4.
CONVERTIBLE NOTES PAYABLE
As
of March 31, 2020 and December 31, 2019, notes payable were comprised of the following:
|
|
Original
|
|
Due
|
|
Interest
|
|
Conversion
|
|
March 31,
|
|
|
December 31,
|
|
|
|
Note Date
|
|
Date
|
|
Rate
|
|
Rate
|
|
2020
|
|
|
2019
|
|
Armada
Investment #2
|
|
5/30/2019
|
|
2/29/2020
|
|
8%
|
|
Variable
|
|
$
|
27,500
|
|
|
$
|
27,500
|
|
Armada Investment #3
|
|
7/22/2019
|
|
7/22/2020
|
|
8%
|
|
Variable
|
|
|
37,950
|
|
|
|
37,950
|
|
Armada Investment #4
|
|
12/6/2019
|
|
12/6/2020
|
|
8%
|
|
Variable
|
|
|
18,150
|
|
|
|
18,150
|
|
BHP Capital NY #3
|
|
3/26/2019
|
|
3/26/2020
|
|
8%
|
|
Variable
|
|
|
28,600
|
|
|
|
28,600
|
|
BHP Capital NY #4
|
|
4/9/2019
|
|
1/9/2020
|
|
8%
|
|
Variable
|
|
|
46,000
|
|
|
|
46,000
|
|
BHP Capital NY #6
|
|
5/30/2019
|
|
2/29/2020
|
|
8%
|
|
Variable
|
|
|
27,500
|
|
|
|
27,500
|
|
BHP Capital NY #7
|
|
7/22/2019
|
|
7/22/2020
|
|
8%
|
|
Variable
|
|
|
37,950
|
|
|
|
37,950
|
|
BHP Capital NY #8
|
|
8/7/2019
|
|
8/7/2020
|
|
8%
|
|
Variable
|
|
|
33,000
|
|
|
|
33,000
|
|
BHP Capital NY #9
|
|
12/20/2019
|
|
12/20/2020
|
|
12%
|
|
Variable
|
|
|
19,000
|
|
|
|
19,000
|
|
Blackbridge Capital
#2*
|
|
5/3/2016
|
|
5/3/2017
|
|
5%
|
|
Variable
|
|
|
80,400
|
|
|
|
80,400
|
|
Coventry #3
|
|
5/31/2019
|
|
5/31/2020
|
|
10%
|
|
Variable
|
|
|
77,382
|
|
|
|
38,691
|
|
Coventry #4
|
|
2/4/2020
|
|
2/4/2021
|
|
10%
|
|
Variable
|
|
|
40,000
|
|
|
|
—
|
|
Emunah Funding #4*
|
|
10/20/2018
|
|
7/20/2019
|
|
24%
|
|
Variable
|
|
|
2,990
|
|
|
|
2,990
|
|
Emunah Funding #8
|
|
1/31/2019
|
|
1/31/2020
|
|
8%
|
|
Variable
|
|
|
33,652
|
|
|
|
33,652
|
|
Fourth Man #2*
|
|
10/26/2018
|
|
7/20/2019
|
|
8%
|
|
Variable
|
|
|
8,257
|
|
|
|
8,257
|
|
Fourth Man #4
|
|
4/23/2019
|
|
4/23/2020
|
|
10%
|
|
Variable
|
|
|
16,865
|
|
|
|
16,865
|
|
Fourth Man #5
|
|
7/22/2019
|
|
7/22/2020
|
|
8%
|
|
Variable
|
|
|
37,950
|
|
|
|
37,950
|
|
Fourth Man #6
|
|
8/12/2019
|
|
8/12/2020
|
|
8%
|
|
Variable
|
|
|
17,600
|
|
|
|
17,600
|
|
Fourth Man #7
|
|
10/9/2019
|
|
10/8/2020
|
|
8%
|
|
Variable
|
|
|
27,500
|
|
|
|
27,500
|
|
Fourth Man #8
|
|
12/10/2019
|
|
9/10/2020
|
|
12%
|
|
Variable
|
|
|
16,500
|
|
|
|
16,500
|
|
James Powell
|
|
9/7/2015
|
|
Demand
|
|
8%
|
|
Variable
|
|
|
150,875
|
|
|
|
150,875
|
|
Jefferson St Capital
#2*
|
|
3/5/2019
|
|
10/18/2019
|
|
0%
|
|
Variable
|
|
|
5,000
|
|
|
|
5,000
|
|
Jefferson St Capital
#3
|
|
4/9/2019
|
|
1/9/2020
|
|
8%
|
|
Variable
|
|
|
44,400
|
|
|
|
44,400
|
|
Jefferson St Capital
#5
|
|
5/30/2019
|
|
2/29/2020
|
|
8%
|
|
Variable
|
|
|
27,500
|
|
|
|
27,500
|
|
Jefferson St Capital
#6
|
|
6/21/2019
|
|
3/21/2020
|
|
8%
|
|
Variable
|
|
|
27,500
|
|
|
|
27,500
|
|
Jefferson St Capital
#7
|
|
8/20/2019
|
|
5/20/2020
|
|
8%
|
|
Variable
|
|
|
38,500
|
|
|
|
38,500
|
|
Jefferson St Capital
#8
|
|
12/20/2019
|
|
12/20/2020
|
|
12%
|
|
Variable
|
|
|
19,000
|
|
|
|
19,000
|
|
Optempus Invest #1
|
|
9/4/2019
|
|
4/4/2020
|
|
6%
|
|
Variable
|
|
|
25,000
|
|
|
|
25,000
|
|
Optempus Invest #2
|
|
9/13/2019
|
|
4/13/2020
|
|
6%
|
|
Variable
|
|
|
20,000
|
|
|
|
20,000
|
|
Optempus Invest #3
|
|
10/15/2019
|
|
6/15/2020
|
|
6%
|
|
Variable
|
|
|
25,000
|
|
|
|
25,000
|
|
Power Up Lending #1
|
|
3/14/2019
|
|
3/14/2020
|
|
10%
|
|
Variable
|
|
|
6,500
|
|
|
|
6,500
|
|
Power Up Lending #2
|
|
5/13/2019
|
|
5/13/2020
|
|
10%
|
|
Variable
|
|
|
—
|
|
|
|
103,000
|
|
Power Up Lending #3
|
|
6/20/2019
|
|
6/20/2020
|
|
10%
|
|
Variable
|
|
|
—
|
|
|
|
53,000
|
|
Redstart
Holdings
|
|
3/5/2020
|
|
6/20/2020
|
|
10%
|
|
Variable
|
|
|
312,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
1,336,021
|
|
|
|
1,101,330
|
|
Less debt discount
|
|
|
|
|
(241,313
|
)
|
|
|
(394,795
|
)
|
Notes payable, net of discount
|
|
$
|
1,094,708
|
|
|
$
|
706,535
|
|
|
*
|
As
of March 31, 2020, the balance of notes payable that are in default is $365,799.
|
Armada
Investment Fund LLC
On
May 30, 2019, the Company issued a convertible note to Armada Investment Fund LLC for $27,500, which includes $16,667 paid Auctus
Fund pursuant to a settlement agreement, $5,000 to settle outstanding accounts payable, transaction fee interest of $3,000, and
cash consideration of $2.833. The note bears interest of 8% (increases to 18% per annum upon an event of default), matures on
February 29, 2020, and is convertible into common stock at 65% of the lowest trading price of the 15 trading day period ending
on the latest complete day prior to the date of conversion. The Company recorded a debt discount from the derivative equal to
$27,500 due to this conversion feature, and $27,500 has been amortized to the statement of operations. As of March 31, 2020, the
note had a principal balance of $27,500 and accrued interest of $2,078. This note is currently in default.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
July 22, 2019, the Company received funding pursuant to a convertible note issued to Armada Investment Fund LLC for $37,950, of
which $33,500 was received in cash and $4,450 was recorded as transaction fees. The note bears interest of 8% (increases to 24%
per annum upon an event of default), matures on July 22, 2020, and is convertible into common stock at 65% of the lowest trading
price of the 20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt
discount from the derivative equal to $37,950 due to this conversion feature, and $26,234 has been amortized to the statement
of operations. The debt discount and transaction fee interest had a balance at March 31, 2020 of $11,716. As of March 31, 2020,
the note had a principal balance of $37,950 and accrued interest of $2,104.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
December 6, 2019, the Company received funding pursuant to a convertible note issued to Armada Investment Fund LLC for $18,150,
which includes $15,000 to settle outstanding accounts payable and $3,150 in transaction fees. The note bears interest of 8% (increases
to 24% per annum upon an event of default), matures on December 6, 2020, and is convertible into common stock at 65% of the lowest
trading price of the 20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded
a debt discount from the derivative equal to $18,150 due to this conversion feature, and $5,753 has been amortized to the statement
of operations. The debt discount and transaction fee interest had a balance at March 31, 2020 of $12,397. As of March 31, 2020,
the note had a principal balance of $18,150 and accrued interest of $461.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
BHP
Capital NY, Inc.
