Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. Two Hands Corp (1494413) 10-Q published on May 17, 2021 at 3:58 pm
On June 10, 2014, the Company agreed to amend and add certain terms to unsecured, non-interest bearing, due on demand notes payable issued to The Cellular Connection Ltd. during the period from February 22, 2013 to June 10, 2014 with a total carrying value $42,189. The issue price of the Note is $42,189 with a face value of $54,193 and the Note has an original maturity date of December 31, 2014 which is subject to automatic renewal. At the option of the Company, the Company may convert principal and interest at a fixed conversion price of $0.0001 per share of the Company’s common stock. The Note allows for the lender to secure a portion of the Company assets up to 200% of the face value of the Note. If the Note is not paid on the maturity date, the outstanding face amount of the Note shall increase by 20% on January 1, 2015. The outstanding face value of the Note shall increase by another 20% on January 1, 2016 and again on each one-year anniversary of the Note until the Note has been paid in full. The condensed consolidated statement of operations includes interest expense of $0 and $93 for the three months ended March 31, 2021 and 2020, respectively. On March 31, 2021 and December 31, 2020, the carrying amount of the Note is $0 and $0, respectively. This Note has been paid in full.
On January 20, 2021, the Company entered into a Side Letter Agreement (“Note”) with Francesco Bisignano for cash proceeds of $15,823. The issue price of the Note is $15,823 with a face value of $23,735. At the option of the Company, the Company may convert principal and interest at a fixed conversion price of $0.0034 per share of the Company’s common stock.. During the three months ended March 31, 2021, the Company elected to convert $23,735 of principal and interest into 8,823,529 shares of common stock of the Company at a fixed conversion price of $0.0034 per share. This conversion resulted in a loss on debt settlement of $2,736 due to the requirement to record the share issuance at fair value on the date the shares were issued. The condensed consolidated statement of operations includes interest expense of $7,912 and $0 for the three months ended March 31, 2021 and 2020, respectively. On March 31, 2021 and December 31, 2020, the carrying amount of the Note is $0.
The fair value of the convertible promissory note derivative liability relating to the Notes issued to Power Up Lending Group Ltd. and Redstart Holdings Corp. on July 13, 2020, September 11, 2020 and February 23, 2021 was $211,380 (December 31, 2020 - $172,261), of which $150,000 was recorded as a debt discount and the remainder of $112,116 was recorded as initial derivative expense. During the three months ended March 31, 2021, the convertible promissory note derivative liability was reduced by $154,384 for settlement of derivative liabilities due to conversion of the Notes into common stock by the Holders. The decrease in the fair value of the conversion option derivative liability of $68,613 is recorded as a gain in the condensed consolidated statements of operations for the three months ended March 31, 2021.
As of March 31, 2021 and December 31, 2020, advances and accrued salary of $32,426 and $106,928, respectively, were due to Nadav Elituv, the Company's Chief Executive Officer. The balance is non-interest bearing, unsecured and have no specified terms of repayment. During the three months ended March 31, 2021, the Company issued advances due to related party for $18,203 of expenses paid on behalf of the Company and advances due to related party were repaid by the Company with $20,505 in cash. In addition, the Company accrued salary of $37,800 for the three months ended March 31, 2021 and issued 30,000 shares of Class Convertible Preferred Stock with a fair value of $110,000 to settled compensation due on March 31, 2021.
On March 31, 2021 and December 31, 2020, the Company had an obligation to issue 32,000,001 shares of common stock valued at $336,000 and 32,000,001 shares of common stock valued at $336,000, respectively, for stock-based compensation – consulting services. These shares relate to an agreement dated August 1, 2020 for services to be provided from August 1, 2020 to July 31, 2022 whereby the Company shall pay 50,000,000 shares of Common Stock of the Company with a fair value of $525,000 for consulting. The shares are expensed the earlier of (i) the date of issue of shares or (ii) on a straight line over the life of the contract.