Kiwa Bio-Tech Products Group Corp (fka KWBT)

[jelaco]

Thanks Maz. So the notes on the last 10Q show as 2,352,977. Is this the note from Lavry's for 1,123,250 that you suspect is almost finished. Or are you referring to the total amount?

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(4) 12% convertible notes- Labrys



On February 27, 2019, the Company entered into a Convertible Note Agreement with Labrys Fund, LP (“Labrys”), for the principal amount of $1,365,000 (the “Note”). The Note carries an Original Issue Discount of $102,375, bears interest at the rate of 12% per annum and must be repaid on or before 180 calendar days after the funding date of the respective tranche. The amounts advanced under the Note may be converted by Labrys at any time after 180 days from the date of the Note into shares of Company common stock at a conversion price equal to 70% of the lowest trading price during the 20 trading day period prior to the date of any notice of conversion. As of September 30, 2019, the Company has received principal totaled $1,213,250 out of the $1,365,000 Convertible Note Agreement.



In addition, the Company issued 50,000 shares of the Company’s common stock with a fair value of $40,000, determined using the closing price of the issuance date of $0.80 per shares in connection with these issuances along with the original issue discount of $90,994 were recognized as discounts from the principal amount to be amortized over 180 days.



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Furthermore, the notes are convertible into shares of the common stock, at conversion price equal to 70% of the lowest trading price during the 20 trading day period prior to the date of any notice of conversion, which is lower than the price of the Company’s common stock on the date of issue. Therefore, the conversion feature embedded in the convertible note meet the definition of beneficial conversion feature (“BCF”). The Company evaluated the intrinsic value of the BCF as $1,071,506 at the issue date. The relative fair values of the BCF were recorded into additional paid in capital.



On August 28, 2019, the Company released 420,000 shares of the Company’s common stock with a fair value of $336,000 to Labrys as a penalty due to the Company was not able to repay the Note upon the maturity date. On September 15, 2019, the Company released 390,000 shares of the Company’s common stock with a fair value of $210,600 to Labrys as a penalty due to the Company was not able to repay the Note upon the maturity date. The fair value of the released shares are determined using the closing price of the date of Note default. The Company recorded $546,600 as financing expense during the three and nine months ended September 30, 2019.



On September 25, 2019, the Company repaid $90,000 to Labrys. On October 12, 2019, the Company repaid $202,631 to Labrys.



On October 17, 2019, the Company issued total 855,000 common shares to Labrys for the conversion of $62,044 interest of the convertible note. On October 31, 2019, the Company issued total 544,000 common shares to Labrys for the conversion of $19,256 interest of the convertible note. On November 7, 2019, the Company issued total 1,128,264 common shares to Labrys for the conversion of $5,873 and 12,828 interest of the convertible note.




For the three and nine months ended September 30, 2019, the Company recorded interest expense of $520,946 and $1,285,149 on the note, including the amortization of the debt discount of $480,997 and $1,202,500 resulting from the value of beneficial conversion feature, and the carrying value of the note as at September 30, 2019 was $1,123,250.