ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.
(FORMERLY ON THE MOVE SYSTEMS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
__________
|
|
*
|
The indicated notes were in default as of August 31, 2018 .
|
(1)
|
The note is convertible beginning six months after the date of issuance.
|
(2)
|
The notes are convertible at a discount (as indicated) to the average market price and are accounted for and evaluated under ASC 480 as discussed in Note 3.
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(3)
|
The conversion price is not subject to adjustment from forward or reverse stock splits.
|
During the three months ended August 31, 2018 and 2017, the Company incurred original issue discounts of $13,960 and $565,000, respectively, and derivative discounts of $123,401 and $0, respectively, related to new convertible notes payable. These amounts are included in discounts on convertible notes payable and are being amortized to interest expense over the life of the convertible notes payable. During the three months ended August 31, 2018 and 2017, the Company recognized interest expense related to the amortization of debt discount of $1,218,459 and $0, respectively. The Company recorded penalty interest of $35,265 during the three months ended August 31, 2018.
During the six months ended August 31, 2018 and 2017, the Company incurred original issue discounts of $62,853 and $565,000, respectively, and derivative discounts of $924,009 and $0, respectively, related to new convertible notes payable. These amounts are included in discounts on convertible notes payable and are being amortized to interest expense over the life of the convertible notes payable. During the six months ended August 31, 2018 and 2017, the Company recognized interest expense related to the amortization of debt discount of $2,352,222 and $0, respectively. The Company recorded penalty interest of $221,055 during the six months ended August 31, 2018.
All the notes above are unsecured. As of August 31, 2018, the Company had total accrued interest payable of $1,074,600, of which $1,001,024 is classified as current and $73,576 is classified as noncurrent.
Convertible notes issued
On January 5, 2018, the Company issued an additional convertible promissory note to an investor with an aggregate principal amount of $250,000, due on January 5, 2019 for cash proceeds of $225,000 payable in tranches, with an original issue discount of $25,000. Each tranche matures one year after disbursement. The promissory note is convertible into common shares of the Company and a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 25 trading days prior to conversion, and has a 10% per annum interest rate commencing on January 5, 2018. On March 14, 2018, this note was amended to include the issuance of warrants to purchase 333,333 shares of the Company’s common stock with an exercise price of $0.15 with a 3-year maturity, and to change the date of the note to March 14, 2018, coinciding with the payment of the first tranche of $50,000 including cash proceeds of $43,000, fees of $2,000 and an original issue discount of $5,000.
On March 1, 2018, the Company issued a convertible redeemable note to an investor with an aggregate principal amount of $95,000, due on March 1, 2019 for cash proceeds of $95,000. The promissory note is convertible into units of the Company comprised of one share of common stock and one warrant to purchase a share of common stock with a three-year maturity and a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion, and has a 15% per annum interest rate.
In March 2018 and April 2018, an investor paid the Company $200,000 in exchange for a June 7, 2017 back end note for $200,000 that matured on June 7, 2018. The note is convertible into common shares of the Company and a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has an 8% per annum interest rate.
On April 9, 2018, the Company issued a convertible redeemable note to an investor with an aggregate principal amount of $55,000, due on April 9, 2019 for cash proceeds of $55,000. The promissory note is convertible into units of the Company comprised of one share of common stock and one warrant to purchase a share of common stock with a three-year maturity and a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion, and has a 15% per annum interest rate.
- 16 -
ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.
(FORMERLY ON THE MOVE SYSTEMS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
In April 2018, the Company received $76,000 of proceeds from an investor for two back-end notes with a total principal amount of $80,000, including original issue discounts of $4,000 and a one-year maturity. The back-end notes are convertible into common shares of the Company at a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and have an 8% per annum interest rate.
On May 2, 2018, the Company received $70,000 of proceeds from an investor for a promissory note with a principal amount of $77,000, including an original issue discounts of $7,000 and an eight-month maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 10% per annum interest rate.
