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14. Subsequent Events
6 Months Ended
Jun. 30, 2013
Subsequent Events [Abstract]  
Subsequent Events

Note 14 – Subsequent Events

 

Debt Conversions into Class A Common Stock

On July 9, 2013, the Company issued 80,000,000 shares of Class A Common Stock pursuant to the conversion of $26,400 of convertible debt owed to a related party, which consisted entirely of principal. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

 

On July 10, 2013, the Company issued 22,222,222 shares of Class A Common Stock pursuant to the conversion of $8,000 of convertible debt, which consisted entirely of principal. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

 

On July 30, 2013, the Company issued 15,476,190 shares of Class A Common Stock pursuant to the conversion of $13,000 of convertible debt, which consisted entirely of principal. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

 

On August 7, 2013, the Company issued 40,000,000 shares of Class A Common Stock pursuant to the conversion of $32,000 of convertible debt owed to a related party, which consisted entirely of principal. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

 

Shares of Class A Common Stock Issued for Services to Related Parties

On July 5, 2013, the Company issued 25,000,000 shares of Class A Common Stock to Vivienne Passley, a related party, for providing human resource services. The total fair value of the common stock was $15,000 based on the closing price of the Company’s common stock on the date of grant.

 

On July 8, 2013, the Company issued 710,526,316 shares of Class A Common Stock to the Company’s CEO in consideration for providing product development services, of which 200,000,000 shares vested immediately and the remaining 510,526,316 shares will be vested once the Company reports revenue of $10 million in a calendar year. The total fair value of the common stock was $497,368 based on the closing price of the Company’s common stock on the date of grant, of which $140,000 is being expensed and $357,368 is presented as a deduction against additional paid in capital in the equity section of the balance sheet until the terms of the vesting periods are satisfied.

 

Shares of Class A Common Stock Issued as Loan Origination Fees to Related Parties

On July 19, 2013, the Company issued 2,500,000 shares of Class A Common Stock to Vivienne Passley, a related party, as a loan origination fee. The total fair value of the common stock was $4,250 based on the closing price of the Company’s common stock on the date of grant.

 

On July 31, 2013, the Company issued 3,000,000 shares of Class A Common Stock to Star Financial Corporation, a related party, as a loan origination fee. The total fair value of the common stock was $4,200 based on the closing price of the Company’s common stock on the date of grant.

 

On August 2, 2013, the Company issued 3,000,000 shares of Class A Common Stock to Star Financial Corporation, a related party, as a loan origination fee. The total fair value of the common stock was $5,100 based on the closing price of the Company’s common stock on the date of grant.

 

On August 12, 2013, the Company issued 5,000,000 shares of Class A Common Stock to Vivienne Passley, a related party, as a loan origination fee. The total fair value of the common stock was $7,000 based on the closing price of the Company’s common stock on the date of grant.

 

Debt Financing, Related Party

On July 31, 2013, the Company received an unsecured loan of $27,000 from Star Financial Corporation, Inc., a corporation owned by an immediate family member of the Company’s CEO. The note carries a 15% interest rate, matures on January 15, 2014. In addition, a loan origination fee of $5,000 and 3,000,000 shares of Class A Common Stock was issued as consideration for the loan, and is being amortized on a straight line basis over the life of the loan.

 

On August 2, 2013, the Company received an unsecured loan of $27,000 from Star Financial Corporation, Inc., a corporation owned by an immediate family member of the Company’s CEO. The note carries a 15% interest rate, matures on January 17, 2014. In addition, a loan origination fee of $5,000 and 3,000,000 shares of Class A Common Stock was issued as consideration for the loan, and is being amortized on a straight line basis over the life of the loan.

  

On August 7, 2013, the Company received an unsecured loan of $24,000 from Star Financial Corporation, Inc., a corporation owned by an immediate family member of the Company’s CEO. The note carries a 15% interest rate, matures on January 20, 2014. In addition, a loan origination fee of $4,000 and 2,500,000 shares of Class A Common Stock was issued as consideration for the loan, and is being amortized on a straight line basis over the life of the loan.

 

On August 12, 2013, the Company received an unsecured loan of $51,000 from Star Financial Corporation, Inc., a corporation owned by an immediate family member of the Company’s CEO. The note carries a 15% interest rate, matures on February 15, 2014. In addition, a loan origination fee of $6,000 and 5,000,000 shares of Class A Common Stock was issued as consideration for the loan, and is being amortized on a straight line basis over the life of the loan.

 

Debt Repayments

On August 12, 2013, the Company repaid $33,333 in complete satisfaction of the First JMJ note, consisting of $33,000 of principal and $333 of accrued and unpaid interest.

 

Amendment to Employment Agreement

On August 16, 2013, the Company amended Shaun Passley’s employment agreement to increase the cash portion of his compensation from $30,000 per year to $100,000 in the initial year of the agreement only. All other terms remain in effect, and the shares of stock awarded as a bonus as previously disclosed were granted in addition to the stock based compensation outlined in the original agreement.