On
March 26, 2019, the Company received funding pursuant to convertible note issued to BHP Capital NY for $28,600, of which $25,000
was received in cash and $3,600 was recorded as transaction fees. The note bears interest of 8% (increases to 24% per annum upon
an event of default), matures on March 26, 2019, and is convertible into common stock at 58% of the lowest trading price of the
20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount
from the derivative equal to $28,600 due to this conversion feature, and $28,600 has been amortized to the statement of operations.
As of March 31, 2020, the note had a principal balance of $28,600 and accrued interest of $2,388. This note is currently in default.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
April 9, 2019, the Company issued a convertible note to BHP Capital NY, Inc. for $55,000, which includes transaction fee interest
of $6,500, and cash consideration of $48,500. The note bears interest of 8% (increases to 18% per annum upon an event of default),
matures on January 9, 2020, and is convertible into common stock at 65% of the lowest trading price of the 15 trading day period
ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount from the derivative equal
to $55,000 due to this conversion feature, and $55,000 has been amortized to the statement of operations. During the year ended
December 31, 2020, the Company issued 76,100 common shares upon the conversion of principal in the amount of $9,000, accrued interest
of $1,915, and conversion fees of $500. As of March 31, 2020, the note had a principal balance of $46,000 and accrued interest
of $3,106. This note is currently in default.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
May 30, 2019, the Company issued a convertible note to BHP Capital NY for $27,500, which includes $16,667 paid Auctus Fund pursuant
to a settlement agreement, $5,000 to settle outstanding accounts payable, transaction fee interest of $3,000, and cash consideration
of $2.833. The note bears interest of 8% (increases to 18% per annum upon an event of default), matures on February 29, 2020,
and is convertible into common stock at 65% of the lowest trading price of the 15 trading day period ending on the latest complete
day prior to the date of conversion. The Company recorded a debt discount from the derivative equal to $27,500 due to this conversion
feature, and $27,500 has been amortized to the statement of operations. As of March 31, 2020, the note had a principal balance
of $27,500 and accrued interest of $2,078. This note is currently in default.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
July 22, 2019, the Company received funding pursuant to a convertible note issued to BHP Capital NY for $37,950, of which $33,500
was received in cash and $4,450 was recorded as transaction fees. The note bears interest of 8% (increases to 24% per annum upon
an event of default), matures on July 22, 2020, and is convertible into common stock at 65% of the lowest trading price of the
20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount
from the derivative equal to $37,950 due to this conversion feature, and $26,234 has been amortized to the statement of operations.
The debt discount and transaction fee interest had a balance at March 31, 2020 of $11,717. As of March 31, 2020, the note had
a principal balance of $37,950 and accrued interest of $2,104.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
August 7, 2019, the Company received funding pursuant to a convertible note issued to BHP Capital NY for $33,000 of which $29,000
was received in cash and $4,000 was recorded as transaction fees. The note bears interest of 8% (increases to 24% per annum upon
an event of default), matures on August 7, 2020, and is convertible into common stock at 65% of the lowest trading price of the
20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount
from the derivative equal to $33,000 due to this conversion feature, and $21,369 has been amortized to the statement of operations.
The debt discount and transaction fee interest had a balance at March 31, 2020 of $11,631. As of March 31, 2020, the note had
a principal balance of $33,000 and accrued interest of $1,714.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
December 20, 2019, the Company received funding pursuant to a convertible note issued to BHP Capital NY for $19,000 of which $15,000
was received in cash and $4,000 was recorded as transaction fees. The note bears interest of 12% (increases to 22% per annum upon
an event of default), matures on December 20, 2020, and is convertible into the lower of 1) 55% of the lowest trading price of
the 20 trading day period ending on the latest complete day prior to the date of the note, and 2) 55% of the lowest trading price
of the 20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount
from the derivative equal to $19,000 due to this conversion feature, and $5,296 has been amortized to the statement of operations.
The debt discount and transaction fee interest had a balance at March 31, 2020 of $13,704. As of March 31, 2020, the note had
a principal balance of $19,000 and accrued interest of $637.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
Blackbridge
Capital
On
May 3, 2016, the Company accepted and agreed to a Debt Purchase Agreement, whereby Blackbridge Capital acquired $100,000 in principal
of a Direct Capital Group, Inc. convertible note in exchange for $100,000. The note bears interest at 5% per annum, matured on
May 3, 2017, and is convertible into common stock at 50% of the lowest market price of the 20 trading days prior to the date of
conversion. The Company recorded a debt discount from the derivative equal to $100,000 due to this conversion feature, which has
been amortized to the statement of operations. The note has converted $19,600 of principal into 267 shares of common stock. As
of March 31, 2020, the note had a principal balance of $80,400 and accrued interest of $15,754. This note is currently in default.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
Coventry
Enterprises, LLC
On
May 31, 2019, the Company issued a convertible note to Coventry Enterprises for $50,000, of which $47,500 was received in cash
and $2,500 was recorded as transaction fees. The note bears interest at 10% (increases to 24% per annum upon an event of default),
matures on March 31, 2020, and is convertible into common stock at 61% multiplied by the lowest trading price during the 20-day
trading period including the conversion date. During the three month period ended March 31, 2020, the Company recorded a default
penalty of $38,691. The Company recorded a debt discount from the derivative equal to $88,691 due to this conversion feature,
and $64,623 has been amortized to the statement of operations. The debt discount and transaction fee interest had a balance at
March 31, 2020 of $24,068. During the year ended December 31, 2019, the Company issued 425,000 common shares upon the conversion
of principal in the amount of $11,309 and accrued interest of $2,818. As of March 31, 2020, the note had a principal balance of
$77,382 and accrued interest of $4,636.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
February 4, 2020, the Company issued a convertible note to Coventry Enterprises for $40,000, of which $37,500 was received in
cash and $2,500 was recorded as transaction fees. The note bears interest at 10% (increases to 24% per annum upon an event of
default), matures on February 4, 2021, and is convertible into common stock at 60% multiplied by the lowest trading price during
the 20-day trading period prior to the conversion date. The Company recorded a debt discount from the derivative equal to $40,000
due to this conversion feature, and $9,946 has been amortized to the statement of operations. The debt discount and transaction
fee interest had a balance at March 31, 2020 of $30,054. As of March 31, 2020, the note had a principal balance of $40,000 and
accrued interest of $997.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
Emunah
Funding LLC
On
October 20, 2017, the Company issued a convertible note to Emunah Funding LLC for $33,840, which includes $26,741 to settle outstanding
accounts payable, transaction costs of $4,065, OID interest of $2,840, and cash consideration of $194. On November 6, 2017, the
Company issued an Allonge to the convertible debt in the amount of $9,720. The Company received $7,960 in cash and recorded transaction
fees of $1,000 and OID interest of $760. On November 30, 2017, the Company issued an Allonge to the convertible debt in the amount
of $6,480. The Company received $5,000 in cash and recorded transaction fees of $1,000 and OID interest of $480. On January 11,
2018, the Company issued an Allonge to the convertible debt in the amount of $5,400. The Company received $5,000 in cash and recorded
OID interest of $480. The note bears interest of 8% (increases to 24% per annum upon an event of default), matured on July 20,
2018, and is convertible into common stock at 57.5% of the lowest trading price of the 20 trading day period ending on the latest
complete day prior to the date of conversion. The Company recorded a debt discount from the derivative equal to $55,440 due to
this conversion feature, which has been amortized to the statement of operations. On October 26, 2018, the principal amount of
$40,000 was reassigned to Fourth Man, LLC. Pursuant to the default terms of the note, the Company entered a late filing penalty
of $1,000. Prior to the period ended March 31, 2020, the note has converted $5,200 of principal and $4,815 of interest into 2,504
shares of common stock. During the year ended March 31, 2020, the Company issued 4,641 common shares upon the conversion of principal
in the amount of $8,250 and interest of $103. As of March 31, 2020, the note had a principal balance of $2,990 and accrued interest
of $539. This note is currently in default.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
January 31, 2019, the Company received funding pursuant to convertible note issued to Emunah Funding LLC for $33,000, which includes
$5,000 to settle outstanding accounts payable, $4,500 in transaction fees and cash consideration of $23,500. The note bears interest
of 8% (increases to 24% per annum upon an event of default), matures on January 31, 2020, and is convertible into common stock
at 50% of the lowest trading price of the 20 trading day period ending on the latest complete day prior to the date of conversion.
