13. Notes Payable | 12 Months Ended |
Dec. 31, 2014 |
Notes to Financial Statements | |
Note 13. Notes Payable | Abrams |
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On September 8, 2014, the Company entered into a Securities Purchase Agreement and issued a Convertible Promissory Note. The Note is in the original principal amount of $35,000, pays interest at the rate of 8% per annum, and has a maturity date of September 7, 2015. The Company may prepay the Note at any time for a premium of 120% of the principal amount and any accrued and unpaid interest. The Note is convertible into its common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The “Variable Conversion Price” shall mean 62% multiplied by the Market Price (as defined herein) (representing a discount rate of 38%), but no more than $0.06 per share. “Market Price” means the lowest Trading Price (as defined below) for the Common Stock during the five Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the VWAP value as posted on Bloomberg. The “Fixed Conversion Price” shall mean $0.0005. The shares of common stock issuable upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The purchase and sale of the Note closed on September 9, 2014, the date that the purchase price was delivered to the Company. At December 31, 2014, the Company had $35,875 in accrued interest and principal recorded as a current note payable. |
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On November 20, 2014, the Company entered into a Promissory Note and Stock Purchase Agreement, pursuant to which the Company issued, a senior promissory note in the principal amount of Fifty Thousand Dollars ($50,000) and fifty thousand (50,000) shares of its common stock. The Note has an interest of rate of 15% per annum and has a maturity date of January 20, 2016. The Company accounts for debt discount according to ASC 470-20 Debt With Conversion And Other Options. No debt discount associated with the Convertible Note was recorded because the fair value of the common stock at the commitment date ($0.095) was less than the effective conversion price of the conversion feature ($0.20). As such, there was no intrinsic value associated with the conversion feature and thus no debt discount was recognized. |
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Adar Bay |
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On June 27, 2014, the Company entered into a Securities Purchase Agreement with Adar Bays, LLC, pursuant to which it sold to Adar two (2) 8% convertible notes, each in the principal amount of $35,000 (the “Notes”). The first of the two notes (the “First Note”) was paid for by Adar at the Closing, while the second of the two notes (the “Second Note”) was paid for the issuance of an offsetting $35,000 note issued by the Company to the Buyer (the “Buyer Note”), provided that prior to conversion of the Second Note, the Buyer must have paid off the Buyer Note. Each of the Notes have a maturity date of June 30, 2015 and is convertible after 180 days into common stock at 58% of the lowest trading price of the common stock for the ten (10) prior trading days, with a floor of $0.0001 per share. The shares of common stock issuable upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The First Note can be prepaid by the Company at a premium as follows: (a) between 0 and 90 days after issuance – 130% of the principal amount; (b) between 91 and 150 days after issuance – 140% of the principal amount; and (c) between 151 and 180 days after issuance – 150% of the principal amount. The Second Note cannot be prepaid; however, if the First Note is prepaid, the Second Note shall be automatically cancelled, as will the Buyer Note. The Buyer Note has a maturity of February 28, 2015 and bears interest at the rate of 8% per annum. The purchase and sale of the Notes closed on June 30, 2014, the date that the purchase price was delivered to the Company. On December 26, 2014, the Company repaid the promissory note to Adar Bays, LLC. The Company repaid the entire principal balance of the Notes plus accrued interest and a prepayment premium, in the total amount of Fifty Three Thousand Nine Hundred Fifteen Dollars and Fifty Six Cents ($53,915.56). |
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Asher Enterprises |
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On January 3, 2014, the Company repaid the promissory note to Asher Enterprises, Inc. that, on July 11, 2013, it entered into in connection with a Securities Purchase Agreement, pursuant to which it sold to Asher a 8% Convertible Promissory Note in the original principal amount of $53,000 (the “Note”). The Company repaid the entire principal balance of the Note, plus accrued interest and a prepayment premium, in the amount of $70,840. |
