and March 2020, the Company extended the note an additional three additional times, paying two payments of $25,000 each, with a total of $30,000 applied to principal and $20,000 to debt extension fees. As of March 31, 2020 and December 31, 2019, the balance on the convertible note payable was $135,000 and $165,000, respectively. These notes have been extended through May 15 and May 30 2020. During the three months ended March 31, 2020 and 2019, the Company recognized $0 and $8,804 in in debt discount amortization expense, respectively.


During February 2019, the Company issued a convertible note payable in the amount of $315,000. The convertible note payable was due one year from the date of issuance, has an original issuance discount of $15,000, accrues interest at the rate of 6% per annum, is unsecured and was convertible at any time into shares of the Company’s common stock at a discount of 65% of the lowest trading price for the Company’s common stock during the ten trading days immediately preceding the conversion. During 2019, the note conversion feature was extended three times through January 6, 2020.


Between January and March 2020, the Company extended the note conversion feature an additional three times through April 15, 2020, paying two payments of $25,000 each, with a total of $30,000 applied to principal, $20,000 to debt extension fees, and incurring prepayment penalties added to principal of $7,500. As of March 31, 2020 and December 31, 2019, the balance on the convertible note payable was $123,329 and $145,829, respectively. During the three months ended March 31, 2020 and 2019, the Company recognized $3,740 and $1,356 in debt discount amortization expense, respectively.


During May 2019, the Company issued a convertible note payable in the amount of $262,500. The convertible note payable is due one year from the date of issuance, has an original issuance discount of $12,500, accrues interest at the rate of 6% per annum, is unsecured and is convertible after 180 days into shares of the Company’s common stock at a discount of 65% of the lowest trading price for the Company’s common stock during the ten trading days immediately preceding the conversion. During 2019, the note conversion feature was extended three times through January 22, 2020.


Between January and March 2020, the Company extended the note conversion feature an additional three times through April 15, 2020, paying payments totaling $87,500, with a total of $60,000 applied to principal, $10,000 to interest, $17,500 to debt extension fees and incurring prepayment penalties added to principal of $15,000. As of March 31, 2020 and December 31, 2019, the balance on the convertible note payable was $157,500 and $202,500, respectively. During the three months ended March 31, 2020, the Company recognized $3,116 in debt discount amortization expense.


During August 2019, the Company issued a convertible note payable in the amount of $157,500. The convertible note payable is due one year from the date of issuance, has an original issuance discount of $7,500, accrues interest at the rate of 6% per annum, is unsecured and is convertible after 180 days into shares of the Company’s common stock at a discount of 65% of the lowest trading price for the Company’s common stock during the ten trading days immediately preceding the conversion.


Between January and March 2020, the Company extended the note conversion feature through April 15, 2020, paying $37,500, with $30,000 applied to principal, $7,500 to debt extension fees and incurring prepayment penalties added to principal of $7,500. As of March 31, 2020 and December 31, 2019, the balance on the convertible note payable was $157,500 and $135,000, respectively. During the three months ended March 31, 2020, the Company recognized $1,870 in debt discount amortization expense.


During September 2019, the Company issued two convertible notes payable totaling $270,000, or $135,000 each. The convertible notes payable are due one year from the date of issuance, each have an original issuance discount of $11,500, accrue interest at the rate of 6% per annum, are unsecured and are convertible after 180 days into shares of the Company’s common stock at a discount of 65% of the lowest trading price for the Company’s common stock during the ten trading days immediately preceding the conversion.


Between January and March 2020, the Company extended the note conversion feature through April 15, 2020. As of March 31, 2020 and December 31, 2019, the balance on the convertible notes payable were $135,000 and $135,000 each, respectively. During the three months ended March 31, 2020, the Company recognized $5,734 in debt discount amortization expense.


During November 2019, the Company issued a convertible note payable in the amount of $336,000. The convertible note payable is due one year from the date of issuance, has an original issuance discount of $45,000, accrues interest at the rate of 10% per annum, is unsecured and is convertible after 180 days into shares of the Company’s common stock at a discount of 65% of the lowest trading price for the Company’s common stock during the ten trading days immediately preceding the conversion. 


As of March 31, 2020 and December 31, 2019, the balance on the convertible note payable was $336,000 and $336,000, respectively. During the three months ended March 31, 2020, the Company recognized $11,219 in debt discount amortization expense.


During December 2019, the Company issued a convertible note payable in the amount of $220,000. The convertible note payable is due one year from the date of issuance, has an original issuance discount of $26,000, accrues interest at the rate of 7% per annum, is unsecured and is convertible after 180 days into shares of the Company’s common stock at a discount of 65% of the lowest trading price for the Company’s common stock during the ten trading days immediately preceding the conversion. 


As of March 31, 2020 and December 31, 2019, the balance on the convertible note payable was $220,000 and $220,000, respectively. During the three months ended March 31, 2020, the Company recognized $6,482 in debt discount amortization expense.


During January 2020, the Company issued a convertible note payable in the amount of $138,000. The convertible note payable is due one year from the date of issuance, has an original issuance discount of $3,000, accrues interest at the rate of 8% per annum, is unsecured and is convertible after 180 days into shares of the Company’s common stock at a discount of 65% of the lowest trading price for the Company’s common stock during the ten trading days immediately preceding the conversion. 


As of March 31, 2020, the balance on the convertible note payable was $138,000. During the three months ended March 31, 2020, the Company recognized $518 in debt discount amortization expense.


During February 2020, the Company issued a convertible note payable in the amount of $440,000. The convertible note payable is due one year from the date of issuance, has an original issuance discount of $40,000, accrues interest at the rate of 5% per annum, is unsecured and is convertible after 180 days into shares of the Company’s common stock at a discount of 65% of the lowest trading price for the Company’s common stock during the ten trading days immediately preceding the conversion. 


As of March 31, 2020, the balance on the convertible note payable was $440,000. During the three months ended March 31, 2020, the Company recognized $8,877 in debt discount amortization expense.


During the three months ended March 31, 2020, the Company paid $20,000 as a debt financing fee on the above financings.