ADGO Advantego Corporation (CE)

Note D – Pre-Production Costs

*We are capitalizing pre-production costs in accordance with ASC 340-10. Development costs will be amortized on a per unit basis over the life of the product once we begin selling the product.

**We have begun capitalizing software development costs during the nine months ended September 30, 2019 in accordance with ASC 985.

Software computer costs for computer software that is to be used as an integral part of a product or process is capitalized after the following conditions are met;

Capitalization of computer software costs shall cease when the product is available for general release to customers. The capitalized costs will then be amortized on a per unit basis.

Each individual note is described below and debt discount amortization, debt premium amortization and interest expense for the three-month period ended September 30, 2019 is disclosed. Debt discount amortization for the nine month period ended September 30, 2019 and 2018 was $260,368 and $64,236 respectively while debt premium amortization for these same nine month periods was $2,390,970 and $582,841 respectively and interest expense for the same nine month periods was $732,325 and $71,744 respectively.

(a) On May 15, 2018, the Company entered into an uncollateralized note payable with an unaffiliated investor in the amount of $75,000. The note carries an interest rate of 12% and matures on November 15, 2019. The note and accrued interest, or any portion thereof, are convertible at the option of the lender, into the Company’s common stock at a rate of 60% of the lowest market trading price per share during the 20 days preceding conversion. At the note’s inception, there was an original issue discount of $3,750 a transaction fee of $2,000, and a finder’s fee of $5,500, which in the aggregate resulted in a total discount of $11,250 to be amortized to interest expense over the life of the note, and net proceeds received by the Company of $63,750. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $150,000 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $.51 per share (60% of the $.85 lowest trading price during the 20 days preceding the note’s issuance), which computed to 126,000 shares of “if-converted” common stock with a redemption value of $192,780 due to $1.53 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. On April 24, 2019, the maturity date on the note was extended until May 15, 2020 and the redemption date was extended to November 15, 2019 in exchange for a $38,188 cash payment. Debt discount and premium amortizations for the three months ended September 30, 2019 totaled $0 and $0, respectively, while interest expense was $2,250.

(b) On June 11, 2018, we issued a fixed price convertible note payable in the amount of $50,000 as a commitment fee to Tangiers in order to provide a long-term funding facility for our operations. The note bears interest at 10% per year, is due and payable on January 11, 2019, and is convertible into shares of our common stock at a fixed rate of $1.44 per share. Under the investment agreement, Tangiers has agreed to provide us with up to $5,000,000 of funding during a three-year period. This investment agreement is pending approval of our S-1 filing. This commitment fee is deemed an offering cost, along with an associated beneficial conversion feature of $14,236, for total offering costs of $64,236 being reported as a non-current asset to be amortized to additional paid-in capital pro-rata in conjunction with each future long-term funding tranche received from Tangiers. On June 7, 2019, this note was paid in full.

(c) On August 2, 2018 the Company issued a convertible promissory note with a face value of $125,000, maturing on August 2, 2019, and a stated interest of 9% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60% of the lowest trading price for the 20 days prior to conversion. The note was funded on August 6, 2018, when the Company received proceeds of $106,250, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $18,750 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $113,454 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.42 per share (60% of the lowest trading price during the 20 days preceding the note’s issuance), which computed to 502,008 shares of “if-converted” common stock with a redemption value of $238,454 due to $0.475 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three months ended September 30, 2019, totaled $1,875 and $11,345, respectively, while interest expense was $1,912. On August 19, 2019 the investor converted $11,000 in principal and $1,025 in accrued interest into 447,154 and 41,677 shares of common stock respectively at a price of $.0246 per share. On September 10, 2019, the investor converted $5,000 in principal and $493 in accrued interest into 915,525 shares of common stock at a price of $.006 per share. On September 24, 2019 the investor converted $3,150 in principal and $321 in accrued interest into 964,322 shares of common stock at a price of $.0036 per share.