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On January 6, 2014, the Company entered into a Securities Purchase Agreement with Asher Enterprises, Inc., pursuant to which the Company sold to Asher a 8% Convertible Promissory Note in the original principal amount of $63,000 (the “Note”). The Note had a maturity date of October 8, 2014, and is convertible after 180 days into its common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The “Variable Conversion Price” shall mean 58% multiplied by the Market Price (representing a discount rate of 42%). “Market Price” means the average of the lowest three (3) Trading Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means the closing bid price on the applicable day. The “Fixed Conversion Price” shall mean $0.00005. The shares of common stock issuable upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The Note can be prepaid by the Company at a premium as follows: (a) between 31 and 60 days after issuance – 114% of the principal amount; (b) between 61 and 90 days after issuance – 120% of the principal amount; (c) between 91 and 120 days after issuance – 124% of the principal amount; (d) between 121 and 180 days after issuance – 130% of the principal amount. The purchase and sale of the Note closed on January 10, 2014, the date that the purchase price was delivered to the Company. On July 8, 2014, the Company repaid the promissory note to Asher Enterprises, Inc. The Company repaid the entire principal balance of the Note, plus accrued interest and a prepayment premium, in the amount of Eighty Four Thousand Four Hundred Dollars ($84,400.00). |
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On February 19, 2014, the Company repaid the promissory note to Asher Enterprises, Inc. that, on August 22, 2013, it entered into in connection with a Securities Purchase Agreement, pursuant to which it sold to Asher a 8% Convertible Promissory Note in the original principal amount of $35,500 (the “Note”). The Company repaid the entire principal balance of the Note, plus accrued interest and a prepayment premium, in the amount of $43,897. |
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On February 24, 2014, the Company entered into a Securities Purchase Agreement with Asher Enterprises, Inc., pursuant to which the Company sold to Asher a 8% Convertible Promissory Note in the original principal amount of $53,000 (the “Note”). The Note had a maturity date of November 26, 2014, and is convertible after 180 days into its common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The “Variable Conversion Price” shall mean 58% multiplied by the Market Price (representing a discount rate of 42%). “Market Price” means the average of the lowest three (3) Trading Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means the closing bid price on the applicable day. The “Fixed Conversion Price” shall mean $0.00005. The shares of common stock issuable upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The Note can be prepaid by the Company at a premium as follows: (a) between 0 and 30 days after issuance – 109% of the principal amount; (b) between 31 and 60 days after issuance – 114% of the principal amount; (c) between 61 and 90 days after issuance – 120% of the principal amount; (d) between 91 and 120 days after issuance – 124% of the principal amount; (e) between 121 and 180 days after issuance – 130% of the principal amount. The purchase and sale of the Note closed on February 28, 2014, the date that the purchase price was delivered to the Company. On August 25, 2014, the Company repaid the promissory note to Asher Enterprises, Inc. The Company repaid the entire principal balance of the Note, plus accrued interest and a prepayment premium, in the amount of Seventy One Thousand Dollars ($71,000). |
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On May 1, 2014, the Company entered into Securities Purchase Agreements with Asher Enterprises, Inc., pursuant to which it sold to Asher, or its affiliates, 8% Convertible Promissory Notes in the original principal amount of $47,500 (the “Note”). The Note has a maturity date of February 5, 2015, and is convertible after one hundred and eighty (180) days into common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The “Variable Conversion Price” shall mean 58% multiplied by the Market Price (representing a discount rate of 42%). “Market Price” means the average of the lowest six (3) Trading Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means the closing bid price on the applicable day. The “Fixed Conversion Price” shall mean $0.00005. The shares of common stock issuable upon conversion of the Notes will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The Notes can be prepaid by the Company at a premium as follows: (a) between 31 and 60 days after issuance - 114% of the principal amount; (b) between 61 and 90 days after issuance - 120% of the principal amount; (c) between 91 and 120 days after issuance - 124% of the principal amount; (d) between 121 and 180 days after issuance - 130% of the principal amount. The issuance of the Note was exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser was an accredited and sophisticated investor, familiar with the Company’s operations, and there was no solicitation. On October 27, 2014, the Company repaid the promissory note to Asher Enterprises, Inc. The Company repaid the entire principal balance of the Note, plus accrued interest and a prepayment premium, in the amount of Sixty Eight Thousand Two Hundred and Seventeen Dollars and Eighty One Cents ($68,217.81). |
