Plenty of notes here,and under a penny QB wont last if it stays there
NOTE 6 – CONVERTIBLE DEBT (CONTINUED)
On March 7, 2017, the Company executed three convertible promissory notes totaling $90,000. The loans bear interest at 10% per annum and are due on March 9, 2018. The lender has the right to convert the principal amount and unpaid interest of the loan at a rate of the lower of $0.03 per share or 55% of the lowest trading price during the prior 20 days of conversion. During the nine months ended September 30, 2017 a portion of the principal totaling $20,000 was converted into 4,000,000 shares of common stock.
On March 8, 2017, the Company executed two convertible promissory notes totaling $60,000. The loans bear interest at 10% per annum and are due on March 9, 2018. The lender has the right to convert the principal amount and unpaid interest of the loan at a rate of the lower of $0.03 per share or 55% of the lowest trading price during the prior 20 days of conversion.
On March 9, 2017, the Company executed a convertible promissory note for $66,000. The loan bears interest at 12% per annum and is due on December 1, 2017. The lender has the right to convert the principal amount and unpaid interest of the loan at a rate of 50% of the lowest trading price during the prior 20 days of conversion. During the nine months ended September 30, 2017 a portion of the principal totaling $38,400 and a portion of interest totaling $2,530 was converted into 11,135,581 shares of common stock.
On March 14, 2017, the Company executed a convertible promissory note for $15,000. The loan bears interest at 10% per annum and is due on March 9, 2018. The lender has the right to convert the principal amount and unpaid interest of the loan at a rate of the lower of $0.03 per share or 55% of the lowest trading price during the prior 20 days of conversion.
On April 10, 2017, the Company executed a convertible promissory note for $30,000. The loan bears interest at 10% per annum and is due on April 10, 2018. The lender has the right to convert the principal amount and unpaid interest of the loan at a rate of the lower of $0.03 per share or 55% of the lowest trading price during the prior 20 days of conversion.
On August 22, 2016, the Company executed a convertible promissory note for up to $300,000 and has received a total of $30,000 with an original issue discount of $5,000 in the first tranche. The loan bears interest at 8% per annum. The first tranche is due on August 22, 2017. In the event of default, the interest rate increases to 22% per annum. The lender has the right to convert the principal amount and unpaid interest of the loan at a rate of 56% of the lowest trading price during the prior 20 days of conversion. However, if the stock price is below $0.10 then the loan can convert at a rate of 46% of the lowest trading price during the prior 20 days of conversion. Additionally, the Company issued 60,000 warrants as part the convertible promissory note. The warrants have an exercise price of $0.50 and can be exercised for 5 years. The fair value of the warrants were recorded as a debt discount and amortized over one year. On October 27, 2016, the Company received the second tranche of $30,000 with an original issue discount of $5,000. The second tranche is due on October 27, 2017. On April 20, 2017, the Company received the third tranche of $45,000 with an original issue discount of $10,750. The third tranche is due on April 20, 2018. During the nine months ended September 30, 2017, the lender converted $30,000 of principal and $1,819 of interest into 6,253,733 shares of common stock. As of September 30, 2017, the principal balance owed is $45,000.
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Table of Contents
GREY CLOAK TECH INC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
(unaudited)
NOTE 6 – CONVERTIBLE DEBT (CONTINUED)
On May 12, 2017, the Company executed a convertible promissory note for $60,000 with an OID of $3,000. The loan bears interest at 12% per annum and is due on February 20, 2018. In the event of default, the interest rate increases to 22% per annum. The lender has the right to convert the principal amount and unpaid interest of the loan beginning 180 days after original loan date at a rate of 61% of the average of the two lowest trading price during the prior 15 days of conversion.
On June 22, 2017, the Company executed a convertible promissory note for $33,000 with an OID of $3,000. The loan bears interest at 12% per annum and is due on February 20, 2018. In the event of default, the interest rate increases to 22% per annum. The lender has the right to convert the principal amount and unpaid interest of the loan beginning 180 days after original loan date at a rate of 61% of the average of the two lowest trading price during the prior 15 days of conversion.
On July 5, 2017, the Company executed a convertible promissory note for $50,000 with an OID of $7,500. The loan bears interest at 9% per annum and is due on June 26, 2018. The lender has the right to convert the principal amount and unpaid interest of the loan at a rate of 58% of the average of the lowest trading price during the prior 15 days of conversion. This loan has prepayment penalties.
On September 27, 2017, the Company executed a convertible promissory note for $53,000 with an OID of $3,000. The loan bears interest at 12% per annum and is due on June 30, 2018. In the event of default, the interest rate increases to 22% per annum. The lender has the right to convert the principal amount and unpaid interest of the loan beginning 180 days after original loan date at a rate of 61% of the average of the two lowest trading price during the prior 15 days of conversion.
During the nine months ended September 30, 2017, the Company recorded interest expense of $50,513 and amortization of debt discount of $434,542.
The Company has determined that the conversion feature embedded in the notes referred to above that contain a potential variable conversion amount constitutes a derivative which has been bifurcated from the note and recorded as a derivative liability, with a corresponding discount recorded to the associated debt.