(d) On August 2, 2018 the Company issued a convertible promissory note with a face value of $63,000, maturing on August 2, 2019, and a stated interest of 8% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60% of the lowest trading price for the 20 days prior to conversion. The note was funded on August 6, 2018, when the company received proceeds of $54,700, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $8,300 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $57,181 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.42 per share (60% of the lowest trading price during the 20 days preceding the note’s issuance), which computed to 253,012 shares of “if-converted” common stock with a redemption value of $120,181 due to $0.475 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. This note (including accrued interest) was paid in full on March 25, 2019.

(e) On August 2, 2018 the Company issued a convertible promissory note with a face value of $65,000, maturing on August 2, 2019, and a stated interest of 10% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60% of the lowest trading price for the 20 days prior to conversion. The note was funded on August 7, 2018, when the Company received proceeds of $56,350, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $8,650 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $58,996 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.42 per share (60% of the lowest trading price during the 20 days preceding the note’s issuance), which computed to 261,044 shares of “if-converted” common stock with a redemption value of $123,996 due to $0.475 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. This note (including accrued interest) was paid in full on February 1, 2019.

(f) On August 2, 2018 the Company issued a convertible promissory note with a face value of $125,000, maturing on May 2, 2019, and a stated interest of 12% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60% of the lowest trading price for the 20 days prior to conversion. The note was funded on August 20, 2018, when the Company received proceeds of $101,850, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $23,150 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $113,454 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.42 per share (60% of the lowest trading price during the 20 days preceding the note’s issuance), which computed to 502,008 shares of “if-converted” common stock with a redemption value of $238,454 due to $0.475 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. This note (including accrued interest) was paid in full on February 22, 2019.

(g) On August 9, 2018 the Company issued a convertible promissory note with a face value of $150,000, maturing on May 9, 2019, and a stated interest of 12% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60% of the average of 2 lowest trading prices for the 20 days prior to conversion. The note was funded on August 16, 2018, when the Company received proceeds of $122,250, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $27,750 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $139,017 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.43 per share (60% of the average of 2 lowest trading day prices during the 20 days preceding the note’s issuance), which computed to 578,034 shares of “if-converted” common stock with a redemption value of $289,017 due to $0.50 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. This note (including accrued interest) was paid in full on April 5, 2019. The remaining debt discount and debt premium was fully amortized at the time of the payoff in the amount of $4,728 and $23,684, respectively, while interest expense was $95,061 of which $94,529 was for pre-payment penalties.

(h) On September 17, 2018 the Company issued a convertible promissory note with a face value of $50,000, maturing on September 17, 2019, and a stated interest of 8% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 61% of the lowest trading price for the 20 days prior to conversion. The note was funded on September 20, 2018, when the Company received proceeds of $42,250, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $7,750 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $49,016 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.50 per share (61% of the lowest trading price during the 20 days preceding the note’s issuance), which computed to 163,934 shares of “if-converted” common stock with a redemption value of $99,016 due to $0.604 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. This note (including accrued interest) was paid in full on May15, 2019. The remaining debt discount and debt premium was fully amortized at the time of the payoff in the amount of $3,660 and $23,146, respectively, while interest expense was $25,056 of which $25,000 was for pre-payment penalties.

(i) On November 14, 2018 the Company issued a convertible promissory note with a face value of $273,000, maturing on November 14, 2019, and a stated interest of 8% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 62% of the lowest trading price for the 20 days prior to conversion. The note was funded on November 14, 2018, when the Company received proceeds of $250,000, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $43,000 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $167,323 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.40 per share (62% of the lowest trading price during the 20 days preceding the note’s issuance), which computed to 668,004 shares of “if-converted” common stock with a redemption value of $440,323 due to $0.64 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three months ended September 30, 2019, totaled $10,875 and $41,831, respectively, while interest expense was $5,460. On May 8, 2019, exchange for $120,181 in cash, the investor extended the maturity date of the note to March 15, 2020. This payment consisted of $109,582 in extension fees that were classified as an interest expense.

(j) On January 3, 2019 the Company issued a convertible promissory note with a face value of $105,000, maturing on January 3, 2020, and a stated interest of 10% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60% of the lowest trading price for the 20 days prior to conversion. The note was funded on January 7, 2019, when the Company received proceeds of $91,500, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $13,500 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $270,000 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.14 per share (60 % of the lowest trading price during the 20 days preceding the note’s issuance), which computed to 1,250,000 shares of ‘if-converted’ common stock with a redemption value of $375,000 due to $0.30 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. This note (including accrued interest) was paid in full on June 26, 2019.