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On May 28, 2014, the Company repaid the promissory note to Asher Enterprises, Inc. that, on December 12, 2013, it entered into in connection with a Securities Purchase Agreement, pursuant to which it sold to Asher a 8% Convertible Promissory Note in the original principal amount of $63,000 (the “Note”). The Company repaid the entire principal balance of the Note, plus accrued interest and a prepayment premium, in the amount of Eighty Four Thousand Fifty Four Dollars and Eight Cents ($84,054.08). |
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Auctus Private Equity Fund |
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On December 15, 2014, the Company entered into a Securities Purchase Agreement with Auctus Private Equity Fund, LLC, pursuant to which the Company sold to Auctus a 8% Convertible Promissory Note in the original principal amount of $55,000 (the “Note”). The Note has a maturity date of September 16, 2015, and is convertible after 180 days into its common stock at the greater of (i) the Variable Conversion Price and (ii) $0.0001. The “Variable Conversion Price” shall mean 48% multiplied by the Market Price (representing a discount rate of 52%). “Market Price” means the average of the lowest Trading Price for the Common Stock during the fifteen (15) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means the closing bid price on the applicable day. The shares of common stock issuable upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The Note can be prepaid by the Company at a premium as follows: (a) between 0 and 30 days after issuance – 115% of the principal amount and any accrued and unpaid interest; (b) between 31 and 60 days after issuance – 120% of the principal amount and any accrued and unpaid interest; (c) between 61 and 90 days after issuance – 125% of the principal amount and any accrued and unpaid interest; (d) between 91 and 120 days after issuance – 130% of the principal amount and any accrued and unpaid interest; and (e) between 121 days and 180 days after issuance – 135% of the principal amount and any accrued and unpaid interest. The purchase and sale of the Note closed on December 16, 2014, the date that the purchase price was delivered to the Company. |
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Backman Notes |
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On March 28, 2014, the Company entered into, with a third party investor, a 20% convertible secured promissory note with a maturity date of April 28, 2015 and in the principal amount of $100,000 (the “Note”), which is convertible into common stock at $0.08 per share and which is collateralized by up to $15,000 on a monthly basis by the $100,000 in monthly payments which the Company receives pursuant to its sale of WeedMaps Media, Inc. if not paid in full within six months of the date of the Note. Furthermore, as further collateral, the Company placed 2,500,000 shares of its common stock into escrow. |
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On December 26, 2014, the Company entered into a Secured Promissory Note and Stock Purchase Agreement with a third party investor. Pursuant to the Agreement, the investor tendered fifty thousand dollars ($50,000) in exchange for (i) secured 15% promissory note, with a maturity date of February 26, 2016, issued by its wholly owned subsidiary, White Mountain River, Inc., but convertible into its common stock in certain circumstances, and (ii) two hundred thousand (200,000) shares of its common stock. The Company guaranteed payment of the Note, which is secured by any and all assets purchased using the proceeds therefrom. The issuance of the note and shares was exempt from registration pursuant to Rule 506 of Regulation D promulgated under the Securities Act of 1933. The Company accounts for debt discount according to ASC 470-20 Debt With Conversion And Other Options. No debt discount associated with the Convertible Note was recorded because the fair value of the common stock at the commitment date ($0.08) was less than the effective conversion price of the conversion feature ($0.20). As such, there was no intrinsic value associated with the conversion feature and thus no debt discount was recognized. |
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Buckles Note |
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On November 20, 2014, the Company entered into a Promissory Note and Stock Purchase Agreement, pursuant to which the Company issued, a senior promissory note in the principal amount of Fifty Thousand Dollars ($50,000) and fifty thousand (50,000) shares of its common stock. The Note has an interest of rate of 15% per annum and has a maturity date of January 20, 2016. The Company accounts for debt discount according to ASC 470-20 Debt With Conversion And Other Options. No debt discount associated with the Convertible Note was recorded because the fair value of the common stock at the commitment date ($0.095) was less than the effective conversion price of the conversion feature ($0.20). As such, there was no intrinsic value associated with the conversion feature and thus no debt discount was recognized. |
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Caesar Capital |
