Quarterly report pursuant to Section 13 or 15(d)

Note 5 - Loan Payable, Related Parties

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Note 5 - Loan Payable, Related Parties
9 Months Ended
Sep. 30, 2019
Notes  
Note 5 - Loan Payable, Related Parties

NOTE 5 – LOAN PAYABLE, RELATED PARTIES

 

Christopher Maggiore

 

During the nine months ended September 30, 2018, Mr. Christopher Maggiore advanced $500,000 to the Company, and on May 1, 2018, he used $500,000 of his loan balance to fund the cash purchase of 5,000,000 units of the Company at $.10 per unit. Each unit consisted of share of common stock and warrants to purchase 20% of one share of common stock at an exercise price of $.10 per share (1,000,000 warrants).

 

As of December 31, 2018, Mr. Maggiore, a director and a significant shareholder of the Company, was owed $176,405 in principal representing advances to the Company, as well as accumulated accrued interest of $111,369. The Company currently accrues agreed upon interest at 11%.

 

During the nine months ended September 30, 2019, Mr. Maggiore converted the principal balance of $176,405 and accrued interest of $135,431 at $.10 per share into 3,118,359 units of the Company at $.10 per unit. Each unit consisted of one share of common stock and five-year warrants to purchase 20% of one share of common stock (623,672 warrants) at $.10 per share.

 

During the nine months ended September 30, 2019 and September 30, 2018, interest expense on this indebtedness was $24,061 and $36,331, respectively.

 

HEP Investments, LLC

 

In addition to amounts owed to HEP Investments pursuant to Convertible Debt (see Note 6), as of January 1, 2018, the Company owed HEP Investments $217,614. During the year ended December 31, 2018, HEP Investments loaned the Company an additional $1,751,187. Pursuant to the terms of the agreement with HEP Investments, $1,968,801 of these loans were used to purchase 11% Convertible Secured Promissory Notes, leaving a remaining loan balance of $-0- as of December 31, 2018.

 

During the nine months ended September 30, 2019, HEP Investments loaned the Company $32,500 (see Note 6 - Convertible Debt), which was later converted at $.10 per share into 325,000shares of the Company’s common stock, leaving a remaining loan balance of $-0- as of September 30, 2019.