(k) On January 17, 2019 the Company issued a convertible promissory note with a face value of $75,000, maturing on January 17, 2020, and a stated interest of 10% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60% of the lowest trading price for the 25 days prior to conversion. The note was funded on January 25, 2019, when the Company received proceeds of $59,500, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $15,500 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $148,214 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.14 per share (60% of the lowest trading price during the 25 days preceding the note’s issuance), which computed to 892,857 shares of ‘if-converted’ common stock with a redemption value of $223,214 due to $0.25 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three months ended September 30, 2019, totaled $3,875 and $37,054, respectively, while interest expense was $4,875. On September 17, 2019, the investor converted $2,400 of principal and $750 in loan fees into 761,905 and 238,095 shares of common stock respectively at a price of $.00315 per share. On September 24, 2019, the investor converted $1,774 of principal and $750 of loan fees into 844,857 and 357,143 shares of common stock respectively at a price of $.0021 per share.

(l) On February 5, 2019 the Company issued a convertible promissory note with a face value of $78,000, maturing on February 5, 2020, and a stated interest of 12 % to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 58% of the average of 2 lowest trading prices for the 15 days prior to conversion. The note was funded on February 8, 2019, when the Company received proceeds of $74,500, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $3,500 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $149,276 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.15 per share (58% of $0.25 - the average of 2 lowest trading day prices during the 15 days preceding the note’s issuance), which computed to 537,931 shares of ‘if-converted’ common stock with a redemption value of $227,276 due to $0.42 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three months ended September 30, 2019, totaled $2,119 and $90,395, respectively, while interest expense was $37,662. On August 7, 2019, the principal amount of this amount of this note plus $37,662 in accrued interest and penalty interest was paid in cash.

(m) On February 6, 2019 the Company issued a convertible promissory note with a face value of $65,000, maturing on February 6, 2020, and a stated interest of 10% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60% of the lowest trading price for the 20 days prior to conversion. The note was funded on February 7, 2019, when the Company received proceeds of $56,350, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $8,650 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $107,250 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.25 per share (60% of the lowest trading price during the 20 days preceding the note’s issuance), which computed to 433,333 shares of ‘if-converted’ common stock with a redemption value of $172,250 due to $0.398 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three months ended September 30, 2019, totaled $5,214 and $64,648, respectively, while interest expense was $30,388. On August 2, 2019, the principal amount of this amount of this note plus $30,088 in accrued interest and penalty interest was paid in cash.

(n) On February 13, 2019 the Company issued a convertible promissory note with a face value of $50,000, maturing on February 13, 2022, and a stated interest of 0% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60% of the lowest trading price for the 20 days prior to conversion. The note was funded on February 21, 2019, when the Company received proceeds of $35,900, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $14,100 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $74,800 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.25 per share (60% of the lowest trading price during the 20 days preceding the note’s issuance), which computed to 333,333 shares of ‘if-converted’ common stock with a redemption value of $124,800 due to $0.374 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three months ended September 30, 2019, totaled $1,175 and $6,233, respectively, while interest expense was $0. On August 21, 2019, the investor converted $22,900 of principal into 609,756 shares of common stock at a price of $.0246 per share. On September 17, 2019, the investor converted $4,500 of principal into 1,000,000 shares of common stock at a price of $.0045 per share. On September 23, 2019, the investor converted $3,400 of principal into 1,333,333 shares of common stock at a price of $.003 per share.

(o) On February 14, 2019 the Company issued a convertible promissory note with a face value of $100,000, maturing on February 14, 2020, and a stated interest of 10% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60% of the lowest trading price for the 20 days prior to conversion. The note was funded on February 15, 2019, when the Company received proceeds of $99,500, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $500 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $140,333 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.25 per share (60% of the lowest trading price during the 20 days preceding the note’s issuance), which computed to 666,666 shares of ‘if-converted’ common stock with a redemption value of $240,333 due to $0.361 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three months ended September 30, 2019, totaled $125 and $$35,083, respectively, while interest expense was $2,500.

