Quarterly report pursuant to Section 13 or 15(d)

EXCHANGEABLE NOTES AND CONVERTIBLE DEBENTURES

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EXCHANGEABLE NOTES AND CONVERTIBLE DEBENTURES
6 Months Ended
Jun. 30, 2021
EXCHANGEABLE NOTES AND CONVERTIBLE DEBENTURES  
Note 8 - Exchangeable Notes and Convertible Debentures

NOTE 8 – EXCHANGEABLE NOTES AND CONVERTIBLE DEBENTURES

 

In August and September of 2020,Medi-Scan issued four 7% Exchangeable Promissory Notes in the aggregate principal amount of $375,000. Principal and interest were payable on the Notes on January 31, 2021. The Notes provided that, in the event that Medi-Scan was acquired by a corporation whose common stock was registered with the SEC, the Notes would be automatically exchanged for 7% convertible debentures issued by that acquirer.

 

In November of 2020, by reason of the Share Exchange, the four 7% Exchangeable Promissory Notes were automatically exchanged for 7% Convertible Debentures issued by Healthtech Solutions in a principal amount of $381,505, which was equal to the principal of and accrued interest on the Notes. Then, during December of 2020, Healthtech Solutions issued four additional 7% Convertible Debentures in the aggregate principal amount of $250,000 in exchange for payment of cash in that amount. On February 4, 2021 an additional debenture was issued in the amount $50,000.

 

The 7% Convertible Debentures were convertible into common stock, at the holders’ option, at a 30% discount to the market price of the Company’s common stock. The Company determined that the conversion feature represented a derivative financial instrument embedded in the Debentures. The accounting treatment of derivative financial instruments requires that the Company record the fair value of that derivative financial instrument as a discount to the value of the Debentures as of the inception date of each Debenture. Accordingly, the Company recorded an aggregate initial discount of $349,202 for the fair value of the derivative liability at inception of each convertible debenture. During the three and six months ending June 30, 2021, the Company amortized $27,303 and $351,202 as interest expense. During the year ended December 31, 2020, the Company amortized $9,277  as interest expense. At December 31, 2020 the notes were presented on the balance sheet, net of unamortized discount, at $325,824.

 

On May 6, 2021, by agreement with the holders of the 7% Convertible Debentures, the Company issued 3,507,164 shares of common shares in exchange for cancellation of the convertible debentures.