On May 4, 2018, the Company received $71,500 of proceeds from an investor for a promissory note with a principal amount of $82,500, including an original issue discounts of $19,892 and a one-year maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 50% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 12% per annum interest rate.
On May 23, 2018, the Company received $90,108 of proceeds from an investor for a promissory note with a principal amount of $110,000, including an original issue discounts of $19,892 and an eight-month maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 50% of the lowest trading price of the Company’s common stock for the last 40 trading days prior to conversion, and has a 10% per annum interest rate.
In July and August 2018, the Company received $85,000 of proceeds from an investor for a back end note date July 6, 2017 principal amount of $95,000, including an original issue discounts of $10,000 and a twelve-month maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has an 8% per annum interest rate.
On July and August 2018, the Company received $32,500 of proceeds from an investor for a promissory note with a principal amount of $32,500, and a one-year maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 50% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 15% per annum interest rate commencing on August 1, 2018.
During the six months ended August 31, 2018 , the Company also had the following activity:
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●
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a debt holder transferred debt of $344,040, including accrued interest to third parties, who exchanged it for new convertible notes totaling $344,040; $100,000 with a one-year maturity, maturing on April 17, 2019, and bearing interest at 8% per annum; $144,404, with a one-year maturity, maturing on April 20, 2019, and bearing interest at 8% per annum; and $100,000 with an eight-month maturity, maturing on December 14, 2018, bearing interest at 10% per annum. A gain on settlement of debt of $268,145 was recorded that includes the amount of associated derivative liability that was written off.
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|
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●
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a debt holder transferred debt of $299,200, including accrued interest to third parties, who exchanged it for a replacement convertible note totaling $299,200; with the same term and conditions, a one-year maturity, maturing on September 25, 2018, and bearing interest at 15% per annum. A loss on settlement of debt of $484,484 was recorded that includes the amount of associated derivative liability that was written off.
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|
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●
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a debt holder transferred debt of $132,149, including accrued interest to third parties, who exchanged it for a replacement convertible note totaling $132,149; with an eight-month maturity, maturing on March 19, 2019, and bearing interest at 15% per annum. A gain on settlement of debt of $71,100 was recorded that includes the amount of associated derivative liability that was written off.
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●
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the Company exchanged a replacement note issued on April 17,2018 for principal of $100,000 and a one-year maturity, maturing on April 17, 2019, and bearing interest at 8% per annum for another replacement note issued on August 23, 2018 for principal of $100,000 and a one-year maturity, maturing on August 23, 2019, and bearing interest at 8% per annum. A gain on settlement of debt of $90,629 was recorded that includes the amount of associated derivative liability that was written off.
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- 17 -
ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.
(FORMERLY ON THE MOVE SYSTEMS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Conversions to common stock
During the six months ended August 31, 2018, holders of certain convertible notes payable elected to convert principal and accrued interest in the amounts shown below into shares of common stock. No gain or loss was recognized on conversions as they occurred within the terms of the agreement that provided for conversion.
