Quarterly report pursuant to Section 13 or 15(d)

Notes Payable and Long Term Loan

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Notes Payable and Long Term Loan
6 Months Ended
Jun. 30, 2017
Debt Disclosure [Abstract]  
Notes Payable and Long Term Loan

Note 3 - Notes Payable and Long Term Loan

 

Notes Payable

 

During the six months ended June 30, 2017, the Company issued six Convertible Notes (“Variable Notes”) totaling $928,750 with original terms ranging from eight months to one year with interest rates equal to 10%, and a variable conversion rate with a discounts of 30% of the Company’s common stock based on the terms included in the Variable Notes. The Variable Notes contain a prepayment option, which enables the Company to prepay the note subsequent to issuance at a premium of 125%.

 

During the six months ended June 30, 2017, an investor in the Company’s Variable Notes purchased from another holder of the Company’s Variable Notes an aggregate of $720,000 principal and $33,028 of accrued interest with terms that extended the maturities to a one-year and increased the interest rate from 6% to 10%. As a result of this modification, the Company recognized a gain on debt extinguishment of $2,556,653 during the six months ended June 30, 2017.

 

The gross amount of all Variable Notes outstanding at June 30, 2017 is $2,150,278. Of this amount outstanding, $66,000 of the Variable Debentures were past maturity.

 

As of June 30, 2017, other notes payable outstanding totaled $1,144,903, all of which are past maturity.

 

    June 30, 2017     December 31, 2016  
             
Notes payable at beginning of period   $ 3,193,956     $ 2,333,751  
Notes payable issued     928,750       1,776,895  
Default interest added to note payable     -       62,500  
Accrued interest payable added to note payable     33,028       -  
Settlements on note payable     -       (55,000 )
Repayments of notes payable in cash     (30,000 )     (241,500 )
Less amounts converted to stock     (830,553 )     (682,690 )
Notes payable at end of period     3,295,181       3,193,956  
Less debt discount     (925,970 )     (1,145,849 )
    $ 2,369,211     $ 2,048,107  
                 
Notes payable issued to related parties   $ 170,000     $ 170,000  
Notes payable issued to non-related parties   $ 2,199,211     $ 1,878,107  

 

The maturity dates on the notes payable are as follows:

 

    Notes to        
12 months ending,   Related parties     Non-related parties     Total  
                   
June 30, 2018   $ 170,000     $ 3,125,181     $ 3,295,181  
    $ 170,000     $ 3,125,181     $ 3,295,181  

 

Long Term Loan

 

The Company has financed the purchase of an automobile. The maturity dates on the loan are as follows:

 

Twelve months ending,      
June 30, 2018   $ 10,465  
    $ 10,465  
         
Current portion   $ 10,465  
Long term portion   $ -