Quarterly report pursuant to Section 13 or 15(d)

Notes Payable

v3.20.1
Notes Payable
3 Months Ended
Mar. 31, 2020
Debt Disclosure [Abstract]  
Notes Payable

Note 5 - Notes Payable

 

Notes Payable

 

During the three months ended March 31, 2020, the Company issued four fixed rate promissory notes totaling $275,000 for funding of $236,500 with original terms of six to twelve months and interest rates of 8%. If the notes are not paid at maturity, two of the four notes will bear a 22% default interest rate and the other two will bear a 24% default interest rate. As of March 31, 2020, all of the new notes remain outstanding and are not in default

 

During the three months ended March 31, 2020, the Company converted two previous fixed rate notes into variable rate notes in an accumulated amount of $558,250 as a result of the notes not being paid at maturity and, therefore, triggering a conditional conversion option for the noteholder. The conversion rate is 70% and 75% of the Company’s common stock based on the terms included in the variable rate notes.

 

The gross amount of all convertible notes with variable conversion rates outstanding at March 31, 2020 is $4,718,976 of which $2,333,576 is past maturity.

 

Notes payable to a related party in the aggregate amount of $157,000 were outstanding at March 31, 2020. The notes bear interest at 12% per annum. During the three months ended March 31, 2020, the Company paid $8,000 principal to this related party.

 

During October 2019, the Company entered into an agreement to receive a license, data delivery and ancillary marketing services in exchange for a note of $352,500 at 8% annual interest and a conversion rate of the lower of $9.00 or 82% of the lowest bid price during the five trading days prior to conversion. The note will become effective when the license period and the services start and the data is delivered.

 

As of March 31, 2020, fixed rate notes payable outstanding totaled $1,335,903, of which $724,903 is past maturity.

 

    March 31, 2020     December 31, 2019  
             
Notes payable at beginning of period   $ 6,874,795     $ 8,158,198  
Notes payable issued     236,500       2,101,000  
Loan fees added to note payable     38,500       91,250  
Settlements on note payable     -       -  
Repayments of notes payable in cash     (8,000 )     (235,000 )
Less amounts converted to redeemable notes     -       (67,500 )
Less amounts converted to stock     (929,916 )     (3,173,153 )
Notes payable at end of period     6,211,879       6,874,795  
Less debt discount     (31,510 )     (12,649 )
    $ 6,180,369     $ 6,862,146  
                 
Notes payable issued to related parties   $ 157,000     $ 165,000  
Notes payable issued to non-related party   $ 6,023,369     $ 6,697,146  

 

The maturity dates on the notes-payable are as follows:

 

    Notes to        
12 months ending,   Related parties     Non-related
parties
    Total  
                   
Past due   $       $ 5,443,879     $ 5,443,879  
March 31, 2021             -       611,000       611,000  
    $       $ 6,054,879     $ 6,054,879