First, I’ll apologize for the length of this post. It may be something everyone has already figured out, but I keep reading posts about new notes. So, I thought I’d try to get a handle on it because something seemed off. I went back in the Q’s to when Berman took over. Everything was adding up until it started to get a little fuzzy on the 10/31/2018 annual report.
In that report on page 15 it states convertible notes payable amounted to $348,633. It lists Machiavelli Ltd LLC as a new note for $288,000 but listed no others. Notes mentioned in the previous Q are Tide Pool ventures $32,633, Louvas Law Group $26,500, and L. G. Capital $1,500. They total $60,633, and when added to the Machiavelli note gives a total of $348,633. Okay so that matched the stated amount; all was good.
Several things stand out in the Q1 for the 3 months ending January 31, 2019. For starters the Machiavelli note for $288,000 disappeared and Carpathia was issued 141,561,726 shares for debt conversion in December. Thing is the Carpathia note didn’t exist prior to this filing. Also, the new notes; Machiavelli note for $20,000 with a 8/11/2018 maturity date, Carpathia note for $20,000 with a 9/5/2018 maturity date, Carpathia note for $60,000 with a !0/6/2018 maturity date, and the J. P. Carey note for $128,000 with a 1/2/2019 maturity date were all past due but had never showed up on previous Q’s.
The Q in discussion states convertible notes payable amounted to $288,633. It also states that the convertible notes payable total from the previous Q was reduced with a note conversion in the amount of $60,000. This would be the Carpathia note issued on 12/11/2018 using 141,561,726.
The notes listed in Q1 on pages 4 and 17 matches up. On page 17 it is states convertible notes payable amounted to $288,633. However, the notes listed Machiavelli ($20,000), Carpathia ($80,000), and J. P. Carey ($128,000) only add up to $228,000. Since I did not find that Tide Pool Ventures ($32,633), Louvas Law Group ($26,500), and L. G. Capital ($1,500) were paid I added their total ($60,633) to the listed notes of $228,000 and came up with $288,663. So, the statement of convertible notes totaling $288,633 is accurate.
When looking at the numbers I realized if you subtract the $60,000 that was achieved through the 12/11/2018 Carpathia note (that didn’t exist before) from the disappearing Machiavelli note for $288,000 you get $228,000 which is the combined amount listed for the new Machiavelli, Carpathia, and J. P. Carey notes.
At this point, with what’s written above, the only conclusion I can arrive at is the original Machiavelli note for $288,000 was broken up and redistributed through the 12/11/2018 Carpathia note that was paid ($60,000) and the new notes of Machiavelli ($20,000), Carpathia ($80,000), J. P. Carey ($128,000). This would explain the disappearing Machiavelli note and the Carpathia note that wasn’t previously listed because it was issued shares in the same quarter it was written. It is shown on page 3 of Q1 as a debt conversion.
Since Canouse control all entities involved it’s at their discretion to do this. It doesn’t explain why it was done or why past due dates are on these notes, but the math adds up and that’s all I care about.
If I am correct, then what I thought were new Canouse notes listed on Q1 is not new debt. Instead it’s a redistribution of old debt from the original Machiavelli note for $288,000 listed in the 2018 annual report that disappeared.
That brings us to Q2.
To begin with, page 18 of Q2 states notes payable amounted to $233,633. It states this is a decrease of $55,000 from Q1’s total. (it actually states a $115,000 reduction for first 6 months, but the math gives me $55,000 for Q2). Also, on page 18 it states as of April 30, 2019 $228.000 represents convertible notes payable to Machiavelli, Carpathia, and J. P. Carey. If correct then this is unchanged from Q1 which also had $228,000 as the total for those notes as.
So, the difference between the stated notes payable amount ($233,633) and the Canouse notes ($228,000) is $5,633. In the past when there was a difference between those numbers the difference always added up to the amount owed to Tide Pool Ventures, Louvas Law Group, and L. G. Capital. Obviously, this time it does not.
