Notes Payable and Long Term Loan
|9 Months Ended|
Sep. 30, 2017
|Debt Disclosure [Abstract]|
|Notes Payable and Long Term Loan||
Note 3 - Notes Payable and Long Term Loan
During the nine months ended September 30, 2017, the Company issued eleven Convertible Notes (“Variable Notes”) totaling $1,667,500 with original terms ranging from six months to one year with interest rates equal to 10%, and a variable conversion rate with a discount 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 nine months ended September 30, 2017, an investor in the Company’s Variable Notes purchased from another holder of the Company’s Variable Notes an aggregate of $920,000 principal and $39,570 of accrued interest with terms that extended the maturities to one-year and increased the interest rate from 6% to 10% and contains a prepayment option, which enables the Company to prepay the note subsequent to issuance. As a result of this modification, the Company recognized a gain on debt extinguishment of $2,358,919 during the nine months ended September 30, 2017.
During the nine months ended September 30, 2017, the Company entered into a settlement agreement with a holder of two $33,000 convertible promissory notes totaling $66,000 in principal and $11,400 accrued interest wherein the Company repaid in full the principal and accrued interest balance with a payment of $90,000. In accordance with FASB ASC 470-50, Debt modifications and Extinguishments, the Company recognized a $58,115 gain on extinguishment of debt in connection with this settlement agreement.
The gross amount of all Variable Notes outstanding at September 30, 2017 is $2,495,315.
Notes payable to a related party in the aggregate amount of $170,000 were extended.
As of September 30, 2017, other notes payable outstanding totaled $974,903, all of which are past maturity.
The maturity dates on the notes payable are as follows:
Long Term Loan
The Company has financed the purchase of an automobile. The maturity dates on the loan are as follows:
The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.
Reference 1: http://www.xbrl.org/2003/role/presentationRef