2.4.0.80014 - Disclosure - NOTE 8 - CONVERTIBLE DEBENTURE/NOTES PAYABLEtruefalsefalse1false falsefalseFrom2013-01-01to2013-06-30http://www.sec.gov/CIK0001024920duration2013-01-01T00:00:002013-06-30T00:00:001true 1us-gaap_DebtDisclosureAbstractus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse0Debt Disclosure [Abstract]2false 2us-gaap_LongTermDebtTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00 NOTE 8-	CONVERTIBLE DEBENTURE/NOTES PAYABLE   <table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify; border-bottom: Black 1pt solid">Convertible debenture/notes payable consisted of the following</td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">June 30, 2013</td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">December 31, 2012</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 70%; font-size: 11pt; text-align: justify; padding-left: 5.4pt">Convertible debenture issued on October 2, 2012, unsecured, interest included, due on October 2,  2015, convertible into common stock at 60% of the lowest closing bid price for the twenty trading days immediately preceding the date of conversion, (less unamortized debt discount of $90,301 and $110,137, respectively)</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">29,699</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">9,863</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 11pt; text-align: justify; padding-left: 5.4pt"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 11pt; text-align: justify; padding-left: 5.4pt">Convertible Notes payable issued on March 12, 2012, unsecured, interest included, due on March 12, 2014,convertible into common stock at $1.00 per share (less unamortized debt discount of $91,455 and $151,869, respectively)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">158,545</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">98,131</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 11pt; text-align: justify; padding-left: 5.4pt"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 11pt; text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Convertible debenture issued on February 1, 2013 , unsecured, interest included, due on October 2,  2015, convertible into common stock at 60% of the lowest closing bid price for the twenty trading days immediately preceding the date of conversion, (less unamortized debt discount of $84,687 and $-0-, respectively)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">15,313</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">  </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 5.4pt">          Total notes payable</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">203,557</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">107,994</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">          Less: current portion</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">158,545</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">  </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">          Long-term convertible debenture/notes payable</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">45,012</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">107,994</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>   Convertible note issued March 12, 2012   On March 12, 2012, the Company issued a $250,000 Convertible Promissory Note which is convertible into 250,000 shares of the Companys common stock at the holders option, or $1.00 per share, and there is no fluctuation in this conversion rate.   In accordance with ASC 470-20, the Company recognized an embedded beneficial conversion feature present in the note. The Company allocated a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The Company recognized and measured an aggregate of $250,000 of the proceeds, which is equal to the intrinsic value of the embedded beneficial conversion feature, to additional paid-in capital and a discount against the note. The debt discount attributed to the beneficial conversion feature is charged to current period operations as interest expense using the effective interest method over the term of the note.   During the six months ended June 30, 2013 and 2012, the Company amortized $60,414 and $0, respectively, to the operations as interest expense. During the three months ended June 30, 2013 and 2012, the Company amortized $30,374 and $0, respectively, to the operations as interest expense. In the year 2012, the holder of the promissory note made payments of $200,000 directly to vendors of the Company for purchase of fuel and paid $50,000 directly to the Company. As part of the joint venture agreement the Company has agreed to pay 37.5% of all the profits generated by all the fuel transactions in South Africa. As of June 30, 2013 and 2012, the Company has paid $-0- to the joint venture partner.   Convertible debenture   On October 2, 2012, the Company issued a $120,000 Convertible Promissory Note which bears interest at a rate of 6% and is convertible into the Companys common stock at the holders option, at the conversion rate of 60% of the lowest closing bid price for the twenty trading days immediately preceding the date of conversion. During the year ended December 31, 2012 the Company also issued 30,000 of shares along with Note which valued at market rate for $75,000 and was charged to expenses. The Company received net $88,000 from the debenture holder and balance $32,000 were paid towards the legal expenses and due diligence fees.   On February 1, 2013, the Company issued a $100,000 Convertible Promissory Note which bears interest at a rate of 6% and is convertible into the Companys common stock at the holders option, at the conversion rate of 60% of the lowest closing bid price for the twenty trading days immediately preceding the date of conversion. The Company received net $90,000 from the debenture holder and balance $10,000 were paid towards the legal expenses.   The Company identified embedded derivatives related to the Convertible Promissory Note entered into on February 1, 2013. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $206,062 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:   <table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 11pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 70%; color: black; text-align: left">Dividend yield:</td><td style="width: 10%; color: black"> </td> <td style="width: 1%; color: black; text-align: left"> </td><td style="width: 18%; color: black; text-align: right">-0-</td><td style="width: 1%; color: black; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="color: black; text-align: justify">Volatility</td><td style="color: black"> </td> <td style="color: black; text-align: left"> </td><td style="color: black; text-align: right">200.33</td><td style="color: black; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="color: black; text-align: left">Risk free rate:</td><td style="color: black"> </td> <td style="color: black; text-align: left"> </td><td style="color: black; text-align: right">0.40</td><td style="color: black; text-align: left">%</td></tr> </table>   The initial fair value of the embedded debt derivative of $206,062 was allocated as a debt discount up to the proceeds of the note ($100,000) with the remainder($106,062) charged to current period operations as interest expense for the six months ended June 30, 2013.   The fair value of the described embedded derivative of $334,082 at June 30, 2013 was determined using the Binomial Lattice Model with the following assumptions:   <table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 11pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 70%; color: black; text-align: left">Dividend yield:</td><td style="width: 10%; color: black"> </td> <td style="width: 1%; color: black; text-align: left"> </td><td style="width: 18%; color: black; text-align: right">-0-</td><td style="width: 1%; color: black; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="color: black">Volatility</td><td style="color: black"> </td> <td style="color: black; text-align: left"> </td><td style="color: black; text-align: right">198.87</td><td style="color: black; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="color: black; text-align: left">Risk free rate:</td><td style="color: black"> </td> <td style="color: black; text-align: left"> </td><td style="color: black; text-align: right">0.36</td><td style="color: black; text-align: left">%</td></tr> </table>   At June 30, 2013, the Company adjusted the recorded fair value of the derivative liability to market on both notes resulting in non-cash, non-operating gain of $76,119 and $137,569 for the three and six months ended June 30, 2013, respectively.   During the six months ended June 30, 2013 and 2012, the Company amortized $35,149 and $-0- to current period operations as interest expense respectively. During the three months ended June 30, 2013 and 2012, the Company amortized $19,325 and $-0- to current period operations as interest expense respectively. falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for long-term debt.Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 22 -Article 5 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 false0NOTE 8 - CONVERTIBLE DEBENTURE/NOTES PAYABLEfalseNOTE 8 - CONVERTIBLE DEBENTURE/NOTES PAYABLEUnKnownUnKnownUnKnownUnKnowntruefalsefalseNoteshttp://FLST/role/Note8-ConvertibleDebenturenotesPayable12