(p) On February 19, 2019 the Company issued a convertible promissory note with a face value of $50,000, maturing on February 19, 2020, and a stated interest of 10% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60% of the lowest trading price for the 20 days prior to conversion. The note was funded on February 22, 2019, when the Company received proceeds of $43,200, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $6,800 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $75,000 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.30 per share (60% of the lowest trading price during the 20 days preceding the note’s issuance), which computed to 277,777 shares of ‘if-converted’ common stock with a redemption value of $125,000 due to $0.450 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three months ended September 30, 2019, totaled $1,700 and $18,750, respectively, while interest expense was $1,250. On September 19, 2019, the investor converted $4,860 of principal into 900,000 shares of common stock at a price of $.0054 per share. On September 24, 2019, the investor converted $4,320 of principal into 1,200,000 shares of common stock at a price of $.006 per share.

(q) On February 25, 2019, the Company issued a convertible promissory note with a face value of $68,000, maturing on February 25, 2020, and a stated interest of 12% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60% of the average of 2 lowest trading prices for the 15 days prior to conversion. The note was funded on February 27, 2019, when the Company received proceeds of $64,500, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $3,500 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $58,974 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.33 per share (60% of the average of 2 lowest trading day prices during the 15 days preceding the note’s issuance), which computed to 343,174 shares of ‘if-converted’ common stock with a redemption value of $126,974 due to $0.370 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three months ended September 30, 2019, totaled $875 and $14,744, respectively, while interest expense was $4,828. On August 27, 2019, the investor converted $10,000 of principal into 666,667 shares of common stock at a price of $.015 per share. On September 23, 2019, the investor converted $4,100 of principal into 953,488 shares of common stock at a price of $.0043 per share. On September 24, 2019, the investor converted $5,400 of principal into 1,255,814 shares of common stock at a price of $.0043 per share. On September 25, 2019, the investor converted $5,400 of principal into 1,255,814 shares of common stock at a price of $.0043 per share. On September 25, 2019, the investor converted $5,400 of principal into 1,255,814 shares of common stock at a price of $.0043 per share. On September 27, 2019, the investor converted $5,200 of principal into 1,238,095 shares of common stock at a price of $.0042 per share.

(r) On March 14, 2019 the Company issued a convertible promissory note with a face value of $610,000, maturing on March 14, 2020, and a stated interest of 9% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of shares the Company’s common stock, based on a conversion rate of 60% of the lowest trading price for the 20 days prior to conversion. The note was funded on March 14, 2019, when the Company received proceeds of $557,500, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $52,500 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $1,300,101 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.20 per share (60% of $0.33 - the lowest trading price during the 20 days preceding the note’s issuance), which computed to 3,080,808 shares of ‘if-converted’ common stock with a redemption value of $1,910,101 due to $0.620 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three months ended September 30, 2019, totaled $13,125 and $325,025, respectively, while interest expense was $13,725.

(s) On April 24, 2019 the Company issued a convertible promissory note (the “Note”) with a face value of $88,000, maturing on April 24, 2020, and a stated interest of 10.00 % to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60.00 % of the lowest trading price for the 20 days prior to conversion. The note was funded on April 25, 2019, when the Company received proceeds of $77,000, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $11,000 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $58,666 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.24 per share (60 % of $0.40 - the lowest trading price during the 20 days preceding the note’s issuance), which computed to 366,666 shares of ‘if-converted’ common stock with a redemption value of $146,666 due to $0.400 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three-month period ended September 30, 2019, totaled $2,750 and $14,667, respectively, while interest expense was $2,200.

(t) On April 26, 2019 the Company issued a convertible promissory note (the “Note”) with a face value of $63,000, maturing on April 26, 2020, and a stated interest of 12.00 % to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60.00 % of the average of 2 lowest trading prices for the 15 days prior to conversion. The note was funded on April 29, 2019, when the Company received proceeds of $59,500, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $3,500 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $58,227 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.23 per share (60 % of $0.39 - the average of 2 lowest trading day prices during the 15 days preceding the note’s issuance), which computed to 272,727 shares of ‘if-converted’ common stock with a redemption value of $121,227 due to $0.445 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three-month period ended September 30, 2019, totaled $875 and $14,557, respectively, while interest expense was $1,890.

