v3.22.1
Convertible debentures - net of discounts and fees.
 3 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]

Note 11 – Convertible debentures - net of discounts and fees.

 

During the year ended December 31, 2021, the Company [partially] funded operations with borrowing on new convertible promissory notes. This table presents the positions on the notes as of March 31, 2022, and December 31, 2021.

 

Holder

 

Date

of Loan

 

 

Loan

amount

 

 

OID and

discounts

and fees

 

 

Interest

rate

 

 

Balance

March 31, 2022

 

 

Balance

December 31, 2021

 

Power Up Lending Group Ltd

 

 

10-06-21

 

 

 

50,000

 

 

$

3,750

 

 

 

8

%

 

 

53,750

 

 

 

53,750

 

6th Street Lending LLC

 

 

11-10-21

 

 

 

35,000

 

 

 

3,750

 

 

 

12

%

 

 

38,750

 

 

 

38,750

 

6th Street Lending LLC

 

 

12-17-21

 

 

 

40,000

 

 

 

3,750

 

 

 

12

%

 

 

43,750

 

 

 

43,750

 

6th Street Lending, LLC

    

2-22-22

      

35,000

      

3,750

      

12

%

    

38,750

      

0

  

Oasis Capital

 

 

07-19-21

 

 

 

118,000

 

 

 

10,000

 

 

 

8

%

 

 

0

 

 

 

7,653

 

Derivative liability

 

 

12-31-21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

234,913

 

 

 

99,034

 

     Total convertible debt

 

 

 

 

 

$

278,000

 

 

$

25,000

 

 

 

 

 

 

 

411,163

 

 

 

242,937

 

     Less Original issue discounts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,066

)

 

 

(9,127

)

Balances at 3-31-22 and 12-31-21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

407,097

 

 

$

233,810

 

 

The Financial Accounting Standard ASC 815 Accounting for Derivative Instruments and Hedging Activities require that instruments with embedded derivative features be valued at their market values. The Black Scholes model was used to value the derivative liability for the three months ended March 31, 2022 and the fiscal year ending December 31, 2021. This value includes the fair value of the shares that may be issued according to the contracts of the holders and valued according to our common share price at the time of acquisition.

 

As of September 1, 2018, the Company entered into an Equity Purchase Agreement with Oasis Capital, LLC, a Puerto Rico limited liability company (“Investor”) pursuant to which Investor agreed to purchase up to $5,000,000 of the Company’s common stock at a price equal to 85% of the market price at the time of purchase (“Put Shares”). The Company agreed to file a new registration statement to register for resale the Put Shares. The Registration Statement must be effective with the SEC before Investor is obligated to purchase any Put Shares. In addition, the Company [i] issued to Investor a one year $150,000 note which is convertible at a fixed price of $.01 per share as a commitment fee for its purchase of Put Shares and [ii] delivered to Investor a Registration Rights Agreement pursuant to which the Company agreed to register all Put Shares acquired under the Equity Purchase Agreement. During 2020, Investor converted $59,692 of principal of the Note and received 930,165,889 shares of common stock. During the twelve months ended December 31, 2020, the negotiated note balance was $3,264. The unpaid principal balance on the Note was $0 and $7,653 at March 31, 2022 and December 31, 2021, respectively.

 

As of January 21, 2020 (“Effective Date”), the Company issued to Oasis a $208,000 Promissory Note, net of a prorated original issue discount of $16,000 (“1/21/20 Note”). The Company received $34,000 (“First Tranche”) with four additional Tranches through December 31, 2020 totaling $85,000. There were three Tranches for the period of January 1, 2021 to February 19, 2021, totaling $70,000. Each Tranche matures nine months from the effective date of each such payment. The Company issued Warrants with each Tranche totaling [2,100,000] shares. Each Warrant expires five years from the date of issuance and is exercisable at a conversion price of 120% of the closing price on the trading day prior to the funding date of the respective Tranche. The Company also agreed to issue to Oasis 5,000,000 shares of common stock as an incentive/commitment fee in connection with the transactions. The Company valued these shares at $14,500 and issued these shares in 2020. The 1/21/20 Note is convertible into common stock at a 35% discount to market. The balance of the Note at March 31, 2022 was $0 including all penalties and interest.

 

On March 29, 2021, the Board of Directors of the Corporation deem it in the best interests of the Corporation to enter into the Securities Purchase Agreement dated March 29, 2021 (the “Agreement”) with Power Up Lending Group Ltd. (“PowerUp”), in connection with the issuance of: (i) a promissory note of the Corporation, in the aggregate principal amount of $80,000 (including $7,500 of Original Issue Discount) (the “Note”), (ii) Three Hundred Seventy Three Thousand Three Hundred Thirty Three (373,333) restricted common shares of the Corporation (“Commitment Shares”) to be delivered to PowerUp in book entry with the Corporation’s transfer agent prior to the Closing Date, (iii) Seventy Hundred Forty Six Thousand Six Hundred Sixty Seven (746,667) restricted common shares of the Corporation (“Security Shares” and together with the Note and the Commitment Shares, collectively, the “Securities”) to be delivered to PowerUp in book entry with the Corporation’s transfer agent prior to the Closing Date; and in connection therewith to enter into an irrevocable letter agreement with Vstock Transfer LLC, the Corporation’s transfer agent, with respect to the reserve of shares of common stock of the Corporation to be issued upon any conversion of the Note (only upon default); the issuance of such shares of common stock in connection with a conversion of the Note (the “Letter Agreement”). The proceeds of this note were specifically slated for payment of the settlement of the Knight Capital Merchant Loan for $22,000 and the final payment of the Pearl Capital merchant note for $36,998. These discounted payoffs of these notes saved the company $26,446 plus future interest. Outstanding principal balance as of March 31, 2022 and December 31, 2021 on the note was $0 and $0, respectively.