GOLDEN EAGLE INTERNATIONAL INC

The Company has been developing a proprietary software system that helps publicly traded company increase the efficiency of consolidating accounting and financial information for reporting to SEC. Certain modules are complete and are available to the public on a stand-alone basis. The system is targeted to be fully completed in first quarter 2020.

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.

(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 $2,040. 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.

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.

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.