The Company recorded a debt discount from the derivative equal to $33,000 due to this conversion feature, and $33,000 has been
amortized to the statement of operations. Pursuant to the default terms of the note, the Company entered late filing penalties
of $50,652. During the year ended March 31, 2020, the Company made cash payments of $50,000. As of March 31, 2020, the note had
a principal balance of $33,652 and accrued interest of $4,108.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
Fourth
Man LLC
On
October 26, 2018, the Company accepted and agreed to a Debt Purchase Agreement, whereby Fourth Man LLC acquired $40,000 of debt
from an Emunah Funding LLC convertible note in exchange for $40,000. The note bears interest of 24%, matures on July 20, 2019,
and is convertible into common stock at 50% of the lowest trading price of the 20 trading day period ending on the latest complete
day prior to the date of conversion. The Company recorded a debt discount from the derivative equal to $16,591 due to this conversion
feature, which has been amortized to the statement of operations. During the year ended December 31, 2019, the Company issued
22,299 common shares upon the conversion of principal in the amount of $31,743. As of March 31, 2020, the note had a principal
balance of $8,257 and accrued interest of $2,712. This note is currently in default.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
April 23, 2019, the Company issued a convertible note to Fourth Man LLC for $26,400, which includes $24,000 to settle outstanding
accounts payable, and transaction fee interest of $2,400. The note bears interest of 10%, matures on April 23, 2020, and is convertible
into common stock at 60% of the lowest trading price of the 20 trading day period ending on the latest complete day prior to the
date of conversion. The Company recorded a debt discount from the derivative equal to $26,400 due to this conversion feature,
and $24,741 has been amortized to the statement of operations. The debt discount and transaction fee interest had a balance at
March 31, 2020 of $1,659. During the year ended December 31, 2019, the Company issued 165,531 common shares upon the conversion
of principal in the amount of $9,535. As of March 31, 2020, the note had a principal balance of $16,865 and accrued interest of
$2,003.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
July 22, 2019, the Company received funding pursuant to a convertible note issued to Fourth Man LLC for $37,950, of which $33,500
was received in cash and $4,450 was recorded as transaction fees. The note bears interest of 8% (increases to 24% per annum upon
an event of default), matures on July 22, 2020, and is convertible into common stock at 65% of the lowest trading price of the
20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount
from the derivative equal to $37,950 due to this conversion feature, and $26,234 has been amortized to the statement of operations.
The debt discount and transaction fee interest had a balance at March 31, 2020 of $11,717. As of March 31, 2020, the note had
a principal balance of $37,950 and accrued interest of $2,104.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
August 12, 2019, the Company received funding pursuant to a convertible note issued to Fourth Man LLC for $17,600, of which $15,000
was received in cash and $2,600 was recorded as transaction fees. The note bears interest of 8% (increases to 24% per annum upon
an event of default), matures on August 12, 2020, and is convertible into common stock at 65% of the lowest trading price of the
20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount
from the derivative equal to $17,600 due to this conversion feature, and $11,157 has been amortized to the statement of operations.
The debt discount and transaction fee interest had a balance at March 31, 2020 of $6,443. As of March 31, 2020, the note had a
principal balance of $17,600 and accrued interest of $895.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
October 9, 2019, the Company received funding pursuant to a convertible note issued to Fourth Man LLC for $27,500, of which $25,000
was received in cash and $2,500 was recorded as transaction fees. The note bears interest of 8% (increases to 24% per annum upon
an event of default), matures on October 19, 2020, and is convertible into common stock at 60% of the lowest trading price of
the 20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount
from the derivative equal to $27,500 due to this conversion feature, and $13,074 has been amortized to the statement of operations.
The debt discount and transaction fee interest had a balance at March 31, 2020 of $14,426. As of March 31, 2020, the note had
a principal balance of $27,500 and accrued interest of $1,049.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
December 10, 2019, the Company received funding pursuant to a convertible note issued to Fourth Man LLC for $16,500 of which $15,000
was received in cash and $1,500 was recorded as transaction fees. The note bears interest of 12% (increases to 24% per annum upon
an event of default), matures on September 10, 2020, and is convertible into the lower of 1) 50% of the lowest trading price of
the 20 trading day period ending on the latest complete day prior to the date of the note, and 2) 50% of the lowest trading price
of the 20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount
from the derivative equal to $16,500 due to this conversion feature, and $6,720 has been amortized to the statement of operations.
