THIS IS HOW!
CURRENT DILUTION
GPLVenturesLLC;
Principal:Alexander Dillon
MATURED 9/19/20
$51,479
GPLVenturesLLC;
Principal:Alexander Dillon
MATURED 10/3/20
$51,598
GPLVenturesLLC;
Principal:Alexander Dillon
MATURED 10/21/20
$51,206
GPLVenturesLLC;
Principal:Alexander Dillon
MATURED 11/25/20
$51,206
NOTE MATURING SOON
GPLVenturesLLC;
Principal:Alexander Dillon
MATURES 12/09/20
$51,206
GOING CONCERN
As shown in the accompanying financial statements, the Company has insufficient cash on hand, a working capital
deficit of $8,024,418 and incurred net losses from operations resulting in an accumulated deficit of $24,775,894, and
used $248,510 of cash from operations during the nine months ended September 30, 2020. These factors raise
substantial doubt about the Company’s ability to continue as a going concern. The Company is currently seeking
additional sources of capital to fund short term operations. The Company, however, is dependent upon its ability to
secure equity and/or debt financing and there are no assurances that the Company will be successful; therefore, without
sufficient financing it would be unlikely for the Company to continue as a going concern.
TALK ABOUT A DILUTED PIG, JUST DOWNLOAD THE FILINGS AND READ UP.
Note 6 – Convertible Notes Payable
Convertible notes payable consists of the following at September 30, 2020 and December 31, 2019, respectively:
September 30, December 31,
2020 2019
On October 27, 2017, we entered into a Convertible Debenture with an
individual investor (“Seventh Goodkin Note”). The Note bears interest at
10%, with a maturity date of Oct. 27, 2018, is convertible at $0.50 per
share. This note is in default.
$ 10,000 $ 10,000
On August 7, 2017, we entered into a Convertible Debenture with an
individual investor (“Sixth Goodkin Note”). The Note bears interest at
10%, with a maturity date of August 7, 2018, is convertible at $127.50 per
share. During the three months ended March 31, 2020, the note was
converted in full into 181,818 shares of common stock. The Company
recognized a loss of $86,322 on this conversion.
- 10,000
On July 14, 2017, we entered into a Convertible Debenture with an
individual investor (“Fifth Goodkin Note”). The Note bears interest at
10%, with a maturity date of July 14, 2018, is convertible at $191.25 per
share. During the three months ended March 31, 2020, the note was
converted in full into 136,364 shares of common stock. The Company
recognized a loss of $64,752 on this conversion.
- 7,500
11
On September 20, 2017, we entered into a Convertible Debenture with an
individual investor (“First Graham Note”). The Note bears interest at 10%,
with a maturity date of September 20, 2019, is convertible at 60% of the
closing traded price at time of Notice of Conversion, or $5, whichever is
greater. The interest rate increases to 18% on default. This note is in
default.
2,400 2,400
On May 30, 2017, we entered into a Convertible Debenture with GPL
Ventures, LLC (“Second GPL Note”). The Note bears interest at 5%, with
a maturity date of May 30, 2018, and is convertible at the greater of a)
$127.50 or b) 50% of the lowest traded price over the twenty (20) trading
days immediately preceding the conversion notice. The note carries
liquidated damages of $500 per day in the event of default. During the
three months ended March 31, 2020, the note holder converted $16,120 of
penalties into 1,232,000 shares of common stock. A loss of $492,084 was
recognized on these conversions based on the fair value of the shares
issued. During the three months ended September 30, 2020, the note holder
converted $240 of penalties into 2,400,000 shares of common stock. A loss
of $422,708 was recognized on these conversions based on the fair value
of the shares issued. This note is in default.
8,702 8,702
On April 29, 2017, we entered into a Convertible Debenture with
Christopher Babinski (“First Babinski Note”). The Note bears interest at
10%, with a maturity date of April 29, 2018, and is convertible at the
greater of a) 50% of the current trading bid price at time of Notice of
Conversion or at a maximum of $12,750 (one cent) per share. 18% Default
Rate and 2M shares in the event of prepayment. This note is in default.