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On September 8, 2014, the Company entered into a Securities Purchase Agreement and issued a Convertible Promissory Note. The Note is in the original principal amount of $35,000, pays interest at the rate of 8% per annum, and has a maturity date of September 7, 2015. The Note may be prepaid by the Company at any time for a premium of 120% of the principal amount and any accrued and unpaid interest. The Note is convertible into its common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The “Variable Conversion Price” shall mean 62% multiplied by the Market Price (as defined herein) (representing a discount rate of 38%), but no more than $0.06 per share. “Market Price” means the lowest Trading Price (as defined below) for the Common Stock during the five Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the VWAP value as posted on Bloomberg. The “Fixed Conversion Price” shall mean $0.0005. The shares of common stock issuable upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The purchase and sale of the Note closed on September 9, 2014, the date that the purchase price was delivered to the Company. |
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On November 20, 2014, the Company entered into a Promissory Note and Stock Purchase Agreement, pursuant to which the Company issued, a senior promissory note in the principal amount of Fifty Thousand Dollars ($50,000) and fifty thousand (50,000) shares of its common stock. The Note has an interest of rate of 8% per annum and has a maturity date of January 20, 2016. The Company accounts for debt discount according to ASC 470-20 Debt With Conversion And Other Options. No debt discount associated with the Convertible Note was recorded because the fair value of the common stock at the commitment date ($0.095) was less than the effective conversion price of the conversion feature ($0.20). As such, there was no intrinsic value associated with the conversion feature and thus no debt discount was recognized. |
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DeLue Notes |
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On March 26, 2014, the Company entered into, with a third party investor, a 20% convertible secured promissory note with a maturity date of April 26, 2015 and in the principal amount of $100,000 (the “Convertible Note”), which is convertible into the Company’s common stock at $0.08 per share and which is collateralized by up to $15,000 on a monthly basis by the $100,000 in monthly payments which the Company receives pursuant to its sale of WeedMaps Media, Inc. if not paid in full within six months of the date of the Note. Furthermore, as further collateral, the Company placed 2,500,000 shares of its common stock into escrow. Finally, as an incentive to the third party investor to enter into the Note, the Company issued 300,000 shares of its common stock. The Company accounts for debt discount according to ASC 470-20 Debt With Conversion And Other Options. No debt discount associated with the Convertible Note was recorded because the fair value of the common stock at the commitment date ($0.05) was less than the effective conversion price of the conversion feature ($0.07). As such, there was no intrinsic value associated with the conversion feature and thus no debt discount was recognized. |
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On December 26, 2014, the Company entered into a Secured Promissory Note and Stock Purchase Agreement with a third party investor. Pursuant to the Agreement, the investor tendered one hundred thousand dollars ($100,000) in exchange for a secured 15% promissory note which has a maturity date of February 22, 2016 and is issued by its wholly owned subsidiary, White Mountain River, Inc., but convertible into its common stock in certain circumstances. The Company guaranteed payment of the Note, which is secured by any and all assets purchased using the proceeds therefrom. The issuance of the note and shares was exempt from registration pursuant to Rule 506 of Regulation D promulgated under the Securities Act of 1933. In connection with the transaction, on January 20, 2015, the Company entered into a Consulting Agreement with Robert S. DeLue pursuant to which the Company issued him three hundred thousand (300,000) shares of its common stock. |
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Domain Capital |
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On August 9, 2013, the Company entered into a sale-leaseback agreement with Domain Capital, LLC, pursuant to which it transferred its interest in the following domains to Domain Capital in exchange for One Hundred and Fifty-Thousand Dollars ($150,000.00): www.ManufacturedHome.com, www.ManufacturedHomes.com, www.ManufacturedHouse.com, www.ManufacturedHomes.net, www.ModularHomes.com, www.TravelTrailer.com, and www.ToyHaulers.com (the Domains). That same day, the Company entered into a Lease Agreement with Domain Capital, pursuant to which it is leasing the Domains at a cost of Five Thousand One Hundred and Ninety-Nine Dollars and Eighty Cents ($5,199.80) per month. The initial term of the Lease Agreement is thirty-six (36) months, and the sum of the lease payments due over the initial term are equal to the consideration it received for the Domains (i.e., $150,000.00) plus interest of 15%. The transactions closed on August 15, 2013, the date that the purchase price was delivered to the Company. At the termination of the Lease Agreement, pursuant to the terms of a Buyback Agreement, the Company can exercise an option to re-purchase the Domains for a total purchase price of one dollar ($1.00), assuming it is not in default under the Lease Agreement at that time. The proceeds the Company received from Domain Capital were used to satisfy outstanding debts related to its acquisition of the following domains, with the balance allocated to working capital: www.ModularHomes.com, www.TravelTrailer.com, and www.ToyHaulers.com |
