RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2016

NOTE 4 – RELATED PARTY TRANSACTIONS

The Company owes aggregate convertible notes payable to shareholders of $3,358,593 and $3,513,598 as of September 30, 2016 and December 31, 2015, respectively.

LIBOR + 2% Notes

The Company owes LIBOR plus 2% convertible notes payable to shareholders of $1,628,303 and $1,484,368 as of September 30, 2016 and December 31, 2015, respectively. The notes payable accrue interest at the 360-day LIBOR plus 2% per annum (calculated on the date of issuance), and are due one year from the date of issuance. Several of the notes have reached maturity and have been extended one or more times with identical terms. Should the Company default on the notes, they are subject to a penalty such that they would accrue interest at 150% of the original rate, commencing on the due date. During the year ended December 31, 2015, the Company borrowed a total of $312,338 pursuant to these notes, and borrowed an additional $143,935 during the nine months ended September 30, 2016. Interest expense on the notes totaled $50,306 and $34,005 during the nine months ended September 30, 2016 and 2015, respectively. Accrued interest payable on the notes totaled $182,492 and $132,188 at September 30, 2016 and December 31, 2015, respectively.

Even LIBOR Note

On July 1, 2015 the Company consummated a debt transaction whereby the Company became indebted to Oil Combustibles, S.A., a related party, in the amount of $2,900,550 (26,370,759 Argentine Pesos). The primary proceeds of this note, $1,997,768, were used to satisfy the Company’s outstanding payable to its former officer Matias Bullrich in the amount of $1,560,000, plus accrued interest totaling $437,768. The remaining $902,782, representing the difference between the note amount and the total amount paid to Mr. Bullrich, was a note premium recorded as a loss on settlement of debt. The note accrues interest at the 360-day LIBOR rate, and becomes due one year from the date of issuance. The note is to be repaid solely in Argentine pesos, and therefore is subject to foreign currency periodic revaluation. From the date of issuance through September 30, 2016, the note balance decreased by $1,170,232 due to changes in foreign currency exchange rates. This amount has been classified as other comprehensive income in the financial statements. At September 30, 2016 accrued interest on the note totaled $27,920.

CENTENARY INTERNATIONAL CORP 10-Q