The debt discount and transaction fee interest had a balance at March 31, 2020 of $9,780. As of March 31, 2020, the note had a
principal balance of $16,500 and accrued interest of $608.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
James
Powell
On
September 7, 2015, the Company issued a convertible note with the Companys former President, James Powell for non-cash
consideration for accrued fees of $150,875. The note bears interest at 8%, is due on demand, and is convertible into convertible
into common stock at 50% of the lowest trading price for the 15 days prior to the date of conversion. As of March 31, 2020, the
note had a principal balance of $150,875 and accrued interest of $55,129.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
Jefferson
Street Capital LLC
On
March 5, 2019, the Company accepted and agreed to a Debt Purchase Agreement, whereby Jefferson Street Capital LLC acquired $30,000
of debt from an Emunah Funding LLC convertible note in exchange for $29,000, and the Company recorded a gain on settlement of
debt of $1,000. The note bears no interest, matures on October 18, 2019, and is convertible into common stock at 57.5% of the
lowest trading price of the 20 trading days ending on the latest complete day prior to the date of conversion. The Company recorded
a debt discount from the derivative equal to $29,000 due to this conversion feature, which has been amortized to the statement
of operations. During the year ended December 31, 2019, the Company issued 10,691 common shares upon the conversion of principal
in the amount of $24,000 and $1,000 in conversion fees. As of March 31, 2020, the note had a principal balance of $5,000. This
note is currently in default.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
April 9, 2019, the Company issued a convertible note to Jefferson Street Capital LLC for $55,000, which includes transaction fee
interest of $6,500, and cash consideration of $48,500. The note bears interest of 8% (increases to 18% per annum upon an event
of default), matures on January 9, 2020, and is convertible into common stock at 65% of the lowest trading price of the 15 trading
day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount from the derivative
equal to $55,000 due to this conversion feature, and $55,000 has been amortized to the statement of operations. During the year
ended December 31, 2019, the Company issued 74,000 common shares upon the conversion of principal in the amount of $10,600 and
$500 in conversion fees. As of March 31, 2020, the note had a principal balance of $44,400 and accrued interest of $5,134. This
note is currently in default.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
May 30, 2019, the Company issued a convertible note to Jefferson Street Capital LLC for $27,500, which includes $16,667 paid Auctus
Fund pursuant to a settlement agreement, $5,000 to settle outstanding accounts payable, transaction fee interest of $3,000, and
cash consideration of $2.833. The note bears interest of 8% (increases to 18% per annum upon an event of default), matures on
February 29, 2020, and is convertible into common stock at 65% of the lowest trading price of the 15 trading day period ending
on the latest complete day prior to the date of conversion. The Company recorded a debt discount from the derivative equal to
$27,500 due to this conversion feature, and $27,500 has been amortized to the statement of operations. As of March 31, 2020, the
note had a principal balance of $27,500 and accrued interest of $2,102. This note is currently in default.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
June 21, 2019, the Company issued a convertible note to Jefferson Street Capital LLC for $27,500, which includes transaction fee
interest of $4,000, and cash consideration of $23,500. The note bears interest of 8% (increases to 18% per annum upon an event
of default), matures on March 21, 2020, and is convertible into common stock at 65% of the lowest trading price of the 15 trading
day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount from the derivative
equal to $27,500 due to this conversion feature, and $27,500 has been amortized to the statement of operations. As of March 31,
2020, the note had a principal balance of $27,500 and accrued interest of $1,803. This note is currently in default.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
August 20, 2019, the Company issued a convertible note to Jefferson Street Capital LLC for $38,500, of which $32,000 was received
in cash and $6,500 was recorded as transaction fees. The note bears interest at 10% (increases to 18% per annum upon an event
of default), matures on May 20, 2020, and is convertible into the lower of 1) 65% of the lowest trading price of the 15 trading
day period ending on the latest complete day prior to the date of the note, and 2) 65% of the lowest trading price of the 15 trading
day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount from the derivative
equal to $38,500 due to this conversion feature, and $28,225 has been amortized to the statement of operations. The debt discount
and transaction fee interest had a balance at March 31, 2020 of $10,276. As of March 31, 2020, the note had a principal balance
of $38,500 and accrued interest of $1,906.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
December 20, 2019, the Company issued a convertible note to Jefferson Street Capital LLC for $19,000, of which $15,000 was received
in cash and $4,000 was recorded as transaction fees. The note bears interest of 12% (increases to 22% per annum upon an event
of default), matures on December 20, 2020, and is convertible into the lower of 1) 55% of the lowest trading price of the 20 trading
day period ending on the latest complete day prior to the date of the note, and 2) 55% of the lowest trading price of the 20 trading
day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount from the derivative
equal to $19,000 due to this conversion feature, and $5,296 has been amortized to the statement of operations. The debt discount
and transaction fee interest had a balance at March 31, 2020 of $13,704. As of March 31, 2020, the note had a principal balance
of $19,000 and accrued interest of $638.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
Optempus
Investments, LLC
On
September 4, 2019, the Company received $25,000 cash from the issuance of a convertible promissory note with Optempus Investments,
LLC in the amount of $25,000. The note bears interest at 6% (increases to 24% per annum upon an event of default), matures on
April 4, 2020, and is convertible into the lower of 1) 70% of the lowest trading price of the 30 trading day period ending on
the latest complete day prior to the date of the note, and 2) 70% of the lowest trading price of the 30 trading day period ending
on the latest complete day prior to the date of conversion. The Company recorded a debt discount from the derivative equal to
$25,000 due to this conversion feature, and $24,530 has been amortized to the statement of operations. The debt discount had a
balance at March 31, 2020 of $470. As of March 31, 2020, the note had a principal balance of $25,000 and accrued interest of $859.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
September 13, 2019, the Company received $20,000 cash from the issuance of a convertible promissory note with Optempus Investments,
LLC in the amount of $20,000. The note bears interest at 6% (increases to 24% per annum upon an event of default), matures on
April 13, 2020, and is convertible into the lower of 1) 70% of the lowest trading price of the 30 trading day period ending on
the latest complete day prior to the date of the note, and 2) 70% of the lowest trading price of the 30 trading day period ending
on the latest complete day prior to the date of conversion. The Company recorded a debt discount from the derivative equal to
$20,000 due to this conversion feature, and $17,396 has been amortized to the statement of operations. The debt discount had a
balance at March 31, 2020 of $2,604. As of March 31, 2020, the note had a principal balance of $20,000 and accrued interest of
$658.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
October 15, 2019, the Company received $25,000 cash from the issuance of a convertible promissory note with Optempus Investments,
LLC in the amount of $25,000. The note bears interest at 6%, matures on June 15, 2020, and is convertible into 70% of the lowest
trading price of the 20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded
a debt discount from the derivative equal to $25,000 due to this conversion feature, and $17,213 has been amortized to the statement
of operations. The debt discount had a balance at March 31, 2020 of $7,787. As of March 31, 2020, the note had a principal balance
of $25,000 and accrued interest of $690.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
Power
Up Lending Group Ltd.
On
March 14, 2019, the Company issued a convertible note to Power Up Lending Group Ltd. for $73,000, of which $70,000 was received
in cash and $3,000 was recorded as transaction fees. The note bears interest at 10% (increases to 22% per annum upon an event
of default), matures on March 14, 2020, and is convertible into 61% multiplied by the average of the two lowest trading prices
during the 20 day trading period on the trading day prior to the conversion date. The Company recorded a debt discount from the
derivative equal to $73,000 due to this conversion feature, and $73,000 has been amortized to the statement of operations. The
debt discount and transaction fee interest had a balance at March 31, 2020 of $14,760. Pursuant to the default terms of the note,
the Company entered a late filing penalty of $36,500. During the year ended December 31, 2019, the Company issued 445,833 common
shares upon the conversion of principal in the amount of $103,000. As of March 31, 2020, the note had a principal balance of $6,500
and accrued interest of $8,446. This note is currently in default.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
May 13, 2019, the Company issued a convertible note to Power Up Lending Group Ltd. for $103,000, of which $100,000 was received
in cash and $3,000 was recorded as transaction fees. The note bears interest at 10% (increases to 22% per annum upon an event
of default), matures on May 13, 2020, and is convertible into 61% multiplied by the average of the two lowest trading prices during
the 20 day trading period on the trading day prior to the conversion date. The Company recorded a debt discount from the derivative
equal to $103,000 due to this conversion feature, and $65,290 has been amortized to the statement of operations. During the three
months ended March 31, 2020, the Company entered a default penalty of $103,000. On March 5, the principal amount of $206,000,
debt discount and transaction fee interest of $37,710 and interest of $14,115 was reassigned to Redstart Holdings Corp. As of
March 31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
June 20, 2019, the Company issued a convertible note to Power Up Lending Group Ltd. for $53,000, of which $50,000 was received
in cash and $3,000 was recorded as transaction fees. The note bears interest at 10% (increases to 22% per annum upon an event
of default), matures on June 20, 2020, and is convertible into 61% multiplied by the average of the two lowest trading prices
during the 20 day trading period on the trading day prior to the conversion date. The Company recorded a debt discount from the
derivative equal to $53,000 due to this conversion feature, and $28,092 has been amortized to the statement of operations. During
the three months ended March 31, 2020, the Company entered a default penalty of $53,000. On March 5, the principal amount of $106,000,
debt discount and transaction fee interest of $24,908 and interest of $6,769 was reassigned to Redstart Holdings Corp. As of March
31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
Redstart
Holdings Corp.
On
March 5, 2020, the Company accepted and agreed to a Assignment Agreement, whereby Redstart Holdings Corp. acquired $156,000 of
principal, $156,000 in penalties, $62,618 in debt discount and financing costs, and $20,884 in accrued interest from two notes
with Power Up Lending Group Ltd. The note bears interest at 10% (increases to 22% per annum upon an event of default), matures
on June 20, 2020, and is convertible into 61% multiplied by the average of the two lowest trading prices during the 20 day trading
period on the trading day prior to the conversion date. The Company recorded an additional debt discount from the derivative equal
to the amount of $156,000 due to this conversion feature, and a total of $171,460 has been amortized to the statement of operations.
The debt discount and transaction fee interest had a balance at March 31, 2020 of $47,158. As of March 31, 2020, the note had
a principal balance of $312,000 and accrued interest of $23,107.
