Convertible Notes Payable

3 Months Ended

Mar. 31, 2020

NOTE 9 – CONVERTIBLE NOTES PAYABLE

Convertible notes payable at March 31, 2020 and December 31, 2019 consists of the following:

	March 31,			December 31,
	2020			2019
Dated September 15, 2017	$	138,090		$	337,653
Dated December 8, 2017		187,500
Dated December 8, 2017		-			-
Dated April 25, 2018		40,123			40,123
Dated September 21, 2018		56,714			56,714
Dated October 18, 2018		60,000			60,000
Dated November 28, 2018		33			25,443
Dated November 28, 2018		37,770			57,870
Dated November 29, 2018		25,000			25,000
Dated December 13, 2018		105,000			105,000
Dated January 15, 2019		115,000			115,000
Dated February 7, 2019		132,720			132,720
Dated February 19, 2019		64,500			64,500
Dated February 19, 2019		55,125			55,125
Dated March 13, 2019		55,125			55,125
Dated May 14, 2019		26,500			26,500
Dated May 17, 2019		27,825			27,825
Dated August 1, 2019		56,194			56,194
Dated August 7, 2019		55,125			55,125
Dated October 3, 2019		5,350			5,350
Dated October 25, 2019		6,825			6,825
Dated March 19, 2020		33,600
Dated March 25, 2020		33,600

Total convertible notes payable		1,317,720			1,308,092

Less: Unamortized debt discount		(12,350	)		-

Total convertible notes		1,305,370			1,308,092

Less: current portion of convertible notes		1,305,370			1,308,092
Long-term convertible notes	$	(0	)	$	(0	)

On March 18, 2020 the Company entered into a promissory note agreement with Adar Alef, LLC (“Adar”) for loans totaling $33,600. The consideration to the Company is $30,000 with $3,600 legal fees and OID. The note is convertible after 181 days at a (i) $0.0075 ceiling or (ii) 60% of the lowest trading price over the past twenty trading days prior to the conversion date.

On March 25, 2020 the Company entered into a promissory note agreement with LG Capital Funding, LLC (“LG”) for loans totaling $33,600. The note is convertible after 181 days at a (i) $0.0075 ceiling or (ii) 60% of the lowest trading price over the past twenty trading days prior to the conversion date.

During the three months ended March 31, 2020 and 2019, the Company recognized interest expense of $135,799 and $352,330, respectively, which represented the amortization of original issue discounts and debt discounts. As of December 31, 2019, all original issue and debt discounts pertaining to outstanding convertible notes were fully amortized. As of March 31, 2020, the unamortized debt discount of $12,350 are related to the new convertible notes issued during the first quarter of 2020.

During the three months ended March 31, 2020, the Company converted principal and unpaid accrued interest totaling $66,101 into an aggregate of 133,414,631 shares of common stock.

The Company has twenty-one (21) outstanding convertible notes as of March 31, 2020 with a total outstanding principal of $1,317,719. The 2019 notes mature from January 2020 to May 2020. The 2020 notes mature in September 2020. These notes carry an interest rate ranging between 8% and 12% per annum. The notes carry an original issue discounts ranging between 10% to 25% of the face value of each note.

The notes may be converted into shares of the Company’s common stock at any time on or after the occurrence of an event of default. The conversion prices of the notes include the conversion price shall be the 60% multiplied by the lowest trading price during the 30 trading days period ending, in holder’s sole discretion on each conversion, on either (i) the last complete trading day prior to the conversion date or (ii) the conversion date.

For some notes, the Company agreed to pay a one-time interest charge of 9% of the principal amount for each note. The notes may be converted at specified times per the respective agreements. The conversion price shall be 75% multiplied by the lowest trading price during the 10 prior trading days period ending on either (i) the last complete trading day prior to conversion date or (ii) the conversion date.

All terms of the notes, including but not limited to interest rate, prepayment terms, conversion discount or look-back period will be adjusted downward if the Company offers more favorable terms to another party, while this note is in effect.

The notes may be redeemed by the Company at rates ranging from 105% to 130% depending on the redemption date provided that no redemption is allowed after the 180^thday.

The following table is a rollforward of activity, by each noteholder, for the three months ended March 31, 2020:

