CONVERTIBLE PROMISSORY NOTES | 9 Months Ended |
Sep. 30, 2013 |
Notes to Financial Statements | ' |
NOTE 7 - CONVERTIBLE PROMISSORY NOTES | ' |
In the nine months ended September 30, 2013, the Company entered into nine convertible note agreements. |
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On April 1, 2013, the Company entered into a Securities Purchase Agreement with Hanover Holdings I, LLC for a $32,500 convertible note payable due interest at 12% per annum, unsecured, and due December 1, 2013. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 55% of the market price, calculated as the average of the lowest trading prices in the previous 3 days leading up to the date of conversion. |
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On April 15, 2013, Magna Group, LLC was assigned $95,000 of the Company’s note payable debt. In connection with assignment of the debt, the Company entered into a Securities Purchase Agreement with Magna Group, LLC for a $95,000 convertible note payable with interest of 12% per annum, unsecured, and due April 14, 2014. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 55% of the market price, calculated as the lowest of the three trading prices in the previous 3 days leading up to the date of conversion. On May 6, 2013, Magna Group, LLC exercised its option to convert the entire $95,000 of debt into 17,101,710 common shares. |
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On May 10, 2013, the Company entered into a Securities Purchase Agreement with Hanover Holdings I, LLC for a $31,500 convertible note payable due interest at 12% per annum, unsecured, and due December 1, 2013. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 55% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. |
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On May 10, 2013, Magna Group, LLC was assigned $100,000 of the Company’s note payable debt. In connection with the assignment of debt, the Company entered into a Securities Purchase Agreement with Magna Group, LLC for a $100,000 convertible note payable due interest at 12% per annum, unsecured, and due May 10, 2014. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 55% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. On May 28, 2013, Magna Group, LLC exercised its option to convert $35,000 of debt into 6,427,916 common shares. On June 10, 2013, Magna Group, LLC exercised its option to convert $25,000 of debt into 4,545,454 common shares. On June 18, 2013, Magna Group, LLC exercised its option to convert $20,000 of debt into 4,489,338 common shares. On June 28, 2013, Magna Group, LLC exercised its option to convert $20,000 of debt into 6,080,477 common shares. |
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On May 21, 2013, WHC Capital, LLC was assigned $100,000 of the Company’s note payable debt. In connection with the assignment of debt, the Company entered into a Securities Purchase Agreement with WHC Capital ,LLC for a $100,000 convertible note payable due interest at 10% per annum, unsecured, and due March 21, 2014. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 55% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. On June 20, 2013, WHC Capital, LLC exercised its option to convert $20,378 of debt into 4,500,000 common shares. On July 16, 2013, WHC exercised its option to convert $15,840 of debt into 6,000,000 common shares. On July 17, 2013, WHC exercised its option to convert $27,500 of debt into 12,500,000 common shares. On August 7, 2013, WHC exercised its option to convert $24,750 of debt into 13,500,000 common shares. On September 9, 2013,WHC exercised its option to convert $12,419 of debt into 8,913,079 common shares. |
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On May 31, 2013, the Company entered into a Securities Purchase Agreement with Hanover Holdings I, LLC for a $31,500 convertible note payable due interest at 12% per annum, unsecured, and due January 31, 2014. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 55% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. |
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On May 31, 2013, Magna Group, LLC was assigned $50,000 of the Company’s note payable debt. In connection with the assignment of debt, the Company entered into a Securities Purchase Agreement with Magna Group, LLC for a $50,000 convertible note payable due interest at 12% per annum, unsecured, and due January 31, 2014. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 55% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. On July 16, 2013, Magna exercised its option to convert $30,000 of debt into 15,584,416 common shares. On July 23, 2013, Magna exercised its option to convert $20,000 of debt plus $500 in interest into 8,471,075 common shares. |
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On June 14, 2013, the Company entered into a Securities Purchase Agreement with WHC Capital, LLC for a $45,000 convertible note payable due interest at 10% per annum, unsecured, and due May 21, 2014. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 55% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. |
