The Company has evaluated all events that occur after the balance sheet date through the date when the financial statements were issued to determine if they must be reported.
On November 2, 2018, the Company received a formal Notice of Default from one of its Lenders. The Note became due and payable on January 13, 2018 and the Company is in default o f its obligations under the Note. The Note Holder demanded payment of all amounts due under the Note plus applicable collection costs, including attorney’s fees at the Mandatory Default Amount. The Mandatory Default Amount means the greater of (a) the Outstanding Balance divided by the Installment Conversion Price on the date the Mandatory Default Amount is demanded, multiplied by the VWAP on the date the Mandatory Default Amount is demanded, or (b) the Outstanding Balance following the application of the Default Effect. Pursuant to the demand letter on that date, the Company owed $125,053 and interest will continue to accrue at the rate of $78.80 per day. The principal increase is considered applied as of the date of the demand for payment and is not tacked back to the Issue Date of the Note.
The above information was disclosed in a filing to the SEC. To see the filing, click here.
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