When I add the Canouse notes listed beginning on page 6 of Q2 (Debt Securities, Including Promissory and Convertible Notes) I get a total of $173,000. This differs from the total stated on page 18 for these notes ($228,000). However, if you subtract the decrease in notes, $55,000, you get $173,000; which is the total for the Canouse notes listed on page 6.
To go a step future if you add the notes of Tide Pool Ventures ($32,633), Louvas Law Group ($26,500), and L. G. Capital ($1,500) to $173,000 which is the total for notes listed on page 6 you arrive at $233,633. This is the amount listed on page 18 in Q2 as “convertible notes payable amounted to”. So, the math adds up.
The error, or confusion, in Q2 is page 18. It states “The remaining loan balance at April 30,2019 of $228,000 represents 12 month convertible notes payable to Machiavelli Ltd LLC, to Carpathia LLC and to J.P. Carey Enterprises, Inc.”. This statement is incorrect. It should state the total for these notes is $173,000, not $228,000. It makes sense that there was a reduction in the Canouse notes since shares were issued to them and no shares issued to Tide Pool, Louvas Law Group, or L. G.
I don’t like making assumptions but in this case I will. These Q’s are not written from scratch. If you compare Q1 to Q2 there is virtually no difference. My guess is they pulled up a copy of Q1 and made the few necessary changes to suit Q2 and called it done. In doing so the change needed on page 18 was overlooked, hence the error in the Canouse note total. The important thing is the statement of “notes payable amounted to $233,633” was correct when totaling the Canouse notes listed on page 6 ($173,000), to the totals for Tide Pool, Louvas Law, and L. G ($60,633).
So, if I’m correct in all of this then the Carpathia note for $60,000 on 12/11/2018 and the Canouse notes that showed up in Q1 is to replace the $288,000 Machiavelli note listed on page 15 in the 2018 annual report. And what appears to be even more new notes listed in Q2 is nothing more than a breaking up of the existing Canouse notes listed in Q1 with some of them receiving 2020 maturity dates
The bottom line is as of April 30th, 2019, (Q2) note total was $233,633. Technically, no new notes were added; one large one was replaced with smaller ones. As of Q2 $173,000 are Canouse notes and $60,633 are Tide Pool, Louvas, and L. G. And it should be remembered that $80,000 of the $173,000 Canouse notes don’t begin to mature until March 2020.
In that report on page 15 it states convertible notes payable amounted to $348,633. It lists Machiavelli Ltd LLC as a new note for $288,000 but listed no others. Notes mentioned in the previous Q are Tide Pool ventures $32,633, Louvas Law Group $26,500, and L. G. Capital $1,500. They total $60,633, and when added to the Machiavelli note gives a total of $348,633. Okay so that matched the stated amount; all was good.
Several things stand out in the Q1 for the 3 months ending January 31, 2019. For starters the Machiavelli note for $288,000 disappeared and Carpathia was issued 141,561,726 shares for debt conversion in December. Thing is the Carpathia note didn’t exist prior to this filing. Also, the new notes; Machiavelli note for $20,000 with a 8/11/2018 maturity date, Carpathia note for $20,000 with a 9/5/2018 maturity date, Carpathia note for $60,000 with a !0/6/2018 maturity date, and the J. P. Carey note for $128,000 with a 1/2/2019 maturity date were all past due but had never showed up on previous Q’s.
The Q in discussion states convertible notes payable amounted to $288,633. It also states that the convertible notes payable total from the previous Q was reduced with a note conversion in the amount of $60,000. This would be the Carpathia note issued on 12/11/2018 using 141,561,726.
The notes listed in Q1 on pages 4 and 17 matches up. On page 17 it is states convertible notes payable amounted to $288,633. However, the notes listed Machiavelli ($20,000), Carpathia ($80,000), and J. P. Carey ($128,000) only add up to $228,000. Since I did not find that Tide Pool Ventures ($32,633), Louvas Law Group ($26,500), and L. G. Capital ($1,500) were paid I added their total ($60,633) to the listed notes of $228,000 and came up with $288,663. So, the statement of convertible notes totaling $288,633 is accurate.