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On May 19, 2014, the Company sold the following domain names: www.ManufacturedHome.com, www.ManufacturedHomes.com www.ManufacturedHouse.com, www.ManufacturedHomes.net, and www.ModularHomes.com. Pursuant to the terms of the sale, the buyer assumed all of the Company’s obligations under the Lease Agreement the Company had with Domain Capital, LLC. See Note 4. Asset Sale for more information. |
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Elkins Trust Note |
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On December 22, 2014, the Company entered into a Secured Promissory Note and Stock Purchase Agreement with a third party investor. Pursuant to the Agreement, the investor tendered fifty thousand dollars ($50,000) in exchange for (i) secured 15% promissory note, with a maturity date of February 22, 2016, issued by its wholly owned subsidiary, White Mountain River, Inc., but convertible into its common stock in certain circumstances. The Company guaranteed payment of the Note, which is secured by any and all assets purchased using the proceeds therefrom. The issuance of the note and shares was exempt from registration pursuant to Rule 506 of Regulation D promulgated under the Securities Act of 1933. |
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Geist Note |
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On November 20, 2014, the Company entered into a Promissory Note and Stock Purchase Agreement pursuant to which the Company issued a senior promissory note in the principal amount of Fifty Thousand Dollars ($50,000) and fifty thousand (50,000) shares of its common stock. The Note has an interest of rate of 15% per annum and has a maturity date of January 20, 2016. The Company accounts for debt discount according to ASC 470-20 Debt With Conversion And Other Options. No debt discount associated with the Convertible Note was recorded because the fair value of the common stock at the commitment date ($0.095) was less than the effective conversion price of the conversion feature ($0.20). As such, there was no intrinsic value associated with the conversion feature and thus no debt discount was recognized. |
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JARVCO Note |
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On November 4, 2014, the Company entered into a Promissory Note, pursuant to which the Company issued a promissory note in the principal amount of Twenty Seven Thousand Dollars ($27,000) in exchange for 4 homesites located in the Strawberry Addition in the City of Arp, Texas. The Note has an interest of rate of 7% per annum and has a maturity date of February 2, 2015. |
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KBM Worldwide Inc. |
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On June 2, 2014, the Company entered into Securities Purchase Agreements with KBM Worldwide Inc., pursuant to which it sold to KBM Worldwide, or its affiliates, an 8% Convertible Promissory Note in the original principal amount of $63,000 (the “Note”). The Note has a maturity date of March 15, 2015, and is convertible after one hundred and eighty (180) days into common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The “Variable Conversion Price” shall mean 58% multiplied by the Market Price (representing a discount rate of 42%). “Market Price” means the average of the lowest six (3) Trading Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means the closing bid price on the applicable day. The “Fixed Conversion Price” shall mean $0.00005. The shares of common stock issuable upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The Note can be prepaid by the Company at a premium as follows: (a) between 31 and 60 days after issuance - 114% of the principal amount; (b) between 61 and 90 days after issuance - 120% of the principal amount; (c) between 91 and 120 days after issuance - 124% of the principal amount; (d) between 121 and 180 days after issuance - 130% of the principal amount. The issuance of the Note was exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser was an accredited and sophisticated investor, familiar with the Company’s operations, and there was no solicitation. On December 4, 2014, the Company repaid the promissory note to KBM Worldwide, Inc. The Company repaid the entire principal balance of the Note plus accrued interest and a prepayment premium, in the total amount of Eighty Four Thousand Three Hundred Seventy One Dollars and Sixty Seven Cents ($84,371.67). |