(u) On May 1, 2019 the Company issued a convertible promissory note (the “Note”) with a face value of $282,000, maturing on November 01, 2019, and a stated interest of 9.00 % to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60.00 % of the average of 2 lowest trading prices for the 20 days prior to conversion. The note was funded on May 1, 2019, when the Company received proceeds of $234,500, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $47,500 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $214,748 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.22 per share (60 % of $0.37 - the average of 2 lowest trading day prices during the 20 days preceding the note’s issuance), which computed to 1,273,712 shares of ‘if-converted’ common stock with a redemption value of $496,748 due to $0.39 per share fair market value of the Company’s stock on the note’s date of issuance. Additionally, the Company issued 361,538 shares of common stock (“Returnable Shares) to the lender as a commitment fee. The Returnable Shares must be returned to the Company if the note is fully repaid and satisfied prior to 180 days from the issue date. As such, the Returnable Shares were valued at $0.38 fair market value on their date of issuance, and their total value of $137,384 has been recorded as a prepaid expense (see Note F). Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three-month period ended September 30, 2019, totaled $23,750 and $107,374, respectively, while interest expense was $6,345.

(v) On May 7, 2019 the Company issued a convertible promissory note (the “Note”) with a face value of $40,000, maturing on May 07, 2020, and a stated interest of 10% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60.00 % of the lowest trading price for the 25 days prior to conversion. The note was funded on May 9, 2019, when the Company received proceeds of $31,800, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $8,200 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $27,029 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.22 per share (60 % of $0.37 - the lowest trading price during the 25 days preceding the note’s issuance), which computed to 181,159 shares of ‘if-converted’ common stock with a redemption value of $67,029 due to $0.370 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three-month period ended September 30, 2019, totaled $2,050 and $6,757 respectively, while interest expense was $1,000.

(w) On May 16, 2019 the Company issued a convertible promissory note (the “Note”) with a face value of $69,300, maturing on May 16, 2020, and a stated interest of 9% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60% of the lowest trading price for the 20 days prior to conversion. The note was funded on May 17, 2019, when the Company received proceeds of $56,500, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $12,800 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $49,500 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.21 per share (60 % of $0.35 - the lowest trading price during the 20 days preceding the note’s issuance), which computed to 330,000 shares of ‘if-converted’ common stock with a redemption value of $118,800 due to $0.360 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three-month period ended September 30, 2019, totaled $2,743 and $10,607, respectively, while interest expense was $1,559.

(x) On May 23, 2019 the Company issued a convertible promissory note (the “Note”) with a face value of $170,000, maturing on May 23, 2020, and a stated interest of 10% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60.00 % of the lowest trading price for the 20 days prior to conversion. The note was funded on May 24, 2019, when the Company received proceeds of $153,000, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $17,000 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $113,333 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.19 per share (60 % of $0.32 - the lowest trading price during the 20 days preceding the note’s issuance), which computed to 885,416 shares of ‘if-converted’ common stock with a redemption value of $283,333 due to $0.320 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three-month period ended September 30, 2019, totaled $4,250 and $28,333, respectively, while interest expense was $4,250.

(y) On June 25, 2019 the Company issued a convertible promissory note (the “Note”) with a face value of $200,000, maturing on June 25, 2020, and a stated interest of 10.00 % to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company’s common stock, based on a conversion rate of 60.00 % of the lowest trading price for the 20 days prior to conversion. The note was funded on June 25, 2019, when the Company received proceeds of $184,500, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $15,500 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $204,762 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.08 per share (60 % of $0.14 - the lowest trading price during the 20 days preceding the note’s issuance), which computed to 2,380,952 shares of ‘if-converted’ common stock with a redemption value of $404,762 due to $0.170 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three-month period ended September 30, 2019, totaled $3,875 and $51,190, respectively, while interest expense was $5,000.