Loan Holder

Principal Amount

Date

Maturity

OID & Financing Costs

Balance at
12 31 17

Additions

Payments

Conversion

Balance at
12 31 18

Additions

Payments

Conversion

Balance at
12 31 19

Additions

Payments Conversion Balance at
3 31 20

1	SBI Investment	$	200,000	9/27/2017	3/15/2018		200,000	75,000	(25,000	)	(93,150	)	156,850	-	-		(6,697	)	150,153			$ (12,062.55 ) 138,090
1	SBI Investment	$	187,500	11/14/2017	5/14/2018		187,500	-	-		-		187,500	-	-		-		187,500			187,500
2	LG Capital Funding, LLC	$	185,292	12/8/2017	6/8/2018	17,646	92,646	92,646	-		(133,032	)	52,260	-	-		(52,260	)	0			0
3	Cerberus Finance Group Ltd	$	185,292	12/12/2017	6/8/2018	17,646	92,646	92,646	(25,000	)	(53,183	)	107,109	-	(99,684	)	(7,425	)	-			-
4	Eagle Equities LLC	$	50,000	3/15/2018	3/15/2019	2,500	-	50,000	-		(50,000	)	-	-	-		-		-			-
5	Adar Capital LLC	$	50,000	3/15/2018	3/15/2019	2,500	-	50,000	-		(50,000	)	-	-	-		-		-			-
6	Bellridge Capital LP	$	60,000	5/17/2018	5/17/2019	10,000	-	60,000	-		(44,000	)	16,000	-	-		(16,000	)	-			-
7	Auctus	$	100,000	4/27/2018	4/25/2019	10,000	-	100,000	-		(59,877	)	40,123	-	-		-		40,123			40,123
8	Bellridge Capital LP	$	60,000	9/17/2018	3/15/2019	10,000	-	60,000	-		-		60,000	-	-		(3,286	)	56,714			56,714
9	Eagles Equity	$	50,000	9/21/2018	3/15/2019	2,500	-	50,000	-		(50,000	)	-	-	-		-		-			-
10	Adar Bay	$	50,000	10/4/2018	10/4/2018	2,500	-	50,000	-		(50,000	)	-	-	-		-		-			-
11	Bellridge Capital LP	$	60,000	10/18/2018	10/18/2019	10,000	-	60,000	-		-		60,000	-	-		-		60,000			60,000
12	Adar Alef Omnibus	$	64,500	11/28/2018	11/29/2019	4,125	-	64,500	-		-		64,500	-	-		(39,057	)	25,443			$ (25,410.13 ) 33
13	Adar Alef Debt Purchase	$	25,000	11/28/2018	11/29/2019		-	25,000	-		(25,000	)	-	-	-		-		-			-
14	LG Capital Omnibus	$	64,500	11/28/2018	11/29/2019	4,125	-	64,500	-		-		64,500	-	-		(6,630	)	57,870			$ (20,100.00 ) 37,770
15	LG Capital Debt Purchase	$	25,000	11/29/2018	11/29/2018		-	25,000	-		-		25,000	-	-		-		25,000			25,000
16	LG Capital Omnibus	$	105,000	12/13/2018	12/14/2019	5,000	-	105,000	-		-		105,000	-	-		-		105,000			105,000
17	LG Capital Omnibus	$	115,000	1/15/2019	1/15/2020	5,750	-	-	-		-			115,000	-		-		115,000			115,000
18	Adar Alef Omnibus	$	132,720	2/7/2019	2/7/2020	6,000	-	-	-		-			132,720	-		-		132,720			132,720
19	Adar Alef Debt Note	$	108,055	2/7/2019	2/7/2019	8,371	-	-	-		-			108,055	-		(108,056	)	-			-
20	Adar Alef Omnibus	$	64,500	2/19/2019	2/19/2020	4,125	-	-	-		-			64,500	-		-		64,500			64,500
21	LG Capital Omnibus	$	55,125	2/19/2019	2/19/2020	2,500	-	-	-		-			55,125	-		-		55,125			55,125
22	LG Capital Omnibus	$	55,125	3/13/2019	3/13/2020	2,500	-	-	-		-			55,125	-		-		55,125			55,125
23	Adar Alef Omnibus #2 Back End	$	26,500	5/14/2019	2/20/2020	1,500	-	-	-		-			26,500	-		-		26,500			26,500
24	LG Capital Omnibus #5	$	27,825	5/17/2019	5/15/2020	2,825	-	-	-		-			27,825	-		-		27,825			27,825
25	Adar Alef Omnibus #2 BE 3rd Tranche	$	56,194	8/1/2019	2/7/2020	50,000	-	-	-		-			56,194	-		-		56,194			56,194
26	LG Capital Omnibus #7	$	55,125	8/6/2019	2/7/2020	50,000	-	-	-		-			55,125	-		-		55,125			55,125
27	Adar Alef Omnibus #2 BE 4th Tranche	$	5,350	10/3/2019	2/7/2020	5,000	-	-	-		-			5,350	-		-		5,350			5,350
28	LG Capital Omnibus #8	$	6,825	10/25/2019	10/26/2020	5,000	-	-	-		-			6,825	-		-		6,825			6,825
29	Adar Alef Omnibus # 5th Tranche	$	33,600	3/19/2020	9/19/2020	3,600														$	33,600	33,600
30	LG Capital Funding, LLC	$	33,600	3/25/2020	9/20/2020	3,600														$	33,600	33,600

	Convertible note total					214,021	572,792	1,024,292	(50,000	)	(608,242	)	938,842	708,344	(99,684	)	(239,411	)	1,308,092		67,200	- (57,573 ) 1,317,719

As of December 31, 2019, several notes were past maturity, in default and due on demand. As such, the Company accelerated the amortization of the remaining unamortized original issue and debt discounts. As of March 31, 2020 the notes remained in default and due on demand.

The Company calculated a default reserve which represents the additional amount the Company would have to pay to all note holders in the event of the default. Management calculated the amount utilizing additional premiums, accrued interest and default accrued interest as per the agreements. As of March 31, 2020 and December 31, 2019, the Company recorded a general default reserve of $1,895,318 and $1,769,791, respectively.