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|
|
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|
|
|
|
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Conversion Date
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Principal
Converted
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Interest
Converted
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Fees
Converted
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Total Amount
Converted
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Shares
Issued
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|
|
|
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|
|
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|
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April 16, 2018
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$ 132,160
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$ —
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|
$ —
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|
$ 132,160
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|
64,000
|
April 26, 2018
|
|
14,500
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|
—
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|
500
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|
15,000
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|
14,286
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May 1, 2018
|
|
26,250
|
|
—
|
|
—
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26,250
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|
25,000
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May 3, 2018
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|
5,000
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|
—
|
|
—
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|
5,000
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|
4,762
|
May 7, 2018
|
|
27,900
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|
—
|
|
—
|
|
27,900
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|
30,000
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May 10, 2018
|
|
32,400
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|
—
|
|
—
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|
32,400
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|
40,000
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May 11, 2018
|
|
14,500
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|
—
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|
500
|
|
15,000
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|
18,519
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May 15, 2018
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7,060
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—
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|
500
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|
7,560
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16,000
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May 15, 2018
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|
8,000
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—
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—
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|
8,000
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9,877
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May 21, 2018
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|
20,250
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|
—
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|
—
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|
20,250
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25,000
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May 22, 2018
|
|
6,075
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|
—
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|
—
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|
6,075
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|
9,000
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May 24, 2018
|
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13,056
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|
3,300
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|
—
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16,356
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|
20,969
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May 30, 2018
|
|
8,182
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|
—
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|
—
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|
8,182
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15,152
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May 30, 2018
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|
15,000
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|
—
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|
—
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|
15,000
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30,000
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June 7, 2018
|
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2,922
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|
—
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|
—
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|
2,922
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|
6,640
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June 18, 2018
|
|
17,000
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|
—
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|
—
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|
17,000
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40,000
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June 19, 2018
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14,500
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|
—
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500
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15,000
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29,412
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June 28, 2018
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18,000
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—
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—
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18,000
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40,000
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June 28, 2018
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|
(7,060)
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—
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(500)
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|
(7,560)
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(16,000)
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July 5, 2018
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14,500
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—
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500
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15,000
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35,714
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July 5, 2018
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8,818
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—
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—
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8,818
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28,524
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July 11, 2018
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10,200
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—
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—
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10,200
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40,000
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July 11, 2018
|
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14,500
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|
—
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|
500
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|
15,000
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49,020
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July 19, 2018
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|
16,000
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|
—
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|
500
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|
16,500
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50,000
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July 19, 2018
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11,000
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1,365
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|
—
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|
12,365
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|
44,055
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July 23, 2018
|
|
14,500
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|
—
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|
500
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|
15,000
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71,429
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July 25, 2018
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5,000
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|
—
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|
—
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|
5,000
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|
23,810
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July 31, 2018
|
|
11,000
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|
1,455
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|
—
|
|
12,455
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|
64,195
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August 24, 2018
|
|
—
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|
15,300
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|
—
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|
15,300
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|
102,000
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August 27, 2018
|
|
5,500
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|
—
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|
500
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|
6,000
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|
100,000
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August 29, 2018
|
|
4,280
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—
|
|
500
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|
4,780
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|
113,814
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August 30, 2018
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|
6,000
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|
—
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|
—
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|
6,000
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|
100,000
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August 31, 2018
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|
20,000
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—
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|
—
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|
20,000
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|
111,111
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August 31, 2018
|
|
7,500
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|
—
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|
500
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|
8,000
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|
111,112
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|
|
|
|
|
|
|
|
|
|
|
|
|
$ 524,493
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$ 21,420
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$ 5,000
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$ 550,913
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1,467,401
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11. RELATED PARTY TRANSACTIONS
For the six months ended August 31, 2018, the Company received net advances of $135,908 from its loan payable with a related party. At August 31, 2018, the balance due to the related party was $452,050, and $316,142 at February 28, 2018.
During the three and six months ended August 31, 2018, the Company paid $60,768 and $196,108 in consulting fees for research and development to a company owned by a principal shareholder.
- 18 -
ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.
(FORMERLY ON THE MOVE SYSTEMS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
12. OTHER DEBT – VEHICLE LOAN
In December 2016, the RAD entered into a vehicle loan for $47,704 secured by the vehicle. The loan is repayable over 5 years maturing November 9, 2021, and repayable $1,019 per month including interest and principal. The principal repayments were $8,984 and $3,903 for the six months ended August 31, 2018 and 2017, respectively. The balances of the amounts owed on the vehicle loan were $73,178 and $82,162 as of August 31, 2018 and February 28, 2018, respectively, of which $17,830 and $17,830 were classified as current and $55,348 and $64,332 as long-term, respectively.
