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Convertible Notes
6 Months Ended
Jun. 30, 2014
Convertible Notes  
Convertible Notes

NOTE 4 – CONVERTIBLE NOTES

 

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 shares of the Company's common stock. The statement of operations included expense of 2,308 and $7,500 for amortization of debt discount for the three and six months ended June 30, 2014, respectively. On June 2, 2014 the holder of the note converted remaining $9,100 of outstanding principal into 91,000 shares of the Company’s common stock.

 

On June 10, 2014, the Company agreed to amend and add certain terms to unsecured, non-interest bearing promissory notes payable on demand issued to The Cellular Connection Ltd. issued during the period from February 22, 2013 to June 30, 2014 with a total carrying value $42,189. Under the terms of the Side Letter Agreement, the issue price of the Note is $42,189 with a face value of $54,193 and interest rate 20% per year. The terms of the Note include a fixed conversion price of $0.0002 per share of Company’s common stock and a maturity date of December 31, 2014. The amendment of the terms of the Note resulted in a beneficial conversion feature of $42,189. The beneficial conversion feature of $42,189 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 June 20 and 26, 2014 the Company elected to convert $5,500 of principal into 27,500,000 shares of the Company's common stock. The statement of operations included expense of $5,313 for amortization of debt discount for the three and six months ended June 30, 2014.

 

On June 10, 2014, the Company entered into Side Letter Agreement with the Dorset Solutions Inc. to amend and add certain terms to invoices issued for services during the period from August 21, 2012 to May 17, 2014 with a total carrying value $17,150. Under the terms of the Side Letter Agreement, the issue price of the Note is $17,150 with a face value of $22,295 and interest rate 20% per year. The terms of the Note include a fixed conversion price of $0.0002 per share of Company’s common stock and a maturity date of December 31, 2014. The amendment of the terms of the Note resulted in a beneficial conversion feature of $17,150. The beneficial conversion feature of $17,150 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. The statement of operations included expense of $2,186 for amortization of debt discount for the three and six months ended June 30, 2014.

 

On June 10, 2014, the Company entered into Side Letter Agreement with the Doug Clark, former Chief Executive Officer, to amend and add certain terms to the related party advances of $82,495 for the period from March 2009 to June 2014 and officer and director compensation accrued and unpaid of $137,000 for the period October 1, 2013 to May 19, 2014. Under the terms of the Side Letter Agreement, the issue price of the Note is $219,495 with a face value of $272,038 and interest rate 20% per year. The terms of the Note include a fixed conversion price of $0.0002 per share of Company’s common stock and a maturity date of December 31, 2014. The amendment of the terms of the Note resulted in a beneficial conversion feature of $219,495. The beneficial conversion feature of $219,495 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. The statement of operations included expense of $26,670 for amortization of debt discount for the three and six months ended June 30, 2014.

 

On June 15, 2014, the Company agreed to amend and add certain terms to unsecured, non-interest bearing promissory notes payable on demand issued to Al Kau in a period from March 2012 to February 2013 with a total carrying value $36,000. Under the terms of the Side Letter Agreement, the issue price of the Note is $36,000 with a face value of $45,500 and interest rate 20% per year. The terms of the Note include a fixed conversion price of $0.008 per share of Company’s common stock and a maturity date of December 31, 2014. The amendment of the terms of the Note resulted in a beneficial conversion feature of $36,000. The beneficial conversion feature of $36,000 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 June 16, 2014 the Company elected to convert $45,500 of principal into 5,699,000 shares of the Company's common stock. The statement of operations included expense of $45,500 for amortization of debt discount for the three and six months ended June 30, 2014.

 

On June 15, 2014, the Company agreed to amend add certain terms to unsecured, non-interest bearing promissory notes payable on demand issued to Aaron Shrira in a period from February to November 2012 with a total carrying value $42,917. Under the terms of the Side Letter Agreement, the issue price of the Note is $42,917 with a face value of $46,320 and interest rate 20% per year. The terms of the Note include a fixed conversion price of $0.008 per share of Company’s common stock and a maturity date of December 31, 2014. The amendment of the terms of the Note resulted in a beneficial conversion feature of $42,917. The beneficial conversion feature of $42,917 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 June 16, 2014 the Company elected to convert $46,320 of principal into 5,790,000 shares of the Company's common stock. The statement of operations included expense of $46,320 for amortization of debt discount for the three and six months ended June 30, 2014.