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CONVERTIBLE BONDS PAYABLE

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

CONVERTIBLE BONDS PAYABLE

14. CONVERTIBLE BONDS PAYABLE

Securities purchase agreement and related convertible note and warrants

On July 8 2020, the Company issued 12,356,061 shares of its common stock to Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B and Hudson Bay Master Fund Ltd. (the “Buyers”) pursuant to a series of Exchange Agreements entered into with the Buyers. Each Buyer shall pay approximately $858.37 for each $1,000 of principal amount of Notes and related Warrants to be purchased by such Buyer at the Closing.

On October 15, 2020, the Company and Buyers agreed to exchange the Note in the original principal amount of $271,833.34 for the delivery of 382,058 shares of the Company’s Common Stock.

On October 30, 2020, the Company and Buyers agreed to exchange the Note in the original principal amount of $271,833.34 for the delivery of 388,556 shares of the Company’s Common Stock.

On November 30, 2020, the Company and Buyers agreed to exchange the Note in the original principal amount of $407,749.93 for the delivery of 602,025 shares of the Company’s Common Stock.

On December 31, 2020, the Company and Buyers agreed to exchange the Note in the original principal amount of $1,087,333.36 for the delivery of 1,605,396 shares of the Company’s Common Stock.

On December 22, 2020, the Company and Buyer agreed to exchange the Note in the original principal amount of $135,916.67 for the delivery of 184,545 shares of the Company’s Common Stock.

At December 31, 2020 and 2019, convertible debt consisted of the following:

		December 31,				December 31,
		2020				2019
Principal		$	739,189				-
Unamortized discount			-				-
Convertible dete, net		$	739,189				-

Warrants

On the same date, the Company closed a private placement of securities and issued Warrant to purchase 784,000 shares of Common Stock at an exercise price of $1.25 per share. Since these Warrants were issued with a Convertible Note, the proceeds of the Note were allocated to the instruments based on relative fair value as the warrants did not contain any features requiring liability treatment and therefore were classified as equity. The fair value of the warrants was estimated using the Black-Sholes valuation model with the following assumption.

Warrant activities for the year ended December 31, 2020 are summarized as follows:

		2020
Divident rate			-
Term (in years)			1.29	years
Volatility			98	%
Risk – free interest rate			15	%

														Weighted
														Average
		Averagate								Weighted				Remaining
		Intrinsic				Number of				Average				Contractual
		Value				Warrants				Exercise Price				Term(Years)
Balance Outstanding December 31, 2019			-				-				-				-
Granted			784,000			$	1.25				1.29				-
Cancelled			-				-				-				-
Balance Outstanding December 31, 2020			784,000			$	1.25				1.29				-

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- References

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- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

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