13. LOANS PAYABLE
Loans payable consisted of the following:
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|
|
|
|
|
|
|
|
|
|
|
|
|
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Annual
|
|
|
|
|
|
|
|
|
Interest
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|
Date
|
Maturity
|
Type
|
|
Principal
|
|
Rate
|
|
June 11, 2018
|
June 11, 2019
|
Promissory note
|
(3)
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$
|
48,000
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25%
|
|
June 20, 2018
|
August 20, 2018
|
Promissory note
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(4)
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|
50,000
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20%
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|
July 30, 2018
|
December 1, 2018
|
Promissory note
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(2)
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|
12,000
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|
15%
|
|
August 10, 2018
|
September 1, 2018
|
Promissory note
|
(4)
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|
10,000
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|
25%
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|
August 16, 2018
|
August 16, 2019
|
Promissory note
|
(1)
|
|
25,000
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|
25%
|
|
August 16, 2018
|
October 1, 2018
|
Promissory note
|
(4)
|
|
10,000
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|
25%
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|
August 23, 2018
|
October 20, 2018
|
Promissory note
|
(4)
|
|
20,000
|
|
20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
175,000
|
|
|
|
__________
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(1)
|
Repayable in 12 monthly installments of $2,376, commencing September 16, 2018 and secured. by the revenue earning devices of the Company having a net book value of at least $25,000.
|
|
|
(2)
|
Including an original issue discount of $3,000.
|
|
|
(3)
|
Repayable in 12 monthly installments of $4,562, commencing August 11, 2018 and secured by the revenue earning devices of the Company having a net book value of at least $48,000. The Company also granted warrants to purchase 2,500 shares of the Company’s common stock, with a 3-year term and an exercise price of $3.00.
|
|
|
(4)
|
Note is in default. No notice has been given by the note holder.
|
14. DERIVATIVE LIABILITES
As of August 31, 2018, the Company revalued the fair value of all of the Company’s derivative liabilities associated with the conversion features on the convertible notes payable and determined that it had total derivative liabilities of $16,548,058.
The Company estimated the fair value of the derivative liabilities using the Monte-Carlo model using the following key assumptions during the six months August 31, 2018:
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|
Strike price
|
$1.00 - $0.001
|
Fair value of Company common stock
|
$0.0739 - $0.0110
|
Dividend yield
|
0.00%
|
Expected volatility
|
258% - 116%
|
Risk free interest rate
|
1.20% - 2.32%
|
Expected term (years)
|
0.00 - 3.66
|
- 19 -
ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.
(FORMERLY ON THE MOVE SYSTEMS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
During the three and six months ended August 31, 2018, the Company released $75,092 and $757,222, respectively, of the Company’s derivative liability to equity due to the conversions of principal and interest on the associated notes.
The changes in the derivative liabilities (Level 3 financial instruments) measured at fair value on a recurring basis for the six months ended August 31, 2018 were as follows:
|
|
|
|
|
Balance as of February 28, 2018
|
|
$
|
31,113,844
|
|
|
|
|
|
|
Release of derivative liability on conversion of convertible notes payable
|
|
|
(757,222
|
)
|
Debt discount due to derivative liabilities
|
|
|
924,009
|
|
Derivative liability in excess of face value of debt recorded to interest expense
|
|
|
684,781
|
|
Increase in derivative liability due to debt settlement
|
|
|
575,286
|
|
Change in fair value of derivative liabilities
|
|
|
(15,992,640
|
)
|
Balance as of August 31, 2018
|
|
$
|
16,548,058
|
|
15. SHAREHOLDERS’ EQUITY (DEFICIT)
Summary of Preferred Stock Activity
During the six months ended August 31, 2018, the Company received $174,070 for the sale of 65 Series F preferred shares. As of the reporting date, these shares have not been issued and are included in preferred stock to be issued on the balance sheet.
Summary of Common Stock Activity
On August 24, 2018, the Company undertook a 100:1 reverse stock split. The share capital has been retrospectively adjusted accordingly to reflect this reverse stock split, except for the conversion price of certain convertible notes as the conversion price is not subject to adjustment from forward and reverse stock splits (see Note 10).
During the six months ended August 31, 2018, the Company issued 1,467,401 shares of its common stock for the conversion of debt and related interest and fees totaling $550,913, including $524,493 for of principal, $21,420 interest, $5,000 in fees in connection with debt converted during the period, as well as the release of the related derivative liability (see Note 11).
