Annual report pursuant to Section 13 and 15(d)

Convertible Notes Payable

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Convertible Notes Payable
12 Months Ended
Dec. 31, 2016
Debt Disclosure [Abstract]  
Convertible Notes Payable

NOTE 9 – CONVERTIBLE NOTES PAYABLE

 

On December 28, 2015, the Company entered into separate note purchase agreements with accredited investors relating to the issuance and sale of an aggregate of $605,000 in principal amount of original issue discount convertible notes for an aggregate purchase price of $550,001.

 

The Notes mature on December 28, 2017. The Company must repay 1/24th or $25,208 of the principal of the Notes each month commencing January 18, 2016. The Notes do not bear interest except that all overdue and unpaid principal bears interest at a rate equal to the lesser of 18% per year or the maximum rate permitted by applicable law. The Notes are convertible into 550,000 shares of common stock subject to adjustment for stock splits, stock dividends, recapitalizations, combinations, subdivisions or other similar events; provided however, that the principal and interest, if any, on the Notes may not be converted to the extent that, as a result of such conversion, the holder would beneficially own more than 4.99% of the number of shares of common stock. Subject to certain specified exceptions, in the event the Company issues securities at a per share price less than the conversion price for a period of one year from the closing, each holder will be entitled to receive from the Company additional shares of common stock such that the holder shall hold that number of conversion shares, in total, had such holder purchased the Notes with a conversion price equal to the lower price issuance.

 

Total amortization of debt discounts for the convertible debentures amounted to $0 and $2,486 for the years ended December 31, 2016 and 2015, respectively, and was included as amortization.

 

At December 31, 2016 and 2015, outstanding balance of convertible debentures was $0 and $605,000, respectively.