5.
PROMISSORY NOTES PAYABLE
On
October 1, 2017, Direct Capital Group, Inc. agreed to cancel two convertible notes in the principal amounts of $25,000 and $36,000,
and $6,304 in accrued interest, in exchange for a Promissory Note in the amount of $61,000. The note bears no interest and is
due on or before October 1, 2020. During the three months ended March 31, 2020, the Company recorded payments of $2,000.
As
of March 31, 2020 and December 31, 2019, the principal balance owed was $14,500 and $16,500, respectively.
6.
DERIVATIVE LIABILITIES
During
the three months ended March 31, 2020, the Company valued the embedded conversion feature of the convertible notes, warrants,
certain accounts payable and certain related party liabilities. The fair value was calculated at March 31, 2020 based on the lattice
model.
The
following table represents the Companys derivative liability activity for the embedded conversion features for the year
ended March 31, 2020:
|
|
Notes
|
|
|
Warrants
|
|
|
Stock Payable
|
|
|
Total
|
|
Balance, beginning of period
|
|
$
|
1,631,390
|
|
|
$
|
3,804
|
|
|
$
|
1,533,605
|
|
|
$
|
3,168,799
|
|
Initial recognition of derivative liability
|
|
|
33,874,887
|
|
|
|
—
|
|
|
|
—
|
|
|
|
33,874,887
|
|
Derivative settlements
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Loss (gain) on derivative liability valuation
|
|
|
(3,259,061
|
)
|
|
|
292,898
|
|
|
|
20,950,911
|
|
|
|
17,984,748
|
|
Balance, end of period
|
|
$
|
32,247,216
|
|
|
$
|
296,702
|
|
|
$
|
22,484,516
|
|
|
$
|
55,028,434
|
|
Convertible
Notes
The
fair value at the commitment date for the convertible notes and the revaluation dates for the Companys derivative liabilities
were based upon the following management assumptions as of March 31, 2020:
|
|
Valuation data
|
Expected dividends
|
|
0%
|
Expected volatility
|
|
717.75%-1,491.31%
|
Expected term
|
|
.14 - 1 year
|
Risk free interest
|
|
1.48%-1.60%
|
Warrants
On
January 2, 2019, the Company executed a Common Stock Purchase Warrant for 1,821,875 shares (1,821 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.016 per share and expire on December
31, 2023
On
January 31, 2019, the Company executed a Common Stock Purchase Warrant for 2,200,000 shares (2,200 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.016 per share and expire on January
30, 2024.
On
March 26, 2019, the Company executed a Common Stock Purchase Warrant for 1,643,678 shares (1,643 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.017 per share and expire on March 25,
2024.
On
March 26, 2019, the Company executed a Common Stock Purchase Warrant for 1,643,678 shares (1,643 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.017 per share and expire on March 25,
2024.
On
April 9, 2019, the Company executed a Common Stock Purchase Warrant for 550,000 shares (550 post-split). The purchase price of
one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.10 per share and expire on April 8, 2024.
On
April 9, 2019, the Company executed a Common Stock Purchase Warrant for 550,000 shares (550 post-split). The purchase price of
one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.10 per share and expire on April 8, 2024.
On
April 23, 2019, the Company executed a Common Stock Purchase Warrant for 105,000 shares (105 post-split). The purchase price of
one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.25 per share and expire on April 22, 2024.
On
May 30, 2019, the Company executed a Common Stock Purchase Warrant for 625,000 shares (625 post-split). The purchase price of
one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.040 per share and expire on May 29, 2024.
On
May 30, 2019, the Company executed a Common Stock Purchase Warrant for 625,000 shares (625 post-split). The purchase price of
one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.040 per share and expire on May 29, 2024.
On
May 30, 2019, the Company executed a Common Stock Purchase Warrant for 625,000 shares (625 post-split). The purchase price of
one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.040 per share and expire on May 29, 2024.
On
June 13, 2019, the Company entered into a Securities Exchange Agreement with Fourth Man Fund, LLC. Both parties agreed
to exchange the Warrants pursuant under the terms of a Securities Exchange Agreement, in its entirety. The Agreement is for warrants
dated July 3, 2018, July 17, 2018, October 3, 2018, and August 22, 2018, representing 89,540 shares of common stock, exchanged
for 10,167 shares of Preferred Series C stock at $10 per share. The exchange extinguished $734,381 worth of derivative liabilities.
On
June 13, 2019, the Company entered into a Securities Exchange Agreement with Emunah Funding, LLC. Both parties agreed to
exchange the Warrants pursuant under the terms of a Securities Exchange Agreement, in its entirety. The Agreement is for warrants
dated October 20, 2017, November 6, 2017, November 30, 2017, January 11, 2018, May 15, 2018, and October 31, 2018, representing
129,952 shares of common stock, exchanged for 35,583 shares of Preferred Series C stock at $10 per share. The exchange extinguished
$1,095,620 worth of derivative liabilities.
On
June 21, 2019, the Company executed a Common Stock Purchase Warrant for 1,000,000 shares (1,000 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.025 per share and expire on June 20,
2024.
On
July 22, 2019, the Company executed a Common Stock Purchase Warrant for 1,679,204 shares (1,679 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.023 per share and expire on July 22,
2024.
On
July 22, 2019, the Company executed a Common Stock Purchase Warrant for 1,679,204 shares (1,679 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.023 per share and expire on July 22,
2024.
On
July 22, 2019, the Company executed a Common Stock Purchase Warrant for 1,679,204 shares (1,679 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.023 per share and expire on July 22,
2024.
On
August 7, 2019, the Company executed a Common Stock Purchase Warrant for 2,200,000 shares (2,200 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.015 per share and expire on August
7, 2024.
On
August 12, 2019, the Company executed a Common Stock Purchase Warrant for 1,173,333 shares (1,173 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.015 per share and expire on August
7, 2024.
On
August 20, 2019, the Company executed a Common Stock Purchase Warrant for 3,500,000 shares (3,500 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.01 per share and expire on August 7,
2024.
On
October 9, 2019, the Company executed a Common Stock Purchase Warrant for 17,187,500 shares (17,188 post-split). The purchase
price of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.0016 per share and expire on
October 9, 2024.
During
the year ended March 31, 2020, warrant holders exercised the warrants and the Company issued 118,280 shares of common stock through
a cashless exercise of the warrants in accordance with the conversion terms.
The
Company evaluated all outstanding warrants to determine whether these instruments may be tainted. All warrants outstanding were
considered tainted. The Company valued the embedded derivatives within the warrants based on the independent report of the valuation
specialist.
The
fair value at the valuation dates were based upon the following management assumptions:
|
|
Valuation data
|
Expected dividends
|
|
0%
|
Expected volatility
|
|
299.87%-492.58%
|
Expected term
|
|
3.76 – 4.53 years
|
Risk free interest
|
|
1.66%
|
Stock
Payable
The
payables to be issued in stock are at 100% of the lowest closing market price with a 15 day look back. The fair value at the valuation
dates were based upon the following management assumptions:
|
|
Valuation data
|
Expected dividends
|
|
0%
|
Expected volatility
|
|
717.75%
|
Expected term
|
|
1 year
|
Risk free interest
|
|
1.59%
|
7.
RELATED PARTY TRANSACTIONS
The
Company is periodically advanced noninterest bearing operating funds from related parties. The advances are due on demand and
unsecured. During the three months ended March 31, 2020, the Company made payments of $3,500 to amounts due to related parties,
and $2,838 was advanced to the Company by related parties. As of March 31, 2020 and December 31, 2019, the Company owed related
parties $90,468 and $91,130, respectively. During the three months ended March 31, 2020, the Company recorded imputed interest
of $3,376 to the statement of operations with a corresponding increase to additional paid in capital. As of March 31, 2020 and
December 31, 2019, the Company recorded accounts payable due to related parties of $31,269 and $31,269, respectively.
8.