Summary of Stock Option Activity
As part of the asset purchase agreement described in Note 8, the Company issued 4,500 options to purchase shares at an exercise price of $5.00 per share that vest on October 2, 2021.
The options have a grant date fair value of $27,843, based on the Black-Scholes Option Pricing model with the following assumptions:
|
|
Strike price
|
$0.05
|
Fair value of Company’s common stock
|
$0.06
|
Dividend yield
|
0.00%
|
Expected volatility
|
303.81%
|
Risk free interest rate
|
1.94%
|
Expected term (years)
|
4.00
|
The Company will amortize the $27,843 over the four-year term on a straight-line basis as stock-based compensation. For the three and six months periods ended August 31, 2018, the Company amortized $4,593 and $6,346, respectively, to stock-based compensation with a corresponding adjustment to additional paid-in capital. At August 31, 2018, the unamortized expense was $18,657 and the intrinsic value was $0.
- 20 -
ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.
(FORMERLY ON THE MOVE SYSTEMS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
During the six months ended August 31, 2018, the Company issued the following warrants as part of debt conversions (see Note 10):
|
|
●
|
On April 16, 2018, the Company issued warrants to purchase 64,000 shares of the Company’s common stock in connection with its issuance of 64,000 shares of the Company’s common stock to an investor. The warrants have an exercise price of $2.00 per share and a three-year term.
|
|
|
●
|
On June 6, 2018, the Company issued warrants to purchase 6,640 shares of the Company’s common stock in connection with its issuance of 6,640 shares of the Company’s common stock to an investor. The warrants have an exercise price of $0.44 per share and a three-year term.
|
|
|
●
|
On August 24, 2018, the Company issued warrants to purchase 102,000 shares of the Company’s common stock in connection with its issuance of 102,000 shares of the Company’s common stock to an investor. The warrants have an exercise price of $0.15 per share and a three-year term.
|
The Company also issued 2,500 warrants with an exercise price of $3.00 per share and a 3-year term on June 11, 2018, in connection with a loan payable (see Note 13).
The above warrants have an aggregate grant date fair value of $533,723, based on the Black-Scholes Option Pricing model with the following assumptions:
|
|
Strike price
|
$0.15 - $3.00
|
Fair value of Company’s common stock
|
$0.50 - $7.00
|
Dividend yield
|
0.00%
|
Expected volatility
|
305.71% - 336.6%
|
Risk free interest rate
|
2.52% - 2.68%
|
Expected term (years)
|
3.00 - 5.00
|
The Company recorded $533,723 to stock-based compensation with a corresponding adjustment to additional paid-in capital.
16. COMMITMENTS AND CONTINGENCIES
Litigation
Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions.
In February 2016, the Company received notice that it had been sued in the Clark County District Court of Nevada. The plaintiff alleges that the Company obtained certain trade secrets through a third party also named in the suit. The Company believes the suit is without merit and intend to vigorously defend it. An arbitration was conducted on May 9, 2017, and the Plaintiff filed a Notice of Trial de Novo, seeking a review of the merit dismissal. The outcome of this matter is uncertain and there is no specific timeline available as of the date of this filing.
Operating Lease
The Company’s principal facility is located in Orange County, California. The lease agreement includes, escalating lease payments, renewal provisions and other provisions. The lease began in April 2017 and expires in March 2022. Rent expense is recorded over the lease terms on a straight-line basis. The security deposit of $25,747 was recorded as a long-term asset as of August 31, 2017.
The Company also leases premises in Northern California. The lease began in August 2017 and expires in August 2020. The security deposit of $5,126 was paid on September 1, 2017. The Company shares premises with a supplier, who is the co-lessee. Through agreement with the supplier, the Company agreed to pay 75% of the lease costs and the supplier agreed to pay 25%.
- 21 -
ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.