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On July 9, 2014, the Company entered into Securities Purchase Agreements with KBM Worldwide Inc., pursuant to which it sold to KBM Worldwide, or its affiliates, an 8% Convertible Promissory Note in the original principal amount of $53,000 (the “Note”). The Note has a maturity date of April 14, 2015, and is convertible after one hundred and eighty (180) days into common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The “Variable Conversion Price” shall mean 58% multiplied by the Market Price (representing a discount rate of 42%). “Market Price” means the average of the lowest six (3) Trading Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means the closing bid price on the applicable day. The “Fixed Conversion Price” shall mean $0.00005. The shares of common stock issuable upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The Note can be prepaid by the Company at a premium as follows: (a) between 31 and 60 days after issuance - 114% of the principal amount; (b) between 61 and 90 days after issuance - 120% of the principal amount; (c) between 91 and 120 days after issuance - 124% of the principal amount; (d) between 121 and 180 days after issuance - 130% of the principal amount. The issuance of the Note was exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser was an accredited and sophisticated investor, familiar with the Company’s operations, and there was no solicitation. On January 9, 2015, the Company repaid the promissory note to KBM Worldwide, Inc. The Company repaid the entire principal balance of the Note plus accrued interest and a prepayment premium, in the total amount of Seventy One Thousand and Fifteen Dollars ($71,015.00). |
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On August 26, 2014, the Company entered into Securities Purchase Agreements with KBM Worldwide Inc., pursuant to which it sold to KBM Worldwide, or its affiliates, an 8% Convertible Promissory Note in the original principal amount of $47,500 (the “Note”). The Note has a maturity date of May 28, 2015, and is convertible after one hundred and eighty (180) days into common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The “Variable Conversion Price” shall mean 58% multiplied by the Market Price (representing a discount rate of 42%). “Market Price” means the average of the lowest six (3) Trading Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means the closing bid price on the applicable day. The “Fixed Conversion Price” shall mean $0.00005. The shares of common stock issuable upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The Note can be prepaid by the Company at a premium as follows: (a) between 31 and 60 days after issuance - 114% of the principal amount; (b) between 61 and 90 days after issuance - 120% of the principal amount; (c) between 91 and 120 days after issuance - 124% of the principal amount; (d) between 121 and 180 days after issuance - 130% of the principal amount. The issuance of the Note was exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser was an accredited and sophisticated investor, familiar with the Company’s operations, and there was no solicitation. On February 26, 2015, the Company repaid the promissory note to KBM Worldwide, Inc. The Company repaid the entire principal balance of the Note plus accrued interest and a prepayment premium, in the total amount of Sixty Three Thousand Six Hundred Forty Four Dollars and Eighty Cents ($63,644.80). |
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On October 20, 2014, the Company entered into a Securities Purchase Agreement with KBM Worldwide, Inc., pursuant to which the Company sold to KBM Worldwide a 8% Convertible Promissory Note in the original principal amount of $83,000 (the “Note”). The Note has a maturity date of July 22, 2015, and is convertible after 180 days into its common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The “Variable Conversion Price” shall mean 58% multiplied by the Market Price (representing a discount rate of 42%).“Market Price” means the average of the lowest three (3) Trading Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means the closing bid price on the applicable day. The “Fixed Conversion Price” shall mean $0.00005. The shares of common stock issuable upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The Note can be prepaid by the Company at a premium as follows: (a) between 0 and 30 days after issuance – 109% of the principal amount and any accrued and unpaid interest; (b) between 31 and 60 days after issuance – 114% of the principal amount and any accrued and unpaid interest; (c) between 61 and 90 days after issuance – 120% of the principal amount and any accrued and unpaid interest; (d) between 91 and 120 days after issuance – 124% of the principal amount and any accrued and unpaid interest; and (e) between 121 days and 180 days after issuance – 130% of the principal amount and any accrued and unpaid interest. The purchase and sale of the Note closed on October 28, 2014, the date that the purchase price was delivered to the Company. |