(z) On July 10, 2019 the Company issued a convertible promissory note with a face value of $63,000, maturing on July 10, 2020, and a stated interest of 8% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the company’s common stock, based on a conversion rate of 60% of the lowest trading price for the 20 days prior to conversion. The note was funded on July 16, 2019, when the company received proceeds of $56,500, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $6,500 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $42,000 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.08 per share (60% of $0.13 - the lowest trading price during the 20 days preceding the note’s issuance), which computed to 801,526 shares of ‘if converted’ common stock with a redemption value of $105,000 due to $0.131 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three-month period ended September 30, 2019, totaled $1,336 and $8,633, respectively, while interest expense was $1,036.

(aa) On July 15, 2019 the Company issued a convertible promissory note with a face value of $75,000, maturing on July 15, 2020, and a stated interest of 12% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the company’s common stock, based on a conversion rate of 60% of the lowest trading price for the 20 days prior to conversion. The note was funded on July 23, 2019, when the company received proceeds of $62,500, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $12,500 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $60,496 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.08 per share (60% of $0.13 - the lowest trading price during the 20 days preceding the note’s issuance), which computed to 954,198 shares of ‘if converted’ common stock with a redemption value of $135,496 due to $0.142 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three-month period ended September 30, 2019, totaled $2,326 and $11,259, respectively, while interest expense was $1,675.

(bb) On July 19, 2019 the Company issued a convertible promissory note with a face value of $69,300, maturing on July 19, 2020, and a stated interest of 9% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the company’s common stock, based on a conversion rate of 60% of the lowest trading price for the 20 days prior to conversion. The note was funded on July 25, 2019, when the company received proceeds of $55,500, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $13,800 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $46,200 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.07 per share (60% of $0.12 - the lowest trading price during the 20 days preceding the note’s issuance), which computed to 962,500 shares of ‘if converted’ common stock with a redemption value of $115,500 due to $0.120 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three-month period ended September 30, 2019, totaled $2,492 and $8,342, respectively, while interest expense was $1,126.

(cc) On July 31, 2019 the Company issued a convertible promissory note with a face value of $100,000, maturing on August 20, 2020, and a stated interest of 10% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the company’s common stock, based on a conversion rate of 60% of the lowest trading price for the 20 days prior to conversion. The note was funded on August 2, 2019, when the company received proceeds of $91,000, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $9,000 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $66,667 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.04 per share (60% of $0.06 - the lowest trading price during the 20 days preceding the note’s issuance), which computed to 2,688,172 shares of ‘if-converted’ common stock with a redemption value of $166,667 due to $0.062 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three-month period ended September 30, 2019, totaled $1,450 and $10,741, respectively, while interest expense was $1,611.

(dd) On August 7, 2019 the Company issued a convertible promissory note with a face value of $88,000, maturing on August 7, 2020, and a stated interest of 12.00 % to a third-party investor. The note is convertible at any time after 0 months of the funding of the note into a variable number of the company’s common stock, based on a conversion rate of 60% of the average of 2 lowest trading prices for the 15 days prior to conversion. The note was funded on August 8, 2019, when the company received proceeds of $84,500, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $3,500 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $101,011 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.06 per share (60% of $0.06 - the average of 2 lowest trading day prices during the 15 days preceding the note’s issuance), which computed to 2,365,591 shares of ‘if-converted’ common stock with a redemption value of $189,011 due to $0.080 per share fair market value of the Company’s stock on the note’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital. Debt discount and premium amortizations for the three-month period ended September 30, 2019, totaled $506 and $14,590, respectively, while interest expense was $1,525.

Note F – Stockholders’ Equity

Common Stock

We are authorized to issue 2,000,000,000 shares of our $.0001 par value common stock, of which 33,384,036 and 16,712,819 shares were issued and outstanding at September 30, 2019 and December 31, 2018 respectively.

Nine Months Ended September 30, 2019:

The Company issued 16,309,679 shares of common stock for conversion of $130,904 in convertible debt and $6,025 in related accrued interest at conversion rates between $.002 and $.025 pursuant to underlying promissory note (Note E).

The Company issued 361,538 shares of common stock at their $.38 per share fair market value for total value of $137,384. These shares represent a commitment fee to a noteholder and are returnable to the Company if certain conditions are met. These returnable shares reported as a prepaid expense at September 30, 2019 (Note C).