(FORMERLY ON THE MOVE SYSTEMS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
On February 1, 2018, the Company entered into an additional lease for premises for a robotic control center. The lease runs from February 1, 2018 to January 31, 2021 for $550 per month.
The Company’s leases are accounted for as operating leases. Rent expense is recorded over the lease terms on a straight-line basis. Rent expense was $30,157 and $59,762 for the three and six months ended August 31, 2018. Rent expense was $16,317 and $ 26,222 for the three and six months ended August 31, 2017.
At August 31, 2018, the Company’s future minimum payments are as follows:
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Twelve Months Ended
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Amount
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August 31, 2019
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$
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120,880
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August 31, 2020
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120,077
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August 31, 2021
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72,284
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August 31, 2022
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33,808
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$
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347,049
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17. EARNINGS (LOSS) PER SHARE
The net income (loss) per common share amounts were determined as follows:
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For the Three Months
Ended August 31,
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For the Six Months
Ended August 31,
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2018
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2017
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2018
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2017
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Numerator:
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Net income (loss)
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$
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(4,731,847
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)
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$
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(2,664,184
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)
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$
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9,673,104
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$
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(3,008,813
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)
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Effect of common stock equivalents:
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Add: interest expense on convertible debt
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—
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—
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410,184
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—
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Less: gain on change in fair value of derivative liabilities
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—
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—
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(15,992,640
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)
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—
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Net income (loss) adjusted for common stock equivalents
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(4,731,847
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)
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(2,664,184
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)
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(5,909,352
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)
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(3,008,813
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)
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Denominator:
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Weighted average – basic
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1,878,320
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44,343
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1,594,296
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22,171
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Dilutive effect of common stock equivalents:
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Stock options and warrants
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—
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—
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16,436
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—
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Convertible debt
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—
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—
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539,933,679
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—
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Preferred stock
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—
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—
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9,377,102
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—
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Weighted average shares – diluted
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1,878,320
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44,343
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550,921,512
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22,171
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Net income (loss) per share – basic
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(2.52
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)
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(60.08
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)
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6.07
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(135.71
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)
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Net income (loss) per share – diluted
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(2.52
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)
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(60.08
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)
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(0.01
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)
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(135.71
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)
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The anti-dilutive shares of common stock equivalents for the three and six months
ended August 31, 2018 and 2017 were as follows:
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For the Three Months
Ended August 31,
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For the Six Months
Ended August 31,
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2018
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2017
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2018
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2017
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Stock options and warrants
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2,294
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|
|
—
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—
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—
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Convertible debt
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|
542,730,108
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|
|
—
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|
|
—
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|
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—
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Preferred stock
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|
|
9,377,102
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|
|
3,518,582
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|
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—
|
|
|
3,518,582
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Total
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552,109,504
|
|
|
3,518,582
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—
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|
|
3,518,582
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|
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18.
SUBSEQUENT EVENTS
Subsequent to August 31, 2018, convertible note holders converted $110,216 of principal, $1,859 interest and $3,500 in fees into 4,790,088 shares of the Company’s common stock.
Subsequent to August 31, 2018, the Company issued warrants to purchase 829,125 shares of the Company’s common stock in connection with its issuance of 829,125 shares of the Company’s common stock to an investor as a part of a debt conversion.
The warrants have a fair value of $61,983 based on the Black-Scholes option pricing model.
On September 13, 2018, the Company received $53,000 of proceeds from an investor for a promissory note with a principal amount of $53,000, maturing on June 13, 2019. The promissory note is convertible into common shares of the Company at a conversion price equal to 55% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 12% per annum interest rate.
On September 18, 2018, the Company received $50,000 of proceeds from an investor for a promissory note with a principal amount of $50,000, maturing on March 17, 2019. The promissory note is convertible into common shares of the Company at a conversion price equal to 50% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 10% per annum interest rate.
On September 20, 2018, the Company received $39,350 of proceeds from an investor for a promissory note with a principal amount of $39,350, maturing on September 20, 2019. The promissory note is convertible into common shares of the Company at a conversion price equal to 50% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 15% per annum interest rate.
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