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On November 10, 2014, the Company entered into a Securities Purchase Agreement with KBM Worldwide, Inc., pursuant to which the Company sold to KBM Worldwide a 8% Convertible Promissory Note in the original principal amount of $54,000 (the “Note”). The Note has a maturity date of August 12, 2015, and is convertible after 180 days into its common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The “Variable Conversion Price” shall mean 58% multiplied by the Market Price (representing a discount rate of 42%). “Market Price” means the average of the lowest three (3) Trading Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means the closing bid price on the applicable day. The “Fixed Conversion Price” shall mean $0.00005. The shares of common stock issuable upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The Note can be prepaid by the Company at a premium as follows: (a) between 0 and 30 days after issuance – 109% of the principal amount and any accrued and unpaid interest; (b) between 31 and 60 days after issuance – 114% of the principal amount and any accrued and unpaid interest; (c) between 61 and 90 days after issuance – 120% of the principal amount and any accrued and unpaid interest; (d) between 91 and 120 days after issuance – 124% of the principal amount and any accrued and unpaid interest; and (e) between 121 days and 180 days after issuance – 130% of the principal amount and any accrued and unpaid interest. The purchase and sale of the Note closed on November 14, 2014, the date that the purchase price was delivered to the Company. |
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On December 9, 2014, the Company entered into a Securities Purchase Agreement with KBM Worldwide, Inc., pursuant to which the Company sold to KBM Worldwide a 8% Convertible Promissory Note in the original principal amount of $63,500 (the “Note”). The Note has a maturity date of September 10, 2015, and is convertible after 180 days into its common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The “Variable Conversion Price” shall mean 58% multiplied by the Market Price (representing a discount rate of 42%). “Market Price” means the average of the lowest three (3) Trading Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means the closing bid price on the applicable day. The “Fixed Conversion Price” shall mean $0.00005. The shares of common stock issuable upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The Note can be prepaid by the Company at a premium as follows: (a) between 0 and 30 days after issuance – 109% of the principal amount and any accrued and unpaid interest; (b) between 31 and 60 days after issuance – 114% of the principal amount and any accrued and unpaid interest; (c) between 61 and 90 days after issuance – 120% of the principal amount and any accrued and unpaid interest; (d) between 91 and 120 days after issuance – 124% of the principal amount and any accrued and unpaid interest; and (e) between 121 days and 180 days after issuance – 130% of the principal amount and any accrued and unpaid interest. The purchase and sale of the Note closed on December 11, 2014, the date that the purchase price was delivered to the Company. |
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On December 30, 2014, the Company entered into a Securities Purchase Agreement with KBM Worldwide, Inc., pursuant to which the Company sold to KBM Worldwide a 8% Convertible Promissory Note in the original principal amount of $45,000 (the “Note”). The Note has a maturity date of October 2, 2015, and is convertible after 180 days into its common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The “Variable Conversion Price” shall mean 51% multiplied by the Market Price (representing a discount rate of 49%). “Market Price” means the average of the lowest three (3) Trading Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means the closing bid price on the applicable day. The “Fixed Conversion Price” shall mean $0.00005. The shares of common stock issuable upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The Note can be prepaid by the Company at a premium as follows: (a) between 0 and 90 days after issuance – 130% of the principal amount and any accrued and unpaid interest; (b) between 91 and 150 days after issuance – 135% of the principal amount and any accrued and unpaid interest; and (c) between 151 and 180 days after issuance – 140% of the principal amount and any accrued and unpaid interest. The purchase and sale of the Note closed on December 31, 2014, the date that the purchase price was delivered to the Company. |
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LG Capital Funding |