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On July 24, 2013, CP-US Income Group, LLC was assigned $100,000 of the Company’s note payable debt and $6,545 in accrued interest on that note payable debt. In connection with the assignment of debt, the Company entered into a Securities Purchase Agreement with CP-US Income Group, LLC for a $106,545 convertible note payable due interest at 10% per annum, unsecured, and due on demand. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 50% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. On August 26, 2013, CP-US Income Group, LLC exercised its option to convert $8,162 of debt into 5,829,736 common shares. On September 5, 2013, CP-US Income Group, LLC exercised its option to convert $27,875 of debt into 22,300,000 common shares. On September 13, 2013, CP-US Income Group, LLC exercised its option to convert $23,400 of debt into 23,400,000 common shares. On September 20, 2013, CP-US Income Group, LLC exercised its option to convert $20,400 of debt into 24,000,000 common shares. On September 27, 2013, CP-US Income Group, LLC exercised its option to convert $18,750 of debt into 25,000,000 common shares. |
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On July 24, 2013, CP-US Income Group, LLC was assigned $25,000 of the Company’s note payable debt and $3,303 in accrued interest on that note payable debt. In connection with the assignment of debt, the Company entered into a Securities Purchase Agreement with CP-US Income Group, LLC for a $28,303 convertible note payable due interest at 10% per annum, unsecured, and due on demand. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 50% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. |
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On July 24, 2013, CP-US Income Group, LLC was assigned $60,000 of the Company’s note payable debt and $5,980 in accrued interest on that note payable debt. In connection with the assignment of debt, the Company entered into a Securities Purchase Agreement with CP-US Income Group, LLC for a $65,980 convertible note payable due interest at 10% per annum, unsecured, and due on demand. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 50% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. |
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On July 24, 2013, CP-US Income Group, LLC was assigned $75,000 of the Company’s note payable debt and $35,801 in accrued interest on that note payable debt. In connection with the assignment of debt, the Company entered into a Securities Purchase Agreement with CP-US Income Group, LLC for a $110,801 convertible note payable due interest at 10% per annum, unsecured, and due on demand. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 50% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. On July 31, 2013, CP-US Income Group, LLC exercised its option to convert $32,655 of debt into 18,660,000 common shares. On August 6, 2013, CP-US Income Group, LLC exercised its option to convert $27,900 of debt into 18,660,000 common shares. On August 26, 2013, CP-US Income Group, LLC exercised its option to convert $21,742 of debt into 15,530,264 common shares. On August 29, 2013, CP-US Income Group, LLC exercised its option to convert $28,504 of debt into 20,360,000 common shares. |
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On July 24, 2013, the Company entered into a Securities Purchase Agreement with CP-US Income LLC for a $80,000 convertible note payable due interest at 10% per annum, unsecured, and due on demand. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 50% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. |
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On September 26, 2013, the Company entered into a Securities Purchase Agreement with WHC Capital, LLC for a $25,000 convertible note payable due interest at 10% per annum, unsecured, and due September 26, 2014. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 50% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. |
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Conversion of convertible debt |
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In the nine months ended September 30, 2013, Magna Group, LLC converted $245,000 of convertible debt and $900 of accrued interest into 62,700,386 common shares, WHC Capital, LLC converted $100,000 of convertible debt and $886 of accrued interest into 45,413,039 common shares, and CP-US Income LLC converted $167,042 of convertible debt and $42,346 of accrued interest into 173,740,000 common shares. The following table summarizes the total outstanding principle on convertible notes payable: |
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| | September 30, | | | December 31, | |
2013 | 2012 |
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Convertible Notes Payable- Magna Group, LLC | | $ | - | | | $ | - | |
Convertible Notes Payable- Hanover Holdings I, LLC | | | 95,500 | | | | - | |
Convertible Notes Payable- WHC Capital, LLC | | | 70,000 | | | | - | |
Convertible Notes Payable - CP-US Income, LLC | | | 182,242 | | | | - | |
Total Convertible Notes Payable | | $ | 347,742 | | | $ | - | |
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For the nine months ended September 30, 2013 and 2012, the Company recorded interest expense related to the convertible notes in the amount of $16,494 and $0. |
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Derivative liability |
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At September 30, 2013 and December 31, 2012, the Company had $3,648,697 and $0 in derivative liability pertaining to the outstanding convertible notes. |