15,000 15,000
On May 22, 2015, we entered into a Convertible Debenture with Ray
Ciarello (“First Ciarello Note”). The Note bears interest at 8%, with a
maturity date of May 22, 2016, and is convertible at the lesser of a)
$12,750 or b) 50% of the lowest market value over the 25 trading days
preceding the conversion notice. The note is currently in default. On April
7, 2017, a total of $5,600, consisting of $5,000 of principal and $600 of
interest, was converted into 439,216 shares of common stock. This note is
in default.
2,500 2,500
The company has several notes that are in default. These notes are
convertible at 50% of the lowest per share market value over the fifteen
(15) trading days immediately preceding the conversion notice. During the
three months ended March 31, 2020, a note payable of $10,000 and
accrued interest of $3,135 were converted in full to 238,818 shares of
common stock in accordance with the terms of the agreement.
38,000 48,000
The company has several notes that are in default as of March 31, 2020.
These notes are convertible at 50% of the lowest per share market value
over the twenty (20) trading days immediately preceding the conversion
notice.
15,000 15,000
The Company has several notes that are in default as, including four
separate 2018 notes from Adam Goodkin as follows: note dated March 15,
2018 for $11,500 maturing March 15, 2020; note dated March 23, 2018
for $4,500 maturing March 23, 2020; note dated April 2, 2018 for $4,500
maturing April 2, 2020; note dated April 9, 2018 for $4,500 maturing
April 9, 2020. These notes are convertible at 50% of the lowest traded
price over the 10 trading days preceding the conversion notice. During the
three months ended September 30, 2020, Adam Goodkin converted
$25,000 of principal and $4,096 of accrued interest into 317,123 shares of
41,636 41,636
12
common stock from the 2018 notes, and the Company recognized a loss
of $31,126 on the conversions.
On September 12, 2018, the Company entered into a convertible note
payable with GPL Ventures for proceeds of up to $200,000 (the "Third
GPL Note"), bearing interest at 5%. In March 2020, this agreement was
amended to adjust the conversion price to the lesser of $0.05 or 50% of the
lowest traded price over the twenty (20) trading days immediately
preceding the conversion. This note is in default. During the three months
ended September 30, 2020, the holder converted $40,932 of accrued
interest and $15,068 of penalties into 1,600,000 shares of common stock
in accordance with the terms of the agreement.
200,000 200,000
On November 2, 2018, the Company entered into a convertible note
payable with GPL Ventures for proceeds of up to $300,000 (the "Fourth
GPL Note"), bearing interest at 10%. In March 2020, this agreement was
amended to adjust the conversion price to the lesser of $0.05 or 50% of the
lowest traded price over the twenty (20) trading days immediately
preceding the conversion. This note is in default.
300,000 300,000
The company has several notes that are in default. These notes are
convertible at the greater of a) $127.5 or b) 50% of the lowest bid price
over the ten (10) trading days immediately preceding the conversion notice
or the closing bid price on the date immediately preceding the notice.
35,500 35,500
The company has several notes that are in default. These notes are
convertible at the lesser of a) $12,750 or b) 50% of the closing bid price
on the date immediately preceding the conversion notice.
30,750 30,750
The company has various convertible notes that are in default. These notes
are convertible at the lesser of a) $12,750 or b) 50% of the lowest bid price
over the fifteen (15) trading days immediately preceding the conversion
notice.
313,443 343,643
The company has several notes that are in default. These notes are
convertible at the lesser of a) $12,750 or b) 60% of the current bid price at
time of notice, but not less than $1,275 per share or more than $12,750/sh.
