Here's an example of using chatGPT to interpret a convertible note in the filings of $AIAD:
Simplify the following:
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Text to be simplified:
On April 20, 2018, the Company issued a convertible promissory note (the “April 2018 Note”) in the amount of up to $200,000, at which time we received an initial advance of $200,000 to cover operational expenses. The terms of the April 2018 Note, as amended, allowed the lender, a related party, to convert all or part of the outstanding balance plus accrued interest, at any time after the effective date, at a conversion price of $0.01 per share. The April 2018 Note bore interest at a rate of 5% per year and had a maturity date of April 20, 2021. During the year ended December 31, 2018, we determined that the April 2018 Note offered a conversion price which was lower than the market price, and therefore included a beneficial conversion feature. The Company included the amortization of this beneficial conversion feature in interest expense in the amount of $139,726 during the year ended December 31, 2018, and $60,274 during the year ended December 31, 2019. During the year ended December 31, 2019, we determined that the conversion feature of the April 2018 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the April 2018 Note. The fair value of the April 2018 Notes has been determined by using the Binomial lattice formula from the effective date of the note. On June 23, 2020, the lender converted $38,894 of the outstanding balance and accrued interest of $4,236 into 4,313,014 shares of common stock. On January 13, 2021, the lender converted $161,106 of the outstanding balance and accrued interest of $22,025 into 18,313,074 shares of common stock. The balance of the April 2018 Note, as of September 30, 2022 and 2021 was zero. This note was converted within the terms of the agreement.
Response from chatGPT:
The company issued a convertible promissory note on April 20, 2018 for $200,000 to cover operational expenses. The note had a conversion price of $0.01 per share, a 5% interest rate per year, and a maturity date of April 20, 2021. The company determined that the note had a beneficial conversion feature in 2018 and included its amortization in interest expense ($139,726 in 2018 and $60,274 in 2019). The company determined the note was a derivative due to reset conversion features in 2019. The fair value was determined using the Binomial lattice formula. On June 23, 2020, the lender converted $38,894 of the outstanding balance and interest into 4,313,014 shares of common stock. On January 13, 2021, the lender converted $161,106 of the outstanding balance and interest into 18,313,074 shares of common stock. The note was fully converted within the agreement and had a zero balance as of September 30, 2022 and 2021.
Question:
Calculate the price per share of those conversions.
Answer:
The price per share of the conversions can be calculated as follows:
June 23, 2020 conversion:
Price = (Outstanding balance + Accrued interest) / Number of shares = ($38,894 + $4,236) / 4,313,014 = $0.009 per share
January 13, 2021 conversion:
Price = (Outstanding balance + Accrued interest) / Number of shares = ($161,106 + $22,025) / 18,313,074 = $0.009 per share
In both conversions, the price per share was $0.009.
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