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BS note. .001 conversions?

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Werbe Member Level  Tuesday, 01/22/19 07:46:05 PM
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BS note. .001 conversions?

Convertible promissory notes were issued in the aggregate amount of $15,000 in October 2015 for the marketing and advertising services received in 2015. The term of the notes is due on demand. Simple interest of 1% is payable upon demand. Prior to maturity the notes may be converted for common stock at a conversion price of $0.001.

The Company evaluated the embedded conversion feature within the above convertible notes under ASC 815-15 and ASC 815-40 and determined the embedded conversion feature does not meet the definition of a derivative liability. Then the Company evaluated the conversion feature for a beneficial conversion feature at inception. The Company accounted for the intrinsic value of a Beneficial Conversion Feature inherent to the convertible note payable and a total debt discount of $15,000 was recorded.

As of September 30, 2018 and December 31, 2017, convertible notes had a balance of $5,500 and $7,500 respectively net of $0 unamortized debt discount.

During the nine months ended September 30, 2018, the holder of a convertible note converted $2,000 of the convertible note payable into 2,000,000 common shares.

On October 5, 2015 Greenkraft, Inc. (the Company) issued a convertible promissory note to Leon Vartanian (the Holder) in the amount of $15,000.00 for advertising and consulting services performed in 2015. The Note has a principal amount of $15,000.00, bears interest at a rate of 1% per annum, and has a voluntary conversion provision with a $0.001 conversion price (see Exhibit “1.02”).

On April 22, 2016, pursuant to Debt Purchase and Assignment Agreements, Leon Vartanian sold $4,000.00, a portion of his $15,000.00 convertible promissory note owed by Greenkraft, Inc., and transferred all conversion rights to non-affiliated third parties, leaving a remaining balance of $11,000.00 owed to Leon Vartanian by Greenkraft, Inc.

On April 22, 2016, pursuant to a Cancellation of Debt in Exchange for Stock Agreement, Leon Vartanian converted $3,500.00 of his remaining $11,000.00 outstanding debt into 3,500,000 shares of the Company’s common stock. Leon Vartanian currently has an outstanding balance of $7,500.00 still owed to him by Greenkraft, Inc. according to the terms of the convertible promissory note.

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