NOTE 5 CONVERTIBLE NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2016

A summary of the convertible notes payable, which are all held by an unrelated party, is as below:

	As of June 30, 2016		As of December 31, 2015
Fixed-rate 12% convertible note, conversion price @$0.02/share, due October 14, 2016 (1)	$	500,000	$	500,000
Fixed-rate 12% convertible note, conversion price @$0.02/share, due October 14, 2016 (1)		20,000		20,000
Fixed-rate 12% convertible note, conversion price @$0.02/share, due October 23, 2016 (1)		40,000		40,000
Fixed-rate 12% convertible note, conversion price @$0.02/share, due November 17, 2016 (1)		30,000		30,000
Fixed-rate 12% convertible note, conversion price @$0.02/share, due December 1, 2016 (1)		17,000		17,000
Fixed-rate 12% convertible note, conversion price @$0.02/share, due December 10, 2016 (1)		10,000		10,000
Fixed-rate 8% convertible note, conversion price @$0.01/share, due January 21, 2017 (1)		720,000		720,000
Fixed-rate 8% convertible note, conversion price @$0.02/share, due December 30, 2016(1)		30,000		30,000
Fixed-rate 8% convertible note, conversion price @$0.01/share, due January 30, 2017 (1)		30,000		30,000
Fixed-rate 8% convertible note, conversion price @$0.02/share, due August 26, 2016 (1)		40,000		40,000
Fixed-rate 8% convertible note, conversion price @$0.01/share, due September 25, 2016 (1)		30,000		30,000
Fixed-rate 8% convertible note, conversion price @$0.02/share, due October 26, 2016 (1)		60,000		60,000
Fixed-rate 8% convertible note, conversion price @$0.03/share, due November 3, 2016 (1)		30,000		30,000
Fixed-rate 8% convertible note, conversion price @$0.03/share, due November 7, 2016 (1)		40,000		40,000
Fixed-rate 8% convertible note, conversion price @$0.02/share, due January 13, 2017 (1)		20,000		-
Fixed-rate 8% convertible note, conversion price @$0.02/share, due August 15, 2016 (1)		20,000		-
Fixed-rate 8% convertible note, conversion price @$0.01/share, due September 4, 2016 (1)		50,000		-
Fixed-rate 8% convertible note, conversion price @$0.02/share, due October 12, 2016 (2)		15,000		-
Fixed-rate 8% convertible note, conversion price @$0.03/share, due November 30, 2016 (2)		20,000		-
Total		1,722,000		1,597,000
Less: unamortized discount		-		(1,250	)
	$	1,722,000	$	1,595,750

(1)

The notes were extended from their previous maturity dates with the conversion price changed to the market price on the dates they were extended. All notes with maturities on or before September 30, 2016 were extended during the quarter ended March 31, 2016. All notes with maturities on or after October 1, 2016 but before January 1, 2017 were extended during the quarter ended June 30, 2016. All notes with maturities on or after January 1, 2017 were extended subsequent to June 30, 2016 (see Note 8). The Company analyzed the terms modification of the convertible notes under ASC 470-60, Troubled Debt Restructurings, and ASC 470-50, Extinguishment of Debt, and determined that the creditors had not granted a concession and the modifications were substantial, which qualified for Extinguishment accounting. The Company amortized the remaining discount on the convertible notes to interest expense on the dates of the conversion. There were no direct costs or fees associated with the terms modification of the convertible notes. The Company also analyzed the modified conversion option under ASC 815, Derivatives and Hedging, and determined that the instrument does not qualify for derivative accounting and that the instrument does not have a beneficial conversion feature and there were no losses on the debt extinguishments recorded.

(2)	The Company analyzed the notes under ASC 815, Derivatives and Hedging, and determined that the instrument does not qualify for derivative accounting and that the instrument does not have a beneficial conversion feature.

Oro East Mining, Inc. 10-Q