70,750 70,750
On January 18, 2019, we entered into a Convertible Debenture with GPL
Ventures, LLC (“Fifth GPL Note”). The Note bears interest at 10%, with
a maturity date of January 18, 2020. In March 2020, this agreement was
amended to adjust the conversion price to the lesser of $0.05 or 50% of the
lowest traded price over the twenty (20) trading days immediately
preceding the conversion.
200,000 200,000
On February 6, 2019, we entered into a Convertible Debenture with GPL
Ventures, LLC (“Sixth GPL Note”). The Note bears interest at 10%, with
a maturity date of February 6, 2020. In March 2020, this agreement was
amended to adjust the conversion price to the lesser of $0.05 or 50% of the
lowest traded price over the twenty (20) trading days immediately
preceding the conversion. The Company is in default of this agreement as
of March 31, 2020.
500,000 500,000
13
On June 11, 2019, we entered into a Convertible Debenture with GPL
Ventures, LLC (“Seventh GPL Note”). The Note bears interest at 10%,
with a maturity date of June 11, 2020. In March 2020, this agreement was
amended to adjust the conversion price to the lesser of $0.05 or 50% of the
lowest traded price over the twenty (20) trading days immediately
preceding the conversion, and to allow the conversion price to be adjusted
for the reverse stock split.
585,000 360,000
Debt in default 2,368,682 1,141,381
Debt not in default - 1,060,000
Total convertible notes payable 2,368,682 2,201,381
Less: unamortized debt discounts - (298,554)
Convertible notes payable, net of discounts $ 2,368,682 $ 1,923,713
On March 20, 2020, the GPL convertible notes payable entered into in September 2018, November 2018, January
2019, February 2019 and June 2019 were amended to specify the conversion price as the lesser of $0.05 or 50% of
the lowest traded price for the 20 trading days preceding the conversion notice, and to allow for all the notes to be
adjusted for the reverse stock split. This amendment was determined to be an extinguishment of the original notes
payable. The Company recognized a loss on extinguishment of $197,954 on the transaction and recognized new debt
discount of $1,675,000 related to the derivative liabilities associated with the embedded conversion options on the
notes payable, of which $1,200,000 was immediately amortized to interest expense due to the notes payable being in
default at the time of amendment. The remaining $475,000 of discount was amortized through the maturity date of
the notes payable.
In accordance with ASC 470-20 Debt with Conversion and Other Options, the Company recorded total discounts of
$225,000 for the variable conversion features of the new convertible debts incurred during the three months ended
March 31, 2020. The discounts are being amortized to interest expense over the term of the debentures using the
effective interest method.
The shares of common stock issuable upon conversion of the Notes listed above will be restricted securities as defined
in Rule 144 promulgated under the Securities Act of 1933. The terms of each convertible note placed a “maximum
share amount” on the note holder that can be owned as a result of the conversions to common stock by the note holder
of 4.99% of the issued and outstanding shares of the Company. The GPL Ventures convertible notes allow for a note
holder to own a maximum of 9.99% of the issued and outstanding shares of the Company.
In accordance with ASC 815-15, the Company determined that the variable conversion feature and shares to be issued
represented embedded derivative features, and these are shown as derivative liabilities on the balance sheet. The
Company calculated the fair value of the compound embedded derivatives associated with the convertible debentures
utilizing a lattice model.
The Company recognized interest expense for the three months ended September 30, 2020 and 2019, respectively, as
follows:
September 30, September 30,
2020 2019
Interest on convertible notes $ 86,289 $ 44,841
Initial derivative liability in excess of principal of note 307,943 806,681
Amortization of debt discounts 110,000 338,982
Total interest expense $ 504,232 $ 1,190,504
The Company recognized interest expense for the nine months ended September 30, 2020 and 2019, respectively, as
follows:
14
September 30, September 30,
2020 2019
Interest on convertible notes $ 196,125 $ 114,150
Initial derivative liability in excess of principal of note 337,494 3,199,093
Amortization of debt discounts 1,979,715 777,359
Total interest expense $ 2,513,334 $ 4,090,602