Nine Months Ended September 30, 2018:

The Company issued 110,955 shares of common stock at $.55 per share fair market value for cash to independent investors.

The Company issued 1,166,469 shares of common stock for conversion of $427,775 in convertible debt at various conversion rates pursuant to underlying promissory notes (Note E). The Company also issued 35,781 shares of common stock for conversion of $13,835 in related accrued interest.

The Company issued 389,370 shares of common stock at $.275 per share for settlement of related party debt and related accrued interest totaling $107,077.

The Company issued 95,890 shares of common stock for payment of accrued officer wages totaling $38,500, along with 17,273 shares of common stock for payment of accrued expenses totaling $13,818.

The Company issued 20,000 shares of common stock valued at $15,000 to secure a line of credit.

Warrants

During August and September 2016, we sold 33,058 shares of our common stock, with warrants to purchase an additional 545,454 shares of our common stock, to a group of private investors for $100,000. The warrants were issued prior to the reverse merger (Note A) and were subsequently still deemed issued and outstanding. The Series A and B warrants have expired, while the Series C warrants expired on June 30, 2019. The warrants were originally exercisable at prices between $0.55 and $2.20 share at any time between June 30, 2017 and June 30, 2019. Each series of warrants was valued using the Black-Scholes Options Pricing Model resulting in total warrant value of $85,833. The remaining proceeds of $14,167 were allocated to the common stock. Black-Scholes data inputs used to value the warrants are as follows:

During May and June 2018, various Series B warrant holders elected to exercise their warrants prior to their June 30, 2018 expiration. As such, the Company issued 19,636 shares of common stock at $1.10 per share for $21,600. The Series C warrants expired on June 30, 2019. There are currently no outstanding warrants.

The following table represents the warrant activity for the periods presented;

Preferred Stock

Our Articles of Incorporation provide that we may issue up to 10,000,000 shares of various series of preferred stock. Subject to the requirements of the Colorado Business Corporation Act, the Board of Directors may issue the preferred stock in series with rights and preferences as the Board of Directors may determine appropriate, without shareholder approval. As of September 30, 2019 and December 31, 2018, 4,500,000 Series B Preferred shares had been authorized for issuance, and 240,000 Series B preferred shares were issued and outstanding. These 240,000 Series B shares are convertible into 10,909 common shares.

Other

During the nine months ended September 30, 2019 and 2018, the Company recorded in additional paid-in capital a premium on convertible debt of $3,366,586 and $1,142,215, respectively, as well as accretion of the premium of $2,390,971 and $582,841, respectively (Note E).

During the nine months ended September 30, 2018, the Company recorded in additional paid-in capital $14,236 of deferred offering costs, as well as $6,022 of related party debt forgiveness.

Note G– Material Agreements

1. On May 26, 2019 the Company entered into an agreement with Aska Electronics Co., Ltd of China. Aska is a manufacturer of Bluetooth headphones, sport earbuds and associated listening devices and provides its products as an OEM and as an ODM for projects worldwide.

Under the Agreement:

The Company, upon no less than thirty days written notice, may redeem the Preferred Shares at a price of $2.00 per share. The Preferred shares will automatically convert into shares of the Company’s common stock if the Company’s common stock closes at a price of $2.20 or more during any 30 consecutive trading days and if the average trading volume of the Company’s common stock during such 30 consecutive trading days is at least 10,000 shares per day.

A “leak out provision” was established such that Aska may not sell more than 100,000 shares per month.

As of the date of this report the Company has not generated any revenue related to this transaction and no shares have been issued.

However, because of the financial structure of the purchase of a percentage of certain profits that were part of the overall distribution rights, the Company was unable to obtain a financial institution that would facilitate the transaction as documented and ASKA, being a Chinese based entity, is prohibited from certain financial structures. Accordingly, the agreement has yet to be consummated and may not be consummated under the original terms and the Preferred Shares were never issued. Consequently, both Companies remain set on utilizing each’s resources for future business, the anticipated revenues that could have possibly been realized are not available at this particular time.