Convertible Notes

12 Months Ended

Dec. 31, 2013

Convertible Notes

Convertible Notes

NOTE 4 – CONVERTIBLE NOTES 

On September 3, 2012, the Company amended the promissory note with a carrying value of $11,250 issued to Al Kau on February 22, 2012. The modification of the promissory note should have been accounted for as debt extinguishment and the issuance of a new debt instrument. The amended note had a fixed conversion price of $0.0001 per share of the Company’s common stock. In additional, as a result of the modification the face value of the amended note was increased from $11,250 to $14,000 resulting in a finance charge of $2,750. The amended note bears interest at 20% per annum and allows for the lender to secure a portion of the Company assets up to 200% of the face value of the note and mature one year from the day of their respective issuance. The amended note resulted in a beneficial conversion feature of $11,250 since the closing price of common stock on September 3, 2013 exceeded the fixed conversion price. The beneficial conversion feature of $11,250 is included in additional paid-in capital. From October 10, 2012 to October 18, 2012, the holder of the amended note converted $14,000 of principal plus accrued interest into 140,000,000 shares of the Company’s common stock.

On June 18, 2013, the Company amended an unsecured, non-interest bearing promissory note payable on demand with a carrying value $1,750 issued to the Cellular Connection Ltd. The modification of the Note has been accounted for as debt extinguishment and the issuance of a new debt instrument. Under the terms of the Side Letter Agreement, the Note has a fixed conversion price of $0.0001 per share of the Company’s common stock. In additional, as a result of the modification the face value of the Note was increased from $1,750 to $3,500 resulting in a finance charge of $1,750. The note bears interest at 20% per annum and allows for the lender to secure a portion of the Company assets up to 200% of the face value of the note and mature one year from the day of their respective issuance. The amendment of the terms of Promissory Note resulted in a beneficial conversion feature of $3,500 since the closing price of common stock on June 18, 2013 exceeded the fixed conversion price. The beneficial conversion feature of $3,500 is included in additional paid-in capital. On June 18, 2013 the holder of the note converted $3,500 of principal plus accrued interest into 35,000,000 shares of the Company's common stock.

On July 2, 2013, the Company agreed to amend the term of an unsecured, non-interest bearing promissory note payable on demand with a carrying value $12,500 issued to the Al Kau, Al Kau is a consultant, investor and customer of the Company. Under the terms of the Side Letter Agreement, the issue price of the Note is $12,500 with a face value of $18,000 and the terms of the Note include a fixed conversion price of $0.0001 per share of Company’s common stock and a maturity date of May 10, 2014. The amendment of the terms of the Note resulted in a beneficial conversion feature of $12,500 since the closing price of common stock on July 2, 2013 exceeded the fixed conversion price. The beneficial conversion feature of $12,500 is included in additional paid-in capital. The Note allows for the lender to secure a portion of the Company assets up to 200% of the face value of the note. On July 11, 15 and 16, 2013 the holder of the note converted $8,900 of principal plus accrued interest into 89,000,000 shares of the Company's common stock. Accreted interest expense of $10,500 as result of the amortization of the debt discount is included in interest expense in the statement of operations for the year ended December 31, 2013.