Notes about done? From yesterday's filing.....
Subsequent Events
From January 1, 2017 through February 17, 2017, $599,620 in June 8, 2016 promissory notes and related interest that were in default have been converted into 127,484,915 shares of common stock. The Company anticipates that additional outstanding debt will be converted into common shares from available authorized common stock.
Convertible Note
On June 8, 2016, the Company issued promissory notes for cash totaling $500,000. The principal amount due on the notes was $587,500. The notes are due October 8, 2016 and bear interest at 5% per annum. The agreements include warrants to purchase shares of common stock at 150% of the face value of the notes with an exercise price equal to the price per share of the Company’s next equity round of financing. In the event of default, the note holders may convert the notes and accrued interest into shares of common stock at a price equal to 60% of the volume weighted average price of the common stock during the 30 day consecutive trading day period immediately preceding the trading day that the Company receives a notice of conversion. If the closing bid price of the common stock is less than the above conversion price on the date following the conversion date on which the note holder actually receives common shares, then the conversion price shall be deemed to have been retroactively adjusted, as of the conversion date, to a price equal to 75% multiplied by the closing bid price of the common stock on the date the common stock is received, and the Company shall issue additional shares based upon the difference between common stock initially issued and the shares due based upon the revised number due. The warrants were valued at approximately $254,000 using the Black-Scholes-Merton option pricing model, and recorded as a discount to the note payable, along with the original issue discount. Because the number of warrants was fixed, such instruments were not considered derivative liabilities. The notes are secured by all of the stock, options, and warrants of the Company owned by Kevin Maloney and Gregory Hrncir. The Company is currently in default on payment of the promissory notes. The amount of principal and accrued interest increased by 25% under Rights and Remedies Upon an Event of Default in the promissory notes agreements. As of December 31, 2016, $8,066 in promissory notes have been converted to 210,791 shares of common stock. All remaining such notes and accrued interest were outstanding as of December 31, 2016. Due to the notes becoming in default in October 2016, thus triggering the conversion feature, and the price protection feature of the conversion feature, the embedded conversion features were considered to be derivative liabilities. As such, the Company recorded a derivative liability and additional debt discount of $390,774, based on the estimated fair value of the derivative liability on the debt default date. See Note 8 Subsequent Events regarding additional conversions to common stock.