CONVERTIBLE PREFERRED STOCK
Series
A Convertible Preferred Stock
On
January 25, 2011, the Company filed an amendment to its Nevada Certificate of Designation to create Series A Convertible Preferred
Stock, with a par value of $0.001 and 10,000,000 shares authorized.
On
January 3, 2017, the Company filed an Amendment to Certificate of Designation with the Nevada Secretary of State defining the
rights and preferences of the Series A Convertible Preferred shares. Series A Convertible Preferred stock shall be convertible
into common shares at the rate of the closing market price on the day of the conversion notice equal to the dollar amount of the
value of the Series A Convertible Preferred shares, and holders shall have no voting rights on corporate matters, unless and until
they convert their Series A Convertible Preferred shares into Common shares, at which time they will have the same voting rights
as all Common Shareholders have; their consent shall not be required for taking any corporate action.
On
October 26, 2018, the Company issued 488,827 Series A Convertible Preferred shares at $1.79 per share to Donna Murtaugh, to settle
liabilities of $875,000 owed to her pursuant to the Asset Purchase Agreement dated March 9, 2016.
As
of November 13, 2018, 3,489,510 shares of Series A Convertible Preferred stock were transferred into the Company in connection
with the reverse merger.
On
November 13, 2018, the Company granted 1,086,592 Series A Convertible Preferred shares at $1.79 per share to Richard Hylen, valued
at $1,945,000, pursuant the Merger Agreement.
On
January 9, 2019, the Company entered into an Asset Purchase Agreement Proscere Bioscience Inc., a Florida Corporation. Pursuant
to the Asset Purchase Agreement, Proscere Bioscience assigned and transferred all of its right, title, and interest to its fixed
assets and know how to Simlatus Corporation. These assets and know how pursuant to the 5 year
Exclusive Distribution & License Agreement dated January 9, 2019 are valued at $3,000,000. As consideration for the assets
and know how Simlatus Corporation issued 1,675,978 shares of Convertible Preferred Series A stock at a price of
$1.79 per share. At that time, Proscere Bioscience became a wholly subsidiary of Simlatus Corporation.
On
March 19, 2019, Richard Hylen entered into a Debt Settlement Agreement with Xillient, LLC to settle $362,261 in outstanding debt
owed to Xillient, LLC for $200,000. Mr. Hylen transferred 111,732 of his Convertible Preferred Series A that are valued at $1.79
per share. The liability amount of $362,261 was reclassed to additional paid in capital due to the contributed capital by a related
party.
On
April 10, 2019, the Board of Directors repurchased and returned to treasury 25,140 Convertible Preferred Series A Shares in the
name of Optempus Investments, LLC. The company authorized and paid the payment of $45,000 to Optempus Investments, LLC for the
repurchase of 25,140 Convertible Preferred Series A at $1.79 per share. This transaction is pursuant with the Asset Purchase Agreement
of Proscere Bioscience and the IP of the Cold-Water CBD/HEMP Extraction Systems. The Convertible Preferred Series A Stock is convertible
to common stock at market price the day of conversion.
On
June 3, 2019, the Board of Directors repurchased and returned to treasury 18,159 Convertible Preferred Series A Shares in the
name of Optempus Investments, LLC. The company authorized and paid the payment of $32,505 to Optempus Investments, LLC for the
repurchase of 18,159 Convertible Preferred Series A at $1.79 per share. This transaction is pursuant with the Asset Purchase Agreement
of Proscere Bioscience and the IP of the Cold-Water CBD/HEMP Extraction Systems. The Convertible Preferred Series A Stock is convertible
to common stock at market price the day of conversion.
On
June 21, 2019, 43,299 Convertible Preferred Series A shares held in treasury were retired.
During
the year ended December 31, 2019, 712,360 shares of Convertible Series A Preferred stock were converted to 2,150,330 common shares
in accordance with the conversion terms.
The
Series A Convertible Preferred Stock has been classified outside of permanent equity and liabilities since it embodies a conditional
obligation that the Company may settle by issuing a variable number of equity shares and the monetary value of the obligation
is based on a fixed monetary amount known at inception. Each share of the Convertible Series A Preferred Stock has a fixed value
of $1.79 per share, has no voting rights, and is convertible into common stock at closing market price on the date of conversion.
The Company has recorded $10,713,594, which represents 5,985,248 Series A Preferred Stock at $1.79 per share, issued and outstanding
as of March 31, 2020, outside of permanent equity and liabilities.
Series
C Convertible Preferred Stock
On
June 13, 2019, the Companys Board of Directors authorized the creation of 45,750 shares of Series C Convertible Preferred
Stock with a par value of $0.0001, and on June 13, 2019, a Certificate of Designation was filed with the Nevada Secretary of State.
The Convertible Preferred Series C shall have no voting rights as to corporate matters unless, and until, they are converted into
common shares, at which time, they will have the same voting rights as all common stock shareholders. Convertible Preferred Series
C shares cannot be sold, assigned, hypothecated, or otherwise disposed of, without first obtaining the consent of the majority
Convertible Preferred Series C shareholders. Convertible Preferred Series C shares shall have a value of $10.00 USD per share
and shall convert into common shares at the rate of the closing market price on the day of conversion notice equal to the dollar
amount of the value of the Convertible Preferred Series C share. At no time may the shareholder convert their shares into more
than 4.99% of the issued and outstanding.
On
June 13, 2019, the Company entered into a Securities Exchange Agreement with Fourth Man Fund, LLC. Both parties agreed
to exchange the Warrants pursuant under the terms of a Securities Exchange Agreement, in its entirety. The Agreement is for warrants
dated July 3, 2018, July 17, 2018, October 3, 2018, and August 22, 2018, representing 89,540 shares of common stock, exchanged
for 10,167 shares of Convertible Preferred Series C stock at $10 per share. The exchange extinguished $734,381 worth of derivative
liabilities.
On
June 13, 2019, the Company entered into a Securities Exchange Agreement with Emunah Funding, LLC. Both parties agreed to
exchange the Warrants pursuant under the terms of a Securities Exchange Agreement, in its entirety. The Agreement is for warrants
dated October 20, 2017, November 6, 2017, November 30, 2017, January 11, 2018, May 15, 2018, and October 31, 2018, representing
129,952 shares of common stock, exchanged for 35,583 shares of Convertible Preferred Series C stock at $10 per share. The exchange
extinguished $1,095,620 worth of derivative liabilities.
During
the year ended December 31, 2019, 10,167 shares of Convertible Series C preferred stock were converted to 28,015 common shares
in accordance with the conversion terms.
The
Convertible Series C Preferred Stock has been classified outside of permanent equity and liabilities since it embodies a conditional
obligation that the Company may settle by issuing a variable number of equity shares and the monetary value of the obligation
is based on a fixed monetary amount known at inception. The Company has recorded $355,830 which represents 35,583 Series C Convertible
Preferred Stock at $10 per share, issued and outstanding as of December 31, 2019, outside of permanent equity and liabilities.
As
of March 31, 2020, 10,000,000 Series A Convertible Preferred shares and 45,750 Series C Convertible Preferred shares were authorized,
of which 5,985,248 Series A Convertible Preferred shares were issued and outstanding and 35,583 Series C Convertible Preferred
shares were issued and outstanding.
9.
PREFERRED STOCK
On
January 25, 2011, the Company filed an amendment to its Nevada Certificate of Designation to create Series B Preferred Stock,
with a par value of $0.001 and 10,000,000 shares authorized.
On
July 1, 2015, the Companys Board of Directors authorized the creation of shares of Series B Voting Preferred Stock and
on July 27, 2015 a Certificate of Designation was filed with the Nevada Secretary of State. The holder of the shares of the Series
B Voting Preferred Stock has the right to vote those shares of the Series B Voting Preferred Stock regarding any matter or action
that is required to be submitted to the shareholders of the Company for approval. The vote of each share of the Series B Voting
Preferred Stock is equal to and counted as 4 times the votes of all of the shares of the Companys (i) common stock, and
(ii) other voting preferred stock issued and outstanding on the date of each and every vote or consent of the shareholders of
the Company regarding each and every matter submitted to the shareholders of the Company for approval.
