Funny how no one is talking about this part of the Financials?
NOTE 5. NOTES PAYABLE
During the period ended March 31, 2015 we accrued $54,000 of penalty expense, and $16,917 accretion of debt discount related to financing costs on debt issued during 2014. These amounts are recorded as part of our interest expense reported for the three months then ended. As of March 31, 2015, our outstanding notes payable balance was $323,333 and $35,000 in convertible note agreements net of debt discount, of which $48,085 are in default as of March 31, 2015. The individual notes in default carry daily interest penalties between $100 and $500. Balance of notes payable at December 31, 2015 totaled $266,336 and $67,500 of convertible debt, net of discount, respectively.
Transactions relating to short-term financing are as followings:
On February 9, 2015, the Company entered into an unsecured short-term commercial financing agreement for furthering diamond parcel shipments in the amount of $30,000 plus 10% interest and 10% share of net profit from the shipment due upon receipt of payment by the Company from our Foreign buyer.
On February 26, 2015, the Company entered into a short-term commercial financing agreement for the furtherance of diamond parcel shipments in the amount of $10,080 due and payable in one year.
On March 26, 2015, the Company entered into an unsecured short-term commercial financing agreement for the furtherance of work with Global Builders Group on housing projects within Africa in the amount of $25,000 due and payable in 180 days with interest of 15% annualized.
During the three months ended March 31, 2015, the Company recognized $16,917 of interest expense related accretion of debt discount to the short-term commercial financing agreements issued in 2014.
Transactions related to convertible debt are as follows:
In January 2015, the unpaid and unconverted principal balance due under the July 2014 convertible note of $32,500 was converted by the note holder into 56,333,333 common shares of the company. In conjunction with conversion of the note, the Company recognized $1,296 of interest expense related to the amortization of the debt discount, $12,180 of interest expense on the related conversion of the note from fair value of common shares issued to the principal amount of debt relieved. The Company recognized a loss on the change in the value of the derivative related to the convertible note from the date the note was convertible till the date of conversion of $131,393.