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On May 16, 2014, the Company entered into a Securities Purchase Agreement with LG Capital Funding, LLC (“LG Capital”), pursuant to which it sold to LG Capital an 8% Convertible Promissory Note in the original principal amount of $105,000 (the “Note”). The Note has a maturity date of May 16, 2015, and is convertible after 180 days into common stock at a forty two percent (42%) discount from the lowest trading price of the common stock, as reported by any exchange upon which the common stock is then traded, for the ten (10) trading days prior to the Company’s receipt of notice from the Note holder to exercise this conversion feature. The conversion price shall be subject to a minimum conversion price of $0.0001 per share (the “floor price”), but in the event that the floor price is triggered, the conversion discount shall increase from forty two percent (42%) to fifty two (52%), calculated against the floor price. Interest accrued on the Note shall be payable in shares of common stock, calculated using the same conversion formula. The Note can be prepaid at a premium as follows: (a) between 0 and 90 days after issuance – 120% of the principal amount; (b) between 91 and 150 days after issuance – 130% of the principal amount; (c) between 151 and 180 days after issuance – 140% of the principal amount. There is no right to prepay the Note after 180 days. The purchase and sale of the Note closed on May 19, 2014, the date that the purchase price was delivered to the Company. On November 5, 2014, the Company repaid the promissory note to LG Capital Funding, LLC. The Company repaid the entire principal balance of the Note, plus accrued interest and a prepayment premium in the amount of One Hundred and Fifty Thousand Nine Hundred Twelve Dollars ($150,912). |
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On October 29, 2014, the Company entered into a Securities Purchase Agreement with LG Capital Funding, LLC (“LG Capital”), pursuant to which the Company sold to LG Capital an 8% Convertible Promissory Note in the original principal amount of $105,000 (the “Note”). The Note has a maturity date of October 29, 2015, and is convertible after 180 days into its common stock at a forty two percent (42%) discount from the lowest trading price of its common stock, as reported by any exchange upon which its common stock is then traded, for the ten (10) trading days prior to its receipt of notice from the Note holder to exercise this conversion feature. The conversion price shall be subject to a minimum conversion price of $0.0001 per share (the “floor price”), but in the event that the floor price is triggered, the conversion discount shall increase from forty two percent (42%) to fifty two (52%), calculated against the floor price. Interest accrued on the Note shall be payable in shares of its common stock, calculated using the same conversion formula. The Note can be prepaid by the Company at a premium as follows: (a) between 0 and 90 days after issuance – 120% of the principal amount; (b) between 91 and 150 days after issuance – 130% of the principal amount; (c) between 151 and 180 days after issuance – 140% of the principal amount. There is no right to prepay the Note after 180 days. The purchase and sale of the Note closed on October 31, 2014, the date that the purchase price was delivered to the Company. |
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Typenex Co-Investment, LLC |
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On July 18, 2014, the Company entered into a Securities Purchase Agreement with Typenex Co-Investment, LLC, pursuant to which it sold to Typenex a 10% Convertible Promissory Note in the original principal amount of $85,500 (the “Note”), which reflected an original issue discount of $7,500 and legal fees of $3,000. The Note has a maturity date of June 23, 2015, and is convertible after 180 days into common stock at $0.075 per share (the “Conversion Price”). The Conversion Price is subject to adjustment downward if the Company issues its common stock at a lower price prior to any conversion. The shares of common stock issuable upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The Note can be prepaid by at a premium of 125% of the principal amount and any accrued and unpaid interest. The purchase and sale of the Note closed on July 23, 2014, the date that the purchase price was delivered to the Company. |
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Below is a summary of note payable amounts which include accrued interest: |
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Notes payable - current portion | | December 31, | | December 31, | |
2014 | 2013 |
Abrams Notes | | $ | 35,875 | | $ | - | |
Asher Enterprises | | | - | | | 152,000 | |
Auctus Private Equity Fund | | | 55,192 | | | - | |
Backman Notes | | | 115,233 | | | - | |
Caesar Capital Group | | | 35,875 | | | - | |
DeLue Notes | | | 113,781 | | | - | |
Domain Capital | | | - | | | 44,087 | |
JARVCO Note | | | 25,981 | | | - | |
KBM Worldwide | | | 351,557 | | | - | |
LG Capital | | | 106,450 | | | - | |
Typenex Co-Investments | | | 89,388 | | | - | |
Total notes payable – current portion | | $ | 929,332 | | $ | 196,087 | |
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Notes payable - noncurrent portion | | December 31, | | 31-Dec | |
2014 | ,2013 |
Abrams Notes | | $ | 51,007 | | $ | - | |
Backman Notes | | | 50,185 | | | - | |
Buckles Note | | | 50,842 | | | - | |
Caesar Capital Group | | | 50,986 | | | - | |
DeLue Notes | | | 100,370 | | | - | |
Domain Capital | | | - | | | 95,519 | |
Elkins Trust Note | | | 50,185 | | | - | |
Geist Note | | | 50,904 | | | - | |
Total notes payable - noncurrent portion | | $ | 404,479 | | $ | 95,519 | |