When looking at the numbers I realized if you subtract the $60,000 that was achieved through the 12/11/2018 Carpathia note (that didn’t exist before) from the disappearing Machiavelli note for $288,000 you get $228,000 which is the combined amount listed for the new Machiavelli, Carpathia, and J. P. Carey notes.
At this point, with what’s written above, the only conclusion I can arrive at is the original Machiavelli note for $288,000 was broken up and redistributed through the 12/11/2018 Carpathia note that was paid ($60,000) and the new notes of Machiavelli ($20,000), Carpathia ($80,000), J. P. Carey ($128,000). This would explain the disappearing Machiavelli note and the Carpathia note that wasn’t previously listed because it was issued shares in the same quarter it was written. It is shown on page 3 of Q1 as a debt conversion.
Since Canouse control all entities involved it’s at their discretion to do this. It doesn’t explain why it was done or why past due dates are on these notes, but the math adds up and that’s all I care about.
If I am correct, then what I thought were new Canouse notes listed on Q1 is not new debt. Instead it’s a redistribution of old debt from the original Machiavelli note for $288,000 listed in the 2018 annual report that disappeared.
That brings us to Q2.
To begin with, page 18 of Q2 states notes payable amounted to $233,633. It states this is a decrease of $55,000 from Q1’s total. (it actually states a $115,000 reduction for first 6 months, but the math gives me $55,000 for Q2). Also, on page 18 it states as of April 30, 2019 $228.000 represents convertible notes payable to Machiavelli, Carpathia, and J. P. Carey. If correct then this is unchanged from Q1 which also had $228,000 as the total for those notes as.
So, the difference between the stated notes payable amount ($233,633) and the Canouse notes ($228,000) is $5,633. In the past when there was a difference between those numbers the difference always added up to the amount owed to Tide Pool Ventures, Louvas Law Group, and L. G. Capital. Obviously, this time it does not.
When I add the Canouse notes listed beginning on page 6 of Q2 (Debt Securities, Including Promissory and Convertible Notes) I get a total of $173,000. This differs from the total stated on page 18 for these notes ($228,000). However, if you subtract the decrease in notes, $55,000, you get $173,000; which is the total for the Canouse notes listed on page 6.
To go a step future if you add the notes of Tide Pool Ventures ($32,633), Louvas Law Group ($26,500), and L. G. Capital ($1,500) to $173,000 which is the total for notes listed on page 6 you arrive at $233,633. This is the amount listed on page 18 in Q2 as “convertible notes payable amounted to”. So, the math adds up.
The error, or confusion, in Q2 is page 18. It states “The remaining loan balance at April 30,2019 of $228,000 represents 12 month convertible notes payable to Machiavelli Ltd LLC, to Carpathia LLC and to J.P. Carey Enterprises, Inc.”. This statement is incorrect. It should state the total for these notes is $173,000, not $228,000. It makes sense that there was a reduction in the Canouse notes since shares were issued to them and no shares issued to Tide Pool, Louvas Law Group, or L. G.
I don’t like making assumptions but in this case I will. These Q’s are not written from scratch. If you compare Q1 to Q2 there is virtually no difference. My guess is they pulled up a copy of Q1 and made the few necessary changes to suit Q2 and called it done. In doing so the change needed on page 18 was overlooked, hence the error in the Canouse note total. The important thing is the statement of “notes payable amounted to $233,633” was correct when totaling the Canouse notes listed on page 6 ($173,000), to the totals for Tide Pool, Louvas Law, and L. G ($60,633).
So, if I’m correct in all of this then the Carpathia note for $60,000 on 12/11/2018 and the Canouse notes that showed up in Q1 is to replace the $288,000 Machiavelli note listed on page 15 in the 2018 annual report. And what appears to be even more new notes listed in Q2 is nothing more than a breaking up of the existing Canouse notes listed in Q1 with some of them receiving 2020 maturity dates
The bottom line is as of April 30th, 2019, (Q2) note total was $233,633. Technically, no new notes were added; one large one was replaced with smaller ones. As of Q2 $173,000 are Canouse notes and $60,633 are Tide Pool, Louvas, and L. G. And it should be remembered that $80,000 of the $173,000 Canouse notes don’t begin to mature until March 2020.
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