On
November 9, 2018, Mike Schatz returned 250 Preferred Series B Control Shares, valued at par value, pursuant to his new employee
agreement dated November 1, 2018.
On
November 9, 2018, Robert Stillwaugh returned 250 Preferred Series B Control Shares, valued at par value, pursuant to his new employee
agreement dated November 1, 2018.
On
November 9, 2018, newly appointed President, Richard Hylen was issued 500 Preferred Series B Control Shares, pursuant to his employee
agreement dated November 1, 2018.
As
of March 31, 2020, 10,000,000 Series B Preferred shares were authorized, of which 500 shares were issued and outstanding.
10.
COMMON STOCK
On
June 15, 2016, the Company approved the authorization of a 1 for 1,000 reverse stock split of the Companys outstanding
shares of common stock, which was effective on July 22, 2016. The financial statements have been retroactively adjusted to take
this into account for all periods presented.
As
of November 13, 2018, 2,918 shares of common stock were transferred into the Company in connection with the reverse merger.
On
November 13, 2018, the Company issued 102,368 shares of restricted common stock to Richard Hylen as collateral, pursuant to the
Asset Purchase Agreement dated November 13, 2018. The shares are valued at $4,298,450 based on the market price of the Companys
common stock on the date of the agreement.
During
the year ended December 31, 2018, the holders of convertible notes converted a total of $10,448 of principal and interest
into 2,792 shares of common stock. The issuance extinguished $115,941 worth of derivative liabilities which was recorded to additional
paid in capital.
On
April 16, 2019, the Company issued 424 common shares at to Hanson & Associates to settle outstanding stock payable liabilities
pursuant to a Consulting Agreement dated April 1, 2017. The stock was valued at $24,953 on the date of issuance, which extinguished
$24,953 in derivative liabilities.
On
June 13, 2019, the Company filed a Certificate of Amendment with the Nevada Secretary of State to increase the number of authorized
common shares from 900,000,000 to 975,000,000 with a par value of $0.00001.
On
July 23, 2019, the Company Board of Directors and the Majority Stockholders owning a majority of the Companys voting
securities, approved a resolution authorizing the Company to amend the Articles of Incorporation to increase the number of authorized
Common Shares from 975,000,000 to 1,500,000,000 shares at par value $0.00001 per share.
On
September 16, 2019, the Company Board of Directors and the Majority Stockholders owning a majority of the Companys
voting securities, approved a resolution authorizing the Company to amend the Articles of Incorporation to increase the number
of authorized Common Shares from 1,500,000,000 to 5,000,000,000 shares at par value $0.00001 per share.
On
October 17, 2019, the Company Board of Directors and the Majority Stockholders owning a majority of the Companys
voting securities, approved a resolution authorizing the Company to amend the Articles of Incorporation to increase the number
of authorized Common Shares from 5,000,000,000 to 10,000,000,000 shares at par value $0.00001 per share.
On
December 18, 2019, the Company approved the authorization of a 1 for 1,000 reverse stock split of the Companys outstanding
shares of common stock. The financial statements have been retroactively adjusted to take this into account for all periods presented.
During
the year ended December 31, 2019, 712,360 shares of Series A preferred stock were converted to 2,161,158 common shares in accordance
with the conversion terms.
During
the year ended December 31, 2019, 10,167 shares of Series C preferred stock were converted to 28,015 common shares in accordance
with the conversion terms.
During
the year ended December 31, 2019, warrant holders exercised the warrants and the Company issued 118,280 shares of common stock
through a cashless exercise of the warrants in accordance with the conversion terms.
During
the year ended December 31, 2019, the holders of convertible notes converted a total of $866,299 of principal and interest,
and $16,500 in note fees, into 2,119,224 shares of common stock in accordance with the conversion terms. The issuances resulted
in a loss on conversion of $86,719 and settled $1,784,469 worth of derivative liabilities which was recorded to additional paid
in capital.
On
March 27, 2020, 3,476 shares of common stock were issued due to rounding in conjunction with the reverse stock split.
As
of March 31, 2020, 10,000,000,000 common shares, par value $0.00001, were authorized, of which 4,527,827 shares were issued and
outstanding.
11.
INCOME TAXES
Deferred
income taxes are determined using the liability method for the temporary differences between the financial reporting basis and
income tax basis of the Companys assets and liabilities. Deferred income taxes are measured based on the tax rates expected to
be in effect when the temporary differences are included in the Companys tax return. Deferred tax assets and liabilities are
recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts
of assets and liabilities and their respective tax bases.
Operating loss carryforwards generated from inception through March 31,2020 of approximately $3,455,243 will
begin to expire in 2034. The Company applies a statutory income tax rate of 21%. Accordingly, deferred tax assets
related to net operating loss carry-forwards total approximately $725,601 at March 31, 2020.
12.
COMMITMENTS AND CONTINGENCIES
On
March 29, 2019, the Company and its subsidiary, Proscere Bioscience Inc., entered into an Exclusive Distribution Agreement with
Brand House Ventures Inc. allowing the rights to sell the CBD Cold Water Extraction Systems within all of the United States. Mike
Mulder is the President of Brand House Ventures Inc., and the company was
formed in 2010 as a sole proprietorship, and in 2014 was formed as a California S-Corporation. Today Brand House is a Holding
Company for the distribution of a variety of products and technologies.
On
March 29, 2019, the Company and its subsidiary, Proscere Bioscience Inc., entered into a Distribution Agreement with United Opportunities,
LLC allowing the rights to sell the CBD/HEMP Cold Water Extraction Systems within Canada and Europe. Shawn Illingworth is the
Managing Partner of United Opportunities, LLC, and the company was formed in 2017 in overseeing the purchases of multiple cannabis
farms in the Humboldt, Adelanto, Needles, Nipton, Cal City, and Searchlight areas of California and Nevada. The company currently
cultivates medical grade crops on a grand scale and supply product to all the major manufacturers and extraction companies in
the industry. Future plans are to expand the company and distribute internationally through attaining cultivation centers in Canada,
Europe, and Australia. United Opportunities is currently opening an office and showroom in Las Vegas, NV which will round out
its current operating platforms in New York, Florida, and San Diego, California.
To
date, the Company has established distribution relationships in the United States, Canada, and Europe. The company also
has purchase orders to fulfill in relationship to the above distribution agreement. Any delays in fulfilling the orders have been
caused by manufacturing delays and the COVID-19 delays in working with our suppliers.
On
November 1, 2019, the Company renewed an Employment Agreement with Robert Stillwaugh, which appoints him as President of Simlatus,
a non-director/officer position, with an annual salary of $45,000, which can be accumulated at 6% interest and converted to restricted
common stock at fair market value at the time of conversion. During the three months ended March 31, 2020, the Company recorded
wages of $11,250 in connection with this agreement.
On
November 1, 2019, the Company renewed an Employment Agreement with Mike Schatz, which appoints him as the Vice President of Simlatus,
a non-director/officer position, with an annual salary of $45,000, which can be accumulated at 6% interest and converted to restricted
common stock at fair market value at the time of conversion. During the three months ended March 31, 2020, the Company recorded
wages of $11,250 in connection with this agreement.
On
November 1, 2019, the Company renewed an Employee Agreement with Richard Hylen which appoints him as Chief Executive Officer,
Chairman of the Board, and President, Secretary, and Treasurer of the Company. Mr. Hylen will receive an annual salary of $120,000,
which can be accumulated at 6% interest and converted to restricted common stock at fair market value at the time of conversion.
During the three months ended March 31, 2020, the Company recorded wages of $30,000 and payments of $10,600, in connection with
this agreement.
On
January 9, 2020, the Company renewed an Employee Agreement with Baron Tennelle, which appoints him as Director of Simlatus
and President of Proscere Bioscience, Inc., a wholly owned subsidiary of Simlatus. He will receive an annual salary of $45,000
paid out quarterly in either cash or stock at the current fair market value of the stock at time of conversion. During the three
months ended March 31, 2020, the Company recorded wages of $11,250 in connection with this agreement.
