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Convertible Notes Payable (Narrative) (Details) (USD $)
 1 Months Ended 12 Months Ended 1 Months Ended
Dec. 31, 2011
Prolific Group, LLC
Dec. 31, 2011
Tripod Group, LLC
Jun. 30, 2013
Asher Enterprises, Inc
Dec. 31, 2012
Collins Note
Jun. 30, 2013
Collins Note
Amount of Convertible Promissory Notes $ 25,000 $ 30,000     $ 100,000
Interest rate on convertible notes 6.00% 6.00%     12.00%
Debt instrument, description

Prolific Group, LLC

On December 6, 2011 we issued a convertible promissory note payable to the Prolific Group, LLC, (the "Prolific Note") in the amount of $25,000. The Note was unsecured, due December 6, 2012 and bore interest at a rate of 6% p.a. The Prolific Note is convertible into shares of our common stock at a conversion price equal to 65% of the average day's lowest closing bid out of the 5 trading days prior to conversion. CTi has the option to pre-pay the note prior to conversion at a premium of 150% of the principal amount. The issuance of the Prolific Note amounted in a beneficial conversion feature of $4,673 on the issue date which has been recorded as a discount to the carrying value of the note and is being amortized to interest expense over the term of the note. As of June 30, 2012, the outstanding balance of the note was $3,550 and remaining unamortized discount balance amounted to $2,030.

By virtue of the variable conversion ratio, the conversion feature is a derivative under ASC 815-40, Derivatives and Hedging, and accordingly, the value of the conversion feature has been classified as a derivative liability on the accompanying balance sheet. As of June 30, 2012, the outstanding balance of the liability was $663.

In July 2012, the $3,550 was paid in full. As a result, the $2,030 note discount was charged to interest expense and recorded a gain of $663 due to the extinguishment of the derivative liability.

 

Tripod Group, LLC

On December 6, 2011 we issued a convertible promissory note payable to the Tripod Group, LLC, (the "Second Tripod Note") in the amount of $30,000. The Note was unsecured, due December 6, 2012 and bore interest at a rate of 6% p.a. The Second Tripod Note is convertible into shares of our common stock at a conversion price equal to 65% of the average day's lowest closing bid out of the 5 trading days prior to conversion. CTi has the option to pre-pay the note prior to conversion at a premium of 150% of the principal amount. The issuance of the Second Tripod Note amounted in a beneficial conversion feature of $5,608 on the issue date which has been recorded as a discount to the carrying value of the note. As of June 30, 2012, the outstanding balance of the note was $30,000 and the remaining unamortized discount balance amounted to $2,436.

By virtue of the variable conversion ratio, the conversion feature is a derivative under ASC 815-40, Derivatives and Hedging, and accordingly, the value of the conversion feature has been classified as a derivative liability on the accompanying balance sheet. As of June 30, 2012, the outstanding balance of the liability was $5,608.

In July 2012, the $30,000 was paid in full. As a result, the $2,437 note discount was charged to interest expense and recorded a gain of $5,608 due to the extinguishment of the derivative liability.

 

 

Asher Note

On July 12, 2012 we entered into a convertible promissory note with Asher Enterprises, Inc. under which we issued a $53,000 convertible promissory note. The note was unsecured, due April 13, 2013 and bore interest at a rate of 8% per annum. The note is convertible into shares of our common stock at a conversion price equal to 60% of the average of the lowest three (3) Trading Prices for the Common Stock during the ten Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. The note was issued in reliance on Section 4(2) of the Securities Act of 1933. The note was not offered via general solicitation to the public. No sales commissions or other remuneration was paid in connection with the issuance of this note.

The conversion price of the note is subject to adjustment based upon the pricing of subsequent financings undertaken by the Company. The Company has determined that this anti-dilution reset provision caused the conversion feature to be bifurcated from the Asher Note, treated as a derivative liability, and accounted for at its fair value. Upon issuance, the Company determined the fair value of the conversion feature was $15,149 and recorded a corresponding note discount to be amortized over the term of the note.

On November 9, 2012 the $53,000 note was paid in full including a pre-payment premium of $19,600 and interest of $1,394. Furthermore, the Company charged the entire $15,149 note discount to interest expense and recorded a gain of $19,159 to account for the extinguishment of the derivative liability which includes the $15,149 liability recorded when the note was issued and $4,010 recorded subsequently to account for the change in fair value of the liability.

 

 

 

 

 

Collins Note

On December 17, 2012 we issued a convertible promissory note payable to a private party, Stephen Collins, in the amount of $100,000 with an interest rate of 12% per annum and due May 31, 2014. The note is unsecured, convertible into shares of our common stock at a conversion price of $0.03 any time during the life of the note. The note was still outstanding as of June 30, 2013. The note was issued in reliance on Section 4(2) of the Securities Act of 1933. The note was not offered via general solicitation to the public. No sales commissions or other remuneration was paid in connection with the issuance of this note. Upon issuance of the note, the trading price of the Company's common stock was also $0.03/share which is the same as the note's conversion price. As such, there was no cost of beneficial conversion feature recorded.

Also, 3,333,333 fully vested warrants with a fair value of $90,106 were issued in connection with this note. The warrants are exercisable at $0.07/share and will expire in 3 years. The fair value of the warrants was recorded as a note discount and is being amortized to interest expense over the term of the note.

During the year ended June 30, 2013, the Company recognized and paid interest expense of $6,500 and amortized the note discount for $30,037. As of June 30, 2013, the outstanding balance of Convertible Notes Payable (net of discount) as recorded on the balance sheet amounted to $44,826 consisting of outstanding principal of $100,000 less discount of $55,174.

 

 

 

 

 

 

 

 

 

 

 

  
Debt Instrument, Maturity Date Dec. 06, 2012 Dec. 06, 2012 Apr. 13, 2013 May 13, 2014  
Conversion Price, per share         $ 0.03
Debt pre-payment premium     19,600    
Warrants issued in connection with note         3,333,333
Unamortized note discount         44,826
Interest payable     $ 1,394