SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2017

NOTE 12. SUBSEQUENT EVENTS

Amendments to Convertible Promissory Notes

On July 10, 2017 (the “Effective Date”), the Company entered into amendments (the “Amendments”) with the owners and holders of the following convertible promissory notes issued by the Company (the “Convertible Notes”):

	·	Secured Convertible Promissory Note in the original principal amount of $75,000 issued by the Company on September 21, 2016 to Summit Trading, Ltd. (“Summit Trading”);

	·	Convertible Promissory Note in the original principal amount of $250,000 issued by the Company on March 28, 2016 to Susannah Forest;

	·	Convertible Promissory Note in the original principal amount of $500,000 issued by the Company on December 18, 2015 to Susannah Forest;

	·	10% Convertible Subordinated Promissory Note in the original principal amount of $62,500 issued by the Company on May 16, 2016 to Monbridge, Inc. (“Monbridge”);

	·	Secured Convertible Promissory Note in the original principal amount of $75,000 issued by the Company on September 21, 2016 to Monbridge;

	·	Secured Convertible Promissory Note in the original principal amount of $150,000 issued by the Company on September 12, 2016 to Taconic Group, LLC (“Taconic”); and

	·	Secured Convertible Promissory Note in the original principal amount of $101,511 issued by the Company on September 12, 2016 to R&T Sports Marketing, Inc.

The Amendments extend the maturity date for each of the Convertible Notes to six months from the Effective Date and, so long as the Convertible Note is not in default, the Company has the right to extend its Maturity Date for an additional period of six months. The Amendments also revise the conversion price under the Convertible Note to mean 50% multiplied by the lowest trading price for the Company’s Common Stock during the twenty trading day period prior to the date of conversion. In the event that shares of the Company’s Common Stock are not deliverable via DWAC following the conversion of any amount under the Convertible Note, the holder shall be entitled to an additional 10% discount. The Company agreed to increase the number of authorized shares of its Common Stock covenants that within 30 days from the Effective Date to an amount that will allow it to and keep available out of its authorized and unissued shares a number of shares of Common Stock at least equal to two times the number of shares of common stock issuable upon conversion of the entire principal amount plus accrued interest due under the Convertible Notes.

The $150,000 Convertible Note held by Taconic and the $75,000 principal amount Convertible Note held by Monbridge were each increased by $60,000 to include liquidated damages due to the holders of such convertible notes as a result of the Company’s failure to deliver shares of its Common Stock for more than 30 days as provided for in the Convertible Notes held by such holder.

Termination of Stock Pledge and Security Agreement

The Amendments terminate a stock pledge agreement whereby the Company’s executive officers and directors had pledged their shares of the Company’s common stock as collateral for certain of the Convertible Notes and terminated an intellectual property security agreement whereby the Company had pledged all of its intellectual property as collateral for certain of the Convertible Notes. As a result of these terminations, none of the Convertible Notes are secured. Further, the holders of the Convertible Notes agreed to forbear from exercising any of their respective rights or remedies under the Convertible Notes as a result of any breach by the Company under the Convertible Note.

Summit Note

On July 10, 2017, the Company issued to Summit Trading a Convertible Promissory Note (the “Summit Note”) in the principal amount of $61,000, in exchange for Summit Trading’s cancellation of (i) a Promissory Note in the principal amount of $51,000, plus accrued interest, issued by the Company to Summit Trading on December 30, 2016, plus accrued interest and (ii) a Promissory Note in the principal amount of $10,000, plus accrued interest, issued by the Company to Summit on January 26, 2017. The Summit Note contains terms and conditions substantially similar to the convertible notes held by Monbridge as amended by the Amendment discussed above except that such note bears interest at the rate of 20% per annum and matures twelve (12) months from the date of issuance.

Securities Exchange Agreement

On July 10, 2017, the Company issued to Taconic Group, LLC (“Taconic”) a Convertible Promissory Note in the principal amount of $94,333 (the “Taconic Note”) in exchange for 94,333 shares of the Company’s Series A Preferred Stock held by Taconic. The Taconic Note bears interest at the rate of 20% per annum and matures twelve (12) months from the date of issuance. The conversion price under the Taconic Note to mean 60% multiplied by the lowest trading price for the Company’s Common Stock during the twenty trading day period prior to the date of conversion. In the event that shares of the Company’s Common Stock are not deliverable via DWAC following the conversion of any amount under the Taconic Note, the holder shall be entitled to an additional 10% discount. The Company agreed to increase the number of authorized shares of its Common Stock covenants that within 30 days from the Effective Date to an amount that will allow it to and keep available out of its authorized and unissued shares a number of shares of Common Stock at least equal to two times the number of shares of common stock issuable upon conversion of the entire principal amount plus accrued interest due under the Taconic Notes. The Taconic Note contains terms and conditions substantially similar to other convertible notes issued by the Company on July 10, 2017 except as noted above.

Power Up Lending Note

On August 2, 2017 (the “Issue Date”), the Company issued a Convertible Promissory Note to an unrelated third party investor in the principal amount of $28,000 (the “August 2017 Note”). The August 2017 Note bears interest at the rate of 12% per annum. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-two (22%) per annum. The principal amount of the August 2017 Note and interest are payable on May 15, 2018 (the “Maturity Date”).

Under the terms of the August 2017 Note, the Investor is entitled to, at any time beginning 180 days following the date of the August 2017 Note, convert the principal balance and any accrued interest (the “Amount Due”) into shares of the Company’s Common Stock, at a conversion price per share equal to 60% of the trading price for its Common Stock during the 20 trading day period prior to conversion, upon the terms and subject to the conditions of the August 2017 Note. The conversion price of the August 2017 Note is subject to adjustment in the event of stock splits, stock dividends and similar corporate events. The August 2017 Note contains representations, warranties, events of default, beneficial ownership limitations, prepayment options, and other provisions that are customary of similar instruments.

The August 2017 Note is not convertible to the extent that (a) the number of shares of our common stock beneficially owned by the Investor and (b) the number of shares of our common stock issuable upon the conversion of the August 2017 Note or otherwise would result in the beneficial ownership by Investor of more than 4.99% of our then outstanding common stock. This ownership limitation can be increased or decreased to any percentage not exceeding 9.99% by the Investor upon 61 days notice to us.

The August 2017 Note may be prepaid upon payment of the following optional prepayment amounts: 110% of the Amount Due during the period beginning on the Issue Date and ending 30 days thereafter, 115% of the total of the Amount Due during the period beginning 31 days after the Issue Date and ending 60 days after the Issue Date, 120% of the total of the Amount Due during the period beginning 61 days after the Issue Date and ending 90 days after the Issue Date, 125% of the total of the Amount Due during the period beginning 91 days after the Issue Date and ending 120 days after the Issue Date, 130% of the Amount Due interest during the period beginning 121 days after the Issue Date and ending 150 days after the Issue Date, or 135% of the Amount Due during the period beginning 151 days after the Issue Date and ending 180 days after the Issue Date. After 180 days after the Issue Date, the August 2017 Note may not be prepaid.

Issuance of Common Stock

Subsequent to June 30, 2017, the Company issued 11,854,813 shares of common stock for the conversion of convertible notes in the principal amount of $21,988.

IDdriven, Inc. 10-Q