On
February 19, 2020, the Company renewed an Employee Agreement with Dusty Vereker as a Director of the company, and Vice
President of Proscere Bioscience. Her employment contract allows an annual salary of $45,000 to be paid quarterly in either cash
or stock. Ms. Verekers Director Agreement allows for fees associated with meetings and conferences. During the three months
ended March 31, 2020, the Company recorded wages of $11,250 in connection with this agreement.
15.
SUBSEQUENT EVENTS
On
June 5, 2020, the Company Board of Directors and the Majority Stockholders owning a majority of the Companys voting
securities, approved a resolution authorizing the Company to amend the Articles of Incorporation to decrease the number of authorized
Common Shares from 10,000,000,000 to 2,000,000,000 shares at par value $0.00001 per share.
On
June 11, 2020, the Company Board of Directors and the Majority Stockholders owning a majority of the Companys voting
securities, approved a resolution authorizing the Company to amend the Articles of Incorporation to increase the number of authorized
Common Shares from 2,000,000,000 to 5,000,000,000 shares at par value $0.00001 per share.
Convertible
Notes and Agreements
On
April 29, 2020, the Company entered into an Assignment Agreement with GPL Ventures LLC and Optempus Investments, LLC. Pursuant
to the Agreement, Optempus sold, transferred, and assigned a convertible note dated September 4, 2019 in the amount of $25,000,
for a purchase price of $25,958. The convertible note bears interest at 10% per annum and matures on April 29, 2021.
On
May 20, 2020, the Company entered into an Assignment Agreement with GPL Ventures LLC and Optempus Investments, LLC. Pursuant to
the Agreement, Optempus sold, transferred, and assigned two convertible notes dated September 13, 2019 and October 15, 2019 in
the amounts of $20,000 and $25,000, respectively, for a purchase price of $47,290. The convertible note bears interest at 10%
per annum and matures on May 20, 2021.
On
June 15, 2020, the Company entered in a Convertible Promissory Note with Power Up Lending Group Ltd in the amount of $43,000.
The note is unsecured, bears interest at 10% per annum, and matures on June 15, 2021.
Subsequent
Issuances
On
April 16, 2020, the holder of a convertible note converted a total of $1,600 of principal into 219,178 shares of our common stock.
On
April 20, 2020, 4,036 shares of Preferred Series A stock was converted in to 225,768 shares of common stock.
On
April 22, 2020, the holder of a convertible note converted a total of $1,600 of principal into 219,178 shares of our common stock.
On
April 28, 2020, the holder of a convertible note converted a total of $1,500 of principal into 254,237 shares of our common stock.
On
April 30, 2020, 2,445 shares of Preferred Series A stock was converted in to 271,764 shares of common stock.
On
April 30, 2020, 108,659 shares of Preferred Series A stock was converted in to 194,499,000 shares of common stock.
On
May 1, 2020, the holder of a convertible note converted a total of $1,100 of principal into 250,000 shares of our common stock.
On
May 4, 2020, 13,966 shares of Preferred Series A stock was converted in to 4,999,800 shares of common stock.
On
May 5, 2020, the holder of a convertible note converted a total of $12,500 of principal into 10,416,667 shares of our common stock.
On
May 6, 2020, the holder of a convertible note converted a total of $12,000 of principal into 2,727,272 shares of our common stock.
On
May 15, 2020, 18,341 shares of Preferred Series A stock was converted in to 9,800,000 shares of common stock.
On
May 19, 2020, the holder of a convertible note converted a total of $13,458 of principal into 11,214,608 shares of our common
stock.
On
May 20, 2020, the holder of a convertible note converted a total of $12,747 of principal and $7,386 of interest into 11,000,000
shares of our common stock.
On
June 3, 2020, the holder of a convertible note converted a total of $22,600 of principal into 10,761,905 shares of our common
stock.
On
June 5, 2020, the holder of a convertible note converted a total of $21,500 of principal into 10,750,000 shares of our common
stock.
On
June 5, 2020, the holder of a convertible note converted a total of $18,000 of principal and $500 in conversion fees into 8,624,708
shares of our common stock.
On
June 5, 2020, the holder of a convertible note converted a total of $34,650 of principal into 42,000,000 shares of our common
stock.
On
June 5, 2020, the holder of a convertible note converted a total of $34,650 of principal into 21,000,000 shares of our common
stock.
On
June 8, 2020, the holder of a convertible note converted a total of $21,500 of principal into 10,750,000 shares of our common
stock.
On
June 8, 2020, the holder of a convertible note converted a total of $22,800 of principal and $1,200 in conversion fees into 13,333,333
shares of our common stock.
On
June 8, 2020, the holder of a convertible note converted a total of $19,168 of principal and $962 of interest into 11,000,000
shares of our common stock.
On
June 9, 2020, the holder of a convertible note converted a total of $21,500 of principal into 10,750,000 shares of our common
stock.
On
June 10, 2020, the holder of a convertible note converted a total of $21,500 of principal into 10,750,000 shares of our common
stock.
On
June 11, 2020, the holder of a convertible note converted a total of $16,500 of principal into 15,008,658 shares of our common
stock.
On
June 11, 2020, the holder of a convertible note converted a total of $18,300 of principal into 10,764,706 shares of our common
stock.
On
June 11, 2020, the holder of a convertible note converted a total of $14,500 of principal and $500 in conversion fees into 7,957,559
shares of our common stock.
On
June 12, 2020, the holder of a convertible note converted a total of $14,000 of principal into 10,769,231 shares of our common
stock.
On
June 12, 2020, the holder of a convertible note converted a total of $18,950 of principal, $2,687 of interest, and $1,200 in conversion
fees into 19,518,506 shares of our common stock.
On
June 12, 2020, the holder of a convertible note converted a total of $8,800 of principal into 10,000,000 shares of our common
stock.
On
June 15, 2020, the holder of a convertible note converted a total of $11,800 of principal into 10,727,273 shares of our common
stock.
On
June 15, 2020, 19,844 shares of Preferred Series A stock was converted in to 20,665,519 shares of common stock.
On
June 16, 2020, the holder of a convertible note converted a total of $10,700 of principal into 10,700,000 shares of our common
stock.
On
June 16, 2020, the holder of a convertible note converted a total of $13,575 of principal and $1,200 in conversion fees into 23,452,381
shares of our common stock.
On
June 17, 2020, the holder of a convertible note converted a total of $11,900 of principal, $2,200 of interest and $500 in conversion
fees into 17,278,106 shares of our common stock.
On
June 17, 2020, the holder of a convertible note converted a total of $9,100 of principal into 10,705,882 shares of our common
stock.
On
June 17, 2020, the holder of a convertible note converted a total of $10,000 of principal, $21 of interest, and $1,200 in conversion
fees into 16,440,765 shares of our common stock.
On
June 17, 2020, the holder of a convertible note converted a total of $9,100 of principal into 10,705,882 shares of our common
stock.
On
June 17, 2020, the holder of a convertible note converted a total of $15,740 of principal and $273 of interest into 25,000,000
shares of our common stock.
On
June 19, 2020, the holder of a convertible note converted a total of $6,600 of principal and $5,150 of interest into 17,537,313
shares of our common stock.
On
June 19, 2020, the holder of a convertible note converted a total of $13,950 of principal and $1,200 in conversion fees into 31,562,500
shares of our common stock.
On
June 22, 2020, the holder of a convertible note converted a total of $12,200 of principal into 20,000,000 shares of our common
stock.
On
June 22, 2020, the holder of a convertible note converted a total of $12,250 of principal and $750 in conversion fees into 20,000,000
shares of our common stock.
On
June 22, 2020, 17,000 shares of Preferred Series A stock was converted in to 31,070,000 shares of common stock.
On
June 23, 2020, the holder of a convertible note converted a total of $9,000 of principal, $12 of interest, and $1,200 in conversion
fees into 19,638,145 shares of our common stock.
The
Company has evaluated subsequent events pursuant to ASC Topic 855 and has determined that there are no additional subsequent events
to disclose.